🎖️ 1.3M Active Duty · 18M Veterans · Finally Your Hub

The Military Money Hub

Complete financial guide for military service members and veterans. TSP, VA loans, BAH, BRS vs legacy retirement, SCRA, and the military-to-civilian financial transition.

🎖️ Military Financial Basics — What Every Service Member Needs to Know
Military compensation is more complex than a civilian paycheck. Understanding every component of your pay is the foundation of financial success in uniform.
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Basic Pay
Base pay based on rank (E, W, O) and years of service. Subject to federal income tax. 2025 ranges: E-1: $1,833/mo → O-10: $16,608/mo. Increases automatically with time in service and promotion.
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BAH — Basic Allowance for Housing
Tax-free housing allowance based on rank, dependency status, and duty station zip code. Covers median rental cost in your area. Not taxable — this is significant. Ranges from $900 to $4,000+/month depending on location and rank.
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BAS — Basic Allowance for Subsistence
Tax-free food allowance. Officers: $311.68/mo. Enlisted: $460.25/mo (2025). Combined with BAH, tax-free allowances can represent 30-50% of total compensation — dramatically increasing purchasing power vs. equivalent civilian salary.
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TRICARE Health Coverage
Comprehensive health insurance for service members, retirees, and dependents at extremely low cost. TRICARE Prime: $0 for active duty. Effectively adds $10,000-$20,000 in compensation value annually vs. civilian health insurance costs.
🏦 TSP — Thrift Savings Plan: The Military 401k
The Thrift Savings Plan is one of the best retirement accounts available — extremely low expense ratios (0.048%) and government matching under BRS. Most service members are leaving significant money on the table.
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Understand BRS vs Legacy Retirement
Blended Retirement System (BRS): Anyone who joined after Jan 1, 2018 is automatically enrolled. 5% government matching contributions, pension at 20 years (40% of base pay vs 50% under legacy). If you joined before 2018 and did NOT opt in, you are under the legacy High-3 system with no matching but a larger pension.
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Contribute at least 5% to capture full match (BRS members)
The government contributes 1% automatically, then matches your contributions dollar-for-dollar up to 3%, then 50 cents per dollar for the next 2%. You must contribute 5% to get the full 4% match. This is free money — never leave it uncaptured.
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Choose Roth TSP for most junior enlisted and officers
Combat zone tax exclusion makes Roth TSP especially powerful — contributions made while deployed are completely tax-free (no tax now, no tax ever). Even outside deployment, most service members are in lower brackets early in service, making Roth the better long-term choice.
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Invest in the L Funds or index funds (C, S, I)
The C Fund tracks the S&P 500 at 0.048% expense ratio — cheaper than any civilian index fund. The S Fund tracks small caps. The I Fund tracks international. The L Funds (lifecycle) automatically rebalance. Avoid the G Fund (government bonds) unless near retirement — it significantly underperforms over long time horizons.
💡 TSP 2025 Contribution Limits

Standard limit: $23,500/year. Catch-up (50+): $31,000. Combat zone exclusion: contributions made while in a designated combat zone are unlimited and permanently tax-free in Roth TSP. A 6-month deployment could allow $40,000+ in completely tax-free Roth contributions — a massive wealth-building opportunity many service members miss.

🏠 VA Home Loan: The Most Powerful Financial Benefit in the Military
The VA loan is one of the greatest financial benefits ever created — and it is dramatically underused. No down payment, no PMI, competitive rates. Most eligible veterans never use it.
FeatureVA LoanConventional Loan
Down payment0% required3-20%
PMI (mortgage insurance)None — everRequired until 20% equity
Credit score minimumNo official minimum (most lenders: 620)620 minimum
Interest rateTypically 0.25-0.5% lower than conventionalMarket rate
Funding fee1.25-3.3% (waived for disabled veterans)None
ReuseCan be used multiple timesN/A
⚠️ Common VA Loan Misconception

The VA loan entitlement is not a one-time benefit. You can use it multiple times throughout your life. You can even have two VA loans simultaneously in some circumstances. Any eligible veteran or service member who buys a home without exploring the VA loan is potentially leaving tens of thousands of dollars on the table.

🔄 Transitioning to Civilian Life — Financial Checklist
1
Convert SGLI life insurance before discharge (31-day window)
Servicemembers Group Life Insurance automatically ends after discharge. You have 31 days to convert to VGLI (Veterans Group Life Insurance) — no medical exam required. Miss this window and you will need to qualify medically for civilian coverage. Critical if you have any health conditions.
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Apply for VA disability rating immediately
File a VA disability claim before separating through the Benefits Delivery at Discharge (BDD) program. Even partial disability (10%) provides monthly tax-free compensation and waives the VA loan funding fee. A 100% P&T rating provides substantial monthly income, CHAMPVA healthcare for dependents, and property tax exemptions in most states.
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Roll over TSP or keep it — but do not cash out
You can leave money in TSP (excellent low-cost option), roll it to a civilian IRA (more investment flexibility), or roll it to a new employer 401k. Never cash out — the 10% penalty plus income taxes can cost 30-40% of your balance.
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Account for the full-pay difference honestly
Military compensation includes BAH, BAS, free healthcare, commissary access, and other non-cash benefits worth $15,000-$40,000 annually. A civilian salary of $60,000 with full benefits may actually be equivalent to $75,000+ in military compensation. Do not undervalue your market worth when negotiating civilian salaries.
❓ Military Finance FAQ
Is BAH included in my taxable income?
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No. BAH and BAS are completely tax-free. This is one of the most significant financial advantages of military service. A service member receiving $2,000/month in BAH avoids approximately $5,000-$8,000 in annual federal income taxes that a civilian earning equivalent housing money would pay.
Should I choose BRS or the legacy retirement system?
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If you joined before January 1, 2018 and were given the opt-in choice: BRS is typically better if you are unlikely to serve 20+ years (statistically, only 17% of service members do). Legacy is better if you are confident in a 20-year career and do not need the TSP matching. The government's financial literacy training significantly underestimated BRS's value for most service members.
What is the SCRA interest rate benefit?
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The Servicemembers Civil Relief Act (SCRA) caps interest rates at 6% on pre-service debts (credit cards, student loans, mortgages) while on active duty. Request this in writing from each lender. Also provides protections against lease termination penalties, foreclosure, and civil court judgments during deployment.
Can I use the VA loan more than once?
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Yes. The VA loan entitlement can be restored after selling a home and paying off the VA loan. You can also have two VA loans simultaneously if you have remaining entitlement (bonus entitlement). There is no limit to how many times you use it over a lifetime — it is one of the most reusable financial benefits in existence.
📚 Related Guides
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Investing Guide
TSP fund strategy explained
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Estate Plan Builder
Critical for deployed service members
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Homebuyer Guide
VA loan deep dive included