Financial Direction Assistance

https://www.va.gov/manage-va-debt/  ~  Get answers to common questions about managing debt related to VA disability compensation, non-service-connected pension, and education benefits.

Annuity.org ~ https://www.annuity.org/financial-literacy/veterans   "When it comes to preparing for the golden years, veterans and their families have many resources at their fingertips. They include pensions, a civilian income, Social Security (or possible disability income), VA healthcare and tax-advantaged savings.  Find out what benefits are available to you and how eligibility is determined."

Qualifying for Military Benefits

Military veterans may be eligible for tax-free monthly monetary benefits based on their current circumstances, discharge conditions and record of service. While the U.S. Department of Defense offers a variety of benefits to meet health and income needs, three of the most common are disability, veterans and retirement pensions.

VA Disability Payments

Veterans with disabilities related to a disease or injury that occurred or was exacerbated during active military service may be eligible for disability benefits. Benefits are available for mental and health conditions. Compensation may also be available for disabilities suffered after military service that are considered related to disabilities suffered in service. Covered disabilities may also happen after service that are presumed related to the circumstances of service. The level of compensation is related to the degree and severity of disability. Medical records should show evidence of how the disability connects to service. Additional special monthly compensation is available to veterans with special circumstances, such as needing an attendant or a specific disability, such as the loss of use of a hand or leg.

Veterans Pension

The U.S. Department of Veterans Affairs (VA) offers a needs-based, tax-free paid benefit, known as the Veterans Pension, to qualifying applicants. This is considered supplemental income for wartime veterans. Veterans discharged under dishonorable conditions are ineligible. You must have served at least 90 days of active duty, including at least 1 day during a period of war. The amount of benefit is based on yearly family income. If you entered active duty after Sept. 7, 1980, you must have served at least 24 months or the full period in which you were called or ordered to active duty, with at least one day during a wartime period.

In addition to meeting the service requirements, to qualify for the pension, the veteran must also meet one of the following conditions:

• Age 65 or older

• Totally and permanently disabled

• Patient in a nursing home receiving skilled nursing care

• Receiving Social Security Disability income

• Receiving Supplemental Security income

Your net worth also has to be less than the level set by Congress to qualify for a Veterans Pension benefit. For 2023, that amount is $150,538.

Your maximum annual pension rate (MAPR) amount is based on the number of dependents you have; whether you’re married to another Veteran who qualifies for a pension; and the level of your disability, if applicable.

Military Retirement Plan

As of Jan. 1, 2018, the military retirement system underwent major changes. The former system was a defined pension benefit, with no requirement from participants to pay in. The new system requires military members to contribute to their own retirement. Members of the military enrolled as of Dec. 31, 2017, were grandfathered under the legacy system were not be switched automatically to the new system. However, service members with fewer than 12 years since their pay entry pay date and members of the reserve who have accrued fewer than 4,320 retirement points as of Dec. 31, 2017, had the option of participating in the new system. The opt-in period ended Dec. 31, 2018. Nearly 1.6 million service members at the time were eligible to make this choice or remain in the legacy plan.

Automatic Enrollment

All service members who entered the military as of Jan. 1, 2018 were automatically enrolled in the new system, referred to as the Uniformed Services Blended Retirement System (BRS.)

To those who have the option, Defense Department suggests service members use training and informational tools, including the BRS Comparison Calculator and numerous online BRS resource materials. The new plan will allow the 83 percent of service members who do not stay in the military the full 20 years required to get a pension to save some money toward retirement.

Similar to 401(k)

The Department of Defense says the new system blends a smaller, traditional defined benefit pension with a defined contribution system of automatic and matching government contributions through the Thrift Savings Plan (TSP). A TSP is similar to a 401(k) in the civilian world. The new system decreases the pension by 20 percent and decreases the disability retirement calculation in order to prove a 5 percent government match to TSP accounts. The matching will end after 26 years of service.

Legacy System

Under the legacy system, veterans who served in the military for 20 or more years are eligible for a retirement pension based on percentage of basic pay. How this is calculated also depends on what year you entered the service. Changes were made for those who entered after September 1980 and August 1986.

Education

Many former service members are eligible for money to put toward education. Eligible veterans can receive up to 36 months of education benefits under the Post-9/11 GI Bill. Benefits are available for 15 years since the last period of active duty of at least 90 consecutive days. The Forever GI Bill, which became law in August 2017, expanded these benefits. One expansion under the law was to remove the 15-year restriction for those discharged on or after Jan. 1, 2013.Veterans and their dependents are eligible for in-state tuition rates in all 50 states if they enroll within three years of discharge.

