Pinto Capital Investments


Everything to Know About Military Retirement Planning

Military retirement planning is crucial for all, including those expecting to retire with a military pension.

It is common to find service members looking forward to retirement pay as the basis for future income and their quality of life. This strategy is quite myopic as you may have to retire before your transition date or meet unexpected expenses. Life after military service could be tricky, and you must invest now to relax after military retirement. It would help if you had robust military retirement planning to face the uncertain future confidently.

While all investments involve some risk, it is critical to be diligent when choosing an investment, as a bad investment could put you in financial chaos. Here, we will discuss a proven way of building wealth, securing a passive income stream, and tips on investing appropriately for the financial security of your future after military retirement.

Investment Tips for Service members

Develop a Plan

Enjoying a financially secure life post-military service does not happen by chance or default. You need thorough military retirement planning to make your switch to civilian life worthwhile. Ensure your plan covers several critical aspects like retirement cash needs and your desired retirement age. Set down annual contributions to reach your target, and investment options to help you reach your mark at your desired retirement age.

Military retirement pay will not be sufficient. You would have to create avenues to secure a steady passive income stream to complement your military pension, one of such options being a multifamily syndication investment.

Create Emergency Funds

The future is overly uncertain for one without foresight. Anything can happen. It is essential to take precautionary steps today to put yourself in a better position to face tomorrow’s challenges, especially as military service members.

These challenges could take forms like redeployment or transition to civilian life. You will need a ton of cash to settle in new housing after redeployment. Military retirees must also brace for the high unemployment rates that ravage society. In the face of these uncertainties, a financial advisor may recommend that you set aside three to six months’ living expenses as an emergency fund.


While 20 years of service makes you eligible for a military pension, it is not advisable to build your whole retirement plan on this basic pay for several reasons. You may decide at some point against doing the entire 20 years. Or maybe you find that the retirement pay is inadequate to fund the lifestyle you desire after service.

Again, retirement life is uncertain, and you must protect yourself against the unforeseen twists of tomorrow. Strive to save 10 percent of your active duty pay, which provides a crucial cushion to your finances. It is even better to over-save for retirement than to under-save or not save. If you over-save, you can redirect the money for other essentials like college expenses.

Pay Yourself Before Anything Else

Arrange for 10 percent of your basic pay to be automatically sent to a retirement account. This strategy continues to be a winning one as it is easier to spend only money available to you. If you do not have it, then you cannot spend it. That’s the trick!

If you fail to pay yourself first and instead depend on what you have left at the end of the month after expenditures, it sets you up for disappointment. Paying yourself first before anything else is crucial to reaching your financial target. There are two types of accounts we recommend you set up as an investment or saving account:

Thrift Savings Plan

TSP is a federal government-backed retirement savings plan similar to the savings and benefits private corporations offer their workers under a 401(k) plan. You can invest in a Thrift Savings Plan in different investment funds. This money only becomes taxable when you make a withdrawal.

Roth IRA

Roth IRA is more flexible than TSPs as investors have the leverage of choosing from various stock options and mutual funds. Taxing Roth IRA is the reverse of what you get with TSPs. That means your money is taxable at the current rate before contribution and not when withdrawing. Your tax rate staying the same now and when you retire will not impact your cash. However, if your tax rate rises in the future, you may prefer to pay now rather than later.


Most service members make the fatal mistake of under-saving for retirement. In line with this reality, it is advisable to choose a good investment while leaving your home out of your calculations. Nothing is worse than retiring to the street.

Never use your home to fund your retirement. You can take advantage of your home equity in the future if you choose, but there’s no reason to do so if it means you will become homeless.

Why You Should Invest in Real Estate

House for investment

Real estate investments are great and are a proven way to create generational wealth. We’ve seen over the years that people will always need a place to live. It’s fair to say real estate investment will never go out of fashion.

Here, we will pay particular interest to commercial real estate and how it can make your switch to civilian life worthwhile and seamless.

Why You Should Consider Multifamily Real Estate Investment

The very thought of buying a multifamily complex might seem daunting. Rightly so, because it’s a big deal regardless of where you live. Buying multifamily property is a solid investment. This investment is shockingly similar to buying smaller rental properties despite its magnanimity.

These apartments often require a down payment of about $100,000 or more, but even more interesting is the fact that you don’t have to cough up the whole sum to complete a purchase. There are several financial options you can explore to buy your multifamily complex.

After so many years of service, you want to transition to civilian life with ease and financial security. This desire is what you get from buying an apartment. The most outstanding advantages of buying commercial real estate are its scale, cash flow protection, and steady passive income stream.

The current shortage of affordable housing in most American cities makes apartment investing a suitable retirement plan for military retirees. It is also common knowledge that apartments are often the most affordable housing options for people looking to rent. These situations work in favor of mid-level apartment complex owners.

Would Investing in Multifamily Real Estate be Suitable for you?

