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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.
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And no one knows that better than military service members and we have the pictures to prove it.
A special operations Marine is due in court on March 7 after being arrested last year for allegedly assaulting his girlfriend, Task & Purpose has learned.
Staff Sgt. Daniel Christopher Evans was arrested and charged with assault inflicting serious injury on July 29, 2018, according to Jennifer Dandron, a spokeswoman for police in Wilmington, North Carolina. Evans is currently assigned as a Critical Skills Operator with the 2nd Marine Raider Battalion at Camp Lejeune, North Carolina, according to the Marine Corps Personnel Locator.
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So earlier this week when the Wall Street Journal published an editorial against women in ground combat by conservative political commentator Heather Mac Donald, the inclination of many ground combat integration supporters was to dismiss it outright. But given Trump's proclivity to make knee jerk policy decisions in response to falling approval ratings and the court's tradition of deference to the military when it comes to policies affecting good order and discipline, it would be unwise to assume the 2016 lifting of the ban on women in ground combat is a done deal.
R. Lee Ermey was laid to rest at Arlington National Cemetery on Friday.
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The U.S. Air Force has two of its most elite aircraft — the B-2 Spirit bomber and the F-22 Raptor — training together in the Pacific, reassuring America's allies and sending a warning to strategic competitors and adversaries about the sheer power the U.S. brings to the table.
These stunning photos show the powerful aircraft tearing across the Pacific, where the U.S. has increasingly found itself facing challenges from a rising China.