Military Money Manual Podcast

Biggest financial lessons from The Alamanc of Naval Ravikant

• 3 biggest decisions: where you live, who you're with, and what you do
• Does money make you happy?
• How to get rich
• Outsourcing
• 3 way to retire
• Cultivating wisdom
• Things money can't buy

Links:

• The Almanack of Naval Ravikant on Amazon
• Don't buy a house on active duty (episode #134)
• Money mindset podcast episode #148

For a limited time, Spencer is offering one-on-one Military Money Mentor sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE!

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.

Tax advantages, confusing tax brackets, marginal vs effective tax rates, and more!

Spencer and Jamie discuss how military service members benefit from unique tax advantages, including untaxed allowances and combat zone tax exclusions.

They also break down real examples of effective tax rates for different ranks and locations, explain tax brackets, and discuss investment implications, particularly for Roth vs traditional retirement accounts.

Main Topics & Questions Covered:

How did Jamie pay an effective tax rate of only 10% in 2023?

What military pay components are not taxed?

• BAH (Basic Allowance for Housing)
• BAS (Basic Allowance for Sustenance)
• OHA (Overseas Housing Allowance)
• Overseas COLA
• Combat Zone Tax Exclusion Pay (CZTE)
• Hostile fire/imminent danger pay

How do combat zone tax exclusions work?

• Areas designated by presidential executive order
• No limit for enlisted members
• Officers capped at highest enlisted monthly pay

Real examples of effective tax rates for:

• E5 at Holloman AFB (single)
• E7 at Fort Sill (married with children)
• O3 at Wheeler Army Airfield (married with child)
• O5 in Hawaii (with children)

How do tax brackets actually work?

• Progressive system explanation
• Standard deduction impacts
• Marriage tax advantages
• Common misconceptions about brackets

Investment implications:

• Roth vs Traditional retirement accounts
• Why Roth often makes sense for military members
• Tax considerations when transitioning to civilian life

Key takeaways:

• Military members often have very low effective tax rates
• Understanding true taxable income vs. total compensation
• Importance of tracking tax information on LES
• Resources for military tax assistance (Military Tax Experts Alliance)

The hosts emphasized two main recommendations:

• Consider Roth retirement contributions while serving
• Be cautious about buying houses while on active duty

Links:

• Military Tax Experts Alliance
• Military One Source's free tax prep software (miltax)
• Money Chimp's tax calculator
• IRS designated combat zones (CZTE zones)
• Money Chimp's Compound Annual Growth Rate calculator (CAGR)
• IRS Tax Brackets
• Podcast episode about state taxes #27
• Episode #130 with Pual Allen from Military Tax Experts Alliance
• Episode #119 with Kate Horrell on taxes for military spouses

For a limited time, Spencer is offering one-on-one Military Money Mentor sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE!

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.

Spencer and Jamie address a listener question about where to save money for a house down payment, which leads to a broader discussion about short-term savings strategies based on different time horizons.

Main Topics & Questions Covered:

• Where to save money for a house down payment
• How to handle proceeds from a home sale while waiting to buy another property
• When to keep money in cash vs. when to invest it
• Different savings vehicle options for different time horizons

Key Points Discussed:

Short-term savings (0-3 months):

• Keep in checking account
• Use for immediate bills and expenses
• Consider automated savings for regular expenses

Medium-term savings (3 months - 1 year):

• High-yield savings accounts (HYSA)
• Money market accounts
• Consider proximity to primary bank for transfers

Longer-term savings (1-5 years):

• HYSAs
• CDs (including no-penalty CDs)
• Treasury ETFs (SGOV, SCUS mentioned as examples)
• Avoid stock market investments due to risk

Beyond 5 years:

• Can consider stock market investments
• Focus on long-term growth strategies
• Align with financial independence goals

For a limited time, Spencer is offering one-on-one Military Money Mentor sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE!

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.

2025 contribution limits are out!

In this episode, Spencer and Jamie discuss the newly announced IRS contribution limits for retirement accounts in 2025. They break down the changes for 401(k), TSP, and IRA accounts, explaining the limits for both standard and catch-up contributions, while also highlighting an important opportunity for military families with non-working spouses.

