Financial planner Sandra Diamond of West Financial Services
in McLean, Va. offered to help the Lesemans. Diamond has experience
with such transitions -- her husband is a Navy commander who left
active duty in 1996 to become a reservist. Here is what she suggests.
PUT OFF BUYING A HOUSE The Lesemans were on the verge
of buying a $425,000 house in Fredericksburg, Va., financing
even the 20% down payment, but decided against it at the last
minute. A wise move, Diamond says. Their $2,700 mortgage payment
would have been a full $1,000 more than the $1,695 a month they
pay to rent a three-bedroom townhouse.
BUILD A CASH CUSHION The biggest shock when a family
leaves the military is the discovery of how many freebies they
took for granted, says Diamond. "It's very hard to budget
at first because you don't realize all those expenses are there
until you actually have to start paying them." To cushion
the blow of unexpected charges, the Lesemans should build up
their savings to $13,000, or about three months' living expenses.
SEND
TRISHA TO SCHOOL Bob and Trisha would eventually like to
own a home, but right now a top priority is graduate school.
One of Bob's biggest concerns about leaving the military is
losing job security, and he wants to stay competitive by getting
his M.B.A. at an elite university like Georgetown. Trisha also
wants to get a master's degree so she can teach. Who should
go to school first? Tuition for Bob at a top business school
would cost $60,000 to $80,000, only about $7,000 of which would
be covered by the G.I. Bill. Because Trisha's education would
be much cheaper -- $2,000 to $4,000 a year part time -- she
should enroll first and then get a teaching job to help pay
for Bob's schooling.
MAINTAIN A HABIT OF SAVING Right now the Lesemans have
only $18,000 in a retirement plan, and they are saving just
$50 a month in 529 plans for Alex and Aidan. A hundred dollars
a month won't make much of a dent in either their retirement
or college needs, but Diamond wants to keep them in the habit
of saving and suggests they invest in a Roth IRA instead of
529s. That will give them the flexibility to tap the account
for either retirement or college. (You can make penalty-free
withdrawals from a Roth for college, though you'll owe taxes
on the earnings if you're below retirement age.)
Ideally, graduate degrees for Trisha and Bob will result in
an income spike that will let them save more. "It's more
important to invest in our education than to put all that money
toward retirement and find out five years from now that our careers
have stalled," says Bob.
In the meantime, Capt. Bob is trying to adjust. He wakes up
at 5 a.m. wondering how to pass the time before work. And he's
restless around the house. "It's literally a physical challenge
for him to sit still for a few minutes, just to sit on the floor
and play with the boys," says Trisha. "We're still so
new at this."
In a few years Bob could try to make his sons understand why
he had to be away for so long by telling war stories, but he's
not that kind of guy. "I don't consider myself a hero or
anything like that," he says. Someday, when they're running
down the soccer field and look over to see their dad cheering
them on, Alex and Aidan might disagree.
SEND
TRISHA TO SCHOOL Bob and Trisha would eventually like to
own a home, but right now a top priority is graduate school.
One of Bob's biggest concerns about leaving the military is
losing job security, and he wants to stay competitive by getting
his M.B.A. at an elite university like Georgetown. Trisha also
wants to get a master's degree so she can teach. Who should
go to school first? Tuition for Bob at a top business school
would cost $60,000 to $80,000, only about $7,000 of which would
be covered by the G.I. Bill. Because Trisha's education would
be much cheaper -- $2,000 to $4,000 a year part time -- she
should enroll first and then get a teaching job to help pay
for Bob's schooling.