Military families face financial circumstances that are often very different from those of civilian households. The frequent relocations, deployment schedules, changes in duty stations, and unique benefits require a thoughtful and adaptable approach to financial planning. For those stationed in or retiring to Colorado Springs, the blend of a large military presence, local resources, and the city’s cost of living creates both opportunities and challenges.
At Concerto Financial, we work closely with military families to help them address these distinct considerations, ensuring their financial strategies are tailored to their needs both during active service and after transitioning to civilian life.
The Colorado Springs Military Connection
Colorado Springs is home to several key military installations, including Fort Carson, Peterson Space Force Base, Schriever Space Force Base, and the U.S. Air Force Academy. The city’s economy, housing market, and community services are shaped by the thousands of active-duty service members, veterans, and their families who live here.
For military households, this environment offers access to specialized support systems but also requires careful planning to coordinate benefits, housing decisions, and long-term financial objectives.
Frequent Relocations and Their Financial Impact
One of the most common challenges for military families is the frequency of Permanent Change of Station (PCS) moves. Each relocation can affect housing, income, expenses, and even state tax obligations.
Key considerations include:
- Homeownership vs. Renting: Deciding whether to purchase a home in Colorado Springs or rent during a tour can be complex. Service members need to consider the local housing market, potential resale value, and the likelihood of returning to the area.
- Moving Costs: While the military covers many PCS expenses, there are often out-of-pocket costs. Building a moving fund can reduce the financial strain.
- State Residency and Taxes: Military families may maintain legal residence in one state while stationed in another. This can impact tax filing, voting registration, and eligibility for state-specific benefits.
Understanding Military Pay and Benefits
Military compensation has unique elements that require specialized planning.
Components to be aware of:
- Basic Pay: Determined by rank and years of service, and subject to federal income tax.
- Basic Allowance for Housing (BAH): Non-taxable and adjusted for local housing costs in Colorado Springs.
- Basic Allowance for Subsistence (BAS): Non-taxable allowance intended to offset meal costs.
- Special and Incentive Pays: Additional compensation for certain roles, deployments, or hazardous duties.
- Leave and Earnings Statement (LES): A critical monthly document outlining all pay, deductions, and benefits.
Understanding the taxable and non-taxable portions of income can influence everything from budgeting to retirement savings contributions.
Deployment Planning
Deployments bring unique financial opportunities and risks.
Steps to consider before deployment:
- Review Legal Documents: Ensure wills, powers of attorney, and beneficiary designations are up to date.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
- Adjust Budgets: Deployment pay may increase household income, but also change expenses. Planning in advance can help direct extra funds toward savings or debt reduction.
- Savings Opportunities: Certain savings programs, such as the Savings Deposit Program (SDP), offer above-average interest rates for deployed service members.
- Family Preparedness: The spouse or family members remaining at home should have access to necessary accounts, documents, and contacts.
Retirement and Transition Planning
Service members have access to the Blended Retirement System (BRS), which combines a pension with defined contributions to the Thrift Savings Plan (TSP). Understanding how to maximize these benefits is essential.
Transition considerations include:
- Pension Decisions: The military pension can be a significant source of lifetime income. Choices made at retirement can affect long-term financial stability.
- TSP Strategies: Allocating TSP contributions and selecting appropriate investment options can influence retirement readiness.
- Healthcare Changes: Transitioning to civilian healthcare from TRICARE may require new coverage and budgeting.
- Employment Shift: Moving to the civilian workforce may bring different income patterns and benefits.
Housing Decisions in Colorado Springs
The local real estate market can be competitive, and military families often face compressed timelines for buying or selling homes.
Factors to evaluate:
- Market Trends: Understanding current housing prices, interest rates, and rental demand.
- Resale Potential: Homes in certain neighborhoods or near military installations may have stronger resale or rental value.
- VA Loan Benefits: VA loans offer no down payment and favorable terms, but it is important to understand funding fees and property requirements.
- Renting to Other Military Families: For those who keep their property after a PCS move, renting to fellow service members can be an option, though it still involves landlord responsibilities.
Education Planning for Military Families
Military families often prioritize education for both children and service members pursuing further studies.
Key considerations:
- Post-9/11 GI Bill: Can be transferred to a spouse or children if certain service requirements are met.
