When it comes to credit cards, understanding your interest rate and how it works can be the difference between staying out of debt with an excellent credit score and falling behind in your payments and dipping to sub-par credit score ratings.
Your interest rate is the amount your credit card charges you to borrow money. If you pay your credit card balance in full and on time, you generally don’t need to worry much about your interest rate, which is expressed as an annual percentage rate (APR).
But if you’re carrying a balance on your credit card, you’ll notice you owe more over time, and that’s because of the interest rate. Credit cards are notorious for being one of the most expensive types of consumer debt, with an average interest rate of about 17%.
While in most cases you probably don’t need to calculate your credit card card interest rate — your statements should clearly reflect how much interest is owed on any unpaid balance and your APR should be clear on your statement and your bank’s website — you may want to get an idea of how much your balance is costing you on a day-to-day basis.
Here’s a quick cheat sheet to help you when it comes to calculating your own credit card interest rate.
1. Pull up your credit card information
Log on to your financial institution’s website or pull out your latest statement (if you haven’t switched to paperless billing yet, get on that!) to find the pertinent information you’ll need to calculate your credit card interest.
You’ll need to find:
your purchase APR
the number of days in your billing cycle
2. Get to know the terms
The way your credit card works boils down to a few different terms, two of which include annual percentage rate (APR) and, more generally, your interest rate.
Although APR stands for annual percentage rate, your credit card company uses this percentage number to determine the interest you’ll be charged each month when you don’t pay your credit card off in full and carry a balance.
Keep in mind that your credit card may have different types of APR, like a:
purchase APR (usually applied to the overall purchases you make with a card),
balance transfer APR (usually applied to any balances transferred from another credit card)
introductory APR (usually applied to purchases made during the promotional period after opening a new credit card)
3. Find your purchase APR
In order to calculate the interest you owe on any leftover balances on your credit card, you’ll need to find your purchase APR. If you can’t find this information readily, try calling your bank, or click on your card’s terms and conditions section.
4. Determine your average daily balance (or balance subject to interest)
This is the aggregate total of what you spent and either paid off and/or were refunded every day throughout your billing cycle, divided by the number of days in your billing cycle.
If you’ve always paid your purchases in full by the due date, you won’t have any interest payments to make and your average daily balance isn’t really a factor. However, if you plan to carry a balance, to calculate your average daily balance when you need to determine interest, log onto your bank account online and track the charges and credits that went through on each individual day, creating a rolling total as you move through the days of your billing cycle.
This will provide you with an aggregate total that you can then divide by the number of days in your billing cycle (which you’ll find in step five).
5. Get the number of days in your billing cycle
Different credit cards have different amounts of time between billing cycles. A typical credit card statement is paid out in 30-day billing cycles.
6. Divide your APR by 365
Since your APR is your annual interest rate, you’ll need to divide your APR by the number of days in the year to get your daily interest rate. So for example, an APR of 13.99% would become: 0.1399/365 = .00038 daily interest.
7. Multiply your daily rate by your average daily balance
Once you know what you’re charged daily for interest, you can multiply that number by your average daily balance to find the daily interest you’ll owe. So for example, if your leftover balance after paying your credit card is id=”listicle-2639175991″,000, you would get: .00038 x id=”listicle-2639175991″,000 = .38.
8. Multiply your daily interest rate by the number of days in your billing cycle
If you determined that you have a 30-day billing cycle, then the credit card interest you would owe on a balance for the 30-day cycle in this example would be: .38 x 30 days = .50 in interest.
9. Ask about your credit card’s grace period allowance
Some credit cards offer a grace period between when items are purchased and when they absolutely need to be paid off before accruing interest. Check in with your bank to learn if you have a grace period on your accounts and what the exact grace period is in order to better avoid paying interest.
Supporting the military is nothing new to T-Mobile. The carrier is one of America’s most dedicated veteran employers. In keeping with the practice of asking customers what they want and giving it to them, T-mobile asked its veteran employees what they needed. The veterans answered truthfully. T-Mobile listened — in a big way.
“We change to adapt to our customers’ needs, we listen to their pain points” says Matt Staneff, Executive Vice President and Chief Commercial Officer of T-Mobile. “Our veteran employees and customers transitioning out of the military were just making ends meet during long periods of unemployment.”
And so began the company’s Military Support Initiative.
(Twitter @JohnLegere, T-Mobile CEO)
T-Mobile decided to go all-in for the military-veteran community in a number of ways. On top of the benefits of buying into T-Mobile’s ONE family plan (of which there are many, including a Netflix subscription), T-Mobile will now offer that plan at half-off for military families — along with half-off of popular Samsung smartphones. It’s not just the biggest discount T-Mobile has ever offered, it’s the biggest discount in the wireless industry. Ever.
But the carrier’s plan is more than just a discount and some great service, it’s a real investment in military communities. It starts with the discount, but T-Mobile quickly recognized that making it easier for transitioning military families to make ends meet was solving only part of the bigger problem: the long period of unemployment. So, T-Mobile decided to do something about that, too.
“Our plan to hire military veterans has had phenomenal success to date,” says Staneff. “We have vets in every department performing very well. What veterans bring to the culture of T-Mobile is one of the keys to our success.”