Veterans and Social Security

Most veterans are eligible for both Social Security payments and benefits tied to their military service. In 2019, more than 9 million veterans received Social Security benefits. The majority of beneficiaries served from 1955 to the end of the Vietnam War in the mid-1970s. Qualifying for these benefits requires working for a minimum number of years, although in some cases military pay may qualify for Social Security earnings during active duty or training.

Extra Earnings

If you were in the active military service from 1957 through 1967, special extra earnings are added to your earnings record when you apply for Social Security retirement benefits. If your active duty was after 1967, the extra earnings are already on your record.

Social Security Earnings

If you were in the military from 1940 through 1956, including attendance at a service academy, you did not pay Social Security taxes. However, your records are credited with special earnings that may help you qualify for Social Security and Medicare or increase the amount of your Social Security benefit. There is no reduction in Social Security retirement benefits because of military retirement benefits.

Some disabled military veterans are able to receive Social Security disability insurance benefits, as well.

Eligibility

Like all Americans, veterans can start receiving benefits at age 62. But the earlier you start getting them, the more the monthly amount is reduced. If you can wait until full retirement age, which changes depending on the year you were born, you can receive full benefits and income.

Former service men and women can qualify for additional benefits. The SSA evaluates military records when claimants apply for benefits, and qualifying veterans can get a lifetime earnings credit for wages during service. Eligibility is based on length of service.

Double-Dipping

A veteran’s best strategy for a financially healthy retirement includes double-dipping, which means collecting veterans retirement benefits while still working full-time (or as a contractor) in the private sector. Critics of this practice argue that veterans are compensated enough without income from a second (or third) job, either in a civilian or government position.

Others see the ability to earn extra income as a benefit of the hard years of service. Although the law generally prohibits drawing two salaries from the federal government, military retirees are exempt. People on terminal military leave may work as civilian federal government employees, collecting both their military pay and their salary in their new government job.

Triple-Dipping

The Government Accountability Office reported that in 2014 nearly 60,000 disabled veterans received cash benefits from three federal programs simultaneously. Some received up to $200,000 in benefits from federal salaries, military pensions, disability income and Social Security payments.

It’s legal to access benefits on multiple fronts like this, but this may eventually put a strain on disability programs and other government benefits.

Taking Advantage of Veterans Savings Plans

The federal government sponsors a special veterans savings and retirement plan called the Thrift Savings Plan (TSP). The TSP is a defined contribution plan, similar to 401(k)s.

Established as part of the Federal Employees Retirement System Act of 1986, the plan includes tax incentives and professionally managed funds. Because this account is designed for long-term savings, it carries penalties for early withdrawals.

Veterans can also choose a Roth-type TSP, which can include contributions from tax-exempt combat pay and can draw interest over a period of years.

Providing for Dependents and Survivors

The VA pays eligible survivors of those who die in the line of duty or from service-related injuries and diseases. This benefit, known as Dependency and Indemnity Compensation (DIC), can extend to parents of deceased service members.

Another VA benefit available for survivors is the survivor pension program. This is for low-income, un-remarried surviving spouses and unmarried children of deceased veterans with wartime service.

Military employees have the option of paying premiums to participate in the Survivor Benefit Plan (SBP), an insurance plan that helps account for lost income when the service member dies. Eligible survivors receive inflation-adjusted monthly payments.

The government also offers life insurance options for veterans, including Service Disabled Veterans Insurance, Veterans Group Life Insurance and Family (SGLI), Traumatic Servicemembers’ Group Life Insurance (TSGLI), and Veterans Mortgage Life Insurance. These low-cost options allow veterans to provide financial security for dependents.

The government pays a death gratuity of $100,000 to the next of kin for armed service members who die on active duty or while traveling to or from active duty. This payment is also available for the family of service members who die in other circumstances, such as while training or traveling to or from training.

Steering Clear of Scams That Target Veterans

A 2017 study by the AARP Fraud Watch Network found twice as many veterans as non veterans lost money to scam artists over the previous five years. The study, based on a survey, found that 16 percent of veterans had lost money to scams, compared with 8 percent of nonveterans. A whopping 78 percent of veterans said they had received scam pitches related to their military service.

Veteran-specific scams included solicitations to:

• Donate money to support other veterans

• Participate in a little-known government program that could provide lots of cash

• Improve the terms of a VA loan

• Pay for a more affordable medical brace

Following are some of the top scams targeting veterans, according to the AARP:

Bogus sales

A scammer claiming to be a deploying service member posts a large ticket item on a classified ad website that he needs to sell right away and at a steep discount. The scammer asks for upfront payment with a wire transfer or gift cards.

