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Personal Financial Brief
- 1. Before You Take Off Financial Planning for Deployment Pre-Deployment Presented by________________
- 2. Deployment Planning » Increases Saving/Spend ing Power » Elim inates Stress » Prepares You and Your Fam ily for the Future 2
- 3. Questions About » Im portant D ocum ents » Financial Issues » Property M anagem ent – H ousing – Vehicles » C om m unication Issues » Em ergencies 3
- 4. IMPORTANT DOCUMENTS Put Your Legal Affairs In Order 4
- 5. Important Documents » Will » A dvanced Medical Directives » Medical Powers of A ttorney » Powers of A ttorney (POA ) – General – Special/ im ited L L egal assistance free of charge in your area http:/ legalassistance.law.af.m il/ / content/locator.php 5
- 6. Important Documents » Update: – Beneficiaries on accounts • SGL I, TSP, PAY • Insurance policies, investm ents – Service Record & C ontact L ist 6
- 7. Nothing says LOVE like Life Insurance
- 8. Important Documents » Update – D EERS-D efense Enrollm ent Eligibility Reporting System • C onfirm enrollm ent, call 1 -800-538-9552 • TRIC ARE and D ental – ID C ard s, d river license, passport – Spouse Relocation-notify com m and 8
- 9. Know Your SCRA Rights » Service Members C ivil Relief A ct (SC RA ) – 6% cap on d ebts incurred before active d uty – Ability to break leases and cell phone contracts – L im ited eviction protection – Tem porary stays of civil proceed ings • Bankruptcy • Foreclosure: www.hud .gov/foreclosure • D ivorce 9
- 10. FINANCIAL PREPARATIONS For Financial Readiness 10
- 11. Financial Preparations » To-Do-L ist – Reevaluate financial goals: “People d on’t plan to fail, but they d o fail to plan.” – Review investm ents – C reate a bud get and avoid com bat overspend ing – Review com bat zone Service M em ber benefits 11
- 12. Show me the Money » Base Pay » BA H — based upon where you live (even for A G R) » BA S » Family Separation A llowance— if you only have a child as a dependent must have court-ordered document stating you have physical custody at least 14 days per month » Hostile Fire Pay » Hardship Duty Pay C ombat Zone Tax E xempt Income: Federal and State taxes are first withheld and then refunded the following month for MDay SMs
- 13. New Money Your Opportunity to Save! » Pay D own D ebt » Revolving Savings » Safety Savings » L ong-term Savings 13
- 14. Financial Bells and Whistles » Savings Deposit Program (pays up to 10% interest on up to $10,000 deposited) » SCRA reduces interest rates on debt acquired prior to A D to 6% --a powerful tool to dig out of debt » ROTH IRA s are powerful savings/investment vehicles when in a low or no tax bracket » up to $49,000 per year to TSP with service in a C OMBA T ZONE --ROTH TSP will be on line by 2012 » MyCAA provides educational opportunities for spouses of A D (E 5, O2 and C W2 and below) • NA C C RRA ’ s Operation: Military C hild C are will help you locate licensed child care in your area which may be subsidized (the size of this is determined by total family income, DOD funding, location, etc.) while your spouse/child’ s guardian pursues an education, works or for 60 days while seeking employment
- 15. Paying Bills » Financial A rrangements – Spouse or PO A – D irect d eposit— 1 st and 1 5th – Allotm ents – Autom atic bill pay – C red it card use – Set spend ing lim its 15
