René Bruer remembers that when he was a 21-year-old Marine at Camp Pendleton in Southern California 17 years ago, he was sold a variable universal life insurance plan by an insurance agent.

“My wife and I needed life insurance, and we didn’t know any better,” says Bruer, currently a Tallahassee, Fla., financial advisor with Smith Bruer Advisors. The VUL product was sold for its cash value, but Bruer says it wouldn’t have helped him if he had been killed on the battlefield.

“What do you sell a 21-year-old Marine a VUL for? If I was to perish in battle … guess what! There is no death benefit.” It was only later on, after he became educated, that he realized he still had the policy and that it was a rip-off.

He says he was helped in that education by having the right people in his life. His father-in-law was financially knowledgeable, as were people in his chain of command. Not everyone was so lucky, he says.

“Especially with some of my enlisted colleagues on the younger side, most of them never had any financial education to speak of,” Bruer says. Predatory lenders (and other types of predators) were rampant in his world. “We always joke the most prominent things outside of a military base are pawn shops, strip clubs and payday loans.”

He says it’s important for members of the military to learn about finances when they are still on active duty, because their behavior can follow them into their lives as vets.

This month, the Finra Investor Education Foundation released a study that compared the financial situation of veterans with those of civilians. The study, called "The Financial Welfare of Military Veterans," says that veterans are overall in slightly better financial standing than civilians. They are 22 percent less likely to be jobless; they are 2 percent more likely to enjoy health insurance coverage. They are 5 percent more likely to be happy with their financial condition and 4 percent more likely to have emergency cash.

"Veterans who retired from the military are 14 percent less likely to report difficulty covering their expenses than those who did not retire from the military," said Finra in a summary.

But on the downside, the paper found, veterans were 40 percent more likely to be underwater on their houses and 28 percent more likely to have been late with a home payment in the last year. They were 9 percent more likely to have picked up bad credit card habits, garnering late payment charges, for instance.

The research released by Finra was authored independently by William Skimmyhorn, a lieutenant colonel in the U.S. Army and a professor in the Office of Economic and Manpower Analysis in the Department of Social Sciences at West Point. He pursued this research because he says there had been little of it conducted on the financial well-being of veterans.

“The veteran population is relatively large, in excess of 20 million people, approximately 8% of the population. That’s pretty sizable,” Skimmyhorn says. “We’d like to know how they are doing. If they are not [doing well], we might think about policies that might help them.” And that policy architecture should be informed by recent data, he says.

He also says that since the military is an all-volunteer force, whose members could be seeking opportunities elsewhere, it’s worth asking whether the armed forces are providing their members with a better life during and after service. “The welfare of our veterans is critically linked to our ability to man an all-volunteer force,” Skimmyhorn says.

He used data from the 2015 National Financial Capability Study, a project of Finra’s Investor Education Foundation, sampling both military veterans and civilians (leaving out active duty service members).

Less Satisfaction 10 Years Out

In the latter part of the paper, Skimmyhorn looked within the veteran population, looking at how their situations compared among the service branches and how different their outcomes were for the length of time they’d been separated from the military. Some of those findings surprised him, he says.

“The veterans who separated 10 or more years ago,” Skimmyhorn says, “report substantially lower financial satisfaction, despite the fact that they have objectively better behaviors—less likelihood of unexpected income drops, less problems marking ends meet, having their bills exceed their income.”

He’s not sure why that is, though he thinks it could have something to do with our current times—the 2008 financial crisis might have affected the outlook of this cohort. Or the disparity could have something to do with the higher financial expectations people have at that age.

Bruer, whose fee-only Tallahassee RIA manages just under $80 million for 90 households, doesn’t target veterans directly in his practice (only about 10% of his clients are ex-military) but he says veterans do respond well to others veterans when seeking advice and he offers them financial education.

“I think one of the biggest things that a lot of guys in the military don’t take advantage of is some of the benefits that you have,” Bruer says. “They don’t know about the housing benefit of VA loans. They don’t know all the benefits they can have based on their disability rating from the VA. The VA overall is not easy to deal with. So you really have to do a lot of homework and a lot of research to know what you are entitled to. There are resources out there like the Disabled American Veterans or the American Legion and these nonprofits, and they can guide you but you have to be your own best advocate. Cause if you don’t know and you’re not advocating for [yourself], others will try but will more likely than not fall short.”

There are a wide variety of veteran benefits out there, and they differ by state, according to the American Legion site. For example, Indiana offers free tuition at state schools to the children of disabled veterans. Veterans can attend Connecticut public colleges and universities tuition-free. Oklahoma law exempts certain veterans from property taxes.

Skip Fleming, a retired Marine Corps officer and pilot who works with veterans and active duty members of the military as a planner at Lodestar Financial Planning in Colorado Springs, says veterans are indeed in better shape with health-care benefits since they have access to military health benefits at reduced costs. “Certain benefits help them along the way. Great medical coverage. Good benefits if they stay and retire after 20 years.” However, he chafes at some of Skimmyhorn’s conclusions about veteran financial well-being in general, saying vets come from all walks of life and varying financial wisdom.

Fleming says he knows active duty members, senior duty NCOs and officers that have a certain amount of discipline in their lives that has carried over to their finances; he sees them as no more credit-prone than your average citizen.

He says comparing veterans financially is like comparing people with brown hair. “It’s tough to generalize people, so the report did them a little bit of injustice.”

But military personnel do face financial choices that civilians don’t, says Fleming. For instance, in the next year, they are going to have to decide whether to stay with the old retirement system or change over to the blended retirement system, which includes payments into the Thrift Savings Plan. The TSP was added to help those who don’t stay in the military long enough to draw a pension (20 years). Those in the new system get TSP matches of up to 5 percent if they stay in the military two years, but those matches can also affect their long-term pension if they stay the full 20 years, says Fleming.

“They have the option of making voluntary contributions to the Thrift Savings Plan, which is a 401(k). … If they opted into the blended retirement system they would have the benefit of up to a 5 percent match on their [TSP] contributions. But if they stayed for 20, that would mean a reduced pension, so instead of getting a pension in 20 years, the pension would be reduced because of the match.

Younger people who aren’t sure they are going to stay for 20 years are likely to want to opt in. “It behooves them to go in there and get the match if not more,” from the TSP, which he calls one of the best DC plans out there. But someone who has seven years or so of service already and plans on staying might want to stay in the old retirement plan and not get the match, he says.

"It is a question they are going to have to solve individually, and a lot of folks are going to have questions about that over the next year.”

The blended system goes into effect January 1, 2018.