Category: Military Pay

Categories
Military Pay

PCS Season: Organize Your Financial Life

Stack of files and folders showing why you need to Organize Your Financial Life

PCS Season: Organize Your Financial Life

 

Whether you’re motivated by an upcoming PCS or it’s simply time for a little desk drawer cleaning, the occasional purge of unwanted household items can feel like a fresh start. When you’re done cleaning out the closets, remember that same sense of accomplishment can be had when it’s time to tidy up your financial documents.  

If you’re setting out to “Marie Kondo” the piles of financial paperwork in your file cabinet and all that snail mail stacking up on your kitchen counter, the classic KonMari question – “does this bring me joy?” — won’t necessarily apply to your financial and tax paperwork.  (Even as a financial planner, taxes never bring me joy.)  

Do I really need 10 years’ worth of utility bills? 

By following a few simple rules, you can tackle the piles of paper and send your financial documents off to the shredder with a little gratitude.

Keep forever. Important life documents, especially those that are difficult to replace, should be kept in a “forever” file, preferably in a fire safe box or similarly protected.  

  • Life documents: birth certificates, marriage certificates, death certificates, adoption papers, social security cards;
  • Military service documents:  DD 214, VA disability certifications, and overseas deployment orders; 
  • Education documents: diplomas, transcipts, certificates.

Keep “permanently.” Key financial and legal documents should be protected in a similar way to your forever documents, but these documents might need to be updated or replaced over time.  

  • Estate planning documents: wills, powers of attorney, medical directives;
  • Legal filings: trusts, inheritance, court orders, contracts, etc.
  • Financial documents: mortgage/loan pay off documentation, life insurance documentation, etc.
  • Investment documents: End of year statements serve as a historical record of all your contributions, distributions, and investment gains which could prove useful if you ever need to establish basis in an investment many years in the future.
  • IRA Tax Form 5498: Your IRA trustee publishes this important documentation of your contributions, conversions and account balances each May;  
  • Deeds & titles: deeds to property, titles of vehicles, certificates of authenticity, appraisals of artwork, antiques, jewelry, etc.
  • Medical documents: your medical records, including your vaccination record.

For estate planning reasons, it’s helpful to keep all the “forever” and “permanently” documents in a safe place like a fire safe box.  It is also important to be sure your family members and potential executor know where and how to access them if necessary.  

“What about my tax documents?”

Keep At Least 7 years. The IRS can audit tax returns going back either 3 or 7 years, depending on their reason for the audit.  That makes at least seven years the better safe than sorry choice for tax related documents. 

  • Tax returns including proof of your payment to the IRS and your state tax documents.
  • Important tax documents like your W2, 1099’s, 1098’s, etc.
  • Retirement contribution documents including your IRS Form 8606 if you have Traditional IRAs. 
  • Supporting documents related to expenses written off including confirmation letters from charities you donated to, donation related credit card statements and canceled checks. This includes health care receipts if deducted on your tax return.
  • Records for any business-related expenses including utilities, taxes, travel, purchases, etc.

Home ownership/rental properties: Documents related to the purchase, improvement or disposal of a home, property or business should be kept for at least seven years after the tax year during which you dispose of the property.  

This includes mortgage, title and tax documents, closing documents, loan pay off documents and any receipts for substantial improvements like additions or remodels that increase the value of the property.

Keep 1 year. Most monthly bills and bank/investment documents are accessible online, so there is little benefit to keeping them in paper form.  If you prefer to keep them in your physical file cabinet, you need only keep them for one year.  As mentioned earlier, end of year investment statements should be kept with your important documents.

Keep less than a year. Utility bills and credit card documents can be discarded once you’ve reviewed your bill for errors and paid the account.  You only need to keep these longer if you write them off as a business expense or otherwise take a tax deduction for them (see 7 years above). 

When in doubt, SHRED it!

Now that we know what to keep, let’s look at which documents need to be shredded instead of tossed in the garbage.  To protect your identity from the teams of fraudsters out there, you should shred any document with your social security number, account number, or any other combination of personally identifiable information including your name, address, date of birth or driver’s license details.  

Even “junk mail” contains an inordinate amount of PII; especially mail from banks and unsolicited credit card offers.  To help stem the flow of these annoying offers, the Federal Trade Commission provides several methods to “opt out” of specific types of junk mail and unsolicited offers.  

When in doubt, shred it.  You can either do this with a home shredder or take your pile of documents to a local commercial shredder.  Both the UPS Store and FedEx Store will shred your mountain of documents for a reasonable price, saving you the trouble of cleaning up the dusty mess yourself. You can also take advantage of free community and base wide shredding opportunities. 

An ounce of prevention … go paperless!

Now that you’ve tackled your collection of twenty-year-old canceled checks, it’s time to take this tidying up one step further – go paperless!  Your banks, lenders, and investment companies offer a wide variety of paperless record keeping options. Simply log into your account and subscribe to their paperless option.  At the end of the year, simply download copies of the important annual documents for your records.  Keeping important financial documents out of your mailbox is an important first step toward protecting your identity and simplifying your life. 

Happy sorting:)

Need help organizing your financial life.  The MFAA advisors can help and you can find them here.

Categories
Military Pay

Tricare for Life – Is It Really Free?

Graphic with Tricare for Life logo and Medicare on

Tricare for Life – Is It Really Free?

Military retirees, including reserve retirees over age 60, are familiar with the retiree Tricare drill. And when you hear “Tricare for Life” you may assume Tricare as you know it continues to death, but free.

Yes, and No

When you reach age 65, whatever Tricare plan you were on ends. You will be automatically moved to Tricare for Life. You will not pay any more Tricare annual fees.

But… In order to be covered under Tricare for Life, you must enroll in Medicare Part A and Medicare Part B. Part A (Hospital Insurance) coverage is free. Part B (Medical Insurance) is not. You will have to pay Part B premiums to Medicare. 

Your Medicare Part B premium is based on your annual income. For 2024, the standard Part B premium is $174.70 a month ($2,096.40 a year) per person. If your annual income is more than $103,000 (single) or $206,000 married filing jointly) you pay even more. 

Sounds Bad

By comparison Medicare premiums are much higher than the Tricare Prime Retired premiums ($363/year, individual). Though much lower than Tricare Retired Reserve ($7,023 a year, individual).

How Can This Be a Good Deal?

It’s unfair to only compare annual premiums. Your coverage will be more complete than Tricare alone because because Medicare covers some things Tricare doesn’t and visa versa.

Tricare for Life and Medicare together provide “wrap around coverage” through coordination of benefits (COB) rules. Medicare as the primary payer will pay it’s share of your medical bills first, and then Tricare will pay it’s share after that. 

For example, the catastrophic cap (total maximum co-pays and cost share per year) you could have to pay with other retiree (under age 65) Tricare plans is $3,000 to $4,399 a year. 

Under Tricare for Life, you pay those Medicare Part B premiums and that’s it. Usually there’s no additional costs. It’s very predictable.

If you receive care that is only covered by Medicare (like chiropractic) or only covered by Tricare (such as overseas care), you will be on the hook for some co-pays/cost share.

And you would need to pay entirely for a few things not covered by either Medicare or Tricare. Dental work and long term care are two examples.

Overall, Tricare for Life is really pretty amazing coverage. Just for reference, “regular civilians” 65 and older have a 20% cost share with Medicare Part B and no catastrophic cap (costs are unlimited). They also pay additional, much higher premiums and copays for drugs.

What if I use the Veterans Administration (VA)?

VA care can be a great option at any time. But if you are considering using only the VA system to avoid Tricare for Life and paying for Medicare Part B, proceed with extreme caution. 

A VA facility may not be available near you if you move or facilities close. VA healthcare is only available in the United States, so you wouldn’t be covered if you travel or move to another country. You are assigned to a priority group for VA care based on your service and disability. If you are in a lower priority group, you may be treated only on a space available basis, and you may have co-pays. And keep reading about penalties if you delay signing up for Medicare Part B.

Note: Also be careful when using Tricare for Life and Veterans Affairs health providers for non-service related care. Because VA providers are not allowed to bill Medicare, you can’t be reimbursed through Tricare for Life for any co-pay a VA provider charges. You’d have to pay for any VA expenses out of pocket. For most retired military these costs are likely low. Just know before you go.

What about my family?

Eligible family members stay on Tricare Standard or Prime until age 65 when they must sign up for Medicare Part A and B themselves and switch to Tricare for Life. So a service member and family members may be in different Tricare plans at the same time.

Don’t Delay Signing Up for Medicare Part B

The Medicare enrollment period starts 3 months before to your 65th birthday through 3 months after. So start when you are 64 years and 9 months old to be sure you don’t have a gap in coverage.

If you’re late, enrollment penalties are added to your monthly premium. The longer you wait to sign up, the higher the penalty. You’ll pay an extra 10% for each year you could have signed up for Part B, but didn’t. This is NOT just a one-time penalty. So if you wait 2 years to sign up, you will pay 20% higher Medicare premiums for the rest of you life!

You can delay enrolling in Part B if you or your spouse are working and covered by a workplace group health plan with 20 or more employees. In that case, you would need to enroll in Medicare Part B within 8 months of stopping work or losing your workplace health coverage, which ever is sooner in order to avoid penalty. 

What About the Rest of the Alphabet?

With Tricare for Life you do not need (and don’t pay for) a Medicare Advantage Plan (Part C) or a Drug Plan (Part D). Tricare for Life has you covered.

Where Can I Get More Details?

