How To Get Military Medals Awarded After You Have Left Service
A military members time of service can take him to many places in various campaigns. In more recent times, military members often work hand-in-hand with sister services as part of joint operations. As such, there are times when members will be discharged by the military but find out later that they had qualified for military decorations that were not awarded. An example is the Kosovo Air and Space campaign: it took place in 1999 but the decoration for it wasn’t awarded until 2002. If you have a similar case, then there is a process for having those decorations added to a service record.
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Does Disability Pay Offset Retirement Pay
There have been significant changes to the law governing Veteran Affairs disability compensation and military retirement pay, which are two different forms of compensation. In the past, veterans were not able to obtain both. Since 2004, Concurrent Retirement and Disability Pay has allowed military retirees to receive military retired pay and VA compensation. You need to be eligible for retired pay to qualify.
You may be entitled to CRDP if the following applies:
You are a regular retiree with a VA disability rating of 50% or higher.You are a reserve retiree with 20 qualifying years of service, who has a VA disability rating of 50% or higher and has reached retirement age. Retirement age is 60 in most cases, but individual reserve retirees may be eligible before turning 60.You are retired under the Temporary Early Retirement Authority and have a VA disability rating of 50% or greater.You are a disability retiree who earned entitlement to retired pay under any provision of law other than solely by disability, and you have a VA disability rating of 50% or higher
Monthly payment amounts for veterans with disabilities are calculated based on disability rating and dependent family member details.
How Can I Make Sure The Plan Administrator Will Send Me My Share Of Retirement
In most cases, youll need a court order called Qualified Domestic Relations Order, or QDRO. A QDRO is an order signed by the judge, separate from your divorce decree, that directs your former spouses employer to divide the retirement benefits according to the decree. If you didnt get a QDRO when your decree was signed, Texas law allows you to go back to the court later to get your QDRO signed.
For more about QDROs, talk to a lawyer. Use TexasLawHelp’s Legal Help Finder tool to locate a lawyer.
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Cost Of Living Adjustment
Military retirement pay, survivor benefit plan annuities, and VA compensation and pension, are adjusted for inflation every year. The cost of living adjustment for recipients of these benefits is tied closely to those of the SSI but is not done automatically.
While the annual COLA adjustment to SSI is automatic, congress must separately approve an increase to the benefits listed above. COLA is determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers from the third quarter of the last year as reported by the Bureau of Labor Statistics in the Department of Labor.
2022 Cost Of Living Adjustment
You will see a 5.9% increase to your entitlements going into 2022.
If you want to know more about the 2022 changes to COLA and other benefits, you can click here.
Is your financial security on your mind? Explore ways to build wealth with your military pension & VA disability to have a better retirement!
How Do I Keep Military Retirement In Divorce
Former spouses will retain all military benefits and privileges, including medical, commissary, military exchanges, if he or she was married to the member at least 20 years, the member had at least 20 years of creditable service, and there was at least a 20-year overlap between the marriage and the military service.
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How Should Compensation Be Calculated For The Leave
To calculate the amount of the makeup contributions and allocations, assume the rehired employee earned compensation at the same rate they would have received during the military service period ). If this is not reasonably certain, use the employee’s average compensation during the 12-month period immediately preceding the qualified military service.
How To Access Your Tsp Account Online
If you have a Thrift Savings Plan account, you can access your account online. However, that is often easier said than done. What with crazy account numbers and special passwords that can’t be reset online, many people tell me that the hardest part of getting into their TSP account is keeping track of the login information. Having trouble? Follow these steps to eventually gain access to your account.
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If You Joined After 2005 You Have Until December 31 Of 2017 To Choose Your Plan
If you are a service member with less than 12 years of service before the plan takes effect, you will be required to choose between the two plans. The election period lasts from January 1 to December 31, 2017. Soldiers with greater than 12 years time in service as of that date will keep the legacy retirement plan. There are two exceptions to the selection deadline: a case by case hardship clause , and a break in service clause. If you leave the military and rejoin after the decision year , you have 30 days to elect either plan upon returning to active duty. If you meet the less than 12-year service criteria, you can opt in to the matching TSP contribution plan or stick with the legacy system. Keep in mind that you will NOT receive any backdated TSP contributions to make up for the reduction in guaranteed retirement pay.