- Yellow Ribbon Program: Helps cover tuition costs at participating schools.
- 529 College Savings Plans: Contributions grow tax-deferred and withdrawals for qualified expenses are generally tax-free.
- School Selection During PCS: Researching schools ahead of a move to ensure academic continuity.
Insurance and Risk Management
Military families have access to certain insurance options not available to the general public.
- Servicemembers’ Group Life Insurance (SGLI): Low-cost term life insurance for service members.
- Family Servicemembers’ Group Life Insurance (FSGLI): Available for spouses and children.
- Veterans’ Group Life Insurance (VGLI): Option to convert SGLI after leaving service.
- Disability Coverage: Both military and private policies should be reviewed to ensure adequate protection.
Estate and Legacy Planning
With frequent moves and deployments, military families benefit from having their legal and estate documents in order.
Steps include:
- Wills and Trusts: Ensuring assets are distributed according to your wishes.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
- Beneficiary Reviews: Keeping beneficiary designations updated for all accounts and policies.
- Powers of Attorney: Granting authority to manage finances and legal matters during deployments.
- Guardianship Designations: For families with children, having a clear plan in case both parents are unavailable.
Tax Considerations
Military families may be eligible for tax benefits that civilians cannot access.
- Combat Zone Tax Exclusion: Certain pay earned in a designated combat zone is not subject to federal income tax.
- State Residency Rules: The Servicemembers Civil Relief Act (SCRA) allows service members to retain state residency for tax purposes despite moving.
- Moving Expense Deductions: Some relocation expenses may be deductible.
- Filing Status Changes: Life events such as marriage, divorce, or having children can change tax obligations.
Building a Flexible Financial Plan
Because military life is filled with change, financial plans should be built with flexibility in mind.
Strategies include:
- Maintaining a Strong Emergency Fund: Helps cover unexpected expenses during relocations or transitions.
- Automating Savings: Ensures consistent progress toward goals, even during busy periods.
- Diversifying Investments: Aligning investments with both short- and long-term objectives.
- Reviewing Plans Regularly: Adjusting strategies after each PCS, deployment, or major life event.
Leveraging Local Resources in Colorado Springs
Military families in Colorado Springs can take advantage of:
- Military Family Support Centers: Offering counseling, classes, and assistance with benefits.
- Local Veterans Organizations: Providing networking and transition support.
- State Benefits: Colorado offers certain property tax exemptions for qualifying disabled veterans.
- Community Programs: Discounts, scholarships, and recreational opportunities tailored to military families.
The Role of a Financial Professional
Working with a financial professional who understands military life can help families coordinate all aspects of their financial picture. This includes integrating military benefits with civilian opportunities, planning for retirement transitions, and preparing for unexpected changes.
At Concerto Financial, we strive to help military families in Colorado Springs create strategies that align with their priorities, resources, and future plans.
Final Thoughts
Military life in Colorado Springs offers a rich community and valuable benefits, but it also comes with complexities that require careful planning. From managing relocations and maximizing military benefits to preparing for civilian transitions, a well-structured approach can help service members and their families navigate each stage with clarity and confidence.
If you are an active-duty service member, veteran, or military spouse in the Colorado Springs area and want to explore how your benefits, resources, and goals fit together in a tailored financial plan, contact Concerto Financial today to schedule a conversation. We are here to help you address your unique needs and prepare for the next chapter of your journey.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
Key Takeaways
- Colorado Springs’ strong military presence shapes housing, cost of living, and available resources for service members.
- Frequent PCS moves impact homeownership decisions, moving expenses, and state residency for taxes.
- Military pay has unique benefits like tax-free housing and subsistence allowances that affect budgeting and savings.
- Deployments require planning for legal documents, family access to finances, and opportunities to save with special programs.
- Retirement planning centers on pensions, TSP strategies, healthcare shifts, and moving into civilian careers.
- Education benefits such as the GI Bill and 529 plans support both children’s schooling and service member studies.
- Insurance and estate planning are critical—SGLI, disability coverage, wills, and guardianship help protect families.
- Tax rules like combat zone exclusions and residency protections create special advantages for military households.
- Flexible financial planning with local support and professional guidance helps families adapt to constant change.