VA phishing

A caller claiming to be from the Department of Veterans Affairs calls to update your information.

Dubious investment advice

An “advisor” will tell the veteran she is missing out on benefits, and wants to review her investment portfolio. He’ll then want to put the veteran’s investments in a trust, so she’ll appear to have fewer assets and therefore be eligible for an additional pension.

Benefits buyout scam

Scammers will target veterans in need of money by offering cash in exchange for their future disability or pension payments. These buyouts are typically a fraction of the value of the benefit.

Among the tips offered by the AARP is to check charities on www.give.org or www.charitynavigator.org before giving any money and make donations directly to the veterans’ organizations you know.

Avoid Bad Investments

All veterans should be wary of insurance company representatives or other professional who use high-pressure tactics to induce them to invest in a product. This includes annuities that are not appropriate for their situation. While annuities can be a useful tool for securing retirement income, they’re not a good fit for everyone.

Some insurance agents and financial advisors push people to purchase annuities because they have high commissions, which may make the policy too costly.

Prevent Income Penalties

Be aware of advisors who manipulate your income reports to make you eligible for tax benefits and low-income pensions. The falsehood will manifest later when you want to access annuity funds only to find out that it is locked up and can be withdrawn only after paying a large penalty.

The National Association of Insurance Commissioners (NAIC) and other regulatory agents work to prevent agents from preying on veterans and exploiting their hard-earned benefits.

Planning for Medical Expenses in Retirement

Eligible veterans and their dependents have access to health benefits through the Tricare program offered by the government. They are provided with hospital and outpatient care based on whether treatment is considered a “need.” VA health care will be based on factors including income level and length of service. Retired service members and their families have a variety of options to select from in choosing which Tricare plan is best for their needs. Plans are also available for retired National Guard or reserve members.

Veterans should dedicate a portion of their savings from pensions, civil income, annuities and other retirement accounts to medical expenses that are not covered by the VA or health insurance.

Birch Gold Group - https://www.birchgold.com/retirement-and-financial-security-for-veterans  "Despite their service to our country, veterans often struggle to find financial security or stability upon their return to civilian life. Whether a veteran was enlisted for a few years or for their entire career, adjusting to life after service and learning how to successfully manage money as well as navigate debt can be challenging. Unfortunately, there is a very wide range of challenges veterans may face.These challenges can result in financial mismanagement, both during service and immediately following, that can cost veterans. Paying off debt, fighting the effects of fraud, and trying to build up some savings can take many years, leaving veterans insufficiently prepared for and therefore vulnerable when they retire. A lot of the resources here are geared towards helping veterans minimize debt and maximize savings so that they are well-positioned for retirement."

How Prevalent is Financial Difficulty Among Veterans?

Veterans are sometimes at a competitive disadvantage when it comes to finding a job and settling down. They might have sustained injuries during service and have to deal with the consequences, sometimes unaware of the range of government and private services available to help support them. Further, veterans can be the target of fraud due to limited financial knowledge, debt burdens, or struggles with mental health. Their loved ones may want to help but might not know where to start in building an adequate support system to help their veterans through.

The data on how veterans fare financially in comparison to their civilian counterparts emphasizes these challenges further. According to the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation, veterans are:

• 9% more likely to engage in problematic credit card behavior (carry balance, get charged late payment fee, etc.)

• 40% more likely to be behind on paying for their homes

• 28% more likely to have made a late home payment

There are also differences within the veteran community that can influence the severity of a person’s hardship as well as the support available to them. Various aspects of the veterans’ experience in service can affect the obstacles they face as well as some of the resources available to them, including:

• their branch of service

• their length of service

• the length of time the veteran has been out of the military

• the age at which the veteran enlisted

• whether the veteran is fully retired

Homelessness is one pervasive issue in the veteran community. According to the National Coalition for Homeless Veterans, homeless veterans make up roughly 11% of the homeless population. Homeless veterans also tend to be younger than the overall veteran population, and are more likely to suffer from disabilities, mental illness, and/or substance abuse issues. It is critical to look for resources that can help with these issues in parallel to financial help and financial literacy education.

Fraud is yet another issue faced frequently by veterans. A survey from AARP found that veterans are targeted for consumer fraud more often than civilians. Specifically, the survey found that 16% percent of veterans have lost money to fraudsters compared to 8% of nonveterans, making veterans twice as likely to fall victim to financial fraud. A whopping 78% of veterans reported being targeted for scams in the past five years that specifically targeted their status as a vet.

