Veteran’s Benefits: A Tool for Financial Planning

Many people are familiar with the basic benefits available to veterans. Did you know there are other benefits that could be beneficial tools in building a financial plan? In this post, I will discuss several programs, resources, and benefits that are available to veterans who qualify.

I am a veteran of the United States Marine Corps, and was discharged honorably about 10 years ago. I take advantage of several programs and benefits offered by the Department of Veteran’s Affairs (VA) and I am familiar with many of the resources available to veterans and their families. Even if you are not a veteran you probably know someone that is– so read on!

Education

Obtaining a quality education is often times one of the motivating factors in a person choosing to join the military. Most people have heard that serving in the military will earn you benefits for college tuition; however, the VA also offers benefits beyond monetary assistance. The VA has an education and career counseling program.

The program is for veterans beginning six-months prior to discharge and continues for up to one year following discharge from active duty. This program offers veteran’s services including assistance with a career choice based on skills and interests; and it offers coaching to ensure the veteran is taking advantage of all available resources. Having a quality education can be a key step on the path toward the veteran getting a job post-service, starting a career, and working towards their life and financial goals of home ownership, raising a family, traveling, or saving towards a comfortable retirement. Read more about education and career benefits here: https://www.vets.gov/employment/

For those still serving on active-duty that also joined after 9/11/2001, unused educational benefits may be transferrable to a spouse or dependent. More information on this can be found here: https://www.benefits.va.gov/GIBILL/post911_transfer.asp

VA Home Loans

Buying a home is a huge part of life’s journey and should be planned for accordingly. The Department of Veteran’s Affairs has a program to help make purchasing a home a reality for veterans who qualify. Many veterans are eligible to purchase or refinance their home through the VA Home Loan program.

Basic eligibility guidelines include:

  • A veteran that served a minimum amount of active-duty time, based on when he/she served and whether it was during war or peace-time. The active-duty requirement varies, anywhere from 90 days to 24 months (may be less if you were discharged for a service-connected disability)
  • Your discharge type cannot be dishonorable
  • A Reservist or National Guard member who was discharged honorably, placed on the retired list, or transferred to the ‘Ready Reserve’
  • The un-remarried spouse of a veteran who died in service or from a service-connected disability, or is a ‘Prisoner of War’ or ‘Missing in Action’ veteran

The VA gives what they call a “home loan guaranty” to lenders. Because the VA does this, the lender provides the homebuyer with more favorable loan terms than a traditional mortgage lender would offer. Some of those include: no down payment, no private mortgage insurance requirement (PMI), a limit on closing costs, and no early pay-off penalty.

Veterans can use the benefit more than once in their lifetime, and it is not necessary to be a first-time homebuyer to take advantage of a VA loan. There is an eligibility process, which can take some time. Veterans who want to take advantage of the program should allow plenty of lead time to obtain the eligibility decision from the VA. Veterans can apply online for the ‘Certificate of Eligibility’ (COE) here: https://www.benefits.va.gov/HOMELOANS/purchaseco_certificate.asp

Find out more about VA Home Loans here: https://www.benefits.va.gov/homeloans/index.asp

Life Insurance

Life Insurance is a key topic to cover when building a financial plan. Several programs offered through the Department of Veterans Affairs may provide affordable coverage for veterans and their family members. Often the rates are discounted from what another insurance company would charge for similar coverage. Coverage ranges from traditional life insurance to traumatic injury protection and service-disabled life insurance. These life insurance options are a valuable asset, especially for veterans who may have sustained injuries during service and may have difficulty getting approval for coverage outside of these programs.

When a veteran obtains a life insurance policy through one of the previously mentioned programs, they qualify for free basic will preparation. Veterans have access to an online program where they answer a few easy questions and then they will be provided a legal will, valid in all states, that is ready to print and sign. Find out more about these programs here: https://www.benefits.va.gov/insurance/bfcs.asp

Long-term Care

Long-term care is not something we like to think about, but we must consider it when planning for the future. LTC can be very expensive and unfortunately is often necessary to provide care for aging relatives. Through both the Aid and Attendance and Housebound programs, many veterans that are eligible for a VA pension and require the aid and attendance of another person may be eligible to receive additional monetary assistance. This assistance would cover the cost of care in a nursing home, an assisted living facility, or other long-term care programs. This benefit could help reduce some of the burden of long-term care costs. There are criteria that must be met in order to qualify for these programs. To learn more, please visit https://www.benefits.va.gov/pension/aid_attendance_housebound.asp

Caregiver Support

Do you or someone you know provide care to an aging veteran at home? The VA offers a caregiver support program. Although this program does not offer any monetary support to caregivers, they will have access to a caregiver support line where they can reach a licensed professional who can answer questions and offer aid. The program also provides the caregiver access to a ‘Caregiver Support Coordinator’ to help them navigate the complexities of caring for a veteran and take advantage of all of the benefits that are available. Read more about this program: https://www.caregiver.va.gov/

Memorial and Burial Benefits

Did you know that many veterans are eligible to be buried in a national cemetery and have military honors at their ceremony, at no cost? There are 135 national cemeteries, and if space allows, a veteran can choose to be buried in any one of them.