A few years back, the company pledged to hire some 5,000 veteran employees, and not just for entry-level positions. The company employs vets at all levels and in all areas. Now, they’ve pledged to hire 10,000 more veterans — and their spouses — in the next five years.
“It took a lot of time thinking about what I wanted to do during transition,” says Tana Avellar, once an active duty Army officer who now serves in the Washington State National Guard. She is also a T-Mobile employee. “I can’t be more proud to work for a company that is such an advocate for their employees, veterans, and their families overall.”
(Photo from Tana Avellar)
But T-Mobile is looking to help out all veterans, not just the ones who want to work for them. It’s teaming up with FourBlock, a career readiness nonprofit designed for veterans and their families. The company is funding FourBlock’s Massive Open Online Course, a training course based in 15 cities in the U.S. (with four more on the way). The training helps spouses gain employment while giving them the confidence to pursue the jobs they’re more than qualified to do.
The last part of T-Mobile’s investment plan is a real investment, in both T-Mobile’s future and military families. The company is rolling out a $8 billion investment in new infrastructure, and will start that with a $500 million plan to build new 5G towers in military communities.
“Our mission is to have the best coverage for all Americans,” says Staneff. “And bases aren’t always near big cities. So, we wanted to make sure everyone had access to the fastest networks, whether they live in cities or rural small towns, military bases or somewhere in between. They all deserve the same access.”
There is another Murph the military comes to know through the years, and he does not come with an Instagram worthy WOD. We’re talking Murphy’s law, the one that wreaks havoc on your government issued bank account.
Years of service and plenty of direct hits to the checking account later, a few of us have learned how to add a bit of financial padding to military life.
Here are 4 tips for disaster proofing your finances:
Quit going through cars like you go through (fill in the blank)
Car buying is a longstanding way to get screwed over as military personnel. Unlike the rest of the world, buying a vehicle for military life requires a whole new set of things to consider. Take this list into consideration before you go through cars like you go through…other things. Your savings account will thank you.
Always go for AWD or 4WD.
It needs to drive well in Alaska, Arizona or the Alps. If it can’t, you’ll be forced to buy again at almost every post.
Be prepared to ditch the second vehicle.
Shipping a second vehicle for OCONUS assignments means an average ,000 out of pocket each way. Is it worth it? Probably not.
Get to know the Military Lending Act
Every used car salesman will claim to be a retired First Sergeant, and every one of them cannot wait to strap you into an interest rate higher than your IQ score.
This is why we can’t have nice things
Government contracted movers are exactly why we can’t have nice things. Before you buy, ask yourself: Will this survive being thrown off a moving truck? If the answer is no, buy something cheaper. In military life, you need to know the household goods to save or splurge on.
Tough boxes (splurge)
Investing in tough boxes is a smart way to keep things both organized and safer from moving-related damages. Use them to house everything from tools to your heirloom china dishes.
Everyday furniture (save)
Screws will get stripped, scuff marks will happen, and eventually, you will replace a fair bit of the goods you acquired. Save your investment pieces for things like mattresses or multifunctional pieces that can be utilized as a dresser or TV cabinet in the likely chance something won’t fit or something else won’t make it.
Quit buying houses like they are forever homes
Bold enough to buy a home while in the military? Spoiler alert, it’s nothing like buying on HGTV. Whatever you buy better have universal appeal because two years from now it will be someone else’s American dream.
The savvy military landlord knows to buy with these tips in mind:
Choose something with rental potential.
Your mortgage should be significantly lower than BAH and the potential rental income (think 0-0 cheaper).
Choose something that will be easy to sell.
Slap the twinkle right out of your eye when looking for homes to buy while serving. Your oddball taste or preference to live in a secluded cabin ten miles into the wilderness will quickly go from dream to nightmare once you’re paying two mortgages after your one of a kind place didn’t sell.
I’ve got the power…of attorney
Who knew a little document could do so much damage? Carefully and thoughtfully designating not just anyone as your power of attorney is a decision not to take lightly. Here’s some basic left and right limits for your money.
Do- Put your money in more than one bank.
Don’t- Give power of attorney to the stripper who is “a really good listener.”
Do- Name an alternate or limit power if you aren’t on good terms.
Don’t- Give it away to your brand new girlfriend or boyfriend as a trust exercise.
We’re down to the wire at our house for Christmas gifts. Due to our crazy travel and flight schedules over the last two months, my husband and I have barely even scratched our shopping list for gifts this year.
And yeah, I know we suck.
So we decided we’d find a few quick gifts that are still awesome and won’t totally break the bank.
1. You almost can’t go wrong with Disney
Disney offers a special program for the military called the Armed Forces Salute. Service members or their spouses can purchase either a five-day or four-day package for $224 or $209, respectively. This is a savings of nearly 50 percent.
Total cost of taking my family to Disney for five days: $1,120 (does not include lodging).
2. Buy an iPhone and get $250 off an iPad
Verizon does this thing where, if you buy an iPhone, you pay for it monthly, and only pay the tax up front. But right now, if you buy that new iPhone your daughter has been eying, you’re going to get $250 off an iPad — which puts the iPad mini at around $150.
Don’t forget to sign up for your military discount if you haven’t already. Total cost of my Verizon shopping trip today for tweenager gifts: less than $250.