What About My Spouses Social Security Or Military Retirement
To be eligible, you must have been married 10 years or longer and meet other requirements. Social Security Spousal Benefits are based on your spouses work history. The amount of spousal benefits may depend on the social security benefits youll receive based on your own work history. Contact your local Social Security Office or visit www.ssa.gov.
Spousal benefits from military retirement are based on how long your spouse was in the service while you were married. If eligible, you can receive payments directly from the service members retired pay. For information, visit www.dfas.mil/garnishment/usfspa/faqs.html.
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How To Avoid Taxes On Military Retirement
What percentage is military retirement taxed?
The percentage of taxes on military retirement pay depends on a number of factors. You must consider your federal and state tax rates that are derived from your fixed income. If you take a new job after the military while receiving your pension ALL of your income is fixed and taxable. This can significantly increase the percentage of of taxes on military retirement pensions.
Is military retirement pay federally taxed?
Yes, all military retirement pay is federally taxed at the individual’s personal income tax rate. However, depending how mow much disability one receives from the Veterans Administration a portion of their income will become federally tax free.
Why is my military pension taxed?
The honest truth… no one knows! The DOD is funded by the American tax-payers, so all pay and benefits going to military and veterans is coming from after tax dollars. When they they tax that money again, it not only takes more from the individuals family’s financial situation, its also a double taxation on the initial dollar that was earned by the tax-payer… This is an overlooked aspect of taxes on military retirement.
On Withdrawing Ira Funds Early
IRAs dont permit account holders to withdraw money penalty-free until age 59 and a 1/2. Those who do withdraw before then are subject to a 10% tax known as the early distribution penalty tax. The early withdrawal process involves something called 72 payments, named after IRS Code Section 72 which governs them.
How can you avoid the 10% tax? By choosing a distribution method known as Substantially Equal Periodic Payment which avoids the IRS penalties by following a specific plan to access the funds. How does it work?
- These withdrawals are subject to income tax.
- Completion of the SEPP plan is required in order to avoid all penalties you were seeking to avoid plus interest.
- You are required to choose between three different distribution types under SEPP. Each one has a different payout calculation. You can choose between amortization, required minimum distribution, and annuitization.
- You may only change your distribution preferences ONCE.
A withdrawal penalty, where applicable, may be charged in different ways. Those who cash out Certificates of Deposit, for example, should not expect the penalties to be the same for all financial investments.
They vary depending on the type of investment, how early the withdrawal was , and may be charged in the form of paying a forfeit in terms of accrued interest or you may be required to pay a specific dollar amount. It is crucial to read ALL the fine print when agreeing to SEPP or any other early withdrawal.
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Transfer Your Tsp Account Balance To A Qualified Annuity
Pros: Predictable, guaranteed income stream for life.
Cons: It is a permanent decision. There may be high fees involved. You may not get anywhere near the full value of your contribution. If it isnt indexed for inflation, the purchasing power of your monthly benefit will decrease each year.
This is a relatively short overview and cant possibly cover every possible situation. As with everything, there are exceptions and nuances for many different scenarios. If you are considering moving your TSP to another investment, you may find value in consulting a financial advisor to figure out which choice is right for you and your specific situation.
Lacey Langford, AFC ®, The Military Money Expert ®, suggests several reasons why you might want to consider using a fee-only financial planner vs. the advisor offered through a bank, insurance company or investment company.
Fee-only allows you to have a clear picture of what youre paying for and how the advisor is being compensated for the advice and recommendations theyre giving you, Langford added.
Meeting The Physical Evaluation Board
The evaluation board is charged with deciding whether a service members condition allows them to remain on active duty, be medically retired, or separated. The following conditions may apply depending on circumstances:
- Those with less than 20 years of active service and who have been awarded a disability rating of 30 percent technically qualify for medical retirement.
- Those with a disability rating below 30 percent may experience medical separation instead of retirement.
- Those with 20 or more years of active service will be recommended for retirement regardless of the disability rating.
- Those who have a disability which existed before entering military service are recommended for military discharge without benefits.
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Loans And Withdrawals From Your Thrift Savings Plan
The Thrift Savings Plan is a retirement savings plan, so loans or withdrawals before separation or retirement are restricted.
