It’s an unfortunate fact of life that men and women who have served their country in the military are frequently targeted by predatory lenders and unscrupulous salespeople that put them into poor investments, saddle them with needless debt and ruin their credit– or even their financial lives. If you’re leaving the military, doing some financial planning, either by yourself or with the help of a professional advisor, is critical for protecting yourself and getting the most from the veteran’s benefits you’ve earned. Here are some suggestions that ought to help.

Utilizing and Protecting Your Veterans Benefits

If you’re a fairly young veteran, say in your 20s or 30s, or if you’re an older vet, your financial planning needs will be different. Ditto for vets that are married or unmarried, or that have children or don’t.

One reason that veterans are attractive prey for con artists is all the financial benefits to which they’re entitled. These are a few of the veteran’s benefits you may be eligible for and how to get the most from them:

Your Education Benefits

Veterans are qualified for educational benefits under two current versions of the G.I. Bill: the Montgomery GI Bill– Active Duty or the Post-9/ 11 GI Bill.

Montgomery GI Bill– Active Duty (MGIB-AD). To be qualified for education and training financing with the Montgomery GI Bill– Active Duty (MGIB-AD), you need to have served at least two years of active duty during particular time periods and meet other criteria listed on the VA website. In most cases, you must also have paid a total of $1,200 into the education program while you were serving.

If you qualify, you can receive as much as 36 months of financial assistance. As of October 2020, the maximum monthly benefit was $2,122 a month for full-time students, or a total of $76,392 over the three years.

The Post-9/ 11 GI Bill. This version of the GI Bill is only for veterans who served after Sept. 10, 2001. Depending on how long you served, it will currently pay up to 100% of tuition and fees at public colleges and universities and as much as $26,042.81 per academic year at private and foreign ones for a total of 36 months. Additionally, you might be qualified for a housing allowance and a stipend for books and supplies.

If you intend to take advantage of your GI Bill benefits, you’ll want to research potential colleges using unbiased resources, such as the Department of Veterans Affairs’ GI Bill Comparison Tool, and not rely on the sales pitches or slick advertising and marketing materials from the schools themselves. Some of the colleges that market themselves most aggressively to veterans are not good choices. Particularly, a lot of for-profit colleges have been known to offer degrees and other credentials that are basically useless in the job market. They have also been known to encourage vets to rack up added debt by taking on student loans.

Your Medical Benefits

As a veteran, you are qualified for VA healthcare, but you have to generally enroll in order to participate. The VA’s Medical Benefits Package consists of a wide range of services, from basic preventive care to specialized care, surgery, mental health services, and prescription medications. This coverage is free if you meet the income requirements, although there can be copayments for particular services and medications.

Retired service members and their family members are also eligible for coverage through the Defense Health Agency’s TRICARE program. Several different plans are available, and costs differ according to the one you choose.

Your Loan Benefits

Veterans who wish to buy, build, or repair a home to live in, or to refinance an existing mortgage can be eligible for the VA’s Home Loan Guaranty program, subject to certain income, credit, and duration of service criteria. This program helps veterans receive VA loans from private lenders, such as banks, with more favorable terms than they might get somewhere else. That can include reduced interest rates and closing costs, no down payment, and no requirement to purchase mortgage insurance. You can get more info on this program on the VA website.

The Consumer Financial Protection Bureau advises veterans to be wary of VA home loan frauds, which usually begin with an unsolicited call or email from someone purporting to be associated with the VA or another government agency. The VA says if you have any questions regarding the legitimacy of a call to hang up and call the department directly at 1-800-827-1000.

Your Life Insurance Benefits

If you had Servicemembers’ Group Life Insurance (SGLI) prior to leaving the military, you may be qualified for Veterans’ Group Life Insurance coverage of $10,000 to $400,000, depending on the amount of your SGLI coverage. Until you reach the age of 60, you can also increase your coverage by $25,000 every five years– up to the maximum of $400,000. Premiums are based on your age and the amount of coverage.

Veterans’ Group Life Insurance is term life insurance and can be renewed for as long as you live. That is a helpful feature in case you have future health problems that would make you uninsurable.

To be qualified for VGLI, you have to apply within one year and 120 days of leaving the military. Note that during the first 240 days of that period, you will not need to show that you’re in good health, but afterwards you will.

Also remember that while VGLI could be your most affordable insurance choice, it may not be adequate to cover your family’s insurance needs. So you may want to supplement it with another policy from a private insurance provider eventually.

Your Retirement Benefits

Once you reach age 65 (or sooner if you have a disability), you could be eligible for a Veterans Pension from the VA. Eligibility depends on your income, net worth, and whether you meet the active service requirements. Surviving spouses and single dependent children are also eligible for VA pension benefits in certain instances.

Depending on when you entered the service you might also be qualified for pension benefits under either the military’s Blended Retirement System (for those that joined on or after Jan. 1, 2018) or the legacy High-3 system (for those who joined before Jan. 1, 2006, and didn’t switch to the blended system prior to the 2018 deadline).

The blended system, or BRS, combines a traditional defined-benefit pension with a defined- contribution plan, similar to a 401( k), called a thrift savings plan (TSP). The traditional pension becomes available after 20 years of service, while the TSP, to which both you and the government contribute while you’re serving, is fully vested after two years. You can begin to withdraw money from your TSP, without tax penalties, at age 59 1/2.

The High-3 is a defined-benefit pension plan that provides a pension benefit after 20 years of service. The benefit equals 2.5% of your average basic pay for your three highest-paid years, multiplied by the number of years you served. So, for example, if you served 20 years, you ‘d get a benefit equal to fifty percent of your average highest pay (2.5% x 20 = 50%). The longer you serve, the greater your pension will be.

The Bottom Line

Many veterans that have served our country have spent their lives until retirement receiving financial as well as health benefits within a military setting. Life outside can be very different, with new opportunities and new rules. Getting help with the transition from DOD-funded programs such as Military OneSource can be beneficial.

With Mission First Capital, you can start your investment journey alongside other military members and veterans! If you have questions or would like to talk about potential partnerships or investment opportunities, don’t hesitate to reach out. Give us a call at +1 (844) 632-3863 or visit our website MissionFirstCapital.com to learn more and let’s invest today!