• What are the new 2025 contribution limits for 401(k) and TSP accounts?
  • Increased by $500 to $23,500 for those under 50
• What are the 2025 IRA contribution limits?
  • Remains at $7,000 for traditional and Roth IRAs (under 50)
• Can non-working spouses contribute to an IRA?
  • Yes, if married filing jointly
  • Can contribute up to $7,000 to spouse's IRA
  • Must have at least $14,000 in combined earned income as a couple
• What are catch-up contributions?
  • Clarification that these are only for those over 50
  • Not meant for younger service members trying to "catch up" on contributions

We encourage you to maximize these tax-advantaged retirement spaces when possible and gradually increase contributions over time!

For a limited time, Spencer is offering one-on-one Military Money Mentor sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE!

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.

Do you still get a pension under the BRS? YES! We can't believe this myth and misinformation is still spreading around the military.

Spencer and Jamie break down the three components of the military's Blended Retirement System (BRS) and address common misconceptions. They explain how the pension calculation works, discuss TSP matching benefits, and detail continuation pay options across different services. The hosts emphasize that servicemembers still receive a pension under BRS and highlight both the advantages and potential pitfalls of the system.

Questions discussed:

• How is the pension calculated under BRS?
• What are the three main components of BRS?
• How does TSP matching work?
• What are the continuation pay rates across different services?
• Why did the DOD switch to BRS?
• Should you take the lump sum option?
• How can leaders help troops not miss continuation pay opportunities?
• Is the BRS lump sum retirement option a good idea?

Resources mentioned:

• militarypay.defense.gov/blendedretirement
• Continuation Pay episode w/ Brandon Lovingier, The Enlisted Money Guy (Ep #128)
• Military Money: Pay and Pension app (free) on Apple's app store
• Nectarine's flat-rate financial advisors available for booking with 10% military discount using this link

For a limited time, Spencer is offering one-on-one Military Money Mentor sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE!

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.

• "I'll always be broke."
• "I can't build wealth with this salary."
• "I'm just a spender- I can't help it."

In this episode, Jamie and Spencer discuss how adopting a growth mindset versus a fixed mindset can transform your approach to personal finance.

Drawing from Carol Dweck's book "Mindset: The New Psychology of Success," they explore how changing your perspective from "I'm not good with money" to "I'm not good with money yet" can open up opportunities for financial growth and learning.

Main Topics Covered: • Definition and differences between fixed mindset and growth mindset • How mindset affects financial behavior and decision-making • The power of labels in personal development • Common financial mindset traps in the military community • Ways to develop a growth mindset with money • The impact of mindset on relationships and money management

Links We Discussed Today:

• Look for personal finance books on the Libby App (using free DOD MWR library)
• Carol Dweck's "Mindset" book
  • See quick book summary on fs.blog or her TED talk
• "I Will Teach You to be Rich" by Ramit Sethi
• "The Simple Path to Wealth" by JL Collins
• "The Psychology of Money" by Morgan Housel
• "Rich Dad Poor Dad" by Robert Kiyosaki
• Military One Source
• Personal Finance Club

For a limited time, Spencer is offering one-on-one Military Money Mentor sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE!

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.

This may surprise you!

Want to experience an easier and simplified strategy for military credit cards? That's fine!

We'd ask "why" you don't want more, but in today's episode we share which cards we'd recommend for listeners who reach out wanting smaller numbers.

Links:

• Ultimate Military Credit Cards course (free)
• Chase Sapphire Reserve (CSR)
• Amex Gold Card
• Amex Platinum
• Amex Hilton Aspire
• Amex Platinum for Charles Schwab
• Chase Ink Business cards
• Marriott Bonvoy Brilliant Amex

• FINRED's benefits page (official of Financial Readiness)

For a limited time, Spencer is offering one-on-one Military Money Mentor sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE!

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.

A new benefit for military families! How good is it?