Download your Tricare for Life brochure here: https://tricare.mil/Publications/Handbooks/tricare_for_life

Categories
Military Pay

State-Level Veterans Benefits 

Map of the United States with a Circle in the Middle That Says State-Level Veterans Benefits

State-Level Veterans Benefits 

The US Department of Veterans Affairs has many benefits for military veterans. But did you know each state also has their own veterans affairs departments with additional benefits? Read on so you don’t miss out.

Where to Start?

State veterans affairs offices, also known as local veterans service offices, are government-run entities run by each state dedicated to helping veterans receive the benefits and services they deserve.

State-level veterans benefits vary from state to state. The benefits available to you also vary based on factors like your length and type of service, type of discharge, and your level of disability rating (if any).

The best place to start is your local state veterans affairs offices. Check out their website to see all they have to offer. Then dig in for benefits that interest you! 

This flyer from the federal VA has links to all 50 states and and the District of Columbia veterans services webpages.

https://www.va.gov/files/2020-11/state-benefits-quick-start-guide.pdf

What Veteran Benefits Do States Provide?

Here’s some categories that your state may offer, along with specific examples from individual states.

Education

State VA offices often offer educational benefits like tuition assistance, scholarships, and vocational training programs. These help you start a new career or enhance their existing skills. You can often find employment support through these offices, like job placement services, resume assistance, and training programs, too.

One of the most valuable state-level veteran benefits is help paying for college. At least 12 states offer tuition waivers (or something similar) for in-state universities to qualifying veterans and, in some cases, family members. 

The tuition waiver typically covers all or some of the in-state tuition and sometimes certain other fees associated with attending college. The states may have different names for the program, such as “Veterans Tuition Waiver,” “Veterans Fee Waiver,” or “Dependents’ Educational Assistance.”

Example: In Virginia, the Military Survivors and Dependents Education Program supports veterans who are Virginia residents and rated at least 90% permanently disabled due to military service. It provides a guaranteed waiver of all tuition and mandatory fees for eight semesters at a Virginia public college or university. An eligible veteran, their spouse, and their children ages 16-29 can use the benefit.

Example: Texas’s Hazelwood Act, provides eligible veterans in Texas up to 150 credit hours of tuition exemption at public universities and colleges in Texas. This benefit can also be transferred to eligible children in certain circumstances. Unlike Virginia, there is no requirement to have a VA disability. However, when you entered active duty, you must have designated Texas as your Home of Record, or enter military service in Texas, or were a Texas resident. You must also currently reside in Texas, served at least 180 days on active duty (excluding training) and had an honorable discharge or a general discharge under honorable conditions.

Tax Breaks

Many states offer veterans some kind of break on state taxes like property tax, income tax, and sales tax.

Example: Florida veterans with VA service-connected disability ratings of 10% or higher are eligible for a state property tax exemption of $5,000. You must file paperwork in the county showing proof of disability and VA rating. Surviving spouses who were married to the veteran for five years before the veteran’s death can also apply.

Example: Almost all states exempt all or part of military retiree pay from state income tax. Only California and the District of Columbia tax all military retiree pay as income.

Example: Oklahoma offers a sales tax exemption, including city and county sales tax, to eligible veterans with a 100% service connected disability rating. The tax exemption  is up to $25,000 for a veteran, and up to $1,000 for a Surviving Spouse. 

State Employment Preferences

Certain states offer veterans hiring preferences for state government jobs. This means veterans may receive additional points or priority in the hiring process when applying for state government positions.

Example: All New York State resident veterans with an honorable discharge from wartime service receive a 5-point employment preference over non-veterans in interviews and exams for state jobs, or 2.5 points for promotion exams. Veterans with a disability rating receive a total of 10 points, or 5 points for promotion exams.

Small Business Support

Several states have programs that offer financial assistance, training, and resources specifically for veteran-owned businesses, aiming to encourage entrepreneurship and economic growth within the veteran community.

Example: Illinois’ Veteran Entrepreneurship helps returning servicemembers and veterans start their own business and assists existing veteran-owned businesses expand their operation. This includes training seminars, educational sessions, and other related events.

Land Purchase

A few states offer veteran residents the opportunity to buy state land at a discount.

Example: Alaska’s Veterans Land Discount program gives Alaska veteran residents a 25% discount on the purchase of state residential/recreational land. A similar but separate program, Veterans Land Sale Preference, allows veterans to purchase land at a restricted sale at fair appraised market value before it is offered to the general public by auction. You can’t use both benefits at the same time. 

Hunting and Fishing Licenses

Some states offer veterans free or reduced price hunting and fishing licenses. 

Example: Colorado offers a free lifetime combination small-game hunting and fishing license for a resident veteran with a permanent service-connected disability of 60% or more.

State Parks Passes

Most states offer veterans free or reduced prices for state park passes and/or camping fees and other use fees. 

Example: Arizona residents who are retired military or service disabled veterans receive 50% off day-use entrance to Arizona State Parks. Arizona residents with a 100% VA disability rating are entitled to a free day-use pass.

License Plates

Many states issue special license plates for veterans. These plates may indicate you are a disabled veteran, your branch of service, or display other symbols representing your service.

Example: Louisiana offers 47 license plate designs that honor veterans and eligible family members. These plates are issued for the same fee as a regular license plate.

Veteran’s Treatment Court

The number of states with Veteran Treatment Courts has grown rapidly. These courts offers alternatives to case proceedings for veterans. They try to address underlying problems which contribute to criminal activity or other court involvement. They promote education and job placement, and access to medical, mental health, dental, homelessness, unemployment, family counseling, and employment services.

Example: California has 33 veteran’s treatment courts throughout the state.

Veterans Homes

Every state operates at least one veterans home providing long-term care services to eligible veterans. These homes offer skilled nursing care, assisted living, and care for veterans who need specialized support in their daily lives. 

Example: North Carolina operates four state veterans nursing homes. Applicants must be a veteran who served on active duty and was discharged under honorable conditions. The veteran must be a resident of North Carolina for two years immediately prior to application. And must be disabled and in need of nursing home care with physician orders. Veterans with a 70% disability rating or higher have most of their costs paid by the VA.

Veterans Cemeteries

Most states maintain their own veterans cemeteries, providing a final resting place for veterans and their eligible family members.

Example: Idaho has two state veterans cemeteries where any veteran may be buried (do not have to be a resident of Idaho). Most veterans are eligible for a VA burial plot allowance that covers the cost of internment, a grave marker, use of a committal shelter, and perpetual care of the gravesite. Spouses can share plot and grave marker with the veteran, but will need to pay their internment fee.

Don’t Miss Out!

You won’t receive these benefits automatically. Check with your local veterans services office or the official website of your state’s Veterans Affairs office for the details on specific benefits you may be eligible for. Then apply!

And remember, every state is different. So it’s on you to look for what a particular state has to offer and apply. Benefits available to you may vary based on factors like your length of service, type of discharge, and level of disability rating (if any), so check the details. 

Here’s the VA link again that has the websites for all 50 states’ veteran services.

https://www.va.gov/files/2020-11/state-benefits-quick-start-guide.pdf

If you need help navigating state-level veterans benefits or federal VA benefits, get in touch with one of our military planners.  MFAA-planners excel at figuring out how to maximize your benefits.  You can find the list of MFAA planners here.

Categories
Military Pay

Why Should you Care About the Survivor Benefit Plan Open Season in 2023?

Why Should you Care About the Survivor Benefit Plan Open Season 2023

Why Should you Care About the Survivor Benefit Plan Open Season in 2023?

When a retiree dies, his/her retired pay (and VA disability compensation) also expire. The Survivor Benefit Plan is a continuation of part of retired pay for a surviving spouse and or children. It can also support special needs dependents too.

The 2023 National Defense Authorization Act (NDAA) authorized a rare “open season” for eligible active and reserve retirees to get into or out of the Survivor Benefit Plan (SPB).  This is a big deal as there have been very few other open seasons in history (about one per decade and at the whims of Congress) and retirees end their service knowing that opting out of SBP is generally a one-way door.

Because opting back in is the rarer opportunity, this article focuses on getting back into SPB versus opting back out past the normal 3rd year opportunity.

A Quick SBP Primer

The DFAS website (and countless other blogs) has all the weedy details about SBP, but here’s what you really care about.  We’ll focus on the most common case—a married service member that chooses the Spouse full coverage SBP option. SBP costs 6.5% of retired pay per month. It comes out pre-tax. If the military member dies, the surviving spouse gets 55% of the military member’s retired pay.

The Pros of SBP include:

  • Inflation-adjusted income for the surviving spouse until remarriage (before age 55) or death.
  • The amount received is generally enough for a mortgage but is unlikely to cover 100% of expenses.
  • The surviving spouse does not have to determine how to invest an insurance payout to create lifetime income.

The Cons of SBP include:

  • If feels expensive initially-especially for military members that aren’t sure what their financial situation will look like on the other side of military retirement.
  • It looks expensive compared to sizeable amounts of Term Life Insurance.
  • 55% of say, 50% of basic pay isn’t enough to live on.
  • The benefit is taxable as ordinary income. Insurance payouts are tax-free and returns from invested insurance dollars could be at more favorable capital gains tax rates.
  • It goes away with remarriage before age 55 (but comes back if the new spouse dies or divorces).
  • Except for unpredictable and rare open seasons, it cannot be cancelled after the 3rd year of premiums. The premiums last for 30 years or until death.

There is an excellent, inexpensive, and short book available by a retired naval officer that has even more detail. In my experiences there are a few key reasons why retirees decline or opt into SBP.