Common Obstacles Faced by Veterans

As touched upon earlier, veterans may face a number of unique challenges upon retirement from duty. Adjusting back to life as a civilian can be difficult. Their experiences in the military, combined with the potentially limited civilian education and “conventional” work experience they have, may result in a competitive disadvantage when trying to apply to a job, get back in school, or just settle down into a regular routine—all of which impact their financial stability.

A strong understanding of the challenges faced by veterans—and the specific problems each challenge poses—can help pinpoint the types of resources that could be most helpful.

Obstacle #1 —Frequent Moves

Frequent moves can make it difficult for veterans and families to make progress on selected careers and can impact total household earnings over time.

• How moving affects financial health: When veterans and their families move around a lot, it can be difficult to establish roots in any one place. The spouse’s career might have suffered from the constant moving; he or she might have been passed up for raises and promotions, and lifetime earnings might be lower as a result. Additionally, the family might have had trouble developing a social life and support network in their community.

• How to settle down: To decide where to settle down, veterans should consider factors such as where their extended family lives, where is familiar and/or comfortable to them, and where they can find opportunities for the types of careers or education that interest them and their families. To ease with the transition, the military offers relocation services.

• Some other resources specific to this obstacle include:

  • VA Relocation Assistance – This resource has some details on the federal programming available to assist with relocation and beyond, as well as what specific resources to look at for further support based on the military branch of service.

  • “Family Assistance,” “Family Services,” and “Family Resources” – Search for each of these phrases to find what’s available near you, since it can vary extensively not just by state but also county and city. Multiple tiers of local programming may exist to assist families with everything from financial aid through planning. These can also help provide veterans with support and counseling in working through issues like financial health.

  • Local VA Services – Some benefits offered to veterans may vary by state, and so it’s worth the time to visit a local office and talk through what’s available.

  • Salute – This program is one of many that helps veterans and their families with the servicemember’s transition back to civilian life, helping to fill in gaps that may arise including problems paying bills or securing transportation.

  • Recycled Rides – Veterans may apply through one of the participating family assistance programs to receive assistance with transportation, including potentially a refurbished car. This can help provide some flexibility with where veterans and their families can live and work.

Obstacle #2—Managing Finances Overseas

Managing finances during overseas deployment is difficult. Service members and veterans become subject to everything from late payment fees to credit score damage.

• Who is affected most: Those who enlisted young—right out of high school—may not have had the chance to learn how to manage their finances or their credit score. A service member who doesn’t have any urgent financial issues or doesn’t see debt as a significant problem might face a bad surprise upon retirement, when they realize that in retrospect they could have been preparing all along. Further, many military jobs require a security clearance; if a person is in debt, he or she might be denied that clearance and forced into early retirement.

• What to do: It’s important to develop good financial habits before problems become unmanageable. The Servicemembers Civil Relief Act (SCRA) protects active-duty service members from creditors. Once service members retire, they can seek out credit counseling if they’re in debt. Nonprofit counseling agencies are an option since they are often inexpensive or free, while sustaining a mission of keeping their clients’ best interests at heart.

• Some other resources specific to this obstacle include:

  • Thrift Savings Plan – Since 2000, military personnel can enroll in the Thrift Savings Plan, a retirement savings plan available to federal employees. Once service has ended and no further contributions can be made, this can be converted strategically to an IRA; learning more about the options available for this, as well as consulting with a financial advisor, are recommended.

  • Veterans Financial Coalition – Dedicated to both veterans’ financial education as well as consumer production, this coalition is comprised of multiple organizations that each have services dedicated to helping veterans.

  • Military Saves – This nonprofit strives to help servicemembers and their families successfully manage their finances and ultimately build wealth.

  • Consumer Finance Protection Bureau – This federal site contains resources for financial literacy, including a detailed section devoted towards credit cards.

Obstacle #3—Fixed Career Paths

Service members may have less say in the progress of their careers and their level of pay than civilians, as they are subject to the military’s linear promotion hierarchy and the federal budget.

• Disadvantages of military compensation: Pay raises and promotions follow a stricter path in the military. A service member’s pay is based on his or her rank, regardless of expertise, which is sometimes significantly lower than the pay he or she might receive outside of the military (think doctors, for example). Pay raises are subject to the budget allotted by the government. The progression through the ranks of the military is more regimented than a civilian career path, which has more variation; it requires a higher level of commitment, and a person cannot just quit if the position isn’t working out. A civilian can somewhat control the direction his or her career takes and negotiate for higher pay and a better title. Military veterans might not be prepared to take control of their careers and negotiate the positions and salaries they deserve, or to know where to begin in career advancement.

• Focus on the positives: Military personnel have access to a number of benefits that a civilian might not, including tax breaks that even the compensation playing field. They have health insurance options for which they incur no additional costs, housing, life insurance, education reimbursement, and more vacation time than the average American, not to mention the fact that they can retire with full pension after twenty years. It’s important for veterans to know their benefits and take advantage of what these benefits offer.