- 16. Taxes » E xtension – Autom atic 60-D ay filing Extension – 1 80-D ay Autom atic C om bat Zone Extension – Freeze any IRS assessm ents for 1 80 d ays com batzone@ IRS.gov » POA or Spouse – N eed prior year tax returns to file extensions • IRS Form 2848 and PO A to File Joint Tax Return • File IRS Form 4868 for Four-M onth Extension 16
- 17. Taxes » Tax A ssistance – http:/ www.irs.gov / • (Search-M ilitary Exclusion Pay) – www.m ilitaryonesource.com • (For FREE tax preparation or questions) • 1 -800-342-9647 17
- 18. While Deployed » C heck your L E S online » Protect Your Identity: – “Active D uty” alert – C red it freeze: www.consumersunion.org/campaigns//learn_more/003484indiv.html Order your free credit reports at www.annualcreditreport.com 18
- 19. Property Management Protect Your Assets In Your Absence 19
- 20. House/Apartment/Vehicles Home/A partment » Paym ent » Subletting – cred it checks » M aintenance and lawn care » Sharing Vehicles » Put in storage » Renew registration, tags, inspection » C heck on red uced insurance rates » C heck for repairs and m aintenance 20
- 22. Communication Tools » Phone C ard s » C ell Phones » H otel Room Phones » E-M ail and Free Web C am s » Regular M ail: stam ps, envelopes » C are Packages 22
- 23. Emergencies Happen Have a Plan 23
- 24. Emergencies Discuss How to Handle: Develop a Support System: » C ar trouble » Friend s » H om e m aintenance » Fam ily » Finances » C om m unity » Red C ross Have on Hand: » Contact Lists » Emergency $$ Funding 24
- 25. TOOLS To Do the Job 25
- 26. Getting the Job Done 26
- 27. Service Members Civil Relief Act (SCRA) 27
- 29. Support System Handout 29
- 31. Websites 31
- 32. Good Luck! » C om plete your checklist » Q uestions? » H ave a safe and prosperous d eploym ent! 32
Editor's Notes
- Note to presenter: Please insert your name in the space allotted above. Credentials and / or company info should NOT be included. START OFF WITH A THANK YOU FOR YOUR SERVICE AND SACRIFICES BOTH IN THEATER AND HERE ON THE HOME FRONT! WE TRULY APRECIATE WHAT YOU ARE DOING FOR OUR COUNTRY Pre-deployment brings with it many unknowns and concerns. This presentation will help you plan your finances for deployment. Remember you will not be able to run to the neighborhood bank or even drive there on Saturday nor can you call your insurance agent if you have a concern. PRESENTER INSTRUCTIONS FOR PRINTING HANDOUTS: TO PRINT HANDOUTS FOR SLIDES AT THE END, GO TO THE SLIDE AND DOUBLE CLICK ON THE CHECKLIST AND IT WILL OPEN IN A PDF FORMAT AND CAN THEN BE PRINTED FOR DISTRIBUTION TO THE AUDIENCE. FOR ON DEMAND EVENTS IF THE COMMAND APPROVES, THE PDF FILE CAN BE SAVED AND EMAILED TO THE POC IN ADVANCE.
- Take control. Together, you, your family and our military can empower you to be in command of your finances and every-day life, here and abroad. You have partners within the military willing to help
- Documents: What types of documents must I have or should I review? Financial: Who will pay the bills, will my family have enough money. ? Housing & vehicles: How will these be handled? Communication: We will look at your options. Let’s take each of them and discuss. Emergencies: What numbers, names, and plans need to be in place before you take off? These questions are to get the Service Member thinking about questions they should be asking themselves before they deploy. The answers to these questions will be answered in the presentation. Ask the audience if they have additional questions and concerns that we can also address during this presentation.
