With so much doom and gloom in the financial area, I thought I’d write about the top five things I see right now that are so positive for military members and retirees right now.
1. Real Estate prices are much more attractive than they were 2-3 years ago. This is great if you are within a year or two of retiring, or are planning on purchasing a potential retirement home in the near future. In my blog on a Simple Plan for military families, I suggested one technique is to purchase a home within your BAH after about your fifth year of service. If you take a 15-year mortgage, when you are retirement eligible, the home will be paid off. With the prices lower, it’s much more likely that you’ll be able to find a home that suits you and is within your price target. The BAH rates haven’t fallen. As a matter of fact, they’ve gone up in some areas!
2. With some indications of inflation, retirement COLA adjustments are up, and active duty members will see a 3.9% pay increase in January. This is a significant increase in pay and benefits for military members. I would argue that this increase will outpace inflation in the short run, so military members, both active and retired, should enjoy a modest improvement in their standard of living.
3. VA Refinance Opportunities. The VA has programs in many areas to allow you to refinance your home to a fixed rate even if you don’t have a lot of equity in your home. In some areas of the country, the amount you can refinance may exceed the $417,000 FHA limitation. This is a great chance to reset your mortgage, get reasonable payments, and lock in at very low interest rates for the life of your loan.
4. Stock prices are low. It’s a great time to continue to add to your long-term investment portfolio. If you’re like me, you add a fixed amount to your portfolio every month. While your fund balances might be down, you’re seeing your shares increase at an accelerated rate. It might take a few years for the bulls to return to Wall Street, but when they do your persistence and courage will be richly rewarded.
5. Everything you need is on sale. Retailers are hurting, bad. If you need a car, now might be the best time in years to get a great deal. The same thing applies to home improvement products, furniture, life insurance, vacations, you name it, it’s on sale. Save a dollar or two, and go out and get what you need, and you’ll still have money left to get what you want. It’s a great buyers market out there. Pay cash and have some fun.
There are some tremendous opportunities out there for military members and retirees who have stable incomes and security. There is money available to purchase real estate, and lenders are ready to make some deals. We might not have another “Perfect Storm” like this in our lifetime. Recognize the opportunity, and don’t waste time wringing your hands.