While investing in apartment buildings fits perfectly into solid military retirement planning, you must also understand that it’s not for everyone. Apartments have risk-adjusted returns that should interest every investor. These returns differ from property to property and often depend on the purchase price.

You must carefully evaluate a property before purchasing. Consider different aspects like the state of the building, rental or ownership demand in the area, the relative price of the property to other similar properties, and local real estate trends.

How Owning a Multifamily Apartment provides a Robust Retirement Income

Multifamily Syndication

Buying an apartment complex is not an option that many investors consider for several reasons. Some of these reasons include but are not limited to the substantial down payment and the general management of such a massive property. It is both of these concerns that multifamily syndication looks to address.

Service members who cannot afford multifamily properties alone can do so with other interested investors. Multifamily syndication is a concept where investors pool funds to secure an apartment complex, thus splitting the reward and risk. Even more interesting about the deal is that these investors do not have to concern themselves with the day-to-day management of the property.

Street View

Syndication deals often involve the sponsor transacting with the investors. The sponsor is the deal manager and property operator who covers several responsibilities like investigating the property, rent collection, and general day-to-day property management. In contrast, investors provide a large part of the financial equity for the deal.

Both groups split financial equity, with the sponsor providing between 5 percent and 20 percent of the total equity capital. Investors cover 80 percent and 95 percent of the amount, depending on the sharing formula.

Service members can see how this can impact their lives post-retirement date by looking at this real estate investment format. After years of service, it is only fitting that you explore investment options that offer a steady passive income stream, secure cash flow, and ample time to engage in other activities you find interesting.

Multifamily syndication makes investing and reaping real estate rewards possible without necessarily being a landlord.

Cash Flow

After years of service, you want to ensure you have a steady and secure cash flow to live comfortably in retirement. One of the best things about multifamily apartment investment is the investor’s stable cash flow. This benefit is quite outstanding as it is comparable to what you would get from stocks and annuities.

You enjoy stability and protection for your cash flow even when the property has vacant units. Investors find this type of investment solid for all the right reasons. Your basic pay will likely not spiral over into retirement, thus leaving you with the full responsibility of creating a reliable retirement income that serves your interest and allows you to live the life you desire.

Passive Income

After active duty, it’s normal for ex-service members to seek money-making ventures that sustain their chosen lifestyle. The multifamily apartment investment option makes this possible.

One characteristic that makes multifamily investment unique is the passive income aspect. The big step is to secure the property. Once you achieve this phenomenal feat, you can be confident of a pure passive income stream.

When considering real estate, among other investment options, be sure to factor in the benefit of a secure passive income stream when filtering your choices. It makes a huge difference.

Tax Benefits

Another top reason to consider this investment format is the benefits of taxation. Apartment buildings fall under commercial real estate even though these properties are often for residential use. This dualism implies that investors enjoy depreciation deductions and huge mortgage interest. This depreciation schedule is often much faster than other commercial assets.

Investors can take full advantage of several tax incentives for investing in multifamily properties. These incentives include:

Depreciation Tax

The most significant commercial real estate tax incentive runs on the idea that properties depreciate over a period. The depreciation amount is the tax deduction that covers the property’s wear and tear over time.

Are you wondering how a property can depreciate while its value rises?

The IRS believes that the quality of assets diminishes with time. This concept also applies to properties allowing investors to enjoy a massive tax break from their properties, whether the same property is making a profit or depreciating.

Real Estate Deduction Tax

Deductions are expenses written off from a multifamily property owner’s taxable income. You have the right to deduct your costs in managing, maintaining, and repairing your property from your total taxable income.


Cost-segregation is similar to depreciation except that it accounts for the value of certain items in the property like appliances, cabinets, and fixtures. The IRS believes these items have a short lifecycle, thus allowing investors to write off their expenses for 7 years.

Passive income tax stimulus

People who spend over 500 hours annually on real estate pay standard federal income taxes. Spending less than 500 hours means you only have to pay passive income taxes and capital gain taxes when your property appreciates.

Federal and state taxes are generally higher than passive income taxes, implying that as an ex-service member who is not a real estate professional, you can slash your tax burden significantly with the appropriate information.


Never make the mistake of retiring without a solid plan. Your pension will not save you. You must get creative and commit enough time and resources to your military retirement planning, as this is the only way to live the way you desire in retirement.

While there are several investment options, you should go for a proven option as a bad investment can erode everything you’ve worked fo. Consider multifamily syndication as it offers an array of benefits, especially to someone who is not a real estate professional.

Anthony Pinto
Anthony Pinto
Anthony Pinto is the founder and CEO of Pinto Capital Investments (PCI), a real estate investment firm focused on acquiring affordable and workforce multifamily properties and apartment buildings through syndications. Since 2019, PCI has gone full cycle on 2 large apartment complexes (+100 units) with an IRR in excess of 85%.