- ENSURE ALL IMPORTANT DOCUMENTS ARE LEFT with your SPOUSE, POA, GUARDIAN, ATTORNEY, ACCOUNTANT ETC. It is unlikely they will need them but again it is a smart move to make sure your POA has the documents they could possibly need. Wills are critical documents at any time, but especially during deployment. Review them to determine if any changes are needed. Guardianships appointments should be reviewed and updated as needed. If a child was born consider a Minor (Testamentary) Trust. If you do not have a will, get one. For assistance in preparing a will or power of attorney you should contact the legal office at your installation. Advance directives: The legal documents outlining people’s wishes about critical care if they become incapacitated and/or unable to make such decisions. There are two types of advance directives: 1) a medical power of attorney, which authorizes someone else, such as a patient advocate, to make decisions on the patient’s behalf, and 2) a living will, which allows patients to spell out their wishes about care and treatment choices they’ll want when they can’t speak for themselves. (Source MOAA PUB FINANCIAL MATTERS, A PERSONAL INVENTORY FOR PEACE OF MIND, 1-911) POA should be reviewed and updated (divorced/separated?) before deploying. General power of attorney : A legal document enabling someone to act as the attorney or agent of the grantor. The agent can have broad or special/limited legal authority to make decisions about the principal’s property and finances. A special power of attorney provides authority over very specific issues versus a general power of attorney, which gives sweeping authority over the grantor’s personal issues. A power of attorney typically has a stated end date. “ Special” power of attorney for financial issues : A power of attorney that allows an individual to empower another with decisions regarding his or her financial matters. For military matters, the “special” power of attorney must specify that the agent has the power to establish, change, or stop military allotment(s) with the Defense Finance and Accounting Service (DFAS). Durable power of attorney : A general, special/limited, or medical power of attorney that contains “durability” provisions, which allow the document to stay in effect if the grantor becomes mentally incompetent due to illness or accident. (Source MOAA PUB FINANCIAL MATTERS, A PERSONAL INVENTORY FOR PEACE OF MIND, 1-911) To reiterate, once you have assigned a power of attorney to your financial caretaker make sure all of the documents are current and accurate and that the POA has copies as does your attorney and spouse or loved one.
- Update & verify all beneficiaries on any retirement, bank, investment accounts and insurance policies. Service Record & Contact List – Make sure your information is current for emergency contacts. Remember that your family member or caretaker may be the one with the emergency. Give a copy of this list to your financial caretaker, command, and family members, including the information for the local Red Cross contact to help your family stay in touch while you are deployed.
- DEERS - Verify DEERS enrollment so your family can receive medical care while you are deployed. Make sure your family is enrolled in DEERS. ID Cards – Check the expiration date of all ID cards, and for any cards that will expire previous to returning, have them updated. If your spouse is planning on relocating while you are away, notify the command, creditors, and post office about the change during deployment. This will help prevent any missed bills and missing contact information. Good time to check when your diver license expires.
- The rights extended under the SCRA are sometimes complicated. It is important to obtain advice from your military legal assistance office for information about how the Act applies to your own circumstances. Your creditors will need to receive a request from you and copies of your notification. (Sample letters in handout). Creditors must reduce the interest rate on debts you incurred before active duty to 6 percent per year during your period of military service. This can include credit card debts, mortgages, car loans, business obligations, and other debts, as well as fees, service charges, and renewal fees. All interest in excess of 6 percent is forgiven. Note that this cap does not apply to new debts you incur while on active duty, and it does not apply to most federally-guaranteed student loans. Mortgage foreclosures or lien actions initiated during your military service or within 90 days after the end of your military service must be stayed. The law prevents you and your dependents from eviction while you are on active duty. If you have received PCS, TDY or TAD (90+ days), or mobilization orders, you may terminate your residential lease (and some other kinds of leases, including agricultural, professional, and business) by delivering written notice of termination. This applies whether (1) you entered into a lease and then started military service, or (2) you entered into a lease during military service and then received a permanent change of station or deployment order for 90 days or more. You may terminate an automobile lease. The SCRA allows you to request a delay regarding a legal matter. If your military service will prevent you from participating in a civil court action or administrative proceeding, you can request a 90-day delay (or "stay") in the proceeding and are automatically entitled to this delay. These proceedings can include actions for divorce, child paternity and support cases, and foreclosure proceedings. An insurer may not decrease your life insurance coverage or require the payment of any additional amount as premiums if you engage in military service See your legal assistance office for information about SCRA and how it applies to you. Do not walk away from your debt. Try to have the deployment time as a time to decrease or eliminate the debts. With the deployments pays and tax saving, you will have more money towards debt elimination. Pay off highest interest rate debt first. Keep up payments on important bills like loans (auto, mortgage) insurance, child support. Work out a plan using Power Pay developed by the Utah State University or talk to a credit counseling service if appropriate. Handouts at end to guide you through the SCRA rules.