Reasons that retirees take SPB:

  • Health conditions prevent attempting to replace it with Term Life Insurance and any other form of insurance is expensive and inadequate to the task.
  • Spouse indicates that s/he feels more secure knowing that there will always be some basic level of inflation-adjusted income.
  • Spouse will be unable to earn an income sufficient to provide for the family’s needs.
  • The family has not built a nest egg at military retirement such that, the nest egg combined with a Term Life Insurance payout could replace the income from SBP.

Reasons retirees decline SBP:

  • The premium is several hundred dollars per month and feels expensive compared to any other insurance the member has encountered.
  • Both spouses will be military retirees, thus one pension will continue if one spouse lives.
  • Both spouses work such that the surviving spouse expects to provide for his/her own needs (plus any children).
  • The family has purchased sufficient Term Life Insurance and believes that:
  • If the retiree dies, the spouse can invest and manage the payout to replace lifetime income needs.
  • The family has a nest egg growing such that the family will be self-insured before the life insurance term expires (which the surviving spouse can invest and manage to replace lifetime income needs).

Keep in mind that what you just read is a low pass over an extremely important topic and it’s vital to your family’s well-being to invest the time and effort required to make a fully informed decision about SBP.

Opting Back Into SBP

While the DOD has yet to announce the devilish details of how the SBP Open Season will work, the NDAA gives us enough information to start exploring the concept.  Let’s examine the case of an O-6 that retired at 23 years in 2020, receives $6,500 per month in retired pay, and chooses to opt back into SBP during the calendar year 2023 Open Season.

The NDAA states that members will need to meet the following criteria to opt back in:

  • Repay missed premiums since retirement (becoming eligible for SBP)
  • Pay interest on the missed premiums
  • Pay any other fees/penalties instituted by DOD

One not-so-small detail in the NDAA is that the calculations on these payments are supposed to be from the date one elects to opt back into the SBP.  If SBP Open Season isn’t already up and ready to as of the NDAA signing (it doesn’t appear to be as I’m typing), then retirees may have to pay for extra months simply because there is no way to opt back in yet.

Sample calculations (holding inflation at 0%) on the costs of opting back into SBP might look like:

  • Months in non-covered status: 36
  • Total premiums not paid: $15,210 (36 months * $6,500 * 6.5%)
  • Interest on premiums: $685 (hypothetical 3% interest compounded monthly from first “missed premium”)
  • Fees: $500 (hypothetical administrative fee)
  • Total upfront payment to opt back into SBP: $16,395
  • Remaining premiums paid over next 27 years if retiree does not die during the normal 30-year payment period: $136,890
  • Total cost of SBP over 30 years: $153,285
  • Total retired pay received over 30 years: $2,340,000

Wow! That’s a lot of Money…

You live in a different financial world if those numbers are budget dust to you. For most readers, separating with six figures of pay for a benefit that may never be used is hard to swallow.  Remember though, opting back into SBP is about taking care of a spouse that doesn’t share your interest in the details of investing such as costs, taxes, asset allocation, timing, account types, custodians, etc.

Still, if you’ve reconciled that you might be willing to make the monthly premium payment going forward (6.5% of your retired pay) but are having a hard time stomaching the upfront cost, it might be good to revisit alternatives.

Perhaps you initially purchased $1.5 million of 20-year term coverage, but now feel as though inflation has eroded the buying power of those dollars. Have you looked at getting more term coverage, perhaps for a longer period?  $16,395 would buy nearly 15 years of an extra $1M term policy at $100 per month.  What additional amount of time and payout to your nest egg would have you and your spouse comfortable trading guaranteed secure income for a one-time windfall?

That $16,395 payment would have bought my first new car and most of the price of the cars I’ve bought since.  It’s a bit more than I plan to spend on vacations and travel most years.  What line items from your family’s budget could skinny-down for a year or two to pay for the upfront missed premiums?

Since ultimately, we’re talking about purchasing a feeling of security for a widow(er), what is that worth? Clearly this is a complex question to answer, and each family needs to do both mathematical analysis and wade carefully through what might be an emotional mine field to get to the right answer.

Cleared to Rejoin

SBP is an important part of your retirement benefits. While it may seem expensive, it’s really about buying security for your spouse/family during part of their life they never expected to have to live: without you.  Even if you have what feels like sufficient life insurance, will your spouse be up to the task of turning a life insurance payout into income for life?

If you consider buying back into SBP, it will be important to compare the costs versus alternatives such as even more life insurance. Since you can’t enroll just yet, here are action steps you take today:

  • Review your life insurance and the assumptions behind it
  • Project your nest egg’s growth under varying conditions
  • Plan where the SBP upfront re-enrollment costs might come from
  • Project your new budget with the SBP premium factored in
  • Revisit the DFAS SBP Open Season site (or set up a Google News Alert) weekly
  • Talk to your spouse about the pros and cons of your current choice and the alternatives

Fight’s On!

Categories
Military Pay Military Retirement Taxes

Is My Military Retired Pay Tax Free if I have a VA Disability Rating? – NO!

Military Retirement Tax Free

Is My Military Retired Pay Tax Free if I have a VA Disability Rating? – NO!

 

Every year I have a handful of clients ask me if their military retired pay (a.k.a. pension) is tax free because they have a disability rating from the Department of Veterans Affairs (VA). When I ask why they believe their military pension is not subject to taxation they forward me “the email.” It is semi-official looking and seems to be from someone who ought to know what they are talking about. The email cites an IRS publication and sometimes (depending on which version you get) a court case.

 

It’s all twaddle. Your military retired pay is taxable income.

 

Like everything involving tax rules there are exceptions to the general rule. That is doubtless where the confusion originates. “The email” makes it seem like many more veterans qualify for the exception than do. The simple test to apply is this – do you have a written determination from the VA or your branch of the service specifying that your disability is combat-related. If that answer is ‘no” then you are paying taxes on your military retired pay. (If the answer is “yes”, you might still have to pay taxes on it, but you have no hope of being tax free without that official determination.)

 

Until recently I had to provide a long explanation to recipients of “the email,” some of whom ardently believe their retired pay was not taxable because they had a VA disability rating. I would have to explain that the court case did not apply, that IRS publications are not legally authoritative, and that the passages cited are being taken out of context. The explanation got much shorter recently, as one veteran took her case to the US Tax Court. The judge ruled against her, and his explanation sheds some light on the tax status of military retired pay.

 

You can read the full Tax Court Memo here.

 

T.C. Memo 2022-42; Tracy R. Valentine v. Commissioner filed April 28, 2022

 

Valentine is an Army veteran who was honorably discharged in 2002 after 22 years of active duty service. She had a disability rating of 60% that was increased to 90% effective May 1, 2016. For the first 4 months of 2016 she received VA disability payments of $1100 per month. For the remaining 8 months of 2016 she received $1700 per month in VA disability payments. The IRS does not dispute that these payments from the VA are tax free (excluded from income).

 

Valentine also received $23,801 from her Army-based retirement plan in 2016. She received a form 1099R from DFAS, reporting the entire amount as taxable. When Valentine filed her 2016 tax return she reported the taxable income from her military pension as $3,158, excluding the remaining $20,643 as not taxable income. The IRS disputed her claim that part of her military pension should be excluded from income and issued a Notice of Deficiency (NOD). Valentine exercised her right to challenge the NOD and petitioned the Tax Court for relief.

 

At Tax Court Valentine testified that IRC Section 104(a) and 104(b) entitle her to use the VA disability rating to exclude both the VA disability payments and a portion of her military pension from taxable income. Valentine represented herself at Tax Court and did not cite specific sub-paragraphs of the IRC to support her claim.

 

In his ruling Judge Gustafson provided some analysis of the tax code. There are two separate provisions in the tax code that could render a veteran’s military retired pay excludible from income. Under section 104(b)(2)(C) a veteran may exclude a portion of the distributions from income if they qualify as “amounts…received by reason of a combat-related injury”. Valentine did not provide any testimony or evidence at trial to indicate her disability rating was combat-related. Therefore section 104(b)(2)(C) does not apply.

 

The other provision is contained in section 104(b)(2)(D). A veteran may exclude a portion of the distributions from income equal to an amount they “would be entitled to receive as disability compensation”. There is legislative history supporting the court’s interpretation of this to mean that it does not apply if one is already receiving disability compensation from the VA. As Valentine was already receiving disability compensation from the VA, section 104(b)(2)(D) does not apply.

 

The Bottom Line

 

Bottom line: The US Tax Court ruled all the retirement distributions Valentine received are “properly includible in her gross income”. Military retired pay cannot be excluded from income solely because one has a VA disability rating. Valentine was also subject to penalties and interest on the tax owed for not reporting the income on her 2016 tax return.

 

I have had clients contact DFAS, explain they have a VA disability rating, and request the tax withholding on their military retired pay stop. When DFAS stops the withholding the veterans assume DFAS agrees that the pay is not taxable. That is not true. It simply means that DFAS will stop tax withholding on your military retired pay if you request it. When the 1099R is issued it will state that all the retired pay is taxable. Since the IRS also receives a copy of your 1099R, they will expect you to declare it on your individual income tax return and pay taxes on it. If you don’t, they will issue you a Notice of Deficiency and charge you penalties and interest for failing to report it.

 

I am a veteran with a VA disability rating. I want my military retired pay to be tax free. I am also a tax professional. If my military retired pay was tax free I’d know about it. If our military retired pay was tax-free I would be writing about it. My colleagues would be writing about it. The VA, VFW, DAV, and the American Legion would all be writing about it. The IRS would have pages of FAQs about it. You wouldn’t find out about it through an old forwarded email that tells a story too good to be true.

