Military families face plenty of financial challenges. If you’re saving for college or retirement, buying a home, or wondering how to help secure your family’s financial future, don’t overlook these five important benefits.
1. Thrift Savings Plan
Retirement is something you need to plan for, whether it’s far away or just around the corner. Even if you can rely on a military pension because you’ve stayed in the service for 20 years or more, it’s probably not going to provide all the retirement income you’ll need, and neither is Social Security. That’s why it’s important to save for retirement on your own. One option you have is to contribute to the government’s Thrift Savings Plan (TSP).
When you leave the military, you can’t continue to contribute to the TSP, but you have the option of keeping your money in the TSP or rolling it over to another retirement account, such as a traditional or Roth IRA or an eligible employer plan.
2. Savings Deposit Program
If you’re deployed to a designated combat zone for more than 30 consecutive days, you may have a unique chance to save for your goals at a guaranteed interest rate by participating in the Defense Department’s Savings Deposit Program (SDP).
Generally, you can withdraw funds and close your account only after you leave the combat zone and are no longer eligible to participate in the SDP, although emergency withdrawals while you’re deployed are allowed in some cases.
3. Post-9/11 GI Bill
Education benefits are one of the most valuable benefits available to servicemembers. If you’re entitled to benefits, the Post-9/11 GI Bill will pay up to the full cost of in-state tuition and fees at public colleges for up to four years, or up to a certain maximum amount per academic year if you attend a private college or foreign school.
But if you don’t need to use your entitlement, the Post-9/11 GI Bill can provide a great way to pay for your family’s education. Servicemembers who make a long-term service commitment have the opportunity to transfer unused education benefits (up to 36 months’ worth) to their spouses and children.
If both your spouse and your children are attending school, you can opt to split your benefit entitlement among them.
4. VA Home Loan
Military families can often benefit from the no-down-payment requirement of a VA loan. This type of loan, which can only be used to finance a primary residence, also features another money saving benefit: borrowers aren’t required to pay mortgage insurance.
Despite its name, the VA loan isn’t handled by the government. Like other home loans, VA loans are offered by private lenders such as banks, credit unions, and mortgage companies. The VA guarantees a portion of the loan, which may make it easier for you to obtain a loan or qualify for more favorable terms, including lower closing costs and appraisal fees. Not all lenders offer VA loans, so you’ll need to ask potential lenders whether they are VA-approved lending institutions.
5. Servicemembers’ Group Life Insurance
Knowing that your family will be protected is extremely important, and affordable term life insurance coverage is available through the Servicemembers’ Group Life Insurance (SGLI) program. Eligible servicemembers are automatically enrolled in SGLI, and spouses and dependent children are generally automatically insured through a related program, Family Servicemembers’ Group Life Insurance (FSGLI).
If you’re married, make sure that you and your spouse understand what financial challenges you face and what benefits you’re entitled to. Regularly discussing financial matters can help ensure that both of you are prepared to handle family finances whenever the need arises.
To learn more about Military or Veteran benefits for you and your family members, visit benefits.va.gov.