• Some other resources specific to this obstacle include:

  • Career path optimization – Many online tools as well as in-person counselors are available to assist with translating military skills into competitive resume points, as well as to help map out civilian career paths.

  • Use veteran small-business assistance – For many retired servicemembers, becoming their own boss and no longer having to take orders is extremely gratifying. There is federal and local programming in place to assist with this, although some veterans are reluctant to assert their merits and use it because they worry about accepting a “handout.” This is not a handout; this is a benefit offered to those who sacrifice their lives to protect their country.

  • Salary negotiation tips for veterans – Civilian careers can seem like a free-for-all compared to the regimentation of the military. Negotiation is not only recommended, but required for success in civilian life, which this piece not only reinforces but also provides some starting points.

Obstacle #4— Civilian Job Market Works Differently

Finding a job and assimilating back into civilian life after active duty poses challenges. The training veterans received as part of their service may not easily translate into skills sought by civilian recruiters.

• Why finding a job is difficult: Veterans often struggle to find jobs that match their skills and interests. Additionally, veterans may have sustained physical or mental injuries during service, which can hinder their ability to find and keep a job. Some employers may not be able to empathize with what a veteran has been through, and the continuing effect it might have on the veteran’s life.

• Who is affected the most: While the overall veteran unemployment rate tends to be lower than the rate for civilians, and these rates were at a low as of May 2019, more recent veterans (those who served since September 2001) and veterans with disabilities tend to have higher rates of unemployment. Returning to civilian life during the financial crisis may have amplified the financial hardships faced by more recent veterans.

• Some other resources specific to this obstacle include:

  • Veteran and Military Transition Center – Sponsored by the US Department of Labor, this resource helps with employment, education, and even relocation guidance not just for service members but their families as well.

  • Consult local universities and libraries – Typically labeled as resources for military veterans, these places offer up services, events, and local contacts who can facilitate career support and networking opportunities. Even resources noted as being for military students can prove useful; consult with the parent source of such resources, as they may have offerings for non-student veterans, or even resources for those seeking to go back to school.

Obstacle #5—Rollbacks of Government Programs

Rollbacks of government programs that assist service members can have huge consequences. For example, the proposed rollbacks of provisions under the Military Lending Act of 2006 might expose military personnel and families to financial fraud, predatory loans, and credit gouging by catering to the interests of those groups.

• What does the Act do: Among other protections, the Military Lending Act caps interest rates on credit provided to military service members at 36 percent, polices the type of collateral a lender can accept from the service member, and provides legal protection for violations.

• Who is affected: The Military Lending Act protects active-duty personnel and their dependents. If provisions are rolled back, these service members are at a higher risk of financial fraud, which can follow them into retirement. Service members that fall prey to fraudulent attacks are likely to go into retirement with higher debt and a lower credit score, and they’re often more exposed to continuous and future attacks, since they’ve proven to be an effective target. Their ability to effectively assimilate into civilian life after service is made that much harder. Further, if a service member’s finances are compromised, he or she might lose security clearance and be forced to leave the military.

• The resources listed here can help—as well as any referrals they offer—but being wary of the reputation and track record of any service provider is recommendable. Referrals from respected bodies and individuals, reviews from real people, and carefully reviewing the terms behind any offers is recommended to help reduce risk.

Obstacle #6— Physical and Mental Health Issues

Many veterans retire from service with physical and/or mental health issues without knowing about all the resources available to help them cope.

• Mental health challenges: According to the RAND Corporation, about a fifth of Iraq and Afghanistan veterans suffer from PTSD or depression, and many also suffer from traumatic brain injuries. Only about half of these veterans seek treatment, and of those, only about half of them are treated adequately. These issues can be debilitating and prevent a veteran from being able to hold a job. Medical and psychological help can also be costly, which compounds the financial burden.

• Reasons for not seeking treatment: A veteran might be unaware that he or she has a problem that needs treatment or thinks it’s not severe enough to pursue. Of those who understand they have a problem, many find shame in seeking help, succumbing to the stigma or the idea of appearing weak. Others have trouble finding the information and services they need and don’t know where to turn; others still find that adequate services are located too far away to be feasible.

• The VA remains a strong starting point for considering services to treat health issues, although there are growing numbers of non-profit organizations dedicated to helping support veterans, including those who are disabled or who suffer from specific conditions. For female veterans, women’s health-specific organizations also exist.

Obstacle #7—Financial Fraud

Veterans are often the targets of financial fraud, commonly due to their service training, their military status and benefits, or the presence of negative life events.

