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How Veterans Can Tap into New Workplace Tools for Emergency Savings

Transitioning from military to civilian life comes with big changes, and sometimes, unexpected expenses. From waiting for your first paycheck to covering relocation costs, it can be tough to keep your savings on track. That’s why we’re teaming up with Veterans Saves to spotlight new ways to help veterans and transitioning service members start building emergency savings. 

Thanks to the SECURE 2.0 Act, there are now new tools built right into some workplace retirement plans that make saving easier. These updates were designed to help you prepare for life’s surprises and build financial confidence as you begin your new chapter. 

Tool 1: An Emergency Savings Account Linked to Your 401(k) 

As you move into a civilian job, you might hear about something called a sidecar account or Pension-Linked Emergency Savings Account (PLESA). It’s a new kind of after-tax savings account that’s connected to your workplace retirement plan. 

Here’s how it works: 

  • You can contribute up to $2,500 per year. 
  • Withdrawals are allowed at least once per month with no penalties. 
  • The first four withdrawals per year are free. 
  • Your money is invested safely, often in stable value or money market funds. 
  • It’s designed for non–highly compensated employees, so many transitioning veterans will qualify. 

Not every employer offers this benefit yet, so check in with your HR or benefits team to see what’s available and how to enroll. 

Why it matters:
This account gives you a simple way to build emergency savings without touching your retirement funds or relying on high-interest credit cards or loans. This is especially important when your income and expenses are shifted during a transition. 

Tool 2: $1,000 Emergency Withdrawal from Your 401(k) 

If you already have a 401(k) through your employer, there’s another helpful feature under the SECURE 2.0 Act: a one-time $1,000 emergency withdrawal without paying the usual 10% early withdrawal penalty. 

Here’s what to know: 

  • You can self-certify your emergency, no extra paperwork required. 
  • You’ll still pay regular income tax on the amount you withdraw. 
  • You have three years to repay the funds if you choose. 
  • If you don’t repay, you’ll need to wait three calendar years before using this option again. 

This tool can provide fast access to cash when the unexpected happens. Just make sure to understand the rules and how it fits into your long-term savings goals. 

How to Get Started 

Start by talking with your HR or plan administrator. These tools are optional, and not every employer has rolled them out yet, but asking can help put them on the radar. 

A few ways to set yourself up for success: 

  • Enroll and set up small, automatic contributions. Even $10 a week adds up! 
  • Learn how withdrawals work ahead of time, so there are no surprises later. 

Use These Tools Wisely 

These programs are not meant to replace your long-term goals, they are there to help when times get tough. Think of them as a safety net, not your main plan. 

At Central One Federal Credit Union, we encourage our members to build a separate emergency fund whenever possible. Whether it’s through a traditional or high-yield savings account, that extra cushion should be your first line of defense. And if you ever need to dip into one of these workplace options, that’s okay, just make a plan to rebuild what you’ve used. 

Why This Matters for the Veteran Community 

Whether you’ve just left the military or you’re a few years into civilian life, these tools were created to make saving easier for hardworking families, including veterans. Even a small amount, like $500, can bring real peace of mind when the unexpected happens. 

You’ve already built discipline, resilience, and focus through your service. These same skills can help you strengthen your financial future, one step at a time. 

You’re Not Alone 

We’re proud to support the financial wellness of veterans in our community. Together with partners like Veteran Saves, we believe that anyone, no matter their rank, income, or career stage, can build savings and financial confidence. 

Programs like the Veterans Benefits Banking Program (VBBP), created in partnership with the Department of Veterans Affairs and the Association of Military Banks of America (AMBA), connect veterans with trusted banks and credit unions that understand military and Veteran needs. Through VBBP, you can access safe accounts, financial education, and tools to manage your benefits more effectively. 

Ready to take the first step?

Commit to your goals by taking the Veteran Saves Pledge. You’ll get access to personalized tips, encouragement, and resources to help you stay on track and make saving a lifelong habit. 

When you have the right tools and the right financial partner, you’re not just saving money. You’re building peace of mind. 

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Adjustable Rate Mortgages

  • The 15/5 Adjustable Rate Mortgage offers a fixed APR of for the first 15 years then adjusts to a new rate every 5 years.

    Term: Available for terms up to 40 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies, or we will not be able to process your application. Payments do not include taxes and insurance. 

    Begin the Application Process Check Rates

  • The 15/5 Adjustable Rate Mortgage offers a fixed APR of for the first 15 years then adjusts to a new rate every 5 years.

    Term: Available for terms up to 40 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application. Payments do not include taxes and insurance. 

     

    Begin the Application Process Check Rates

  • The 10/5 Adjustable Rate Mortgage offers a fixed APR of for the first 10 years then adjusts to a new rate every 5 years.

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application. Payments do not include taxes and insurance. 

     

    Begin the Application Process Check Rates

  • The 10/5 Adjustable Rate Mortgage offers a fixed APR of for the first 10 years then adjusts to a new rate every 5 years.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30-year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies, or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 5/1 Adjustable Rate Mortgage offers a fixed APR of for the first 5 years then adjusts to a new rate every 1 year.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30-year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 5/1 Adjustable Rate Mortgage offers a fixed APR of for the first 5 years then adjusts to a new rate every 1 year.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies, or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 3/3 Adjustable Rate Mortgage offers a fixed APR of for the first 3 years then adjusts to a new rate every 3 years.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 3/3 Adjustable Rate Mortgage offers a fixed APR of for the first 3 years then adjusts to a new rate every 3 years.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 1/1 Adjustable Rate Mortgage offers a fixed APR of for the first 1 year then adjusts to a new rate every 1 year.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30-year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 1/1 Adjustable Rate Mortgage offers a fixed APR of for the first 1 year then adjusts to a new rate every 1 year.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

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