3. Great news those of you who wear Oakleys
If you don’t already know, Oakley has a thing called the Oakley Standard Issue, offering approved eye-pro sunglasses to service members at about a 25 percent discount. Total cost of my husband’s preferred shades: $128.
4. Pretty much anything from Best Buy, amiright?
Best Buy has a 15 percent military discount, so it looks like tomorrow I’ll be buying a bunch of electronic gifts I won’t know how to use.
But the kids and husband will be stoked!
5. Last (but certainly not least), adult grape juice
It’s kind of like a gym membership, except you don’t have to go anywhere, and you don’t have to wear yoga pants (though I do recommend wearing something comfy).
The only thing is that instead of the gym, you get a case that you pick up and set down. Okay, it’s wine — a wine club membership, to be exact.
With the military discount at Twisted Roots Vinyard, it’s $255 every four months. That’s a lot of wine, and it’s worth it.
If you’re lucky enough to have a budget that allows you to spend hundreds of dollars on fancy board games, you’d better act quickly — the collection will only be available until June 29, 2018, according to the website.
But if you don’t have a spare $1,500 lying around, you can always indulge your nostalgia with the classic Hasbro version of Connect Four that sells on Amazon for $8.77.
This article originally appeared on Insider. Follow @thisisinsider on Twitter.
Starbucks Armed Forces Network, a private group within the company of Starbucks, released a statement yesterday asking that those calling for Starbucks to hire 10,000 veterans instead of refugees check their facts.
Recently, Starbucks came under fire for announcing that they would hire 10,000 refugees. The general reaction was anger and calls for boycotts of Starbucks until they vowed to also hire 10,000 veterans.
The problem with that? Starbucks vowed to hire 10,000 veterans in 5 years way back in 2013. And they’re ahead of schedule.
One of the many internal groups at the coffee giant, Starbucks Armed Forces Network, penned a note to their customers to explain why the anger at the refugee program was misdirected.
The note, simply signed by The Men and Women of Starbucks Armed Forces Network (AFN), began, “We write to you today as representatives of the thousands of veterans and spouses who currently work for Starbucks Coffee Company.”
The writers went on to express their gratitude to their customers and then they moved right into addressing the refugee and veteran initiatives.
“The false and inaccurate statements [about the veteran hiring initiative were] deeply troubling to those of us who’ve served,” the group wrote.
The statement described how the CEO and his wife, Howard and Sheri Schultz, had visited military installations around the country to learn more about how they could advocate better for veterans and military spouses after announcing the veteran hiring initiative in November 2013. The couple invested their own personal funds into “plans for transitioning service members,” according to the group.
“We respect honest debate and freedom of expression,” the statement read. “But to those who would suggest Starbucks is not committed to hiring veterans, we are here to say: check your facts. Starbucks is already there.”
The 5 year initiative has only used about 60 percent of its time, but has met 88 percent of its goal. This means that, if they continue at this rate, Starbucks will surpass their initial goal of hiring 10,000 veterans by 2018 by 4,600 veterans.
The company also offers Military Service Pay to employees who have to report for National Guard or Reserve assignments. Eligible partners can receive up to 80 hours of paid time to fulfill their reserve service obligations yearly.
Starbucks provides a Military Allowance to eligible employees that are called to active duty, as well.
Starbucks has made a name for themselves as a veteran friendly company, even being awarded Gold status by G.I. Jobs in this year’s annual “Military Friendly” list.
Choose a degree that leads to a career and a school that can help build a career network. I know it looks tempting to get the BAH, and take random classes. Don’t take that temptation. If you have to, go to a community college for two years to get a taste for school, and then choose a direction.
Choose a school that lets you go to school year-round. If you can take 6 classes per semester, do it. If four is better for your school-life balance, do that. Remember, it may be more economical to take more classes. If your school charges the same for 12 credits as 18, take 18 credits. It might be hard, but you will be pushing through more effectively. Again though, you want to succeed, so only take a course load that helps you succeed.
Life hack: bend your young, naïve classmates to your war-hardened will.
3. Plan it out
Plan your classes down to the day. Look at the schedule for each semester. The GI Bill is prorated down to the day. If you have even one-day left, you will qualify for the entire semester including BAH. By planning this, you’ll be able to get more from your GI Bill. Also, the BAH is lower for an online program, but if the degree gives you something of benefit, it might be worth it to take a lower BAH rate. Focus on the long-term plan.
4. Choose a school based on the professors and the network they offer you
This is not GI Bill specific, but your professors and fellow-students will be your network in the future. Look at alumni. Look at the research by your professors. Look at who works for the school in a consulting or a part-time capacity. These relationships are super important towards shaping your future. Utilize them.
5. Don’t be afraid to change direction and re-plan everything
I did this in my first semester of undergrad. I had a plan that wasn’t smart. My professors pushed me toward a degree that would get me to my goals. That being said, my last semester of Graduate School, I changed my mind on what I wanted to do with my life. It happens. I am creating my own peacebuilding business instead of going to work for the UN. I have all the skills for this from my two degrees, and it fits my interests better.
6. Be active in planning, preparing, and choosing all aspects of your degree path
This is part of planning your schedule, but it’s also about taking classes that will help you in your career. Don’t take a math class that you don’t need. Don’t take gym just to take it. Take classes that teach you things that you will use. If you do this, you’ll get more than your money’s worth from the GI-Bill.