 

If you still have questions, the Military Financial Advisor’s Association has both tax professionals and financial planners with tax planning expertise that can help with your unique situation.

 

 

 

 

Categories
Financial Planning Military Pay

10 Financial Opportunities and Challenges Dual Military Couples Experience

Dual Military Couples

When both members of a couple serve in the military, they share a greater understanding of the mission and life demands that come with putting service before self.  They also share the unique financial planning opportunities and challenges created by their double duty lives.

 

While dual military couples enjoy the financial advantage of two incomes and twofold benefits; they also to juggle the challenges that come with two military careers – two missions, two commanders, two demanding work schedules.   Add a couple of kids to the mix and you’ve got a recipe for financial challenges created by tag-team deployments, maintaining multiple households, and paying for sky-high childcare expenses.

 

Across the Department of Defense, seven percent of service members are in a dual military couple; or looked at another way, one in five military women are in a dual military couple.

 

If you’re a member of a dual military couple or a couple considering jumping into military service together, this article will help you understand the unique financial planning opportunities you may experience and the financial and career challenges you may face.

 

Let’s look at the top ten financial opportunities and challenges dual military couples experience.

 

#1: Two Incomes

 

No matter the rank, two incomes make life a little easier – easier to live within your means and easier to avoid debt. Two incomes allow dual military couples to save more aggressively for both short and long term goals, provided they’re able to establish a standard of living more closely aligned with one income, than two.

 

The key for dual military couples is to take advantage of this opportunity from the beginning of their careers.  Demographic data tells us that the number of dual military couples drops off dramatically as rank increases.  Among enlisted ranks, the number of dual military couples peaks at E-6; for officers, the peak is O-3. (DOD Demographic Report.)

 

This data suggests that dual military couples are wise to maximize their savings and investing opportunities in the first ten years of their careers in part to benefit from the power of compounding; but also, recognizing this two income opportunity may be fleeting.

 

#2 Two Housing Allowances

 

In many situations both members of a dual military couple receive a basic allowance for housing (BAH).  Let’s walk through a couple of scenarios –

 

First, if a dual military couple is assigned to the same location and live off base, both members of the couple receive BAH.  If they’re able to carefully manage their housing costs, this is a golden opportunity to ramp up their savings rate by applying their second housing allowance toward their Thrift Savings Plan (TSP) account or other savings accounts.

 

If this same couple lives on post in privatized housing, they both receive BAH, but their rent is based on one BAH at the with dependent rate.   This too can be a great opportunity to maximize their savings rate by applying the additional housing allowance toward savings.  By contrast, if this same dual military couple is assigned government provided housing, neither receives BAH.

 

If a dual military couple has a dependent child, one of the two members receives BAH at the dependent rate.  In the not so rare case that the couple is not assigned together and each of them has a dependent child living with them, then both members could receive BAH at the dependent rate.

 

Let’s walk through an example of this last scenario.   A dual military couple with two kids is stationed overseas when the husband receives a one-year stateside school assignment.   He relocates stateside with one of the couple’s children, while the wife extends her assignment overseas and keeps their other child with her.  Both receive a housing allowance at the with dependent rate.

 

This example of multiple households leads to our first challenge –

 

#3 Living Together or Not?

 

The services try to keep dual mil couples together when possible, the Air Force refers to these assignments as a “join spouse” assignment, while the Army calls it a “joint domicile” assignment.

 

Like everything in military life, the needs of the service always comes first. It isn’t always possible to perfectly align two military careers every step of the way, especially as both careers progress into leadership positions.

 

When it all works out, one roof with two BAHs, it’s an amazing opportunity to save, save, save.

 

When it doesn’t work out, when the couple needs to maintain two households because they aren’t stationed together, that’s when they’re really glad they decided to live within the value of one BAH at their previous assignment.

 

Technically a “joint domicile” assignment could assign the spouses to two separate installations within 50 miles from each other.  In this scenario, a dual military couple might decide to live somewhere in the middle and each commute to their duty station.  This scenario is common with dual military couples who are not in the same service.

 

#4 VA Loan Entitlements

 

With all this moving to and from installations, sometimes together, sometimes not; it’s important to understand that each member of a dual military couple earns their own VA Loan entitlement.

 

When they buy a home, they can either use one of the entitlements and save the other for a future home purchase, or they can split the entitlement, leaving each of them with a partial VA entitlement.

 

An important consideration is if one of the spouses is a member of the Reserve Component and has already established a VA disability rating; their VA loan entitlement allows them to avoid paying the VA funding fee, which could substantially reduce their upfront costs for purchasing their primary residence.

 

So far, we’ve looked at several financial opportunities that dual military couples experience which allow them to maximize their savings; but it’s important to consider a few of the common financial challenges.

 

#5 Military Childcare

 

Obviously, quality childcare is critical to all working parents, military or not.  Across corporate America, only 20% of employers provide any assistance or subsidy for their working parents’ childcare needs.  Fortunately, the DOD has invested substantially in installation Child Development Centers (CDCs) and Family Childcare programs.

 

The DOD’s childcare program is the largest employer sponsored childcare program in the US, providing care to over 200,000 military children at a cost of about $1B per year.

 

CDCs provide nationally accredited childcare to our military families at an affordable price, but dual military couples still face several childcare related challenges.

 

Availability.  There are more than 400,000 military kids under the age of 5, yet only half that many CDC slots across the DOD.  Unfortunately, waitlists are the norm at many installations.  Single military parents and dual military families have priority at their installation CDC, but even that advantage is not always enough to guarantee a slot when they need it.

 

Duty Hours.  The typical duty day rarely fits neatly within the CDC’s hours of operation, leaving parents with extended duty days or shift work scrambling for alternatives.  Training exercises and temporary duty assignments stretch dual military parents even further beyond the CDC’s hours.

 

Cost.  To say that childcare is expensive is an understatement, even on two incomes.  Nationwide, parents spend on average more than ten percent of their income on childcare; in high cost of living locations like Washington DC, couples can spend over $2000 a month on a single child’s care.

 

For dual military couples who can’t fit their duty day within the CDC’s workday, they often turn to nannies to provide in home care including early morning and late evening care, or overnight care when necessary.  On average, nanny’s charge $700-800 a week or over $30,000 a year.

 

Subsidized Fees.  In order to keep CDCs affordable, the military subsidizes the program and charges parents on a sliding scale based on their total family income.  These fees can range from just under $300 to almost $800 per month per child; both well below the national average.

 

Fee Assistance.  Additionally, the services now offer financial support to families who cannot find care for their children on the installation, either because of a lack of availability or the distance between the duty station and the CDC.  The Fee Assistance Program is meant to partially cover the difference in cost between what the servicemember would be expected to pay at the CDC and what they are required to pay at an off base childcare facility.

 

# 6 Tag Team Deployments

 

Let’s look at another financial challenge for dual military couples – potential Tag Team Deployments.  When spouses are in separate units, that can mean separate deployment schedules.

 

In some cases, dual military couples with kids intentionally alternate their deployments so that one parent is always home with the kids.  While this is an amazing sacrifice, it can be a strain on their relationship and their wallet.

 

This constant churn of one parent always being deployed can increase childcare expenses, travel costs, and spending on household help to balance the demands on the family.  Fortunately, when the demands of duty keep these couples apart, they may be eligible for the Family Separation Allowance (FSA).

 

The one positive of these dual deployments is that it provides ample opportunity to push up their tax-free Thrift Savings Plan Roth contributions while in a combat zone.  They may also contribute up to $10,000 to the Savings Deposit Program earning 10% interest during their deployment.

 

#7 Estate Planning

 

You can’t talk about dual military couples’ deployments without addressing the importance of proper estate planning.  Because both members could and often do deploy, their estate planning preparedness is even more critical to their overall financial plan.

 

If they have minor children, they have the added requirement to complete their services’ Family Care Plan, which requires among other things, naming short-term and long-term guardians for their children should they need to deploy on short notice.

 

Dual military families frequently list this as their biggest pain point.  Each time they PCS, they find themselves in a new community, a long way from family, asking brand new neighbors they barely know to take responsibility for their kids on a moment’s notice.

 

#8 Two GI Bills

 

One of the most amazing financial benefits dual military families earn is two GI Bill education benefits.  All that money they spent on childcare–they finally get a benefit that can work for them!  For dual military couples, this provides the ultimate education funding flexibility.

 

From a planning point of view, each member of the couple should transfer their benefit to other spouse as soon as they’re eligible, this starts their service commitment clock.  If they have children, they should both transfer at least one month of GI Bill benefit to each child.  This sets them up to take full advantage of this amazing education benefit when their kids are college bound.

 

#9 Two Careers

 

It can’t be overstated how difficult maintaining a marriage and raising a family can be when there are two military careers involved – two separate but important missions to achieve, two commanders to serve, and two deployment schedules to meet.   It’s a lot.

 

Dual military couples face a constant challenge to live together while meeting the needs of their services.  Every career milestone is fraught with possibilities and tradeoffs between the two careers.  Every assignment cycle brings another “should I stay or should I go” conversation.  Whose career will take priority? Will we be able to live together? Where will we find childcare?

 

What frustrates many dual military couples is that they have little or no control over these life changing decisions.  This lack of flexibility leads many dual military couples to decide that one member will step off active duty and into the reserve component to gain more control of their lives.

 

From a financial planning point of view, it’s important to recognize that the competing demands of two careers and raising a family may put achieving two active duty retirements out of reach.

