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Finances

Finances

Financial Management
Whether you are returning to school, transitioning to a new job or retiring, your financial situation will undergo a great deal of change. Your salary and benefits may not measure up to your current earnings and benefits. You will soon discover that shopping and paying medical costs can create serious sticker shock. Getting into debt is not the best way to start a new life.

Careful planning is the only way to avoid problems. It may take you a while to find a new job. Start by identifying your income and expenses. Check with friends and family to find out what you may have to pay for your rent or mortgage, groceries and daily expenses. Create a budget and be conservative. Research your earning potential and make sure you can afford to pay your bills and live. Your Army Community Service office is equipped to help you take control of your finances.

Prior to final separation, the finance office will audit your pay account and research your entitlements as well as your liabilities. You will then draw final pay and you may cash in any unused leave.

Debt Counseling
If your financial situation is shaky, you need to stabilize your finances before you leave federal service. Your Army Community Service office has trained debt counselors who can help you take control of your money and debts.  Be leery of commercials for debt consolidation. Consolidation may help, but only if it's part of a total financial management plan. If you're married, make sure you and your spouse work together as partners.

Thrift Savings Plan
The Thrift Savings Plan (TSP) is a defined-contribution retirement and investment plan that offers savings and tax benefits. Since your contributions and earnings are yours to keep even if you separate from the military, you need to be sure you understand the requirements and penalties you can incur if your TSP is not managed correctly.

Retirement
If you are planning to retire, schedule your appointment with the installation Retirement Services Officer (RSO) as soon as possible. The RSO is a valuable resource for all retirement issues who can provide a wealth of information and help ease your retirement concerns. Retirement is a major transition in your and your family's life, so be sure to include your spouse in any appointments you schedule with the RSO.

As part of your pre-retirement counseling, you and your spouse must be counseled on the Survivor Benefit Plan (SBP). You and your spouse must agree, in writing, if you want SBP and on the level of coverage you want.

If you entered active duty after July 31, 1986, you will be required to select the method for calculating your retirement pay. You can learn more about your options at the Military Pay and Benefits website at http://www.defenselink.mil/militarypay/. Once there, select Retirement.

Separation Pay
You may be eligible for separation pay. The type of separation and conditions under which you are being separated will determine if you qualify for separation pay. The Finance Office at your installation can compute the actual amount. Separation pay entitlement must be specified on your separation order to be payable. Separation pay is authorized only:

  • If you have finished your first term of enlistment or period of obligated service, AND
  • have at least six years of service, AND
  • are separating involuntarily, AND
  • are not yet eligible for retirement, AND
  • are separating with a fully honorable discharge.

If you think you qualify, discuss this with your commander and local personnel and finance offices. This benefit is computed on the basis of 10 percent of your yearly base pay when you separate, multiplied by the number of years of active service you have. Separation pay is taxable.

Unemployment Compensation for Ex-Service Members (UCX)
Service members separating from active duty may qualify for unemployment compensation if they are unable to find a new job. Under 5 USC 8521, a former service member is eligible to receive unemployment compensation only if the discharge or release is, at a minimum, Under Honorable Conditions. Receiving separation pay may also influence your receipt of unemployment compensation. (Retirees will almost certainly receive a lesser amount, or no amount, since the weekly amount of retirement pay is usually "offset" against the amount of unemployment compensation.)

Your state employment office handles unemployment compensation. Benefits vary from state to state. Because of this, only the office where you apply will be able to tell you the amount and duration of your entitlement. Your nearest state employment office is listed in your local telephone directory. To receive unemployment compensation, you must apply. The best time to do that is when you visit the Local Veterans Employment Representative (LVER) at your state employment services office for assistance in finding a new job. To apply for unemployment compensation, you must bring your Certificate of Release or Discharge from Active Duty (DD Form 214), your Social Security card and your civilian and military job history or resume.

VA Loans
Eligible veterans may obtain loans guaranteed by the VA to purchase or refinance homes, condominiums and manufactured homes. VA home loans feature a competitive interest rate and a lower down payment or, if the lender agrees, no down payment at all. More information is available from the VA homepage at http://www.homeloans.va.gov/.

FHA Mortgage Insurance
The Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD) insures mortgage loans for the construction, purchase and improvement of homes. FHA-insured mortgages allow veterans to borrow with a minimum down and payments over longer periods of time. More information is available by visiting the FHA homepage at http://www.hud.gov/faqs/faqbuying.aspx.

SBA Loans
Business loans are available to veterans through programs of the Small Business Administration (SBA). In addition, SBA offers loans specifically to Vietnam-era and disabled veterans. More information is available by visiting the SBA homepage http://www.sba.gov/.

Credit Reports
In order to prepare yourself to apply for a mortgage, car loan or other type of credit, you may wish to obtain a credit report. You can do this, usually for a small fee, by contacting a credit reporting agency. Ask your bank which credit reporting agency they use, then contact that agency. Once you receive a copy of your report, check it carefully for errors. If you find any, contact the credit reporting agency to correct them. Keep in mind that they may ask you for documentation such as receipts or cancelled checks.

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Untitled Document
Transition Assistance

Preseparation Timeline

Effects of a Career Change

Employment Assistance

Relocation Assistance

Education/Training

Health and Life Insurance

Finances

Reserve Affiliation

Veterans Benefits Briefing

Disabled Veterans Benefits

Post Government (Military) Service Employment Restriction Counseling

Retiring Soldier