Coming Home Wealthy: Post‑Deployment Money Strategies That Actually Work

Deployments aren’t just about surviving long days and dangerous missions- they can be one of the most powerful wealth‑building moments in a service member’s life. With tax‑free income, special pays, and access to high‑yield programs you simply can’t get in the civilian world, a single tour can fast‑forward your financial future by years. When that extra cash is channeled into smart moves like automated investments, debt destruction, and strategic saving, it can fund everything from a first home to a business launch or a college degree. And when cities, employers, and community programs step up to support veterans’ financial health, the payoff isn’t just personal- it strengthens entire families and communities.

Maximizing Deployment Pay and Benefits

One of the most significant financial advantages during a deployment is the eligibility for special pay and tax exemptions. Service members in combat zones often receive Hostile Fire Pay (HFP), Imminent Danger Pay (IDP), and Family Separation Allowance (FSA), among others. These additional entitlements can significantly increase monthly earnings. In designated combat zones, base pay, bonuses, and certain allowances are also exempt from federal income tax, which can provide immediate and noticeable improvements in take-home pay. For example, a staff sergeant deployed to a combat zone can save several thousand dollars annually due to tax exclusions alone, depending on their length of deployment and duty location.

To fully benefit from these entitlements, service members should review their Leave and Earnings Statement (LES) regularly and confirm that all eligible pays are reflected accurately. Errors in entitlements are not uncommon, and early detection ensures timely correction. Command finance offices and unit-level administrative staff can assist in resolving discrepancies. Additionally, understanding the duration and eligibility criteria of each type of special pay can help service members make informed decisions about volunteering for deployments or extending them when financially advantageous. The Defense Finance and Accounting Service (DFAS) provides updated guidance on these pays and should be referenced regularly during deployment planning and execution phases.¹

Automating Investments While Abroad

Deployments present a unique opportunity to automate financial growth. With reduced living expenses and increased pay, service members can allocate more toward long-term investment vehicles. The Thrift Savings Plan (TSP), a government-sponsored retirement account for military personnel, allows automatic deductions from monthly pay. During deployments, contributing to the TSP with tax-exempt income can offer both immediate and future tax advantages. Roth TSP contributions, which are made with after-tax dollars, can be particularly effective, as they allow for tax-free withdrawals in retirement.

Beyond the TSP, service members can consider setting up automatic transfers to brokerage accounts or Individual Retirement Accounts (IRAs). Many financial institutions offer military-friendly services, including lower fees and mobile access, which are critical when stationed overseas. Auto-investing in diversified index funds minimizes the need for constant monitoring and leverages dollar-cost averaging to mitigate market volatility risks. Service members should also ensure their financial institution is compatible with the Servicemembers Civil Relief Act (SCRA), which can reduce interest rates on pre-service debt and provide legal protections.²

Building Emergency Funds and Reducing Debt

While the temptation during deployment may be to spend increased income on immediate comforts or large purchases, prioritizing the creation of an emergency fund is critical. Financial advisors typically recommend saving three to six months' worth of expenses, and a deployment is an ideal time to achieve this goal. Allocating even a portion of combat zone tax-exempt pay to a high-yield savings account can provide a safety net for post-deployment transitions, such as a PCS move or unexpected family expenses.

Debt reduction should also be a strategic focus during deployments. Paying down high-interest credit cards, personal loans, or auto loans can significantly improve long-term financial health. Utilizing DFAS's automatic allotment system, service members can direct specific amounts from their paychecks toward debt repayment, ensuring consistency. In my experience, some of the most financially resilient service members upon return from deployment were those who paid off substantial portions of their debt systematically during their time overseas. The Service Members Opportunity Colleges (SOC) and Military OneSource also offer debt-reduction counseling and tools tailored to military life.³

Leveraging Savings Deposit Program (SDP)

For those looking for a guaranteed return during deployment, the Department of Defense offers the Savings Deposit Program (SDP). Eligible service members deployed in designated combat zones for at least 30 consecutive days can contribute up to $10,000 to this program, earning 10 percent annual interest compounded quarterly. This rate far exceeds typical savings and money market accounts, making it an attractive short-term investment tool. The interest accrues while the service member remains in the qualifying area, and funds can be withdrawn after redeployment.

Despite its high yield, many service members are not aware of the SDP or fail to enroll due to administrative oversight. Units should incorporate SDP briefings into pre-deployment financial readiness training. Enrollment is typically completed through the local finance office or via myPay. To maximize returns, service members should deposit funds early in the deployment cycle and aim to reach the $10,000 cap as soon as feasible. Coordination with family members or financial power of attorney holders can also ensure that contributions continue even if the deployed member faces connectivity issues or restricted access.⁴

Post-Deployment Financial Planning and Support

Returning from deployment presents both challenges and opportunities in financial management. The influx of cash from saved deployment income can be used to achieve major goals such as home purchases, educational expenses, or business startups. However, without a structured plan, this money can be quickly depleted. Post-deployment financial counseling, offered by installation-based Personal Financial Managers (PFMs), can guide service members through budgeting, investment planning, and major financial decisions. These consultations are free and confidential, and they often include tools to assess credit scores, mortgage readiness, and insurance needs.

Service members should also update or create a long-term financial strategy upon reintegration. This includes revisiting the TSP or other retirement accounts, adjusting insurance coverage, and setting new savings goals. If the member has transitioned to a new duty station or left active service, understanding changes in income, housing stipends, and benefits is essential. The transition assistance program (TAP) includes financial planning modules that can help ensure continuity in financial growth beyond military service. Municipal agencies that hire veterans can also support them by connecting them to local financial empowerment programs and veteran-specific services.⁵

Municipal Partnerships and Veteran Financial Empowerment

Local governments can play a pivotal role in supporting the financial resilience of returning service members. By partnering with veteran service organizations, credit unions, and nonprofit financial literacy programs, municipalities can create pipelines for education and support. Initiatives like low-interest home loans, small business grants, and financial coaching can be tailored to veterans' unique needs. Municipal workforce development offices can also integrate financial literacy into job readiness programs for veterans transitioning into civilian roles.

From a policy perspective, local leaders should ensure that veterans and military families are included in financial well-being initiatives. This may include offering workshops tailored to deployment-related finances, creating advisory boards of veteran residents, or leveraging federal funding through programs like the Community Development Block Grant (CDBG) to support veteran-owned business development. These efforts not only assist service members in maintaining financial progress post-deployment but also strengthen community resilience through veteran engagement and economic participation.⁶

Bibliography

1. Defense Finance and Accounting Service. “Special and Incentive Pays.” Accessed April 10, 2024. https://www.dfas.mil/militarymembers/payentitlements/Special-and-Incentive-Pays/.

2. Office of Financial Readiness. “Investment Options for Service Members.” Department of Defense, February 2023. https://finred.usalearning.gov/Investing/InvestmentOptions.

3. Military OneSource. “Managing Debt While Deployed.” Department of Defense, 2023. https://www.militaryonesource.mil/financial-legal/personal-finance/debt-management/.

4. Defense Finance and Accounting Service. “Savings Deposit Program.” Accessed April 10, 2024. https://www.dfas.mil/militarymembers/payentitlements/sdp/.

5. Transition Assistance Program. “Financial Planning for Transitioning Service Members.” Department of Labor, 2023. https://www.dol.gov/agencies/vets/programs/tap.

6. National League of Cities. “Local Strategies to Support Veterans' Financial Empowerment.” November 2022. https://www.nlc.org/resource/local-strategies-to-support-veterans-financial-empowerment/.