• Types of fraud: Veterans often encounter fraud designed to pinpoint their weaknesses, such as schemes that offer tech support, debt elimination, discounted goods and services, and the opportunity to support fellow veterans through donation. Schemes often cater to the veteran’s specific situation and military benefits.

• Why veterans are at risk for fraud: Veterans tend to be more likely than civilians to take risks with their money in the hope it will benefit them financially. Veterans also have a high level of trust in fellow veterans, as opposed to civilians, and they’re more likely to donate money to help other veterans without investigating the charity or even knowing how to do so. Additionally, veterans tend to have experienced more negative life events (loss of a loved one, injury or illness, mental health issues, etc.) than nonveterans, a vulnerability that fraudsters are quick to take advantage of.

• The AARP has a very comprehensive yet concise resource to help avoid veteran fraud by highlighting the most common scams, what can be done to detect a scammer, and available resources to check the legitimacy of those offering services geared towards veterans and/or their families.

Obstacle #8—Poverty and Homelessness

A high proportion of veterans experience poverty and homelessness when they return to civilian life.

• Who is at risk: Younger veterans make up a larger proportion of homeless veterans compared with their proportion of the entire veteran community. African American and Hispanic veterans make up a significantly larger portion of the homeless veteran population. A higher proportion of homeless veterans are male, but the rate for females is rapidly rising.

• Why veterans are so susceptible: Veterans with high levels of debt struggle to make ends meet and often find themselves homeless. Mental and physical health issues only compound this, since they might make it harder to keep a job, and medical costs might be higher. Additionally, successful fraud attacks can strip a veteran of his or her financial security.

• What to do: Veterans in financial trouble should seek counseling as early as possible, to prevent debt from becoming unmanageable. For those who are struggling, government programs such as the Supplemental Nutrition Assistance Program (SNAP) provide essential aid. Veterans Affairs offers assistance to those who are homeless or at risk of becoming homeless.

• Some other resources specific to this obstacle include:

  • National Coalition for Homeless Veterans – This group provides up-to-date coverage of news and policies that affect veterans, service providers that can assist with veterans’ challenges, and resources for veteran assistance.

  • US Vets – This nonprofit is focused on facilitating the best possible transition back into civilian life for veterans.

  • Volunteers of America – Among those they serve are homeless veterans, which this nonprofit seeks to take off the streets.

When to Seek Help

For veterans and civilians alike, it’s all too easy to ignore the warning signs and not seek financial help until it’s too late. Additionally, many veterans don’t know where to turn for help, especially since there isn’t a one-size-fits-all solution, and they need to seek services geared specifically for their situation.

• Seek help early: Missing credit card payments or falling behind on any sort of repayment is a warning sign that more severe financial troubles could follow. Debt often has a snowball effect; the deeper a person is in debt, the harder it is to get out due to high payments and high interest. Veterans can educate themselves on budgeting and managing money, or they can consult a nonprofit credit counselor to assist.

• Take control of debt: For those veterans already deep in debt, a debt management plan might be best. This plan is more drastic than simply money management; the debt management company negotiates with creditors to lower monthly payments and reduce penalties, usually settling on a multiyear plan for the veteran to pay off all debt.

Types of Veterans

Veterans experience a variety of challenges based on their age, their experience, the amount of time they spent in the military, their disability status, and the branch in which they served. Consequently, there isn’t a one-size-fits-all financial solution; veterans need access to the resources that will specifically benefit them. There are three main types of veterans, each requiring different retirement and investment savings plans.

Junior Enlisted

This group of veterans joined the military young, often fresh out of high school. They have never known any other type of adult lifestyle, and so entering civilian life after service can be especially daunting. They don’t have a college education or any work experience and often have trouble finding a job and settling down.

Common financial problems

• High levels of debt and no savings: Younger veterans may have built up a lot of debt without necessarily realizing it while they were enlisted, while also lacking in savings.

• Financial illiteracy: Veterans who enlisted right out of high school may lack the basic financial education many civilians learn in college and through early employment. This could leave them prone to making uninformed financial decisions after returning to civilian life. The consequences can compound over time to draw them deeper into debt, which they have to face when they leave the service.

What to do

• • Use programming designed for young vets: Younger veterans can particularly benefit from the GI Bill, which provides tuition and fees for their education. Additionally, the new Blended Retirement System (BRS) (for those who enlisted on or after January 2018) will be particularly beneficial for those who haven’t reached the twenty-year retirement benchmark. Under this system, service members can plan for retirement by contributing to a government-run 401K program while serving, and the government will match the contribution, up to 5 percent of the person’s pay.