This is how I’ve used the GI-Bill with purpose, and how I think you can do the same.
Buying a car in today’s world is a necessity. Even the troops who grew up in a city where they never needed anything more than a subway pass will find themselves needing a set of wheels to call their own. Military installations are way too big and timetables are way too tight for a young private to make it around comfortably on foot.
So, be prepared to fork over a bit of your enlistment bonus just to adhere to a standard. Meanwhile, it’s kind of ingrained into military culture to belittle and mock the unfortunate lower enlisted who thinks they’re getting a good deal on a sports car and ends up paying a 28% interest rate over five years.
Instead, shouldn’t we actually, you know, help the poor soul?
(U.S. Army photos by Cpl. Han, Jae Ho and Dean Herrera)
You can’t throw a rock outside of a military installation’s main gate without hitting a sketchy used-car lot that boasts that “E-1 and above” are automatically approved for a loan. Because so many young troops are told they must get a car and have no idea how to do so intelligently, they’ll usually shop at the first stop — often coming away with a car without even taking it for a test drive.
Yes, a young private has few bills to pay — they’re given a barracks room rent-free and their meal card deductions hit their LES instead of their bank account — but too many troops are crippling their credit report right out the gate. A simple bad decision will follow them for life.
This is where their first line supervisor or their non-commissioned officer can step in and spend a Saturday afternoon making sure their troops are taken care of.
“A new set of wheels and this baby will be good as new! But for you, my special friend, I’ll see if I can sweet talk one of the guys to throw in a few air-freshening trees for the rear view.”
(Department of Defense)
Leaders have been around for a while and generally have a good sense of the installation and its surrounding area. Given that an NCO likely has a vehicle, they could talk the rideless private past all of those sketchy spots and take them to a reputable dealership. Depending on your location, this might be an hour-long drive, but it’s still better letting someone fall prey to months of ridiculously high payments.
Next comes the choice of car. The young troop, fresh out of mama’s basement, might see all those numbers in their bank account and fail to piece together that 00 isn’t really all that much to grown adults. Feeling like Mr. Moneybags, the young troop may casually stroll up to the car of their dreams — and it’s kind of up to the NCO to be the reality check.
Hell, NCOs could even pop out a PMCS checklist right then and there. It’ll establish dominance over any crooked salesmen and show you mean business.
(U.S. Army photo by Spc. Wilmarys Roman Rivera)
That new muscle car seems nice, but it’s not the best fit for for someone who gets paid half of federal minimum wage. So, you’ll want to pinch pennies. You might think that used cars are the best option then, but that opens another can of worms if the NCO isn’t careful.
So, here’s a little trick for you: insist that both the troop and the NCO must take the car for a test drive. The troop should be busy deciding if the car is comfortable for them, while the NCO should be looking out for deficiencies. If the car lot is reputable, they’ll always allow you both to ride. If not, you found a solid reason to move on to the next place.
Nipping this in the butt early can also help prevent even more paperwork if that troop has to go through financial aid.
(U.S. Army photo by Sgt. John L. Carkeet IV, 143d ESC)
Finally, we arrive at haggling. A young, dumb idiot willing to throw cash around is a used car salesman’s wet dream. If the troop doesn’t know the actual cost of a car but is willing to sign the papers because “they threw in a free tank of gas,” then they’re about to get screwed. It’s up to the NCO to be the middleman. A well-placed knife hand and serious demeanor could mean the difference of hundreds — if not thousands — of dollars.
Once the troop has found a vehicle that is within their price range, from a dealership that isn’t trying to ripoff service-members, runs excellently, and makes the troop happy, you move on to the paperwork. Read every single line before the troop signs anything. Make sure they never take the “zero-down” offer and advise them to put at least id=”listicle-2607400034″,500 down — regardless of the vehicle. Just that bit can change a horrific 28% interest rate to a reasonable 8% for someone without an established line of credit.
However, what you cannot do is co-sign the lease with them. It doesn’t matter if you trust them to pay the lease of on time or you’re willing to take the hit for your guy. It’s strictly forbidden by the UCMJ to enter a financial agreement of any kind with a direct subordinate.
What you can do is cattle prod your troop into making the payment every month. Yeah, it won’t be pleasant for them to be reminded every month to do it, but their financial security is at stake. They’ll thank you once they realize that you helped them out immensely.
The Department of Veterans Affairs says that it is “amending its regulation” on the copays that veterans pay for medications they receive that are not for service related conditions.
Currently, veterans pay $8 and $9 for a 30-day (or less) supply of prescriptions.
The VA says that the new system will “keep outpatient medication costs low for Veterans.”
Dr. David J. Shulkin, the VA Undersecretary for Health, said “Reducing their out-of-pocket costs encourages greater adherence to priscribed outpatient medications and reduces the risk of fragmented care that results when multiple pharmacies are used.”
The new system tossed out the old way of determining costs, which was based on the Medical Consumer Price Index.
Three classes of outpatient medications have been designed to help curb the costs.
Tier 1 is for preferred generics, and will cost veterans $5 for a 30-day or less supply.
Tier 2 is for non-preferred generics, which includes over the counter medications, and will cost veterans $8 for a 30-day or less supply.
Tier 3 is for brand name medications, and will cost veterans $11 for a 30-day or less supply.
The new system will go into effect February 27th, 2017, and only apply to medications that are not for service connected issues.
Veterans who are former Prisoners of War, catastrophically disabled, or are covered by other exceptions will not have to pay copays.
Veterans who fall into Priority Groups 2-8 will have a $700 cap on copays, at which point the copays do not apply. To find out which Priority Group you fall into, check out the VA’s list of Priority Groups in their Health Benefits tab (here).
According to 38 U.S.C. 1722A(a), the VA is compelled to require veterans to pay a minimum copay of $2 for every 30-day (or less) supply of medications which are prescribed for non-service related disabilities or connections, unless there is an exemption for the veteran. 38 U.S.C. 1722A(b) gives the VA the authority to set the copay amount higher and to put caps on the amount veterans pay.
How to use your Veteran Benefits to Help Achieve Financial Independence
Can you, as a veteran, hack military benefits to financial freedom? Yes. The average American household spends $5,000/month. Let’s imagine that this represents you. If you succeed in stacking your benefits as monthly passive income to outweigh $5K/month, then you win in hacking your way to financial freedom.
You can win freedom by increasing money flowing in or reducing the money flowing out. I prefer to focus on income, to think offensively, vs. the defensive approach of aggressive saving and living frugally. Your expenses can shrink to the floor, but your income has no ceiling. And as we say in the military, the defense sets up the offense. The offense remains decisive.
As a veteran, there exist at least four significant sources of passive income that you should hack: retirement, VADC, SSDI, and VR&E. You also have at least two state-level benefits on which to give serious thought: zero property tax, and free college for your dependents.
For illustration, let’s say that you’re an Army Captain (O-3E) retiring at 20 years in 2020. Let’s also say that you fall under the High-3 pension, with two dependent children, and have a good chance at VA 100. And yes, presume $5,000/month in expenses. Sneak peek. That means $3,700/month (pension), $3,300/month (VA 100), $2,800/month (SSDI), and maybe $1,500/month (VR&E housing stipend). That adds up to $11,300/month, best-case scenario.
Veteran Retirement and Pension
Retirement qualifies you for a pension. There exist four pension types: Final Pay, High-3, CSB/REDUX, and BRS. The math goes as follows, monthly pension = (retired base pay) x (multiplier) x (years of service). At present, you can’t choose. It’s a moot issue. You have what you have, and that got determined by when you entered. In our example, the High-3 applies to you. It calculates as follows, $3,700 = (approx. $7,400) x (2.5%) x (20 years).
There exist five types of retirement:
Regular. Completed 20 years of active service. You can begin active duty as early as age 17 and retire at 37. Some do.
Reserve. Reservist with 20 years of service who has reached age 60. Sometimes called a non-regular retirement. Ready Reserve recalled to active duty or in response to a national emergency, shall have the age 60 requirement reduced by 3 months for each cumulative period of 90 days (3 months) so performed in any fiscal year after 28 Jan. 2008.
TERA. Temporary Early Retirement Authority. At least 15, but less than 20 years of active service between 2012 and 2025. Program expected to end 31 Dec. 2025. Future use of TERA will require approval by Congress. Specific eligibility criteria for TERA depends on the service branch. The Army has in place a limited use of TERA, enough to conclude that it’s not an option.
TDRL. Temporary Disability Retirement List. Temporary disability rating, placed on retirement rolls by member’s branch of service (max of 5 years) before returning to duty, separating, or proceeding onto PDRL. Results from a med board. This results in a military pension. This retirement check comes from the DOD and not the VA.
PDRL. Permanent Disability Retirement List. Placed on the retirement rolls by member’s branch of service.
All of the above will result in a pension. The math will differ for each. We’ll continue with our High-3 and regular retirement example. But I’m guessing that you’ll want an idea of how to retire as soon as possible, and with the highest return you can get. Keep reading.
Regular, reserve, and TERA allow with reasonable certainty for Concurrent Retirement Disability Pay (CRDP). That means both the pension plus VADC. CRDP requires retirement under the first three, as well as a ≥50% VA disability rating. In our example, that means $3,700/month plus $3,300/month (VA 100), or $7,000/month so far and well over the average in household expenses.
Otherwise, the only way to get both, concurrently, is through Combat-Related Special Compensation (CRSC). The criteria:
Entitled to or receiving retired military pay
Rated at least 10% by VA and combat-related
Have waived VA pay from retired pay (the VA waiver or offset) (it’s a bit complicated)
Can present documentation for the event resulting in the condition
Notice that CRSC can occur before 15 or 20 years, and pay the pension plus VADC. The math will adjust accordingly. To keep this article from getting too long, I won’t go over it here. Know that less time in service or a lower disability rating means a smaller compensation amount. Also note that yes, with CRSC, you can stack both the pension and VADC, and well before 15 or 20 years. Such a case would most likely look like TDRL/PDRL plus CRSC.
By the way, combat-related need not refer to actual combat. Combat-related may mean training that simulates war, e.g., exercises or field training. It could mean hazardous duty, such as dive, flight, parachute. Or come from an instrumentality, such as combat vehicles or weapons. In 2011, as a Second Lieutenant (O-1E) at Fort Lee, a Private negligently discharged her rifle during a range and almost shot my foot. If she had shot my foot, that would’ve counted as combat-related.
VA Disability Compensation (VADC)
Here’s the big one. A high enough VADC rating can lead to SSDI, VR&E, zero property tax, free college for dependent children, student loan forgiveness, and more. The goal here is not to be disabled but to obtain disability compensation. And winning compensation is probably much easier than you think. There’s no lying or cheating required or encouraged – only diligence. We’ll go over ways to give your claim the best chance possible.
Keep this framework in mind: How much is it? How long will it take? Claims, conditions, criteria, and appeals? Anything quirky? Where can I get help?
How much is it? The amount will depend on the VA’s final composite rating and the number of dependents. The higher the composite and the more dependents, the higher the amount. In our example, a 100% VADC (or VA 100) with two dependent children would pay $3,300/month, non-taxable.
The final or composite score consists of adding up the ratings of each separate disability. Two disabilities, each rated at 50, do not add up to 100. The VA uses a unique table. If you search Google for a VA disability calculator, try punching in 10 different disabilities. With 10 disabilities, you’ll need to score the following individual ratings at the least for VA 100: 70, 40, 40, 10, 10, 10, 10, 10, 10, 10. Notice that using lay math, these individual ratings add to 220. The rule of thumb is to shoot for 250+ points to reach VA 100.
How long will it take? Six months to a year or more. Anecdotal evidence from my friends who’ve reached VA 100 tell me about two years. You can begin your claim at https://www.ebenefits.va.gov/ebenefits/login, six months from separating or retiring, or upon referral to a medical board. Fill out the VA Form 21-526EZ. If you’ve been referred to a medical evaluation board (MEB), your claim will happen as part of the IDES (Integrated Disability Evaluations System) process.
Claims. Two types, standard and a Fully Developed Claim (FDC). File an FDC. The standard claim relies on the VA to obtain your medical information. The FDC lets you take charge. It means more work for you, but you don’t want to leave this up to the VA.
When filing your FDC, look for a form to attach to it called a Disability Benefits Questionnaire (DBQ). DBQ refers to a category of standardized forms for specific disabilities. The VA has created over 70 DBQs, one per disability. For example, if you intend to file a claim for scars or disfigurement, the DBQ for that is Form 21-0960F-1 (scars/disfigurement). Check if the disability you intend to claim already comes with a corresponding DBQ. If not, no worries. Continue mission.
Conditions. Two types, primary and secondary. Primary disabilities refer to those which military service caused or aggravated (made worse). Notice the part about the military having made worse the condition. Even if pre-existing, it suffices VADC that military service has exacerbated it. Primary conditions represent the category that most of us know, and on which we spend most of our efforts trying to win.
There also exist secondary disabilities. Whereas primary refers to a direct service-connected condition, secondary refers to indirect. Secondary connects to primary. These seem easier to win. Whether they are, know that they represent one more way to increase odds of VA 100. Some of the more common reasons connecting secondary to primary include behavioral health, illness, medication side effects, and overcompensation. Also, note that the connecting primary may suffice at a non-compensable rating of 0%.
Yes, 0%. 0% compensation for a primary condition still means service connection, although non-compensable. You may still use it to achieve compensation for a secondary. One more time, realize that a 0% rating on a primary can still service-connect to a 100% rating on a secondary. Makes sense? It doesn’t matter. One more way to stack the odds and the benefits in your favor.
Criteria. For the VA rater to decide, you must connect at least three records:
What · your present impairment limits your earning capacity
When · you experienced an illness/injury while serving active duty
Nexus · that illness/injury caused/aggravated the present impairment (service connection)
Something happened on active duty. That something, or set of somethings, produced or made worse your present medical condition. You indeed have a medical condition that limits your earning capacity. Get straight to the point. Give the rater these records and nothing more. If you lack one of these records or clog his inbox, it makes work difficult for him and unlikely for you to win.
The medical nexus letter will look like a memo for the record (MFR). It should contain four parts:
Records review. The medical professional writing the letter must state that he has looked at your relevant medical records.
Medical opinion. The opinion, which must at minimum say, at least as likely as not (the 50% probability evidence standard). Equipoise.
Medical research. Reason and evidence to support the opinion.
Credentials. The examiner states his relevant credentials. An eye doctor probably knows more about feet than a VA rater. But when it comes to your foot problem, the VA doesn’t want your eye doctor’s opinion.
For each disability you claim, you should also fill out a VA Form 21-4138 (statement in support of a claim). Tell your story. Say what the condition is. Identify what it resulted from, the symptoms, and the severity of those symptoms. Describe the degree to which it has limited your life.
If the claim requires lay evidence, ask someone relevant to your case to fill out a VA Form 21-4138. When filled out as lay evidence, it now becomes a buddy letter. In his letter, he should state how well he knew you during the qualifying incident, and then what he observed about you.
Along the way, the VA may ask you to undergo a C&P (compensation and pension) exam. It’s a medical review with a VA doctor. It could be a few questions or a comprehensive physical exam. Be honest, of course, but do not be on your best day either. The C&P examiner aims to disqualify you. Furthermore, carry with you the attitude that you gave military life your best effort. If he sniffs you out as lazy or looking to milk the system, he’ll decide accordingly.
Even if he does decide against you, you may still get a second opinion from an approved examiner of your choice. Notice the word equipoise above. Given a 50% probability, such as when the C&P says no, but your doctor says yes, the benefit of the doubt goes to you.