- Goals are important in any financial plan and should be carefully written. Use the acronym SMART goals: specific, measurable, action oriented realistic, timely. Worksheets at the end of presentation are available to guide you through the planning process. Considerations when reviewing expenses and developing a spending plan: A cell phone might not work in the deployed location. Try phone cards and find out about the morale call program at your base. Suspend your cell phone plan if feasible. Put furniture into storage. Cancel lease or sublet Cancel or suspend subscriptions (including cable TV if single). Purchase cards & stamps before you leave and take the mailing addresses with you. During deployment, maintaining two households can be expensive. Decide on a spending plan that is agreeable to both parties, and leave some extra money in the spending plan to cover unexpected expenses without having to tap your emergency account. Find ways to cope with the deployment for both the member deployed and those left at home that fits the spending plan and meets the needs of all parties involved. Online banking & Electronic Bill Pay can provide access (in most locations) for the Service Member or the spouse/ caretaker to keep close track of income and expenses. Child care may be a major increase in expenses. PAYING BILLS – Spouse or POA; Direct Deposit; Allotments; Automatic bill pay; Credit Card use and Spending Limits Ask : What they know about how to open an SDP account? Where else could they save and be guaranteed a 10% return? GET AHEAD, GET INTO A ROUTINE, TAKE ADVANTAGE OF THE TSP. If savings can come right off the top of non-taxable income. If they know what part of their pay is tax excluded? What % of their enlistment bonus, hardship pay, etc. BAS, BAQ, BAH. Clothing Allowance, Incentive or Hazardous pay, etc. Review combat zone Service Member benefits, ask for statement of others who have used any of these benefits in the past: Savings Deposit Program, Tax free pay, and bonuses, Entitlements, Pay for hardship, hostile fire and family separation, Service Member’s Civil Relief Act (SCRA) on a previous slide
- Tax-free income Combat pay Bonuses Entitlements Special pay All of these extras translate into opportunity knocking at your door. Do not increase spending, rather put the extra $$ in savings towards a major goal ( house, vehicle, retirement). Using it to pay down debt is similar to investing it in an account paying the same percentage as your credit card interest. During deployment you have the opportunity to participate in the SDP, which will pay you 10% interest on monies up to $10,000 deposited while you are deployed and for three months after leaving theater. Revolving Savings: This savings is designated for expenses that occur throughout the year, but not every month, for example, car insurance, oil changes, taxes, tuition, birthdays, and Christmas. Make a list of expenses that you will face this coming year, their expected cost, and the month in which they will occur. Add the expenses together and divide by 12. This will give you a figure to save each month. As the expenses occur, use the revolving savings to pay for them. It will take a year to build up this savings account. If you can put a little extra in each month it will help you to meet this year’s expenses and prepare for next year. If it is too difficult to put that much away in a revolving savings account, then take your time. It might take 2 years to build up the account but a little money saved over a long period of time is better than no money saved at all! Safety Savings/ Emergency Fund It has been recommended that each household have 3 – 6 months of income in a savings account. This will help your family avoid getting into debt should there be a loss of income. It is important to have money set aside for emergencies. You cannot always tell when you will get sick, injured, or even lose your job. This type of savings account can be set up at a bank or credit union. Emergency savings must be liquid (ability to access the cash whenever needed with minimal or no consequence. Long Term or Investing: Long term savings would be for college, retirement, a house purchase, etc. This account could be set up in a number ways through banks, credit unions, certificates of deposit, or a number of investment companies. This type of savings is usually accumulated over a period of time and does not need to be liquid.
