As CERTIFIED FINANCIAL PLANNER™ professionals, we are intimately familiar with the term ‘fiduciary.’ It means to put the best interests of others (in our case, our clients) above all else. It’s hard to imagine a job with more fiduciary responsibility than that of a military serviceperson. Veterans, you are called to put the best interests of not only individuals but the country above all else.
There are several financial benefits available to you. Unfortunately, a cumbersome system can make it difficult to seek out these opportunities. Here are a few of the highlights of financial services and support available to US veterans, as well as a few resources for further information:
Higher Education Opportunities
As a military veteran, the Post-9/11 GI Bill entitles you to in-state, public school tuition and fees for up to four years. There are some maximums available, should you choose to attend a private or out of state school (in 2018-2019 academic year, it was $23,671). If you don’t use the entire GI benefit, there are some circumstances that enable you to transfer the remaining benefit to your spouse (you must have served 6 years and commit to four more), or children (you must have served for 10 years). Aside from the GI Bill, many states have individual scholarship and grant opportunities to you or your dependents. To learn about the specifics of Oregon’s benefits and programs for veterans, click here.
Veteran Status
The Department of Veterans Affairs will subsidize some of the pay for employers who hire veterans. Therefore, it’s beneficial to be able to qualify as a veteran sooner than later. Under the VOW (Veterans Opportunity to Work) to Hire Heroes Act of 2011, you can qualify as a veteran through job searches, even while you’re still active-duty. This can be helpful if you – like many active-duty members – begin your job search before you conclude service.
In addition, if you’re a veteran business owner, your state may allow some breaks on fees and taxes. Oregon residents can learn more about the specifics by clicking here.
Home Loans
VA loans have a number of perks that only you as a veteran can enjoy:
- They require no down payment.
- They do not require primary mortgage insurance.
- They typically have a better-than-average interest rate.
- There are no prepayment penalties.
These loans are intended for primary residences, not vacation or rental homes, so there are several parameters that make them less attractive for ‘flippers.’ That said, you could use a VA loan to finance your first home, then later rent it out, using the remaining VA loan entitlement to buy a primary residence. As with all financial planning decisions of this magnitude, we encourage you to consult with a CERTIFIED FINANCIAL PLANNER™ professional.
Did you take out a home loan before qualifying for veteran status? An additional benefit available to you is the ability to refinance your existing, traditional home loan under the VA parameters.
Tax Breaks
Disability benefits received from the Department of Veterans Affairs do not need to be reported on your personal return; however, retired military pension benefits are fully taxable. If you are a disabled veteran, the timing of your disability determination could trigger an opportunity to retroactively reclassify some of your income from pension to nontaxable disability.
Most states have property tax exemptions for disabled veterans. In Oregon, for example, a veteran who qualifies as 40% or more disabled as a result of service is entitled to an exemption of at least $22,028 (2019). For a full list of the exemptions available by state, click here.
Survivorship Benefits
A Survivorship Pension benefit is available for some un-remarried surviving spouses / children. The benefit is the difference between your income and a pension limit set by Congress. Click here to visit the portion of the VA website that digs into the detail of this qualification.
In addition, the state-sponsored education benefits mentioned previously are robust for your survivors. Many states will offer free tuition as long as residency and age requirements are met.
For an overview of survivorship benefits for veteran families, start here.
Summary
Many of the veterans we have met are humble about their service. Don’t let your humility keep you from these benefits. They are well deserved and well earned. Connect with a local VA representative. If you’re an Oregon resident, and looking for your veteran’s services officer, click here to find yours by county.
This article written in large part thanks to inspiration and information from the following article: Rasmussen, Eric “Help for Heroes.” Financial Advisor Magazine, January 2019. https://www.fa-mag.com/news/help-for-heroes-42413.html?section