 

 By optimizing your savings opportunities in your early career, you can ensure you’re financially prepared to make decisions when career challenges arise later in your career.

 

#10 – Two Pensions

 

Finally, if a dual military couple survives all the deployments and meets all the competing mission demands, in the end, they earn the best financial opportunity of all, two military pensions.

 

For many dual military couples, if they’ve saved and invested properly all along, this can mean a “BIG R” retirement.

 

They may not need to take on a second career.   They may be able to hop in the RV and travel the county or more likely, chose work that is rewarding rather than focusing on earning power.

 

Looked at from investment portfolio point of view – two military pensions mean double the income floor provided by their inflation protected government pension; which could allow them to carry a higher equity to bond ratio in their portfolio than would be typical for their age or retirement timeline.

 

Also important is that they will have two Survivor Benefit Plan (SBP) decisions to make.  If both members of the couple had careers of equal length and rank, if they don’t have any dependents at home and have saved aggressively, growing a large investment portfolio on which to rely, their SBP decision could be simple.

 

On the other hand, if they have significant career differences, maybe one left as soon as they reached 20 years, while the other continued to get promoted and retired at 30 years; then their SBP decision is a little more complicated.

 

Another factor to consider is that because of the competing work/life demands, dual military couples frequently wait to have children until later in their careers.  This means their kids are younger when they retire from the military and have a longer time horizon until they become financially independent adults.  This can create a scenario where it is important for dual military couples to extend SBP coverage to their children.

 

Follow these links for more insight on the Survivor Benefit Plan and Reserve Component SBP.

 

A Financial Strategy for Dual Military Couples

 

If you’re a member of a dual military couple, what is important to understand is that you will experience opportunities and challenges along the way.  If you’re able to maximize your savings and minimize your debt when your dual military careers align, you’ll be prepared for the inevitable financial and career challenges when your careers don’t align.

 

As a dual military couple, you don’t need to get every financial decision correct, nor do you need to perfectly align your career aspirations at every turn.  If you’re able to maximize your savings opportunities, you’ll have the financial freedom to make decisions that best support your combined professional goals and your family’s priorities.

Every military family’s situation is unique and presents its own challenges and opportunities.  We recommend working with a financial planner who understands your military benefits from first-hand experience and specializes in serving military and veteran families.  The advisor members of MFAA understand your life, your challenges and your benefits because they’ve walked in your shoes.

The information provided in this blog is simply that, information.  It is not intended to serve as an individual recommendation and should not be relied on as investment or tax advice.

Categories
Financial Planning Goals Insurance Military Pay Military Retirement Savings Taxes

Military Retirement: Should You Take SBP?

Military Retirement - Should you take SBP

Military Retirement and the Big SBP Decision

This article was jointly written by Adrienne Ross, CFP ®, AFC ®, and Pam Bergeson, CRPC

As you’re working your way through your pre-retirement checklist, you may have discovered a couple of decisions that you need to make before you out process one last time from the military.  Of all these decisions, none is more important or more permanent than your decision to accept or decline the military’s Survivor Benefit Plan (SBP).

This blog dives into some of the most common questions about SBP and shares a few examples of when the SBP can be most useful.  It also addresses some of the common myths surrounding the military’s SBP.

What is the Survivor’s Benefit Plan (SBP)? 

The most important fact to know about the amazing military pension you’ve earned during your 20+ years of service is that it ends at your death.  The only way to ensure your spouse and/or your dependents continue to receive a portion of your retired pay is to sign up for the Survivor Benefit Plan.

In the event you pass away before your spouse or your dependent children, SBP continues to pay an inflation adjusted monthly benefit, known as an annuity, to your survivors.  In the case of your spouse, the annuity continues until their death or remarriage in some instances.

What may surprise you is that while you’re on active duty, you’re already covered by SBP at no cost.  If an active duty service member dies of a service connected cause, their survivors are covered by the Survivor Benefit Plan.

Of all the decisions you’ll make at retirement, the SBP election is the most critical because it is largely irrevocable.

Why is your SBP decision so critical?

The exact decision comes in the form of either accepting or declining SBP in the weeks before your final out processing.  If you’re married and decide to decline SBP or accept less than the full SBP benefit, your spouse will need to sign off on that decision during your out processing. The rationale behind requiring your spouse’s concurrence is he or she has the most to lose if you decline SBP.

If you decline SBP, it is very unlikely that you’ll ever have a chance to regain it, your decision is final.   On the other hand, if you elect to accept SBP, you will have an opportunity to discontinue it during the period between 25-36 months after your retirement.  To be extra clear – this window of opportunity to change your mind in your third year of retirement is a one-way decision – exit only.  You can only choose to discontinue SBP, you cannot regain access to SBP.

The only other opportunities to change your SBP decision occur when you have a qualifying major life event that changes the status of your dependents.  The death of your spouse, marriage to a new spouse, or the birth/adoption of a child are examples of potential events that could trigger a short window to change your SBP decision.  The rules surrounding these life events and which ones do or don’t trigger an opportunity to add SBP coverage are complicated and require detailed information to understand fully.

The decision to accept or decline SBP is unique to each service member and their family.  Because there are so many important variables to consider, it is vital to make your own decision with your family’s specifics in mind rather than simply following the decisions of your peers.

Your SBP decision requires careful consideration of your family’s make-up including your ages, age differences, health status and each spouses’ earning potential along with your children’s ages, health, and educational goals, and finally your spouse’s financial interests.  We take a closer look at many of these variables in the next few paragraphs.

Why do you need SBP?

If your family depends on your income, then your decision on SPB is critical to your financial plan.  

If you’re married or have dependent children, chances are they rely on your military pension for a portion of their monthly living expenses.  If your family depends on both your post retirement civilian income and your military retirement income to cover their living expenses, the impact of your passing would be even more devastating.

If your spouse’s lifetime earnings have been hindered by multiple military moves over the course of your military career, they most likely have accumulated fewer retirement assets of their own.  In this case, the SBP annuity may prove even more important in providing long term security to your family.

As difficult as it is to imagine, you must ask yourself if your family had to live without you, and without your civilian income and your military pension, could they pay the mortgage or rent, would your family be able to afford college tuition, and would your spouse have sufficient income to cover their living expenses well into retirement and old age?

What’s so special about SBP?

In today’s retirement savings environment, pensions are rare; a pension with a cost of living adjustment is like finding a unicorn.

Inflation protected.  Your military pension and its survivor benefit are that rare unicorn.  Your military pension adjusts each year to keep up with inflation and your SBP will continue to do so as well.  SBP ensures your survivors continue to benefit from your decades of dedicated service through continued payments from your inflation-adjusted pension.

As the cost of living increases, so does the SBP payment to your survivors.  For example, if your spouse lives twenty years longer than you, the value of their SBP annuity will keep pace with inflation over those two decades.  A payment of $1000 in 2021 could more than double over the course of your spouse’s lifetime.

SBP eliminates two of the most significant risks a widow or widower faces – longevity risk and inflation risk.  

Risk management. Longevity risk is the risk that your surviving spouse will outlive the money you’ve saved for retirement.  With SBP, you don’t have to worry how long your surviving spouse will live, the payments continue as long as he/she is alive, or in some cases, until he/she remarries.

Inflation risk is the risk that the value of the money you’ve saved for retirement won’t keep up with the cost of living over the decades after you retire.  The SBP payments increase each year commensurate with the national inflation rate.  This increase ensures the payment your spouse receives can still cover key expenses as their costs increase.

A third type of risk avoided with SBP is default risk. Default risk is the risk that your life insurance or annuity provider will run out of money or go out of business before paying all the payments they’ve promised you.  Because the SBP is backed by the US Government, the risk of default is nearly zero.

Pre-tax premium.  Beyond eliminating risk in your long-term retirement plan, your SBP premium is paid before your taxes are calculated, meaning the amount you pay is lower than it appears.  For example, if your SBP premium is $300 per month and you’re in the 15% tax bracket; your pre-tax SBP payment is only $255.  For more senior retirees the benefit of SBP’s pre-tax premium is even greater.  A $800 SBP premium for someone in the 28% tax bracket only costs the retiree $576.

Are there situations when I don’t need SBP?  

There are certainly a few examples of situations where you might not need SBP.  First, if you don’t have anyone depending on your income, no spouse or dependent children, you likely don’t need SBP.

If you’re a dual military couple without dependents who’ve earned very similar military retirement benefits, you may not need SPB, or you may be able to take less than the full SBP rate and still cover your future expenses.

This isn’t true of all dual military couples.  When a dual military couple has substantially different career lengths and where there is a significant difference in rank at retirement between the two service members, the SBP decision is less straightforward.

The same comparison is true if your spouse has their own pension through their civilian employer.  Or if the non-military spouse has higher life-time earnings and retirement savings that set them up for a self-sufficient retirement.

What are some special considerations with SBP?

Special needs. If your retirement income will support a dependent with special needs you may want to designate a special needs trust to receive your SBP benefits instead of passing directly to the special needs child, so as not to negatively impact their access to other government benefits.  If this situation applies to you, you’re advised to work closely with an attorney who specializes in special needs trusts in advance of making your SBP election.

Divorce.  If you’re divorced, your former spouse may have a legal claim to a portion of your pension and therefore a court order could require you to obtain SBP coverage.  Learn more about these requirements at this link. https://militarypay.defense.gov/Benefits/Survivor-Benefit-Program/Costs

Reserve Component. The rules for Guard and Reserve retirees differ slightly in terms of when you make your SBP election and the cost of your SBP premium.  We’ll cover the specifics of the Reserve Component Survivor Benefit Plan (RCSBP) in a future post.