  • Develop financial literacy: Younger veterans should focus on building their financial knowledge so they can make educated decisions moving forward. With a basic knowledge of how to manage their money, they can develop a budget and a plan for paying off loans and debt, and they can start saving for the future.

 Career Enlisted

These veterans have been in the military for the majority of their adult lives, often having achieved high-ranking and decorated positions. While regulations differ depending on the branch of the military in which a person served, twenty years of service allows a person to retire with lifetime pension.

Common financial problems

• Learning how to navigate benefits: Upon retirement, veterans are presented with a daunting amount of information and decisions to make on their benefits. Without guidance, it’s easy for veterans to make decisions that they later regret. For example, the Survivor Benefit Plan (SBP) is the military’s version of life insurance and provides a monthly income for spouses and/or dependents upon a veteran’s death, but the veteran must elect for this coverage upon retirement; he or she cannot just opt in later.

• Reintegration late in a veteran’s career can be jarring. It can be hard for older veterans to start anew so far into their careers, and they’re often passed up in favor of younger, more targeted job applicants.

What to do

• Understand military benefits: A veteran’s retirement pay and benefits depend on a number of factors, including years of service, the year the person entered the military, whether the person was active duty or reserve, the person’s disability status, and the type of retirement. The longer a veteran serves, the higher the retirement pay. Additionally, the year a veteran entered the military determines the pay system he or she falls under:

  • • Before September 1980: Final Pay retirement system

    • Between September 8, 1980, and August 1986: High 36 retirement system

    • After August 1986: You can choose either the High 36 or the Career Status Bonus/REDUX (CSB) system; High 36 is the default.

    • Blended Retirement System (BRS): This system is new for service members that joined on or after January 2018.

Disabled Service Members

According to the U.S. Bureau of Labor Statistics, 25 percent of veterans had a service-related disability as of August 2018. Disabled veterans face unique challenges upon retirement. They receive disability retirement money, but this amount differs based on the years of service, the branch of the military, and the severity of the disability (disability ratings range from 0 to 100 percent).

Common financial problems

• Varying effects of disability: While the type and severity of disability varies, it’s often harder for a disabled person to find work after retirement, despite the fact that the Americans with Disabilities Act protects veterans from discrimination. More severe disabilities prevent the veteran from being able to work at all, which means they’re completely reliant on government benefits and any additional income generated by their family.

What to do

• Understand military disability benefits: Additional retirement pay for disability is based on the severity of the disability and other factors, such as whether the veteran has dependents to take care of.

  • Special Monthly Compensation (SMC): Based on a number of factors, veterans can calculate the monthly amount of this tax-free benefit they’re entitled to collect.

  • Dependency and Indemnity Compensation (DIC): This tax-free benefit is paid to survivors of veterans who died while serving.

• Seek help: Organizations like Disabled Veterans provide additional financial and personal support for veterans with disabilities and even sponsor community events.

Even more resources

What resources can a veteran turn to in order to become financially literate and stable? Getting a job, seeking further education, and consulting a credit counselor are good first steps, depending on the veteran’s interests and needs. Veterans, particularly those in debt, should learn how to balance a budget, manage money, and make smart financial decisions moving forward. The resources below, ranging from financial help to general reintegration assistance, can help veterans get started on their journey to financial success.

General financial resources

• Retirement planning: Learn how to prepare for retirement by taking advantage of the benefits available to you.

• Free credit report: Veterans should learn to keep track of their credit. This site offers one free credit report per year from each of the three major credit reporting companies.

• Mint, YNAB, and other budgeting tools: Keep track of all your accounts and expenditures, create budgets and financial goals, and see exactly where your money is going at a glance.

• VA Financial Benefits Administration: Resources for the VA on managing your finances, Veterans Benefits Banking Program (VBBP), and other private and federal veteran resources.

Veteran-specific resources

Financial resources

• National Foundation for Credit Counseling — This nonprofit organization offers an immediate plan for debt relief and instills the financial skills to prevent a veteran from falling into debt in the future.

• Debt relief — Veterans can get a handle on their debt with this range of solutions, depending on their situation.

• VeteransPlus — Veterans can take charge of their finances with the financial coaching and financial literacy courses and education offered through this site.

• Hands-on Banking — This service, offered in partnership with Wells Fargo, offers financial resources specifically for military personnel and veterans.

• Understanding your military benefits — This resource is a landing page for exploring the various military benefits available to veterans. Another breakdown can be found here.

• Protect yourself against fraud — This site lists common fraud attempts that target veterans, so they know what to look out for, and offers guidance on how to avoid being duped.

