Need-to-Knows for U.S. Veterans and Their Survivors

| Mar 10, 2021 | estate and tax planning, Estate Planning, veterans estate planning

veterans' benefitsAt Rebecca W. Geyer & Associates we often provide assistance to veterans and their surviving spouses by helping them obtain VA benefits through the Veteran’s Benefits Administration, so we were interested to meet Nebraska-based financial advisor and author Todd Gaswick of TAG Financial Solutions, who also works with veterans.

As they re-enter civilian life, our military service retirees find they have many decisions to make. The TAP (Transition Assistance Programs) offered at each base or post help with everything from resume writing, coaching and “dress for success” coaching to practical advice on money management and insurance options. The mission of TAG Financial Solutions is to help veterans sort through the different choices as they plan for themselves and their families….

Life insurance
SGLI (Servicemembers’ Group Life Insurance) is available to all active duty and reserve members of the uniformed services. The program is supervised by the U.S. Department of Veterans’ Affairs, and is administered by Prudential Insurance Co. of America. Upon leaving the military, service members may:

  • convert an SGLI policy into a civilian policy
  • apply for VGLI (Veterans’ Group Life Insurance) for up to the same amount of coverage as the SGLI policy)
  • choose beneficiaries and change them as needed

Retirement benefits
Military retirees receive a monthly pension for the rest of their lives, but since those payments end upon the veteran’s death, one decision that needs to be made concerns the Survivor Benefit Plan (SBP), which provides a lifetime monthly income. Since the premiums insuring the survivor benefit are taken out of the veteran’s retirement pay, Todd Gaswick spends a lot of time discussing options with both vets and their spouses, weighing the benefits of SBP and private insurance:

  • Unlike most private life insurance plans, the SPB protects survivors against inflation risks through Cost of Living Adjustments (COLAs).
  • The premiums for SPB are deducted from the vet’s retirement income pre-tax.
  • On a private insurance policy, the vet can name secondary and even tertiary beneficiaries; SBP allows only a primary beneficiary (the spouse – or a child in the case of an unmarried vet).

Investment decisions
Contributing to a Thrift Savings Plan (TSP) is an option for active service members, similar to a civilian 401(k) plan. Although vets may no longer contribute to the plan, they may leave their money with the TSP and seek guidance in making investment choices within the plan.

Combat-related Special Compensation
A relatively new option, Gaswick explains, is the CRSC. Until recently, many military retirees who were collecting disability benefits had their military retirement pay reduced by the amount of their VA disability compensation. Now, qualified retirees will receive both those disability benefits and their full military retirement pay.

At Geyer Law, we continue to find that many veterans and their families are simply unaware that, even if they did not directly retire from the military or suffer injuries in the line of duty, they might still be eligible for certain benefits. Given our experience in the field, we know there will be many hurdles and barriers to encounter along the way to being approved for those benefits. . Our firm’s focus is with the Veteran’s Benefits Administration, one of three areas within the Department of Veterans Affairs. Our mission is offer professional assistance in navigating the qualification process.

– by Ronnie of the Rebecca W. Geyer & Associates blog team