Can I Really Be a
Yes. Collect VA disability, invest it wisely and receive tax-free earnings upon retirement.
If you want to be a millionaire when you retire I have one recommendation for you. Max out a Roth IRA with your tax free stipend that you receive from disability or from your GI Bill allowance. If you need guidance on how to obtain disability and need guidance submitting your VA Claim, schedule an appointment with us.
If you begin contributing to a Roth IRA at 25 years old and max out your annual contributions at $6,000 a year when you reach retirement age you will have accumulated over $1.1 million dollars.
This money is tax free when you contribute and will be tax free when you begin making withdrawals.
You can make tax free withdrawals beginning at 59 ½ years old.
If you are late to the investment game you are not totally out of luck. If you retire from the military at 40 years old and start investing for retirement with a Roth IRA you can still accumulate $405,000 by retirement age. You can pursue more aggressive means to save for retirement but it will cost you more and you will inherit greater risk.
You’re Never Too Old
If you are 50 years old you may qualify for ‘catch up’ contributions which would allow you to contribute $1000 more annually. A 50 year old could contribute $7,000 a year. At a retirement age of 67 you will have $209,000.
The sooner you can contribute to a Roth IRA the better.
I am not an expert investor but the reason I chose to discuss this means of investing is because it is the most straightforward. Roth IRA’s historically have low risk with significant returns of the lifeage of the IRA.
These numbers are based on a fairly conservative rate of return at 6%. The rate of return is a variable and is not immune to volatility in the market but you can still invest safely in a Roth IRA. No investment with any decent return is totally immune to market fluctuations and if you are concerned about such things invest in a long term CD or mutual funds. For the most part, a Roth IRA is a safe bet.
If you want a more detailed estimate of your Roth IRA check out NerdWallet Roth IRA calculator here: https://www.nerdwallet.com/investing/roth-ira-calculator
If you are in your 20’s and find yourself collecting VA disability, which is incidentally tax free, consider investing in a ROTH IRA. If you retire out of the service you are not too old to begin investing for your future. By writing this it is my hope that it inspires more deliberate and aggressive planning for your future. Find someone you can use as a sounding board and start planning on making your first million.