Closing the Military Spouse Retirement Gap

August 20, 2021 | Stacy Miller, CFP® | Rethinking65


Stacy Miller, CFP®, herself a military spouse, recently wrote an article titled Five Tips for Closing the Military Spouse Retirement Gap. In it, she shares some of the unique challenges and solutions for military spouses who want to save more for retirement.  


Some of the unique challenges that women face every day can have a compounding negative effect on their ability to successfully achieve their future retirement goals. Women are often the caretakers in the family. This means taking time off work to care for children and aging parents. This time off means fewer opportunities for contributing to workplace retirement plans (for example, a 401(k) plan), and fewer opportunities for pay raises and promotions. Additionally, women statistically live longer than men, and therefore their retirement portfolio would need to be larger than a man’s in order to last longer. 

Military spouses, 92% of whom are women1, face these challenges and more. According to the Blue Star Families 2020 Family Lifestyle Survey Comprehensive Report, challenges to military spouse employment are the top contributors to financial stress. These challenges often include the service member’s work schedule and deployments, licensing and credentialing from state to state, a resumé that has many moves and gaps, getting passed over for a raise or promotion because managers believe the military spouse will move soon, availability and affordability of childcare, and not having the local connections that can facilitate employment opportunities. Military spouses have an unemployment rate that is almost 12-times the national average (up to 35% versus 3% nationally, pre-pandemic). Of the employed military spouses that were surveyed, 67% said they were underemployed which means fewer hours than desired, over-qualified, lower pay than previous position, or lower pay than experience and/or education would suggest. 

I am a military spouse to a now-retired U.S. Army veteran. We moved 14-times in 27 years. I was regularly unemployed or underemployed. My resume was filled with gaps, and my retirement portfolio is not nearly sufficient. My story is like many others because my future financial security is directly tied to my husband’s, and that is not a comfortable place to be. We have been together for over 30-years and married for 27. I trust him completely, but death and divorce are real. According to the Women’s Institute for a Secure Retirement, 80% of women die single, and military spouses are married to service members that risk their lives on a daily basis.


Bottom line for military families and military spouses is that a comfortable retirement will take extra effort. If you have a military family as a client, please share my 5 Tips for Closing the Military Spouse Retirement Gap:


  • Ask for a raise or a promotion: I can promise if you do not ask, you will not receive a raise or a promotion. Set yourself up for success and be prepared to explain why you deserve it (military spouses are problem-solvers, resilient, adaptable, creative, dependable, loyal, and hard-working).
  • Have a candid money conversation with your spouse: You need to understand your service member’s (or retiree’s) financial security. Is it enough to support you both? Do you have an emergency fund to cover emergencies so that you never have to touch your retirement portfolio? Do you have life insurance that will cover your spouse AFTER he gets out of the military? What happens in the event of death (uncomfortable, I know, but when you are grieving is not the time to try to figure these things out)? 
  • Contribute to your spousal IRA: The working spouse (service member) can contribute to a non-working spouse’s (military spouse’s) IRA (Roth or Traditional) up to $6,000/year in 2021 ($7,000 if the spouse is over 50; catch-up contribution). These accounts are tax-advantaged and can be tax-deferred or tax-free, so don’t miss this opportunity to invest wisely.
  • Don’t just save; invest: Right now, savings accounts are paying an average of 0.06% (to be clear, that’s point zero six percent, not six percent). If you have $10,000 saved for a year at this rate, you will only earn 6-dollars. In contrast, the S&P500 has gained 19.27% so far this year. If you had $10,000 invested in an S&P500 index fund or ETF, you may have gained $1,927 in eight months. Compounding interest and compounding returns are the keys to successful investing. 
  • Become an entrepreneur: When I was 45 years old, my kids were graduating high school, and my husband had 25-years in the military. I decided to become a Partner with my current firm so that I could work remotely (yes, I worked remotely before the pandemic made it cool and easy) and build a business that will add to my future financial security. When you are your own boss, you control so much more.

Military spouses are just as concerned about their future financial security as any of your other clients. At times it can feel like they have no control, so assistance with planning and tips for success will add great value to your relationship. For more information on helping retiring military clients through their transition to civilian life, please read the Rethinking65 companion article. I hope that you will use what I have shared to serve military spouses with integrity, empathy, and pride. 


  1. Source: Hiring Our Heroes, U.S. Chamber of Commerce Foundation, Military Spouses in the Workplace, 2017
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