Make the Most of Your Military Service: Financial Tips for Veterans

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If you’re actively serving or have served in the military, you’re something of a rarity. And trends predict that you’ll soon be rarer still. According to Veteran’s Administration data, there are only about 19 million living veterans in the US today—less than 10% of our total population. The number of active service members in the country has been declining for some years—the suspension of the draft in 1973 has been influential, of course—and today active soldiers represent less than 0.5% of US residents.

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But just as rare as soldiers and vets are some of the financial advantages they can access as a result of and in thanks for the unique contribution they make. At every stage of life, the government offers service members and their families benefits that can amount to many thousands of dollars over a lifetime. Regardless of whether you’re a vet or a civilian, it’s important to understand how—and how much—the government supports its military community. Many private enterprises also do their share to reward vets for their service. So let’s take a look at some of the unique opportunities available to those who have served their country.

Exceptional Educational Benefits

The Servicemen’s Readjustment Act of 1944, more commonly known as the GI Bill, was passed following World War II during Franklin Delano Roosevelt’s fourth term. Currently, eligible veterans can receive up to 100% of costs associated with their education, including tuition, fees, books, and housing for 36 months. Your actual benefits will depend on your length of service and your discharge date: post 9/11, the bill was updated and benefits increased. But even soldiers who have served just 90 days are eligible for 50% of the maximum benefit. And if you were honorably discharged after January 1, 2013, thanks to the Forever GI Bill, your benefits will not expire. If you decide to switch careers when you reach senior citizenship and need some new skills, the government has your back!

It’s hard to overestimate how big a leg up the GI Bill gives you—unless you’re one of the 45 million Americans saddled with student loan debt, that is. On average, students earning an undergraduate degree have about $30,000 in debt by the time they get their diplomas. That’s $30,000 that vets can put in their pockets or deploy for investment, a down payment on a house, or further education.

Veteran’s Administration Home Loans

And speaking of down payments, if you’re a vet, you may not even need one to buy a home. For veterans, VA mortgages are almost always the best loan option. While these loans are administered through banks and other mortgage lenders, they are backed by the government. That makes them less risky for lenders.

Many vets take out no-down-payment mortgages. VA loan borrowers have a further advantage because they can take out these loans without having to pay Private Mortgage Insurance (PMI), which is typically a condition of borrowing without putting 20% of a loan’s value down. VA loans are also extended under less stringent income and credit qualifications and their interest rates historically track well below conventional mortgage rates. And if interest rates go down, refinancing a VA loan is simpler and less costly than refinancing a traditional loan, due to the availability of VA Interest Rate Reduction Loans (IRRRLs). I

What’s more, if you wind up buying more than one home in your lifetime, you’ll be glad to know that you can take out VA loans to finance them all. There’s no limit on how many times you can apply for this benefit. All in all, VA mortgages put homeownership within reach of more homebuyers.

VA Life Insurance

Most financial experts consider purchasing life insurance a critical component of a comprehensive financial plan. Certain life events, including starting a family or becoming responsible for the well-being of an aging parent, make coverage all but essential. While you can certainly buy commercial life insurance directly through a private insurer, as a veteran or active military member, you also have access to a wide range of life insurance plans through the Veterans Administration, including both term and permanent policies. As an active military member, you’re covered by Servicemembers’ Group Life Insurance (SGLI). Once you leave the service, you have 240 days to convert your SGLI to Veteran’s Group Life Insurance (VGLI). Veterans aged 29 and under can purchase $400,000 worth of VGLI coverage for $28 per month, without a medical exam. The amount of insurance you’re eligible to buy depends on how much SGLI coverage you had when you were an active duty servicemember. It’s best to consult an insurance expert when purchasing life insurance of any kind. He or she can help you decide whether private or military life insurance is the better choice for you.

Financial Counseling

Military and non-military personnel alike count financial stress as one of the most serious emotional problems they face. A 2019 survey by the National Credit Counseling Foundation found that about a third of active military members and veterans do not pay their bills on time. Fortunately, the VA offers counseling to help you manage debt and, if necessary, develop a credit repair plan. The good news is that, when compared to the general population, service members and vets fare well according to two important financial measures. Nearly 90% have amassed some savings and are planning for retirement.

The Securities and Exchange Commission provides educational materials to help present and past military personnel make smart retirement investment choices. In addition, if you’ve served for 20 years or more, you’re eligible to receive a lifetime monthly pension, too. Service members with shorter service records can opt into the Thrift Savings Plan. The plan offers both traditional and Roth-style retirement savings vehicles, though the number of funds the government invests in is considerably limited compared to non-military plans. Government retirement plans do not, for example, invest in the cryptocurrency market, which has been on fire for some time.

The Savings List Goes On

So far, we’ve discussed some of the most widely known benefits available to uniformed service members. But the government offers many other assistance programs that are perhaps less famous, but tremendously valuable throughout a lifetime. These include long-term care assistance, caregiver support, free tax preparation, employment services through the American Corporate Partners program, and more.

Countless organizations in the private sector support service members and vets, as well. From Adidas to Zappos, brands that offer military discounts abound. These businesses cut across a wide variety of products and services, including banking, cell phone and Wi-Fi plans, and air travel. So keep your service or veteran ID card in your wallet at all times. Saving on purchases you make every day can add up to a lot of money over the years. That’s money you can use to pay for your kids’ education or make investments that increase your wealth and secure your future.

About the Author

Susan Doktor is a journalist, business strategist, and principal at Branddoktor. She writes on a wide range of topics, including finance, technology, real estate, and government affairs. Follow her on Twitter @branddoktor.

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