Appeals. Yes, you can appeal. Search for VA Form 20-0998 (your rights to seek further review of our decision). It outlines four review options: supplemental claim, higher-level review (HLR), appeal to the board, and a U.S. District Court complaint. File a supplemental claim given new and relevant evidence. File an HLR when you have no new evidence. These first two, especially HLR, appear to result in more success than the last two and happen much quicker. The last two take years. The VA Form 20-0998 gives instructions on how to file for review. More ways to win. Keep at it.
Quirky things. We’ll discuss SMC (special monthly compensation) another time. Know that there exist four types of VA 100: temporary, schedular, TDIU, and P&T. Temporary means you’re incapacitated or suffering a severe condition. If schedular, you reached about 250 lay points. TDIU pays the equivalent of VA 100 if the member rates at least VA 60 or 70 and cannot obtain substantially gainful employment. Permanent and Total (P&T) provides the least likely chance of reduction later. You want P&T. If you’ve reached VA 100 the other ways, you may write to your local VA Regional Office to request P&T.
Recap. Stack the odds in your favor. Use FDCs and DBQs. File for both primary and secondary disabilities, and claim as many as reasonable. Shoot for 250+ lay points. Add buddy letters. Present the rater with what he needs, and nothing more. Realize TDIU could shortcut to VA 100. And use supplemental claims and HLRs.
VADC covers a veteran for loss of earning capacity because of a service-connected medical condition. SSDI compensates the applicant for the loss of the ability to do substantially gainful work because of a medical condition. For SSDI, the condition must have lasted or be expected to last at least a year or to result in death.
How much is it? For our notional Captain (O-3E) with 20 years of work credits, that’s $2,000/month plus $400/month each for two dependent children, or $2,800/month.
How long will it take? Expect about six months to get a response from the SSA, and a mandatory five-month wait if approved. Oh, and the five-month wait comes with no back pay.
Claims, conditions, and criteria. First, you need to meet the non-medical requirements: sufficient work credits, below retirement age, residency, and not working or earning too much. As a veteran, you likely already meet all of those. Then, the SSA asks five questions when evaluating SSDI:
Do you work too much or make too much money?
Is your medical condition severe? Will it last at least 12 months?
Does the condition meet or exceed a listing? A listing is a condition found on the SSA’s Listing of Impairments. It outlines the SSA’s established set of medical conditions determined severe enough to prevent one from performing any gainful activity.
Can the applicant perform past relevant work?
Can the applicant retrain for new work?
Income, condition, listing, past work, and retraining. To award SSDI, the applicant must reasonably answer, respectively: no, yes, yes if so, no, no. But the gist of it is that the condition must have lasted or be expected to last at least a year or to result in death.
Appeals. Yes, you can. Your denial letter should explain. You typically receive only 60 days from the date of the denial letter to appeal. If you miss the deadline, you may have to start from the beginning. Recommend that you seek help by this point.
Quirks. Instead of applying online or in person, call the SSA at (800) 772-1213. One book on Social Security puts the burden back onto the SSA when it comes to form-filling and the nuisances of interpreting the forms. The SSA would know best anyway on how to fill out its own forms. If you don’t finish it all in one day, the SSA will schedule another phone call to work around your schedule.
You can get SSDI while still serving on active duty. In what scenario? Assignment to the Warrior Transition Unit (WTU). Not easy, but not impossible.
VR&E intends to help a veteran fix his vocational impairment or employment handicap, resulting from a service-connected disability. It consists of five tracks. I’ll just cut to the chase.
How much is it? Track 4 (employment through long-term services) can work just like the Post-9/11 GI Bill and pay a monthly housing stipend, or subsistence within the VR&E language. Think of it as BAH. It depends on the school and on attendance, but we could reasonably estimate around $1,500/month.
There’s also a Track 3 (self-employment) that could pay up to $100K towards business startup costs. Yes, up to $100K, to you. You can ride Track 4 up through a doctorate and then get $100K through Track 3 to start your practice.
How long will it take? Expect about a month to get a meeting with a Voc. Rehab. Counselor (VRC), then another two months to get a decision.
Claims, conditions, criteria. Fill out a VA Form 28-1900 at www.ebenefits.va.gov/ebenefits/login. The VA will also ask you to fill out an Individualized Employment Assistance Plan (IEAP), in which you outline exactly what it’ll take to help you. You’ll need at least a VA 20 rating, or VA 10 for a serious employment handicap.
There’s a 1,200-page manual called the M28R that the VRC uses to do his job. If you’re wondering what questions he’s trying to answer, then check out Part IV, Section B, Chapter 2 (evaluation and planning determinations).
Appeals. Can you? Yes.
Quirks. The C in VRC may stand for counselor, but you should treat him like the C&P examiner. Think of him more as an interviewer.
Although not direct cash, that’s still a BA/BS degree that would’ve cost $40K at a public four-year college (in-state student), $90K public four-year (out-of-state), or about $180K private.
Bonus · Four More Financial Freedom Hacks!
House Hack · VA Home Loan Guaranty
Use the VA home loan guaranty to get zero down on a residential property. This hack lets you obtain up to a four-plex. You could reside in one unit and rent out the other three. In the unit you live, you could further hack that with roommates or Airbnb. Eventually, you could refinance to then re-use the VA home loan guaranty and obtain yet another multi-family.
