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3 Ways To Be Financially Prepared When You Transition
Financial actions are especially challenging when you leave the military, but fundamentally they consist of three components:
- Budgeting for today
- Saving and investing for tomorrow
- Protecting against unexpected risks
Think of these tasks as three as three legs of a stool: Neglecting any of them will unbalance the stool and topple your financial stability. These components evolve from active-duty service, to transitioning from the military, and finally to retirement.
This article addresses the specific habits needed as military families transition from the service to ensure their continued financial success.
Since you did a good job budgeting on active duty, as you transition you should have at least six to 12 months of income saved up to sustain your family. Even if you find a job quickly, you will face new expenses including healthcare, child care, food, entertainment, and even gym costs that were previously provided or discounted in the military.
As you are transitioning, be sure to request VA compensation if you have a disease or injury incurred or aggravated during active military service. The VA will pay tax-free disability compensation from $133 to $3,447 per month, depending on the severity of your disability and your family size. Veterans Affairs or the Disabled American Veterans can help you get this income, which you deserve.
Saving and investing.
As you transition, continue the good savings program you started in the service, but now focus even more on saving for retirement. While in the service, contributing to the Thrift Savings Plan is a good way to save. Generally, you can’t contribute to TSP after you leave the military, but it is advisable to keep your money growing in TSP because it has the lowest costs of any retirement plan.
As you join a civilian company or start your own business, definitely take advantage of retirement savings through a 401(k) or other retirement accounts. Selecting mutual funds with low cost ratios that coincide with your long term goals is the key to success.
As you transition, you need to replace your life insurance. Within 240 days of leaving the military, SGLI can be converted to Veterans Group Life Insurance, with no medical exam. Since VGLI premiums are substantially higher, if you are in average or better health, you will almost certainly be able to get term life insurance for less money from a nonprofit association, or a commercial life insurance company.
For those retiring, your most valuable benefit is your well-earned military retirement. Retirees participating in the Survivor Benefit Plan deduct 6.5% of their current retired pay so their surviving spouse will receive continued payments of 55% of the retired pay if the retiree dies. Most retirees with a spouse of similar age should consider choosing full SBP to take advantage of the COLA adjustment, government subsidy, tax-advantage, and peace of mind.
A sprawling new survey says a ‘culture of resilience’ helped US military families weather housing woes for years
A new survey of thousands of military families released on Wednesday paints a negative picture of privatized military housing, to say the least.
The Military Family Advisory Network surveyed 15,901 adults at 160 locations around the country who are either currently living in privatized military housing, or had lived in privatized housing within the last three years. One of the report's primary takeaways can be summarized in two lines: "Most responses, 93 percent, came from residents living in housing managed by six companies. None of them had average satisfaction rates at or above neutral."
Those six companies are Lincoln Military Housing, Balfour Beatty, Hunt, Lendlease/Winn, Corvias, and Michaels.
What's behind these responses? MFAN points to the "culture of resilience" found in the military community for why military families may be downplaying the severity of their situations, or putting up with subpar conditions.
"[Military] families will try to manage grim living conditions without complaint," MFAN says in its report. "The norm of managing through challenges, no matter their severity, is deeply established in military family life."
Judge approves negligence lawsuit against Air Force and Pentagon by victims of 2017 Sutherland Springs church massacre
The suit meets the criteria to fall under the Federal Tort Claims Act, which allows people to seek damages in certain cases if they can prove the U.S. Government was negligent, The Dallas Morning News reported.
Under most circumstances the doctrine of sovereign immunity protects the government from lawsuits, but in this case U.S. District Judge Xavier Rodriguez held that failure of the U.S. Air Force and the Department of Defense to log shooter Devin Kelley's history of mental health problems and violent behavior in an FBI database made them potentially liable.
ABOARD THE USS THEODORE ROOSEVELT -- Loose lips sink ships, but do they reveal too much about the hugely anticipated "Top Gun" sequel, "Top Gun: Maverick," filmed onboard in February?
Not on this carrier, they don't. Although sailors here dropped a few hints about spotting movie stars around the ship as it was docked in San Diego for the film shoot, no cats — or Tomcats — were let out of the bag.
"I can't talk about that," said Capt. Carlos Sardiello, who commands the Roosevelt.
WASHINGTON (Reuters) - The U.S. Justice Department unveiled 17 new criminal charges against WikiLeaks founder Julian Assange on Thursday, saying he unlawfully published the names of classified sources and conspired with and assisted ex-Army intelligence analyst Chelsea Manning in obtaining access to classified information.
The superseding indictment comes a little more than a month after the Justice Department unsealed a narrower criminal case against Assange.