- Service Members are responsible for their household expenses/bills while deployed. Expenses could include rent, mortgage payments, car payments, credit cards, etc. Before deploying you should ensure that you have made arrangements for these payments to be taken care of. There are a number of ways to handle these expenses. You may wish to appoint your spouse or family member with power of attorney, so that they can handle some or all of your finances while you are deployed. Direct deposit is the quickest, most convenient, and safest way to receive your pay check. Having direct deposit will enable both the Service Member and family members to have easier access and more control of their money. Online banking & Electronic Bill Pay can provide access (in most locations) by the Service Member. An allotment is a portion of your pay that is automatically set aside each month for an individual, a mutual fund, creditors, etc. In the event of a deployment, a couple may choose to open a second checking account and set up an allotment for the Service Member. This is a convenient way to make sure that both the Service Member and the family receive funds on a regular basis. Many banks offer an automatic bill pay program . Use one of your allotment amounts to fund bills due on a monthly or established basis and have the bank take over that responsibility, You can check on line that the bank is following through. It will be one more thing taken care of. Contact creditors if you think there is a problem paying debts. Set spending limits with spouse.
- The IRS provides the most comprehensive resource on tax regulations for military personnel. The IRS Publication 3, Armed Forces Tax Guide; available online along with annual updates on military tax laws. Tax code provisions apply to military serving in combat zones and include members of the Reserves and the National Guard. Military pay earned by enlisted personnel or warrant officers is excluded from gross income. Commissioned Officers tax free pay is limited to the highest monthly Enlisted Pay plus Hostile Fire Pay. Military personnel who miss a tax filing deadline because they are in a combat zone have 180 days after they leave that combat zone to file a tax return, if they have taxable income.
- Military notifies IRS of all combat zone members. Service members should still consider filing even if only income is non-taxable combat pay. Refundable credits may be available. For more information, go to http://www.irs.gov/publications/p3/index.html .
- You need to check that things are happening the way you indicated they should. Don’t miss out on any of the benefits associated with your deployment. Check your LES: Entitlements commenced - Hostile fire, family separation and hardship duty Deductions, insurance, allotments Federal income tax withholding ceased Combat zone leave days are accumulating Allotments are current TSP, SDP, bills, others… Order your free annual credit report and correct errors. Place an “active duty alert” on the report that is good for one year. It removes your name from pre-screened offers of credit for two years. If you tell one agency, it is required you notify the others. Note: Federal guidelines allows voluntary compliance to active duty alert. Consider a credit or security freeze, but beware of its nuances. This website lists the cost of a credit freeze by state: http://www.consumersunion.org/campaigns/learn_more/003484indiv.html Security freezes are designed to prevent a credit reporting company from releasing your credit report without your consent. However, you should be aware that using a security freeze to take control over who is allowed access to the personal and financial information in your file may delay, interfere with or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, insurance, government services or payments, rental housing, employment, investment, license, cellular telephone, utilities, digital signature, Internet credit card transaction or other services, including an extension of credit at point of sale. You must provide authorization to remove the freeze by contacting the reporting agency. A security freeze generally does not apply to circumstances in which you have an existing account relationship and a copy of your report is requested by your existing creditor or its agents or affiliates for certain types of account review, collection, fraud control or similar activities. If you are actively seeking credit, you should understand that the procedures involved in lifting a security freeze may slow your own applications for credit. You should plan ahead and lift a freeze, either completely if you are shopping around, or specifically for a certain creditor, a few days before actually applying for new credit. (Experian) Identity theft is a crime in which an imposter obtains key pieces of personal information, such as credit card, Social Security, or driver's license numbers, in order to impersonate someone else. The information can be used to obtain credit, merchandise, and services in the name of the victim, or to provide the thief with false credentials. In addition to running up debt, an imposter might provide false identification to police, creating a criminal record or leaving outstanding arrest warrants for the person whose identity has been stolen. Identity theft is categorized in two ways: true name and account takeover. True name identity theft means that the thief uses personal information to open new accounts. The thief might open a new credit card account, establish cellular phone service, or open a new checking account in order to obtain blank checks. Account takeover identity theft means the imposter uses personal information to gain access to the person's existing accounts. Typically, the thief will change the mailing address on an account and run up a huge bill before the person whose identity has been stolen realizes there is a problem. Also listed on handouts: Credit Bureaus: Equifax 1-800-525-6285; www.equifax.com E xperian 1-888-397-3742; www.experian.com TransUnion 1-800-680-7289 www.transunion.com
- Many military branches have formed partnerships with area agencies to assist members in renting homes while deployed. Home/Apartment - Make payment arrangements; If subletting, run credit check on potential tenants; always think of liability issues when subletting and consider an umbrella insurance policy, usually inexpensive. Arrange routine maintenance and lawn care; If sharing, ensure all names are on lease and utilities; Insure home contents at replacement costs. Vehicles While deployed it is recommended that you make storage arrangements for your vehicle(s). Some installations have long-term storage available. Additionally, you should check your vehicle registration expiration date. If your registration will expire while you are deployed, you should renew your registration prior to deployment or make arrangements for someone with your power of attorney to take care of it for you. Also, some insurance companies offer reduced rates to Service Members who are deployed if their vehicle will not be in use. Contact your insurance agency to see if this is an option for you. Additionally, ask the company if you do reduce coverage or suspend coverage while deployed will you get the same preferred rates when you return. THIS ISSUE VARIES STATE TO STATE AND SOME COMPANIES WILL NOT REINSTATE OR CHANGE THE COVERAGE TO A PREFERRED RATE WHEN YOU RETURN SO YOU WANT TO ENSURE THIS IS NOT THE CASE BEFORE CHANGING COVERAGE.