In fall of 2024, SecDef announced a new Healthcare Flexible Spending Account (HCFSA) for military families. In March 2025, you'll be able to sign up for it for the first time. It may give you a minor tax savings but also may complicate your situation a little.

We break down the details of this pre-tax benefit, explaining how it works, who's eligible, and whether it's worth signing up for.

Main topics and questions covered:

• What is the new Healthcare Flexible Spending Account (HCFSA)?
• Who is eligible for the HCFSA?
• What can the HCFSA be used for?
• How much can be contributed to the HCFSA?
• How does the contribution process work?
• What are the tax benefits of the HCFSA?
• Are there any risks or downsides to the HCFSA?
• How does the "use it or lose it" rule apply?
• What are some potential use cases for the HCFSA?
• Is the HCFSA worth signing up for?
• How does the HCFSA compare to other military benefits?
• Where can listeners find more information about the HCFSA?

Links Mentioned:

• FSAfeds HCFSA official page
  • Eligible Expenses List
  • FSAfeds app
  • HCFSA calculator- how much tax savings would it be for you?
• Military One Source's info on HCFSA
• FINRED's benefits page (official of Financial Readiness)

For a limited time, Spencer is offering one-on-one Military Money Mentor sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE!

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.

Did you know Required Minimum Distributions (RMDs) will be a factor in your future that you may not be tracking?

If you have any traditional TSP or IRA money, you'll be required to take a portion of that money starting at 73 (as of 2024, scheduled to go up to 75), and that distribution will be taxable income. This can affect how to withdraw from accounts in retirement and how you decide to contribute to your accounts now.

RMDs are also required for your beneficiaries on traditional IRAs you pass on (taxable income for them). While RMDs are required for some Roth IRAs for your beneficiaries as well, they're not taxed. (Inheritance tax is 2024 is $13,610,000. As long as you pass on less than that, no federal taxes. If it's all in a Roth IRA for example, no tax at all. If it's an inherited Traditional retirement account, your beneficiary owes taxes on the money as they withdraw funds per RMD schedule.)

Today main takeaways:

• RMDs are important for you to understand
• They affect your beneficiaries who receive your accounts after you pass
• Understanding RMDs may affect how you choose Roth or Traditional investments now
• If you inherit an IRA, it's complicated but important to get right. Hiring some fee-only help (links below) may be a great idea.

Links from today's episode:

• Military Financial Advisors Association (MFAA)
• Nectarine (includes 10% off military discount w/ this link)
• Military Tax Experts Alliance
• IRA RMD Calculator at Schwab (just one of many examples)
• IRA RMD Calculator at Vanguard (just one of many examples)
• Inherited IRA RMD Calculator

For a limited time, Spencer is offering one-on-one Military Money Mentor sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE!

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.

How do you finance the life between possible early retirment and 59.5 years old when you can access you retirement accounts? A gap fund is one common approach.

Today we discuss:

• What is a gap fund?
• Is it necessary?
• Where does it fall in priority order when saving for early retirement?
• How do you invest a gap fund?

For a limited time, Spencer is offering one-on-one Military Money Coaching sessions! Get your personal military money and investing questions answered in a confidential coaching call.

Our new TSP course is live! Check out the Confident TSP Investing course at militarymoneymanual.com/tsp to learn all about the Thrift Savings Plan and strategies for growing your wealth while in the military. Use promo code "podcast24" for $50 off. Plus, for every course sold, we'll donate one course to an E-4 or below- for FREE! Just e-mail us at [email protected] for the free promo code.

If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email [email protected].

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

I also offer a 100% free course on military travel hacking and getting annual fee waived credit cards, like The Platinum Card® from American Express, the American Express® Gold Card, and the Chase Sapphire Reserve® Card in my Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

Learn how to get your annual fees waived on premium credit cards from American Express in the Ultimate Military Credit Cards Course at militarymoneymanual.com/umc3.

The Platinum Card® from American Express and the American Express® Gold Card waive the annual fee for active duty military servicemembers, including Guard and Reserve on active orders over 30 days. The annual fees on all personal Amex cards are also waived for military spouses married to active duty troops.