- Loans Loans are available to members who are still in pay status. You can borrow from your contributions and earnings for a small processing fee, and pay back the loan, with interest, through payroll deductions.
- In-service withdrawals Hardship withdrawals are available to members under specific, limited conditions. Also, members age 59 ½ or older can make a one-time, age-based in-service withdrawal.
Leaving The Federal Government
- Leaving the federal government
Did you know if your account balance is $200 or more, you can keep it in the TSP when you leave the federal government?
Once you leave the federal government, youll no longer be able to make employee contributions. However, you can still change your investment mix, transfer eligible money into your account, and enjoy our low costsall while your account continues to accrue earnings.
As you prepare to leave federal service, here are four important things you must do:
- Make sure the TSP has your current address at all times.
- If you have any TSP loans, pay them off within 90 days of your separation.
- Read the tax notice Important Tax Information About Payments From Your TSP Account.
Did you know if your account balance is $200 or more, you can keep it in the TSP when you leave the federal government?
Once you leave the uniformed services, youll no longer be able to make contributions. However, you can still change your investment mix, transfer eligible money into your account, and enjoy our low costsall while your account continues to accrue earnings.
As you prepare to separate from service, here are some important things you must do:
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How Long Do You Have To Be Married To Get Half Of Military Retirement
However, in order for the Department of Defense to make direct payments of a military members retired pay to the former spouse, the former spouse must have been married to the military member for a period of at least 10 years, with at least 10 years of the marriage overlapping a period of military service creditable
Your Military Pension Isn’t Enough For Retirement Here’s How Much More You Need
Many companies and industries phased out pension plans long ago in favor of plans like 401s, where employees make contributions toward their own retirement savings.
The military, however, still offers uniformed members a pension. If you remain in service for 20 years, your pension will amount to 50% of your highest 36 months of base pay. For each additional year of service beyond 20 years, that percentage increases by 2.5%.
While this is generous, it may not actually be enough money to support yourself in retirement. Add to that the fact that 80% of military members serve for less than 20 years, and its likely youll walk away from your years of service with no pension at all.
The Solution: The Blended Retirement System
Because the majority of members of the military leave service before the 20-year mark, the new Blended Retirement System went into place on January 1, 2018. The BRS allows you to choose a pension only, a Thrift Savings Plan , or both with a reduced pension. Anyone who entered the military on January 1 or later is automatically enrolled in BRS.
Military members with 12 or fewer years of service have the option to opt into BRS. If youve currently completed eight or fewer years of service, opting into BRS may allow you to save more for retirement. This is because the 5% match on your TSP contributions could exceed the sum youd get in your pension .
What Is A TSP?
How Else Can You Save For Retirement?
-Traditional and Roth IRAs
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The New Plan Comes With A Cost
Current law says that service members will receive the number of years in service times 2.5, to calculate what percentage of their base pay they can expect to collect each year in retirement. Generally, you need to serve for 20 years to retire, and when you retire with 20 years of service youll receive 50% of your base pay. If you choose the new plan, that multiplier of 2.5 reduces to 2.0, so youll only receive 40% of your base pay at 20 years. The matching contributions of 5% will cease after 26 years in service, but you can still earn the 2.0 multiplier on your base pay until you retire.
Your Biggest Lifetime Expense: Taxes On Military Retirement
There is one major problem that everybody ignores, yet I think that this is the greatest cost over any individuals lifetime and the greatest risk to the American people and the American way of life: taxes. I encourage you to understand the true history of the tax code in America, where it comes from, why its there, and how its hurting the American people. Its not about taxing the rich versus taxing the poor thats just political fear-mongering in the media.
The reality is that taxes are taking from one person against their will and giving it to another. Personally, Id rather make that choice myself and call it charity. But by constitutional law, the government can now come at you with guns and take your money from you just because they think somebody else should have it. Its wrong and its immoral. Unfortunately, we have to deal with it for the time being.
What the majority is unaware of, though, is that all the increases in healthcare have caused two problems that will increase taxes on military retirement. The first is that the older, aging population the non-working, non-producing population is living longer. Theyre not dying when the government thought they were going to die when they implemented these plans like Medicare, Medicaid, and Social Security. The reason the corporate pension system doesnt work anymore is that companies couldnt afford it. People werent dying, and they had to keep paying them.
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