If you’re still wondering why you need SBP, let’s explore some of the myths about the costs and benefits of the program. 

Data from 2018 suggests that retirees from each service have different outlooks on the benefits of SBP.  On average, the participation rates of Army and Air Force retirees exceed 60 percent, while Navy and Marine retirees participation remains below 50 percent.  These differences between services may reflect variations in understanding and potentially misunderstanding of the benefits of SBP.  Let’s explore some of the myths surrounding SBP that may impact your decision on SBP.

Some myths about SBP

Myth #1: I can buy term life insurance a lot cheaper than SBP.

Fact: Depending on your age and health, term insurance may in fact be less expensive than your SBP premium.  What is important to consider is that term life insurance is a temporary solution to a long-term challenge.   Term insurance by its very nature is for a specific term or period of time.  The premium you pay is based on your age and your health; as you age, your premiums will increase dramatically.  Have a history of high blood pressure, smoking or asthma?  These and other health conditions will dramatically increase your premiums. Love to scuba dive or pilot airplanes, you may not be insurable.

Fact: The second part of the “buy term” equation is that you need to “invest the difference” in order to cover your family’s loss of your military pension when your access to inexpensive term life insurance ends.  Because it is difficult to secure affordable term life insurance beyond age 60-65, you will need to use the time between your military retirement and reaching your sixth decade to build up a substantial investment portfolio to offset your lack of life insurance.  The savings you reap between the cost of SBP and the cost of term life insurance needs to be invested in order to earn sufficient gains to cover your family’s expenses and to stay ahead of inflation.  This requires not only persistent discipline to save, but also the willingness to take on investment and market risk to generate long term gains.

Myth #2: I’ve done the math; I’ll save money by not selecting SBP.

Fact: There is way more to your SPB decision than just a math problem.  For that math problem to work in your favor, you need to accurately predict how markets and inflation will behave and then you must accurately predict how you and your beneficiaries will behave.

Inflation & Markets: To adequately replace SBP with term life insurance requires you to accurately estimate several very important unknowns, including inflation over the next four to five decades, investment returns over the same 40-50 years, your life expectancy and your spouse’s life expectancy.  These are some important variables, all of which you have no control over.

In the case of future inflation and investment returns, even economists won’t venture to estimate these factors forty years into the future.   If you’re able to create a scenario where the math works in favor of term life insurance, all you need is a steady increase in inflation or a couple of stock market declines to turn your carefully crafted mathematical solution upside down.

Human Nature: There are also several key behavioral predictions necessary to make this math problem work out.  First is the one mentioned above, you need to follow through with the disciplined investment of the “save the difference” if you buy term life instead of taking SBP.  Then you need to have the aptitude and willingness to take on the necessary market and investment risk to grow your investment in order to come out ahead of inflation.

Next, your spouse will need the aptitude to safely manage the life insurance windfall.  She/he will need to continue to manage these investments, balance risk factors and make decisions about taxes in order to generate sufficient income to pay the bills for the rest of their lives.

Myth #3: Life Insurance proceeds are tax-free, SBP payments are taxable.

Fact: Life insurance proceeds are income tax-free, but once those proceeds are deposited in your spouse’s checking account, she/he will need to invest them in order to generate sufficient income and capital gains to keep up with inflation and replace the loss of your military pension for the remaining decades of their life.   Guess what? Investment earnings are taxed as either income or long-term capital gains, depending on the type and duration of the investment.

Conversely, SBP premiums are paid before tax and life insurance premiums are paid post tax.  This means you can discount the cost of your SBP premium by a factor equal to your tax bracket.  Once you calculate the tax advantaged cost of SBP, there may be very little difference from your post tax term life premiums.

Concluding thoughts on SBP

Unfortunately, myths and misinformation surround SBP.  What’s key to remember is that your SBP decision is the single most important decision you’ll make when you retire from the military because your decision to accept or decline SBP will impact your family when you’re no longer there to support them.

It’s critical to consider all the facts and make an informed decision that best supports your family.  Because this decision can have impacts well beyond a carefully crafted math equation, it is important to consider the lasting impacts on your family and your financial plan.

Sometimes it comes down to one simple consideration: which decision helps you sleep at night knowing your family is protected.  

Because the right answer is unique to each military family, we recommend working with a financial planner who understands your military benefits from firsthand experience. As financial planners who help military families every day, we know from experience that each military family’s SBP decision is unique and depends not just on their present-day budget, but on all the elements that go into a great financial life plan.

The financial planners at the Military Financial Advisor Association can help you work through the various SBP scenarios so you can make the decision that best meets your family’s needs.  Reach out to one of us today!

 

Categories
Financial Planning Military Pay Taxes TSP

How Much is Your Military Compensation Actually Worth?

Understanding Your Entire Military Compensation

For any servicemembers who are transitioning out of the military or perhaps daydreaming about what that might look like someday, many of them have never considered the full impact that transition will have on their finances and total compensation.  Most of the servicemembers that I talk to are surprised after they separate and don’t have the same salary, benefits, or total compensation as they did in the military.  So what can you do about this if you’re set to separate or are thinking about it?

Every year, usually in early April, DFAS publishes the Personal Statement of Military Compensation (PSMC) with the intent to help make servicemembers’ full compensation more readily visible.  While DFAS states that this may be helpful in applying for credit or loans, the true benefit lies in understanding what your equivalent compensation would need to be outside of the military to maintain your same standard of living.

So what is compensation? 

In this context, compensation refers to the entire sum of salary, benefits, and other financial support that servicemembers receive.  The majority is “direct compensation” — money paid directly to you — while the rest is called “indirect compensation” — things that financially benefit you but aren’t a direct payment.  Indirect compensation can either be financial compensation or non-financial.

One example of indirect financial compensation is healthcare.  When an employer helps pay for your healthcare coverage, that’s indirect financial compensation since you otherwise would have to pay that amount.  Indirect compensation can also be non-financial like leave.

Direct compensation is readily apparent because these are clearly listed on your LES while indirect compensation might not be as immediately clear.  The goal of this post is to help you understand the full picture of all of your compensation.

It’s important to take a look at each detail of the PSMC since each analysis can differ based on personal circumstances.  You can access your PSMC through myPay right underneath where you can view your LES.  This article will probably be most helpful if you have your own PSMC to go through.    We will look at an example PSMC for this post and show you how to analyze your own.

Navy members should note they will have to visit the PSMC website calculator directly at:
https://militarypay.defense.gov/Calculators/RMC-Calculator/

Direct Compensation

DFAS pre-fills in your basic pay, special pay and bonuses, expense allowances (OHA, COLA, etc.), as well as an estimate of the added value of indirect compensation which is usually based on the federal tax advantage of BAH and BAS.  This provides the starting point for you to add in some personal analysis about all the indirect compensation and add your estimate back in at the end to get your total compensation figure.

To help illustrate some of these concepts more concretely, we will look at an example of a hypothetical O-3 compensation.

  • Basic Military Compensation: $85,047.96
  • Special Pay and Bonuses: $2,472
  • Total Direct Compensation: $87,519.96
  • Added value of Service-estimated indirect compensation: $3,275.21

Estimating Your Indirect Compensation

As you estimate the various forms of indirect compensation, don’t stress getting each figure down to the exact dollar amount.  The goal is to gain a more complete understanding of what that benefit might cost you if you had to pay for it yourself so estimating is OK.  It’s also usually best practice to estimate conservatively on these figures so you don’t have a highly inflated final compensation figure to compare against equivalent civilian compensation.

If you aren’t sure what a benefit is worth, ask friends or family for help especially if they aren’t in the military and they could give you a more realistic picture of what benefits are worth outside of the military.  Below is an explanation of how you can go about calculating each of the indirect compensation categories on the PSMC.

Military Taxes

In the PSMC example above, DFAS has estimated that based on the current BAH and BAS, this person is saving $3,275.21 a year by not paying federal income tax on those two allowances.

Another thing to consider here is combat zone tax exclusion (CZTE).  The PSMC doesn’t list this as part of the analysis, and it could easily be argued that this is a direct benefit to help offset some of the challenges of deployments.  For many servicemembers however, a deployment might mean going down one tax bracket from 22% to 12%, but more senior servicemembers or dual-military could really reap benefits here if they own more significant taxable investments and drop from the 24% tax bracket to the 12% and its equivalent 0% tax rate on long-term capital gains and qualified dividends.

Junior servicemembers could also drop below the income threshold to be eligible for the Earned Income Tax Credit (EITC) which could mean quite a bit of extra money at tax time.  For this example, we won’t consider CZTE in my calculation, but others might choose to do so, especially if you deploy on a more regular schedule.

  • Formula: (Projected) State Income Tax x Current Basic Pay = State Income Tax Benefit
  • CZTE Formula: # of Months Deployed x Monthly Federal Tax Deduction = Benefit

Military Medical Care

Tricare is undoubtedly the biggest indirect financial compensation for most servicemembers and their families.  For servicemembers who haven’t had a full-time job outside the military, most are insulated from what almost everyone else in the country has been going through over the last several years.  Medical insurance can be incredibly costly for many Americans so this area of compensation is critically important to understand.

As a financial planner who helps people find and evaluate health insurance on their own through the federal and state exchanges, I just cannot stress how amazing this level of medical coverage is!

How much is Tricare worth to you?

