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Heroes Earned Retirement Opportunities Act (HERO)


The Heroes Earned Retirement Opportunities Act (HERO) is a U.S. law enacted in 2006 that allows members of the United States military to include their tax-free combat pay into the earned income category for purposes of contributing to an Individual Retirement Account (IRA), thus increasing the IRA’s tax benefits. Previously, this form of pay was not included, limiting the contribution capability of military personnel. The HERO Act thus provides military personnel with enhanced opportunities to save for retirement.


H-E-R-O, Heroes Earned Retirement Opportunities Act, is pronounced as “hee-roh.”

Key Takeaways

  1. The Heroes Earned Retirement Opportunities (HERO) Act aims to reduce the tax burden on the service members’ retirement accounts. It permits the members to contribute to their IRAs even though their income is nontaxable, thereby enabling them to build more substantial retirement savings.
  2. The HERO Act enhances veterans’ financial wellbeing by enabling tax-free combat zone payments to be considered as income for IRA contribution purposes. Therefore, making veterans eligible for tax-deductible contributions.
  3. The Act is retroactive. It applies to any contributions made after December 31, 2003, allowing any military personnel who have been in a combat zone during this period to retroactively fund their IRA accounts for the years they’ve served.


The Heroes Earned Retirement Opportunities Act (HERO Act) is vitally important as it concerns the financial well-being and future of military personnel in the United States. Implemented in 2006, the act permits members of the U.S. military to include their non-taxable combat zone compensation into their earned income for the purpose of contributing to an individual retirement account (IRA). This provision essentially addresses an income discrepancy issue and allows U.S military personnel serving in combat zones to save for their retirement and benefit from tax advantages simultaneously. Hence, the HERO Act plays a significant role in providing equal financial and retirement planning opportunities for those who serve their country.


The Heroes Earned Retirement Opportunities Act (HERO) serves the significant purpose of supporting members of the US military by enhancing their retirement savings options. Enacted into law on May 29, 2006, the HERO Act allows service members, including those in combat tax-exempt zones, to contribute to their Individual Retirement Accounts (IRAs). This was not permissible before the establishment of the HERO Act as the previous legislation limited IRA contributions to taxable income only, a restriction that downplayed the investments of military personnel who often receive portions of their income as tax-free, particularly when deployed in combat zones. HERO is used primarily to incentivize retirement savings among active duty military members. It eliminates certain barriers, thereby enabling them to make the most out of their income, regardless of the source or nature of their earnings. The Act comes as a significant financial planning tool enabling the affected military personnel to secure their financial future by taking advantage of the potential benefits of long-term investment growth. The implementation of the HERO act therefore manifested as a significant milestone and an advantageous modification for the military personnel aiming at efficient retirement planning.


As an AI developed by OpenAI, I don’t have real-time access to real world examples or direct usage of the Heroes Earned Retirement Opportunities Act (HERO). However, I can explain general hypothetical examples of how the Act might be applied in a real-world context. The Heroes Earned Retirement Opportunities Act was enacted in 2006 in the United States to allow deployed military personnel to contribute tax-deferred income earned in combat zones to their Individual Retirement Accounts (IRA).1. If a US soldier is deployed in a recognized combat zone for a prolonged period, his/her income during this deployment is not subjected to the usual income tax. This provides an opportunity for the individual to contribute more effectively toward their IRA for their retirement.2. A military officer, due to the HERO Act, can increase contributions to their Roth IRA with their tax-exempt combat pay, allowing for more tax-free growth and tax-free withdrawals upon retirement.3. A National Guard Member, while deployed overseas in a combat zone, can add his/her untaxed income to a traditional IRA and defer taxes until withdrawal after retirement. This would provide additional savings and leverage for retirement planning, thanks to the HERO Act.Remember these are general hypothetical examples and the actual application can vary due to individual circumstances and factors.

Frequently Asked Questions(FAQ)

What is the Heroes Earned Retirement Opportunities Act (HERO)?

The Heroes Earned Retirement Opportunities Act, also known as the HERO Act, is a piece of U.S. legislation that enables the members of the military to include their tax-free combat pay into their eligibility for retirement contributions.

When was the Heroes Earned Retirement Opportunities Act established?

The Heroes Earned Retirement Opportunities Act was established and signed into law on May 29, 2006.

Who is eligible to benefit from the HERO Act?

All active duty military personnel who generate tax-free combat pay are eligible to benefit from HERO Act provisions.

How does the HERO Act benefit military personnel?

The HERO Act allows military personnel to increase their contributions to retirement plans due to their ability to count tax-free combat pay for retirement purposes.

What retirement accounts does HERO Act pertain to?

The HERO Act applies to contributions to Individual Retirement Accounts (IRAs), both traditional and Roth, as well as other retirement saving methods.

Are there specific contribution limits under the HERO Act?

The contribution limits under the HERO Act are in line with those of conventional IRAs. This means that the limits may change year by year. Please refer to the current year’s IRA contribution limits for correct figures.

Where can one get more information on the HERO Act?

More comprehensive information regarding the HERO Act can be obtained from the Internal Revenue Service’s (IRS) official website or from a financial advisor knowledgeable about military benefits and retirement planning.

Can military personnel combine HERO Act benefits with other retirement benefits?

Yes, the HERO Act is designed to complement standard retirement benefits allowing military personnel to save more efficiently for retirement. However, it’s always important to consult with a financial advisor to understand how these can be best optimized.

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