Retirement

• Federal Employees Retirement System (FERS) – This federal benefit provides basic benefits, Social Security, and Thrift Savings Plan (TSP). (This replaces the Civil Service Retirement Act (CSRS), for federal employees who began service before January 1, 1987.)

• Phased Retirement – This program allows individuals to work part-time jobs while starting to draw retirement benefits.

• Veterans Pension – Information about this pension can be obtained here directly from the U.S. Department of Veterans Affairs/

• USA.gov on Military Pensions – A detailed breakdown of federal and state pension benefits available for military servicemembers.

• TSP.gov – More information can be found here on participating in a Thrift Savings Plan, investing, and planning for retirement.

• VA blog on making changes to your TSP – This government source provides an overview of what to keep in mind when considering making changes to a TSP.

Reintegration

• Relocation Assistance Program — Veterans can take advantage of this military program when looking for a place to live, facing financial issues, and navigating other reintegration difficulties.

• Transition Assistance Program — Before retiring or leaving the service, veterans can educate themselves on various aspects of reintegration by taking some of these courses.

• Job searching — This job search tool is specifically for veterans.

• GI Bill — Veterans who want to pursue further education can take advantage of the benefits offered to them under the GI Bill, including tuition reimbursement and money for housing, books, and fees.

Mental illness, homelessness, and poverty

• Veterans Affairs, Make the Connection — Make the Connection provides broad assistance for veterans transitioning to civilian life, with a focus on mental health and awareness.

• National Coalition for Homeless Veterans — This organization provides assistance for those in need; the website also keeps readers informed on recent related policy decisions, statistics, and grants and provides information on how to volunteer.

• Mental health support — This site serves as a guide for veterans who might not know how to combat mental health issues. It provides information, support, and stories of other service members and veterans who have struggled with similar issues.

• SAMHSA National Helpline — Veterans who are struggling with substance abuse or mental health issues and don’t know where to turn can call this hotline for help. The hotline directs veterans to the services they need.

• Children of Fallen Patriots Foundation ~ https://www.fallenpatriots.org   866-917-CFPF (2373)  "Providing college scholarships and educational counseling to military kids who have lost a parent in the line of duty."

• Code of Vets - https://www.codeofvets.com   "We are bringing awareness & ​seeking practical solutions to the daily struggles & issues of our veteran community. Our mission is to take care of our own. One veteran at a time. We are coalescing our base to be a powerful voice speaking for the rights of veterans with dignity & respect.  We provide immediate intervention for veterans in crisis, at-risk and/or in need."

• Folds of Honor ~ https://foldsofhonor.org (918)936-3956  “Folds of Honor is a 501(c) (3) nonprofit organization that provides educational scholarships to the spouses and children of military members who have fallen or been disabled while serving in the United States armed forces. Beginning in 2022, Folds of Honor expanded its mission to include first responders. Its educational scholarships support private-school tuition or tutoring in grades K-12 as well as post-secondary tuition. It is rated a four-star charity by Charity Navigator and Platinum on GuideStar.”

• MBA Stack ~ https://www.mbastack.org/saving-money-in-college/  Tips for budgeting and managing finances that are applicable for all areas of life! 

• MilTax - https://www.militaryonesource.mil/financial-legal/tax-resource-center/miltax-military-tax-services  "Military OneSource MilTax, offers a secure and free tax preparation and e-filing software for service members, including members of the National Guard and reserves, immediate family members, and eligible survivors."

• Owens Corning National Roof Deployment Project  https://newsroom.owenscorning.com/all-news-releases/news-details/2016/Owens-Corning-Launches-National-Roof-Deployment-Project  "The Roof Deployment Project is an initiative by Owens Corning and its Platinum Preferred Contractors to identify, honor and help protect deserving military families by installing new roofs. For more information on the Roof Deployment Project, visit RoofDeploymentProject.com or contact Matt Schroder Owens Corning 419-248-8987 matt.schroder@owenscorning.com   or Jamie Maralla Coyne PR (973) 588-2000 jmaralla@coynepr.com."

• Navy Seal Foundation -   https://www.navysealfoundation.org   (757)744-5326  “The Navy SEAL Foundation provides critical support for the warriors, veterans, and families of Naval Special Warfare.  Established in 2000, the Navy Seal Foundation (NSF) is a 501(c)(3) national nonprofit organization that provides a comprehensive set of over 30 essential programs for Seals, SWCC, Veterans and their families.  We are there to help keep our warriors strong, healthy and in the fight.  We are there to help them transition to successful careers in the civilian sector.  We are there to help their families every step of the way.   And under the tragic circumstances that a member of NSW does not come home, we are there to assist as well.”