One way to measure this is to see how much it would cost you to buy Tricare Standard coverage without the military paying for any of it.  This option exists as the Continued Health Care Benefit Program (CHCBP)  provided by Humana.  Similar to COBRA, this plan can give you temporary health coverage for 18-36 months when you lose eligibility for Tricare.  Basically, it means that you pay 102% of the total insurance premiums which in this case were previously all paid for by the military.

In FY20, CHCBP premiums would be $1,599 per quarter for individual coverage and $3,605 per quarter for family coverage.  In addition to these premiums, there will be yearly deductibles and cost-shares similar to Tricare Standard.  That comes out to a minimum of $6.396 (individual) or $14,420 (family) respectively a year.  Plus, consider that is also a tax-free benefit while on AD so it’s worth even more than just an equivalent cash payout.

Another way to compare the value of Tricare is to see what health insurance coverage would cost you on the healthcare.gov exchanges.  This gives you a very good example of how much you could otherwise be spending given your specific family circumstances as healthy, young individuals can acquire more minimal coverage much cheaper than CHCBP while families might see some major sticker shock.

Many of my military clients who get out and suddenly have to pay the full costs of tens of thousands of dollars a year towards healthcare they purchased on the exchange experience DRAMATIC sticker shock. Even employer-provided health insurance will almost always be far more expensive than anything they paid on AD.

Practice expectations management prior to separating and don’t expect your health insurance to offer as much for as little as Tricare costs.  The bottom line is this: don’t undervalue your Tricare coverage!

Pro tip: consider switching from AD to the Reserve Component to still have access to subsidized medical insurance through Tricare Reserve Select at still a low personal cost.

  • Formula: Expected Civilian Annual Health Insurance Cost – What You Currently Pay Annually for Tricare Prime/Standard = Your Benefit

Military Pension + BRS Match

The legacy military retirement benefits only consist of the High-3 system as an all-or-nothing pension that requires vesting at 20 years of service. As such, it’s a little harder to directly value compared to the Blended Retirement System (BRS) direct matches which are more straightforward.

For the BRS contributions and match, just add those percentage amounts based on the basic pay rate right into your calculation. The BRS matching rate is comparable to many civilian employers’ 401(k) matching.

One of the good friends of MFAA, Doug Nordman, has done a great job giving some estimates of what that military pension is worth. The trick of course is that the pension is still worth “nothing” until you actually vest in it so there’s no real way to say you’ve earned half of the pension’s value just because you have served 10 years.  To quote Doug, “Stay in the military if you’re challenged and fulfilled, but don’t join just to stick it out for a pension.  If the pension is your only motivation then you won’t last past the first obligation.  When the fun stops then you should leave active duty for the Reserves or National Guard instead of grimly clenching your jaw and gutting it out for 20.”

Still, it is critical to understand just how incredibly valuable an active duty military pension can be as an E-7 pension can be worth around $1.4 million at the time of retirement and an O-5 pension could be worth as much as $2 million!

This part of the PSMC analysis doesn’t produce a number to add into your overall compensation, but it does help you think through the calculus of staying in or getting out.  The more years of service that each servicemember has should also weigh heavily in this consideration as it’s easier to make the decision to get out after only 4 years vs. 15 years.

Thrift Savings Plan (TSP)

The TSP offers incredible cost savings as it is dramatically cheaper than the average expense ratio of traditional mutual funds or many employer-sponsored 401k plans.  In 2021, the TSP had a net expense ratio of only about 0.05% while the average expense ratio of the civilian TSP equivalent of a 401(k) and average mutual funds are much more expensive!

That means that if your TSP balance is $1,000, you are only paying about $0.50 a year in fees while that same $1,000 in an average 401(k) would cost you $5 – 10 (per $1K) a year based on plan administration or investment expense ratios.  Over time, that fee differential becomes a huge drag on investment returns — to the tune of tens of thousands or even hundreds of thousands of dollars — which you can see for yourself using this Vanguard tool.

  • Formula: (Amount Currently in TSP x 0.01) – (Amount Currently in TSP x 0.0005) = Benefit

Life Insurance (SGLI), Dependency and Indemnity Compensation (DIC), and Survivor Benefit Plan (SBP)

Let’s analyze SGLI, DIC, and SBP in the context of the actively serving member to apply this to the PSMC, but understand that these concepts also apply to retirees albeit with some differences.  Many companies offer some type of group life insurance that is tied directly to employment and SGLI functions just like this.  Although individual servicemembers pay for SGLI, this guaranteed insurance is still pretty low-cost, but most importantly helps ensure servicemembers can stay insurable post-military with VGLI should something happen to them while in the military.  These are the other benefits broken out:

  1. Should you pass away, your family or designated beneficiary will also automatically receive a death gratuity payment of $100,000 regardless of whether you have SGLI coverage or not.
  2. If your death is determined to be in the line of duty and if you are married, your spouse will also receive monthly non-taxable Dependency and Indemnity Compensation (DIC) payments of at least $1,357.56 and an additional $336.32 for each surviving child are payable. DIC is generally adjusted annually for inflation.
  3. The family will also receive one year of BAH based on the current rate they were previously receiving.
  4. If you die while on active duty in the line of duty, your family is protected by SBP at no cost to you. The formula for this looks like this:  SBP = 0.55 x (2.5% x YOS x average of the highest 36 months basic pay).
  5. Due to some recent changes to how DIC and SBP work together, you should research the most current status to determine how much if any offset is given between these two payments.
  6. For our example here, we will just assume a surviving spouse and one child at $20,316 a year.

So how much life insurance would you approximately need today in order to provide a $20,000 a year inflation-adjusted annuity for the rest of your spouse’s life?  I plug the requirements into the calculator here (I used ~3% for the interest rate as inflation) which says that annuity is worth about $509,000 in today’s dollars given a spouse’s age of 30 and IRS expected life span.

That means I would need to carry an additional $609,000 ($509K + $100K death gratuity) in life insurance today to provide that same level of benefit to a spouse.  For the sake of estimating, we’ll use the SGLI rate of $0.07 per $1,000 of coverage at $609,000 x $0.00007 = $42.36 a month or $511.56 a year. [Note: You could potentially get a lower term life insurance rate than this rate given underwriting characteristics]

The equivalent costs of term life insurance vs. SGLI are usually easy to compare and many servicemembers often carry life insurance through companies like AAFMAA, USAA, or Navy Mutual.  Many people though don’t think about pricing out the income streams that their families could also earn through DIC and SBP when considering their life insurance needs.

Pay Raises

The PSMC next has you calculate the value of annual pay raises, longevity increases, and promotion raises.  While the annual raises haven’t always tracked directly with inflation, the longevity increases, and promotion raises both offer standardized opportunities for increases in pay.  This one is a lot more difficult to measure though and depends on you remaining in the military so we will skip it for this analysis. 

One important consideration for you though might be the comparison here between regular raises in the military and whether or not your civilian career offers the same chances to regularly grow your pay.

Commissary and the Exchange

This category is very dependent on how much each family uses the Commissary and Exchange.  Recent PSMC estimates list out that the average Commissary benefit is about $4,600 a year for a family of four with most people saving about 30% of their grocery purchases.  Take into your purchasing habits to fully analyze this one for you.

  • Formula: [(Average Monthly Commissary Spending x 1.24) x 12] – [(Average Monthly Commissary Spending x 12] = Average Benefit
  • Note: To get a more accurate estimate, an older Stars and Stripes article breaks out the average savings by region and can range from around 19% to over 44% for OCONUS.

Federal Long-Term Care Insurance Program (FLTCIP)

This benefit primarily offers long term care insurance for those looking to help cover the cost of nursing home and other end-of-life care.  The goal of FLTCIP is to help preserve your retirement savings should a long-term care need arise.  Those eligible for the FLTCIP include all Federal Employees (Uniformed Service members), their spouses, adult children (including natural, adopted & step), parents, parents-in-law, and stepparents.  Given my current age, current and projected savings rate, and expected financial independence long before my 60s, I don’t have a need for this.  Your situation may be different especially if your parents could purchase through this benefit program.

Note that this benefit is not as good as it once was and is not necessarily something I would automatically recommend.

  • Formula: Other Annual Long Term Care Insurance Cost – FLTCIP Annual Cost = Benefit

Education Benefits

The military offers some pretty incredible education benefits through Tuition Assistance (TA), the GI Bill, ROTC scholarships, Academy appointments, job certifications, and numerous other opportunities.  I’ve written about that using my own example here where I figured out how I turned $80,000 of education benefits into more than $2.1 million in lifetime value!

The primary education benefit to account for here is TA or service-specific associate degree program since it is a function of remaining on active duty whereas the 9/11 GI Bill vests after 36 months of qualifying service (ROTC scholarship and Academy grads take note that you must first finish your education commitment before starting to earn credit towards the 9/11 GI Bill).

If you are currently still serving towards the 36 months to earn 100% of your benefits or are still serving an ADSC because you transferred the benefit to a dependent, include a pro-rated portion in the calculation below.  There will be lots of variation about how much the 9/11 GI Bill education benefits can be worth so you can personalize this to your own unique situation.

Service Activities

Everyone’s use of the services provided by their base will differ greatly so this is another highly personalized analysis.  Among the most financially impactful is the child development center (CDC) since this cost is subsidized based on rank.  For those that utilize the CDC, you can try to determine the cost of a similar daycare off base and compare the CDC cost to add up your benefit.

Other things to consider include the fitness center, auto facilities, hobby shop, outdoor recreation rentals, etc.

