This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Returning Troops Face Financial Challenges

BOSTON ( TheStreet) -- Earlier this month, President Barack Obama announced that 10,000 servicemen will be withdrawn from the war effort in Afghanistan.

It will be the first wave in a troop reduction that will reduce the military presence by 33,000 by the summer of 2012. Troops stationed in Iraq will also continue to be scaled back in the months ahead.

As soldiers shift back stateside, managing their money will require extra care.

As more and more of the troops return stateside, they face a variety of issues and challenges -- not the least of which are financial.

"Having gone through that not too long ago, there is certainly a financial aspect to that adjustment," says J.J. Montanaro, a certified financial planner practitioner with USAA, which specializes in financial products and services for military personnel and their families. Before entering the financial services industry, he served in the U.S. Army for six years on active duty, including spending 2005-06 in Afghanistan, and in 2009 retired as a lieutenant colonel in the U.S. Army Reserve.

"You are coming back and all of a sudden the taxes that weren't an issue while you were deployed are coming back into play," he says, referring to the suspension of income tax during active duty. "There are extra allowances you had while deployed that go away, and a lot of times there are reduced expenses while you are deployed."

All these things can lead to necessary cash-flow adjustments, considering the potentially decreased income and likely increased expenses.

Montanaro estimates that for some enlisted men and women, combat pay could be reduced by as much as 25% once they return home.

Soldiers who participated in the Savings Deposit Program while serving in a combat zone will have 90 days to withdraw or transfer those accumulated assets once their tour of duty ends, and deposits must stop upon being transferred out of a combat zone. The SDP is a military-run savings account that offers 10% annual interest on deposits.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.52 -1.60%
FB $80.67 -1.50%
GOOG $553.67 -0.31%
TSLA $230.44 -0.48%
YHOO $44.34 -0.04%

Markets

DOW 18,110.14 +72.17 0.40%
S&P 500 2,113.09 +4.17 0.20%
NASDAQ 5,050.0810 -10.1650 -0.20%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs