We provide all different types of guidance for clients that are looking ahead toward their senior years. Many people that are relatively young assume that retirement is something that falls into your lap naturally, but in fact, this is not the case. At the time of this writing, Americans that were born in 1960 or later will become eligible for their full Social Security benefit at the age of 67. That’s the good news, but the bad news is that these benefits are modest. Very few people will be able to retire with little to no savings and Social Security as a sole source of income.
It takes careful planning to develop the resources that you need to retire in comfort, and people that serve in the military have fantastic opportunities in this regard. After a minimum of 20 years of active duty, service members become eligible for a retirement pension. The amount of the pension rises along with your time of service beyond the first two decades.
There are different parameters in place depending on when you served, and there can be multiple options available to you. In any event, if you remain in the service throughout your career, and you add your pension to your Social Security benefit, you should have sufficient income to be able to enjoy your golden years without any significant financial concerns if you budget appropriately.
The military pension can facilitate a different course of action that can be quite fruitful from a retirement planning perspective. Many people join the service when they are quite young, so you could potentially retire from the military after 20 years of service and embark on a career in the private sector.
You could live on the income that you receive from your job, and your military pension could be saved or invested. While you are working, you may also contribute into the 401(k) plan that is offered by your employer. When you reach the age of Social Security eligibility, you should have a considerable nest egg tucked away. You would also have a nice stream of ongoing income through the combination of your Social Security benefit and your military retirement pension.
The Veterans Aid and Attendance Special Pension
Most people have heard of the retirement pension that military service members can receive, but there is another pension that tends to fly under the radar. This benefit is called the Veterans Aid and Attendance Special Pension. It exists to provide financial assistance to former service members that have trouble taking care of all their own day-to-day needs.
This will often apply to senior citizens. Studies show that the vast majority of people who reach the age of 65 will someday need help with their activities of daily living. In-home health aides and assisted living communities are costly, and nursing homes are exorbitantly expensive. Medicare does not pay for this type of custodial care, so any help that you can receive from the Veterans Administration would be quite welcome if you ever need help with your activities of daily living.
Of course, you have to provide medical proof that you do in fact need living assistance to become eligible for the pension. There is a length of service requirement, but it is nothing like the two decades that you must have under your belt to qualify for the retirement pension. If you have served during wartime for a single day out of a total active duty stint of at least 90 days, you meet this requirement.
Since the Veterans Aid and Attendance Special Pension is intended for people with some modicum of financial need, there is an asset limit. The figure of $80,000 is generally utilized, but evaluators will look at each application on a case-by-case basis. When you are thinking about this number, you should understand the fact that your home is not counted, your motor vehicle is not a countable asset, and your household goods and personal effects are excluded.
A veteran that is eligible for this benefit can receive up to $1,794 each month, and a married couple can qualify for $2,127 per month. The surviving spouse of a veteran can receive a $1,153 monthly benefit to defray assisted living costs. Plus, if a healthy veteran has a spouse that is in need of help with their activities of daily living, a $1,410 monthly benefit may be approved.
If you would like to learn more about veterans benefits, we would be glad to answer any questions that you may have. To schedule a consultation, give us a call at 408-356-9200 or 831-476-2400.