Counseling and Assistance Programs

The PSMC helps provide some figures here ranging from $30 an appointment up to more than $5,000 for transition assistance services to help you analyze the costs for free personal financial management counseling, relocation services assistance, transition counseling, spouse employment consultation, and assistance from a wide range of services available from their services’ community centers.  Again, each individual circumstance will differ here. Note that some of these are given as an estimated hourly rate.

  • Personal Financial Counseling/Education: $ 250 – 375
  • Spouse Employment Counseling: $ 585 – 990
  • Transition Assistance Services: $ 5096
  • Non-Medical Counseling: $ 30 – 100

Legal Counseling

Military members and family members can get free legal assistance in a wide range of areas, including consumer law, landlord-tenant law, family law, estate planning, and tax assistance services.  The PSMC again offers their estimates for costs associated with everything from notarization or powers of attorney to tax returns preparation and consultations with an attorney. Note that some of these are given as an estimated hourly rate.

  • Consultations with an Attorney: $ 150 – 175
  • Wills: $ 250 – 3,000
  • Notary: $ 10 – 20
  • Advance Medical Directives: $ 100 – 250
  • Client Correspondence: $ 125
  • Powers of Attorney: $ 60 – 250
  • Tax Return Preparation: $ 147 – 273

Space-A Travel

Space available travel for Uniformed Services members can provide substantial savings over commercial airline fares.  Space available travel is defined by DoD policy as a privilege (not an entitlement), which accrues to servicemembers as an avenue for travel.  This is again a highly individual element likely based on how close you are to frequent space-a travel opportunities.

Tricare Dental Program (TDP)

Tricare dental provides fairly good coverage, but is not quite the comparison as Tricare health insurance is compared to civilian counterparts.  Based on equivalent quotes for comparable coverage, most people could be covered by a similar plan where you live for about $30 – 80 a month.

Other Military Benefits

The PSMC stops its analysis here, but there are a few other benefits to consider.

Leave

The average civilian job has much less paid time off (PTO) than the annual 30 days of leave a year each and every servicemember receives.  Although I’ve never met someone who only uses that leave to take a month straight off each year, one way to think about it is that you are getting paid 12 months’ worth of salary for 11 months of work.

Military life demands many more sacrifices on your time (TDYs, deployments, long shifts, etc.) and there’s certainly no such thing as overtime so perhaps this issue ultimately is a wash.  However, don’t discount the amount of paid time off you do get lest you be surprised when your civilian job starts out with only around 5 days a year.  Expectant or future mothers should especially value the longer military maternity leave as it outpaces most companies in the country as this is a rarer benefit. 

Disability Insurance (DI)

At most other jobs either your company offers some small level of disability insurance or you can purchase this on your own.  While most people might not know what disability insurance covers, they have probably seen this product advertised somewhere thanks to a famous quacking duck.

Disability insurance is coverage that will help pay a reduced portion of your previous salary if you were to get hurt or otherwise be unable to work anymore.  In the military, this is provided by the VA if you were to become seriously injured or disabled while serving in the military.  You would be evaluated and given a disability rating which would then be used to determine how much you get paid.

You would otherwise have to purchase a DI policy on your own to provide this coverage. The average cost for a disability income insurance policy is around 1% – 3% of your annual income (take note that most policies will only allow you to purchase around ~60% of your previous salary).  You would have to get a personalized quote from an insurance agent to get more details.

VA Benefits

Outside of the VA benefits specifically mentioned already, there are a host of other benefits available such as the VA loan, education and career counseling, VA medical resources, and other support.  Evaluate what services you already use or might expect to use when you separate for an estimate here.

Military Discounts

You may never have considered this one, but this perk can really add up as long as you remember to ask about it wherever you shop.  This benefit again is highly dependent on how much you spend and if the places you shop offer it.

Invaluable Camaraderie and Leadership Experiences

This consideration isn’t here to try and put a financial number on this one.  However, one of the biggest trend items from separating veterans is how they miss the close bonds of friendship that are often more like family for most.  You need to have realistic expectations that your average civilian employer will have a different (not inherently bad) culture in this area. 

Summary

Let’s add up some example numbers to see what the total estimated annual compensation is:

  • Basic Pay = $85,047.96
  • Special Pay = $2,472
  • Total Direct Compensation = $87,519.96

PSMC estimate of indirect compensation (federal income tax benefit of BAH/BAS) = $3,275.21

  • State Income Tax = $2,000
  • Tricare = $16,000
  • TSP = $310
  • DIC and SBP = $511.56
  • Pay Raises = $0
  • Commissary and Exchange = $800
  • Federal Long-Term Care Insurance Program = $0
  • Education Programs = $180
  • Services Activities = $400
  • Counseling Assistance = $300
  • Legal Help = $400
  • Space-A = $0
  • Tricare Dental = $216
  • Leave = $0
  • Disability Insurance = $1,740
  • VA Benefits = $0
  • Military discounts = $2,000
  • Total Indirect Compensation Estimate = $24,857.56

Example Total Estimated Compensation = $87,519.96 + $24,857.56 = $112,377.52

Service in the military can bring with it quite a lot of financial benefits that are often underappreciated or not considered when evaluating total compensation.  In fact, most servicemembers earn more in total compensation than their civilian counterparts when you consider similar levels of education and experience.  After this article, I trust you are better able to understand and analyze your PSMC.  This can then help you evaluate equivalent civilian employment opportunities or perhaps even come to the realization that you’re better off staying the military for now.  In any case, make sure to appreciate each of these benefits now whether you’re getting out soon or will stay for a whole career.  In this case, it’s pretty interesting to realize that the total compensation is significantly higher than what the LES says!

Categories
Goals Military Pay Savings

Small Goals, Big Impact

small impact, big goals

Goal Setting in 2021

Like many of you, I started the new year with a list of personal goals to make the most of 2021.  Some of my loftier “bucket list” goals have been on hold during COVID and will likely remain on pause for now – the reality is, I won’t be running any distance races or setting off for a new continent this year.  Maybe 2021 is a perfect year to focus on goals a little closer to home.  I’ve decided this is the year to set small but impactful goals to establish healthy habits so I’m ready for those big adventures when the opportunity arrives.

As a financial planner, I find many similarities between fitness and financial wellness.  I can’t set out to run a marathon tomorrow in the same way I can’t save for retirement in a single day.  Both require consistent small efforts over an extended period of time.   Three or four miles a day all year long sets me up for long-term success in the same way $300-$400 per month for a few decades builds my retirement nest egg.  Slow and steady wins the race.

Financial Wellness

When you’re thinking about financial wellness in 2021, start with three simple financial goals that will help you fine-tune your finances and set you up for success over the long term.

Consider setting financial goals in these three areas: your income, your savings and your spending rates.  These goals can be bite-sized and achievable, involving small, specific activities each month that help you build good habits and make meaningful progress throughout the year.

Income:  If you’re a salaried employee or servicemember, increasing your income may seem impossible, but there are ways to increase how much of your hard-earned income you keep by making smart tax decisions and optimizing your employee benefits.  Are you earning your employer’s maximum 401(k) / TSP match with BRS or taking full advantage of pre-tax set-asides in your Health Savings Account or Flexible Spending Account for this without Tricare?  Does your employer cover cell phone or home internet expenses or offer wellness benefits like discounted gym memberships?

For those outside of AD, the first place to look is at your employee benefit package.  Most companies describe the details of their plan on an employee benefit website or in a detailed brochure.  Identify your company’s 401(k) retirement plan match and determine how much you need to contribute to earn the maximum match from your employer.  Not contributing enough to earn the match is like leaving money on the table.

Savings: Establishing a regular habit of saving each month is the most efficient way to achieve your long-term financial goals, whether that is saving for retirement, your children’s college education, or other goals like a down payment or vacation.  If you earned a raise this year, can you increase your monthly savings by a commensurate amount? Can you bump your savings rate up just 1% this year? Even a small increase can have a huge impact over time.

For example, let’s say you’ve set a goal to save for retirement in an Individual Retirement Account, but you’re not sure where you’ll come up with $6000 to maximize your 2021 IRA contribution.  Much like the marathon example, you need not come up with $6000 all at once – try setting aside $250 per paycheck or $500 per month over the course of the year to ensure you maximize the savings opportunity.  If you’re over 50 years old, you can step it up a little more: $7000 per year, or $583 per month, $291 per paycheck.  The simple step of putting your IRA savings on autopilot with an automatic monthly contribution can set you up for long-term success.

Spending: I’m not a big advocate of budgets that require you to keep track of every penny you spend.  Most of us don’t have time for that level of detail, and generally, it isn’t necessary.  These days, one of the easiest ways to check your spending is to pull open your monthly credit card statement or your bank’s built-in budgeting tool.  A quick review of your statement will help you identify where your money is going.  Your bank’s phone app likely has a budget tool, one click and it shows you a graphic of how you spend your money – housing, groceries, entertainment, etc.

The goal here is simply awareness, not shame.  Are there charges for services you’re no longer using?  Are you paying for five entertainment streaming services when you really only watch two of them?  Most importantly, are you spending money on what is most important to you?  Small fine-tuning steps here free up cash to spend on what is most important to you.

Small Inputs can Drive Big Outcomes

Identifying small, achievable financial goals that lead to progress each month will help you establish strong financial habits and reap meaningful benefits over time.

Taking positive steps in each of these areas – earning more, saving more and spending less is a great way to start the new year and set yourself up for long term success.

As financial advisors, members of the MFAA help people just like you navigate the questions, challenges, and planning opportunities related to setting goals and using your money to help accomplish them. We would love to be of help and have a free consultation!

Find an advisor here!