Kevin McCormally: I am Kevin McCormally of Kiplinger's. I am here with Kim Lankford, the contributing Editor of Kiplinger's Personal Finance Magazine, to talk about retirement savings for military families. Kim, I know folks in the military have got a really good pension, do they really need to save more for retirement?

Kim Lankford: Well, actually they need to save for retirement on their own as well. The pension can be really generous if you stay for 20 years. But unlike many other pension plans, there is no partial investing. So, if you leave 17, 18 years, you get nothing.

Kevin McCormally: So, what should they be doing?

Kim Lankford: The Thrift Saving Plan is a great opportunity for military members to save and that pre-tax money that grows tax deferred, they can access on retirement.

Kevin McCormally: So, it's like a 401(k)?

Kim Lankford: It's a lot like a private sector 401(k). In fact, the limits are pretty much the same. You can save $15,500 in 2008 but you get extra bonus if you are deployed to a combat-zone.

Kevin McCormally: What's that?

Kim Lankford: Well, then you can actually save up to $46,000 per year.

Kevin McCormally: Well, who could afford $46,000 a year?

Kim Lankford: Well, people in a combat-zone actually get an extra benefit because their pay while they are gone is tax free. So, you are getting a little bit of extra money, it can help you boot at least for a little bit and really help with your retirement plan.

Kevin McCormally: Can military members also have an IRA?

Kim Lankford: Yes, they can and in fact, it's a great idea and the law recently changed to make it easier for people who are deployed to contribute to an IRA. In the past, their combat-zone pay and tax-exempt pay didn't count towards IRA eligibility but now, it does.

Kevin McCormally: Okay, one final question; I have heard about some special account that guarantees people in the military a 10% return. Is that possible?

Kim Lankford: It is actually true. It's a Savings Deposit Program that while you are deployed to a combat-zone, you can contribute up to $10,000, keep that money there while you are gone and up to three months afterwards, you are guaranteed a 10% return.

Kevin McCormally: Thank you very much, Kim.