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Financial Pitfalls Veterans Should Avoid

Financial Pitfalls Veterans Should Avoid

May 13, 2021

Veterans are widely appreciated and revered for their service to our country; unfortunately, however, they can be overlooked within the financial services industry. As such, veterans often face an uphill battle when it comes to investing and finances. Let’s discuss some common pitfalls veterans can work to avoid so they can attain financial success for themselves and their families.

Lack Of Life Insurance

Financial planning is about planning for what you don’t think will happen(running out of money in retirement), what will happen (kids going to college and your retirement) and what might happen (the unexpected death of an income earner). No one wants to think about their death, but having a life insurance policy in place is crucial to ensure your family will be taken care of in the event of an untimely death. I don’t sell life insurance, but I do believe life insurance is an important component of a financial plan, especially for younger couples. If you don’t have any life insurance in place, we can refer you to an insurance professional to help make sure you’re properly covered and not sold an insurance product that you don’t need.

Misalignment Between Personal And Portfolio Risk Number

Do you know what your personal risk number is, and is it in alignment with your portfolio? Alignment between your risk number and your portfolio is critical to achieving your financial objectives, ensuring your portfolio is positioned to build your wealth while limiting risk exposures that make you uncomfortable. Talk to a financial professional that can help you determine your risk number and make sure it aligns with your portfolio.

Lack Of Budgeting Or Systematic Savings Program

A budget paired with a systematic savings program will ensure you aren’t living paycheck to paycheck, help you plan for the future, and give you a source to cover unexpected financial emergencies that occur. To get started, track your expenses for one month and compare them to your net income. You’ll know if you are overextending yourself on a month-to-month basis. Next, set aside any extra money you have into an emergency savings fund. Once you build up 3-6 months’ worth of expenses, it is time to start putting aside at least 10-15% of your income toward retirement. Setting up automatic contributions into your retirement account will help make sure you stay on track.

Balance Between Regular Investment Accounts And Retirement Accounts (IRAs) 

Strike a balance between how much you contribute to regular investment accounts and any retirement accounts. Both are great for building savings and achieving growth over the long term. However, retirement accounts have tax advantages that standard brokerage accounts do not. For example, if you have an IRA, try to contribute the annual limit so your savings will grow on a tax-deferred basis. After you’ve maxed out your retirement contributions, invest any leftover dollars you want to save into other types of investment accounts. With a standard brokerage account, you can often access different types of investment products that aren’t available with IRAs.

Systematic Rebalancing Of Investment Portfolio

It is essential to make sure your investment allocation aligns with your goals, risk tolerance, and your current life stage. As your life or goals change, it is important to rebalance your assets periodically. Failing to reallocate your assets regularly can hinder your ability to achieve your investment objectives and leave you exposed to more risk than you intended. At the same time, reallocating your assets too often can be an expensive hindrance as well. Seek advice from a financial professional to determine how often your portfolio needs rebalancing and to help you rebalance your investment allocation.

Lack Of Essential Estate Planning Vehicles

Make sure you have some essential estate planning vehicles in place in the event of your passing. An attorney can help you draft a last will and testament and a living will. A last will and testament designates how your assets will be distributed upon your death. A living will specifies how you’d like your designated beneficiaries to make health decisions for you if you are in an incapacitated or vegetative state. Establish a power of attorney to decide how your money will be spent in the event you are unable to do so. Having these essential estate planning vehicles in place will give you peace of mind and make it easier for your family to help in these types of circumstances.

We’re Here For You

To create a financial strategy tailored to our clients, we at Grace Wealth Management Group focus on their personal needs, wishes, concerns, and constraints—everything that makes their circumstances unique to them. If you could use some help in any of the above areas or with any pieces of your wealth management puzzle, schedule an appointment here or call me at (949) 631-3840 x2 or email

About Jim Peters

Jim Peters is an independent financial advisor and the founder of Grace Wealth Management Group, Inc., a full-service financial firm committed to helping people pursue their financial goals. With more than 24 years of experience in the industry, Jim combines his extensive knowledge with his genuine interest in helping people pursue financial independence. Beyond his experience, he is certified as both a Chartered Life Underwriter® (CLU®) and Chartered Financial Consultant® (ChFC®), meaning he has advanced training and knowledge in financial planning and insurance. Based in Irvine, California, Jim specializes in working with individuals, families, and businesses throughout Orange County. To learn more, connect with Jim on LinkedIn or visit