- Telecommunication technology has made keeping in touch easier than ever. Update all e-mails, and regular addresses. Ask about free phone cards, check if your cell phone will work out of country. Take advantage of every opportunity to communicate. A message on an answering machine is better than no communication at all.
- Emergencies are part of life, whether you are deployed or stateside. Have family conversations prior to deployment about “what if” Mom , Dad, kids or Grandma get sick. What if there is a major problem with the home or car? Have a plan and stick to it as best possible.
- Discuss with family members and POA how to handle any emergencies that may come up during your deployment. MilitaryOneSource.com TurboTAP.org Command Financial Specialist (CFS) Aid Societies EXAMPLES OF AVAILABLE SUPPORT SYSTEMS (in handout) Airman and Family Readiness Center Financial Planning Association (FPA) Women, Infants & Children (WIC) Ombudsman DoD, VA, and Guard-endorsed organizations Personal Emergency Fund Military Relief Societies American Red Cross Fleet and Family Support Center, Army Community Service Centers (ACS) Family Service Centers Personal Financial Manager (PFM) Relocation Services Family Advocacy Program United Service Organizations (USO)
- Presenter: Double-click on the checklist to enlarge. Also, when opened, the PDF contains several worksheets that can be printed for handouts including: Budget and Net Worth worksheets, various checklists, Action plans and Family Care Plan. (21 pages all together).
- As mentioned earlier, the SCRA offers protection from undesirable legal and financial consequences due to your deployment. Certain benefits are specific to Reservists and Guardsmen, while others are available to all active duty service members. The handouts include valuable checklists and sample letters to help implement the benefits. Presente r: double-click on the checklist to enlarge and to print out. There are several pages of checklists and sample letters.
- This is an excellent 10-page list of various military sources at your disposal and can be found at: https://militaryonesource.com/LinkClick.aspx?fileticket=Fl93Hq23UaY%3D&tabid=144&mid=1962 And http://www.transitionassistanceprogram.com/portal/transition/resources/PDF/MyHelpList.pdf Presenter : You can double-click on pdf to enlarge and to print out all 10 pages.
- Useful Resources . Can be printed out. Double-click on the handout The TurboTap site is especially helpful in transitioning to civilian life.
- Web Resources. Double-click to open and print.
- Double click to open and print
- Optional Participant Activity: Experienced Deployers Panel Time: 10 – 20 minutes Procedure: Ask 4–6 experienced deployers and / or spouses to come to the front of the room. Have chairs prepared for them to sit on. If possible, include at least one spouse. Ask each participant to tell the rest of the group one thing they did to ensure a successful deployment in the past or for their “top tip” for deployment success. Ask each person to stand as they speak to the rest of the group. Elaborate or clarify panel responses as needed. Ask for a round of applause for panel members as they return to their seats. Comment that even though deployments are stressful and challenging, they are survivable as evidenced by the panel.