First Person: Financial Decisions Made in My 20s

Yahoo Contributor Network

I made two great financial decisions when I was in my twenties. After joining the Marine Corps Reserves and only intending to serve for six years, I decided at age 21 to cross into the Air Force and make it a career. I stayed on active duty for 25 more years. On the 1st of each month, I receive a retirement check that makes it all worthwhile. I thought about getting out of the military at several points during my career. This was very tempting in the mid-1990s as the military was in the post Cold War drawdown and the Department of Defense was offering incentives to leave military service early.

I had the choice of choosing between a lump sum known as the Special Separation Bonus (SSB) or an annual annuity known as Voluntary Separation Incentive (VSI). The SSB was a onetime lump sum payment that would have been about $36,000 for me. The VSI would have been an annual payment of approximately $6440. I would have received this amount for double the amount of time I had already served on active duty. That total payment to hang up the uniform would have been about $154,000 over the course of the payments. It was certainly tempting at the time. But, if I live to my average life expectancy of around 75, I will have been retired for over 30 years and will have earned far more than the VSI would have totaled.

Additionally, I started investing when I was in my twenties. At the age of 23, I started an Individual Retirement Account (IRA) and began to systematically put money into the savings vehicle. I still remember my reaction when the credit union lady told me, "Now you realize you can't withdraw this money until you are 59 ½ years old." That was more than twice the amount of time I had been alive and was hard to even imagine. Of course, now that I am 50 years old it sure doesn't seem that distant. Along the way, I have also invested in rental property, stocks and other financial tools.

By investing early in adult life, a person can discipline their mind towards planning for their financial future. Systematically saving even a few dollars a month can set a person up for prosperity later in life. I certainly recommend a military career and a sound retirement strategy.

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