He was making a major transition, but when Hoover McCoy retired from the Air Force, financial uncertainty and money woes were, at most, only a remote concern. After 22 years in the military, Hoover was ready to move on. It was in 2001 that the Oklahoma City resident took a position as a program analyst with the Department of Defense. Having relocated several times throughout his career, Hoover, 52, and his wife, Kathy, 49, were looking forward to staying put for a while. While in the military, the couple, along with their two sons, Hoover III and Christopher, lived in Germany, California, Kansas, and Nebraska.
Now several years later, it seems as though things have worked out well. Hoover’s civilian earnings, combined with his military pension, are almost three times more than his military salary alone. And Kathy, who had worked at a variety of jobs during Hoover’s military career, became a teacher and assistant director of the Metro Tech Head Start program in Oklahoma City. Today the couple brings in a household income of about $120,000.
While the couple’s finances are in good shape, things weren’t always so smooth. They’ve learned a number of lessons along the way. In terms of managing his finances, Hoover says that despite his nominal Air Force salary, tax savings were significant due to various tax-exempt allowances for military staff, such as the Basic Allowance for Subsistence and Basic Allowance for Housing.
After he transitioned to civilian life, however, Hoover’s financial situation became more complex as he and his wife hit a major financial road bump.
It was tax season and the couple received a $4,000 bill from the Internal Revenue Service. “After I retired, I didn’t make the necessary tax withholding adjustments,” Hoover says. “That’s why we received the tax bill.”
The McCoys had to scramble to pay off the bill, using a combination of credit cards, modest savings, and help from family members.
Credit card bills also shook things up for the couple, since much of their income had been allotted for daily living expenses and other bills. They didn’t have any real savings plan or budget. “We were floundering and coming up short when it came to paying taxes and managing our money,” Hoover says.
He needed a solution to this tax dilemma, so Hoover formulated a plan to get the family’s finances back on track, vowing to never again fall prey to unexpected tax bills and poor money management. Of course, the first priority was to adjust his federal withholdings in order to meet his annual tax obligations and avoid future bills from Uncle Sam.
Today, with a healthy annual income-and a home valued at more than $210,000-the McCoys are determined not to
let past financial mistakes creep back into their portfolio. The couple chose to make the investment of seeking professional help and began to work with Kathleen Williams, president of Williams Financial Services Group in Oklahoma City.
With her help, the couple has transformed their financial life over the past four years.
“I encouraged them to establish an