The Martins: Millionaires in the Making
NEW YORK (CNNMoney.com) - For most of us retirement comes at the end of our career. But for Jeff Martin, 34, retirement from the Army is just over the horizon. Martin is five years away from being able to leave the Army with a pension of half his current monthly income, which today is $4,256.
Jeff, a native of Carrollton, Ohio, joined the Army out of high school in 1990 and has been promoted up to the rank of Warrant Officer. He works as a Legal Administrator, similar to a law office manager in the civilian world.
His wife Getriz Martin, 31, who goes by the name Jet, just started work as a civilian nurse in a position the couple expects to gross $5,500 per month. Jet takes home an additional $300 per month as an Army Reservist.
Now stationed at Fort Lewis, Washington, the couple has lived around the country and the world, including Washington DC, Georgia, Korea, Kansas City - Jet's hometown where the couple met - Colorado, Italy and Washington State. Jeff also served in Afghanistan while stationed in Europe.
Jeff is not sure what line of work he'd like to pursue when he leaves the Army. He could even reenlist. But he and Jet talk about the possibility of retiring in their 50s.
They have amassed $240,000 in savings and investments, taking advantage of plans offered to members of the armed services. "I really enjoy the thrill of watching my money grow, sometimes ever so slowly, but knowing that I have been doing this for 15 years in the Army," said Jeff.
Real estate has also helped. They bought and lived in a house in Colorado Springs in 2002 when they were stationed there. They now rent it, with the help of a property manager. The $945 the couple takes in on rent, after the management fee, is actually less than the $1,243 the Martins pay on its monthly mortgage. "The difference in depreciation and interest eases our taxes," Jeff said.
The Martins are looking for another home in Washington State. In addition to Jeff's base salary, he receives $1,684 per month in the form of a tax-free housing allowance. "We try to leverage the housing allowance to the best of our ability."
Taking advantage of benefits
Both husband and wife have taken advantage of the education funding offered by allowing the Army to pay for 75% of their tuition. Jeff got his BS in Management and his Masters in Computer Resources and Information Management. Jet is attending classes part time to get her Bachelors of Science in Nursing.
Another advantage the Martins enjoy is the Thrift Savings Plan, a benefit offered to government employees and military members. The plan works like a simplified, government run 401(k) that allows members to divert portions of their income into six types of mutual funds.
Jeff diverts 25% of his income into his TSP account nearly reaching the IRS cap of $15,000 a year. Military personnel aren't entitled to the same matching program civilian employees like Jet are. Since Jet worked as a nurse in a clinic while they were stationed in Italy, her TSP and vacation will carry over to the new job she's just begun at a hospital on base. The couple plans to max out Jet's TSP as well.
Although the Martins are rigorous about their savings, they don't live a Spartan existence. They love to travel and vacationed in London, Paris, Prague and Budapest while they were stationed in Europe.
They own three cars. A 2000 Miata paid for in cash as a "bit of a reward to ourselves" that "gives us something fun for day trips on the weekends to the islands and coastal areas of Washington State." A 2005 Acura TL for which Jeff pays $1,000 a month and is on track to pay off by the end of the year - 2 years ahead of schedule. And he still owns the first car he ever bought new - a '96 Chevy Cavalier Z24.
"I feel good that we are making the right choices along the way to at least position ourselves for a retirement where we don't outlive our money."
Jeff is considering becoming a teacher or a financial planner after the military. In the course of his job, Jeff has occasion to speak with young privates who are just getting their first paycheck. Often, they have little financial sense, so Jeff offers them some pointers about saving and investing. "I enjoy seeing them get excited about saving and showing them that it doesn't take much if you start early."
"You should be able to have some fun with your money," Jeff says, especially since many soldiers today get deployed in highly stressful environments for long periods. At the same time, he believes people should "show some discipline and position [themselves] for a future that includes not working in your retirement years."
Jeff wants other soldiers to know "you can start as a private and by being patient and taking a disciplined approach you can save tremendous amounts of money over your career." After all, he did and the Martins will be enjoying it for years to come.
CORRECTION: An earlier version of the story stated Jeff Martin would receive a pension amounting to 50% of his current monthy income of $5,940. In fact, Martin's monthly income is $4,256 - he also receives $1,684 each month in housing allowance, but that amount is not included in the pension calculation.
By Christian Zappone, CNNMoney.com staff writer, December 26 2006: 5:17 PM EST