If a veteran qualifies, he/she receives a gravesite, opening and closing of the grave, ongoing care, a government-issued headstone, a burial flag, and a Presidential Memorial Certificate. Burial benefits are also available for spouses and dependents who wish to be buried in the national cemetery with the veteran at no cost; those family members may be buried, even if they predecease the veteran. Obtaining eligibility, confirming available space at the preferred cemetery, and getting the burial flag and Presidential Memorial Certificate all take time, so it is good to take care of these arrangements ahead of time if possible. This program is called the pre-need burial eligibility determination program. Learn more here: https://www.cem.va.gov/cem/pre-need/index.asp

 

Veteran’s benefits are very complex and vary widely depending on the veteran’s status and eligibility. From a financial planning standpoint, many programs could help the veterans and their families plan for the future. Our veterans have earned these benefits and are wise to take full advantage of what is available to them.

Lori King, FPQP™

 

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Things are not as bad as the media would have you believe

Queen Elizabeth II turned ninety years old on April 21st.  While I don’t follow the Royal Family all that closely, I do love Princess Kate’s fashion sense and have a thing for sparkly tiara’s (the real ones).  So naturally when I saw an article about the Queen’s birthday I had to check it out.  In addition to some great shots of the Crown Jewels, I found one of the Queen’s comments particularly uplifting.  When asked about the state of the world, Elizabeth unequivocally said that things are much better today than when she was a child.  Although recent headlines – from terrorist attacks to slowing global growth – would have us believe otherwise, I’d like to provide some much-needed evidence that we’re living in pretty good times.

First, Americans are living longer and are healthier than ever before in history.  In 1800 the U.S. life expectancy was 39 years at birth, then 49 years in 1900, 68 years in 1950, and an incredible 79 years today!  In addition to a longer life expectancy, we can take advantage of our twilight years with something called retirement.  The concept didn’t exist in the U.S. prior to the late 1880’s, when workers pretty much labored until they died.  That started to change in 1875 when American Express offered America’s first employer-provided retirement plan.  The Federal Government followed suite in 1935 with the creation of Social Security; and medical health benefits for those over 65 years, also known as Medicare, started in 1965.

According to the Federal Reserve, the number of years spent in leisure – measured as retirement plus time off during your working years – rose from 11 years in 1870 to 35 years by 1990.  While we’re not all experiencing a Downton Abbey lifestyle, things could be worse.

Concerning crime and violence: while the tragic terrorist attacks in recent years are difficult to reconcile, overall murder rates in the U.S. have dropped dramatically since the 1990’s.  America averaged 20,919 murders during that decade but the average number of murders in the 2000’s dropped to 16,211.  On a global level, a report from the Human Security Report Project suggests the world is getting safer, as it relates to people killing other people.  Deaths from war has been in decline since the end of World War II and high-intensity conflicts have declined by more than half since the end of the Cold War.  The report goes on to say that terrorism, genocide, and homicide numbers are also down.

Americans often worry that slowing U.S. growth and rising debt levels will result in a downward economic spiral.  They often point to Japan as a worst-case-scenario.  While the island nation has its challenges, consider that Japanese unemployment has remained below 5.7% for the last 25 years, income per capita adjusted for purchasing power continues to grow at a healthy rate, and life expectancy is on the rise.  Plus I hear they have amazing sushi.  I can think of worse outcomes.

Another common concern I read about is stagnant wage growth.  While I believe this is an important issue, consider that the median annual household income adjusted for inflation was about $25,000 in the 1950’s.  Today it’s almost double that!

A few other things that are better: U.S. death rate from strokes has declined by 75% since the 1960s; deaths from heart attacks have also dropped dramatically; more Americans attend college today than at any other time in our history; smoking is down sharply; poverty is on the decline in the U.S.; and fewer people around the world die from famine each year.

Happily, I could go on, but I won’t.  Suffice it to say that Queen Elizabeth II, in her 90 years of experience and wisdom, may be right.  And even if she’s not, we’re all better off believing she is.

Carrie A. Tallman, CFA
Director of Research

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