Fill in the gaps to manage your cash flows

From the outside, life in the armed forces looks privileged: housing is taken care of during service, the Canteen Stores Department (CSD) offers household items, including big-ticket purchases like cars and electronics, at subsidized rates and medical expenditure is covered while you are in service and even after you retire, to a great extent. Then, there is a sizeable pension to make retirement comfortable. But when you consider the fact that signing up for the forces also means signing up to face a bullet or a bomb, or, on a less morbid note, be ready to live in remote locations away from family for prolonged periods, the privileges don’t seem abundant.

Suhas Phatak (top), a retired Air Force officer, says his equity investments helped him achieve some of his financial goals; Suhas Jatkar, a retired Army officer, says his wife couldn’t work because he had a transferable job.Though many things work in favour of military personnel from the financial standpoint, that doesn’t obviate the need for a financial plan. “Protecting the family financially and planning for life after service are the two main challenges for a military person. Many people in the military are on short service commissions. Other ranks such as jawans also retire early,” said Prakash Praharaj, founder of MaxSecure Financial Planners, a financial planning firm.

Here’s why it’s important for military personnel to have a financial plan and the things they should keep in mind.


A few factors make financial planning important for India’s military families. First, many of these are single-income households. For instance, Suhas Jatkar, 57, a retired Army officer who is now settled in Pune, says his wife who was a lawyer by profession couldn’t practise law because of the transferable nature of his job. That meant a sacrifice on his wife’s part and a single-income household. “The transferable nature of a soldier’s job makes it difficult for his wife to settle down and build her own career,” Jatkar said. That is why military families are usually vulnerable to loss of the single income they depend on.

Second, fulfilling goals such as holidays, big-ticket purchases and children’s education needs planning or such expenses can upset your cash flow. “A lot of financial decisions are taken by the spouses of serving personnel because of the serving soldiers’ long absences from home. Without proper financial awareness, they can fall prey to mis-selling,” said P.V. Subramanyam, author of Retire Rich, Invest Rs 40 a Day, and personal finance

Third, retirement comes early. “Typically, jawans retire in their mid-30s and officers in their mid-50s,” said Jatkar. “Not all of them are able to take up a new career, since they are not trained for the same.”


While financial planning is different for different individuals, the basic tenets remain the same.

This means protecting your wealth is the first box you need to tick. The good news is medical expenditure is paid for, so health insurance may not top the charts on insurance requirement.

“Armed forces personnel should look at buying a cover for children who have attained adulthood and who will no longer be covered by parents’ government-provided health insurance,” said Yashish Dahiya, chief executive officer, Policybazaar, an insurance aggregator.

“In the case of retired individuals, the government-provided health insurance scheme (ex-servicemen contributory health scheme or ECHS) is very good. However, bigticket top-up plans covering expenses from ₹5 lakh to ₹1 crore can also be very cost-effective and helpful,” he added.

Military personnel have life insurance while in service, but the cover may be insufficient. Mint spoke to some retired officers at different ranks who indicated that the life insurance cover depends on the rank and ranges from ₹50 lakh to ₹75 lakh. Financial planners advise a term insurance policy to supplement this cover. “Military officers need to top up on life insurance to ensure they are well insured. In addition, they should look at personal accident plans and critical illness cover, especially for diseases where treatment is needed abroad,” said Dahiya.

The next step is to create an emergency corpus.