Credit Card Hack · SCRA (Title 50 USC Chapter 50)
Credit cards typically come with a low introductory rate (anywhere from 0% APR to a little more) before becoming about 20%+ APR. However, if you serve on active duty or if the military called you onto active duty, among other benefits, the SCRA provides a cap at 6% APR and a waiver of service and renewal fees.
By the way, Chase gives me 0% APR as part of its SCRA benefit. If your side hustle consists of e-commerce, use this credit card hack to boost your margins from arbitraging goods. How often do the credit card companies check? About once a year, otherwise, they use your anticipated (hint, self-reported) end date. Self-reporting applies to those with indefinite contracts. If this is you, I’m sure you can see how you could self-report an end date far into the future.
On 21 Aug. 2019, President Trump signed a memo to cancel student loan debt for disabled veterans. To qualify, you’ll need to have either reached VA 100 or have been approved for SSDI. See https://disabilitydischarge.com for details.
The Army’s Career Skills Program (CSP) allows a Soldier to spend the last six months of active duty interning with a school or employer. While on CSP, the Soldier still gets paid as if on active duty but instead reports elsewhere. I’ve seen this flow as smoothly as a one-page form signed by an OIC. Are you separating or retiring? Do you have a friend who also happens to have her own business? It’s like shaving six months off your contract.
Every one who’s ever work the uniform loves that military discount. No matter how hard you try to deny it or blow off a small discount, that extra ten percent ain’t bad. In California, that’s like not paying sales tax. While we all love them and appreciate them when it happens, many of us don’t really go looking for them. Let’s be real: shopping purely for military discounts can be a lot of work. Now you can find everything you’ll ever need discounted in one place.
And what’s more, your shopping spree will go toward helping your fellow veterans.
Then you can keep your savings in one place.
GovX has access to the products and brands everyone loves, not just veterans. From outdoor gear by The North Face to Ray-Ban accessories, this site covers most anything you can think of wanting or needing for work or play. Like the A-10 being a tough plane designed around a giant gun, GovX is a retailer designed around providing amazing discounts to military, veterans, and first responders.
The site is like the exclusive Costco for the military-veteran and uniformed community. A membership with GovX provides access to discounts on brands like 5.11 Tactical, Propper, Vortex Optical, Under Armour, and – amazingly – Yeti.
If you’re unfamiliar with this miracle brand, I suggest you head to the Google posthaste.
But wait. That’s not what really makes GovX stand out. The real power of this site is that every month, the company selects a new nonprofit organization who does work related to first responders, military members, veterans, and their families and donates a portion of its revenues to the chosen groups. This is what GovX calls “Mission: Giveback.”
Previous Mission: Giveback recipients include the Iraq and Afghanistan Veterans of America, Firefighter Aid, National Law Enforcement Officers Memorial, the Semper Fi Fund, Team Rubicon, The Pat Tillman Foundation, and the Green Beret Foundation.
In 2019, GovX is supporting the Military Influencer Conference, a three-day event that brings together entrepreneurs and veterans from all walks of life to share knowledge, build one another up, and help mentor each other through the rigors of starting their own businesses. Learn more about it by visiting the website and look for a Military Influencer Conference near you.
Now feel free to splurge on those yoga shorts you were iffy about buying – and feel good about doing something for your brothers and sisters in arms.
The Veterans Affairs home loan can be incredibly confusing, and it’s easy to get overwhelmed with all of the information found on the VA website. So we have broken it down into six basic questions for you: who, what, when, where, why, and how?
*As always, when making decisions that impact your personal finances, make sure you’re sitting down with a financial advisor. Most banks have financial advisors on staff who are always willing to work with customers.
The VA home loan program is a benefit for eligible service members and veterans to help them in the process of becoming homeowners by guaranteeing them the ability to acquire a loan through a private lender.
Utilizing the VA home loan, lendees do not make a down payment and are not required to pay monthly mortgage insurance, though they are required to pay a funding fee. This fee varies by lender, depends on the loan amount, and can change depending on the type of loan, your service situation, whether you are a first time or return lendee, and whether you opt to make a down payment.
The fee may be financed through the loan or paid for out of pocket, but must be paid by the close of the sale.
The fee for returning lendees and for National Guard and members of the reserve pay a slightly higher fee.
The fee may also be waived if you are:
a veteran receiving compensation for a service related disability, or
a veteran who would be eligible to receive compensation for a service related disability but does not because you are receiving retirement or active duty pay, or
are the surviving spouse of a veteran who died in service or from a service related disability.
Lendees may utilize the loan program during or after honorable active duty service, or after six years of select reserve or National Guard service.
Veterans Affairs helps service members, veterans and eligible surviving spouses to purchase a home. The VA home loan itself does not come from the VA, but rather through participating lenders, i.e. banks and mortgage companies. With VA guaranteeing the lendee a certain amount for the loan, lenders are able to provide more favorable terms.
Eligible lendees should talk to their lending institution as each institution has its own requirements for how to acquire the loan.
Retirement planning can be stressful, but figuring out how to finance it takes a great deal of the stress away. Enter the government’s Thrift Savings Plan, or TSP. The first step in understanding TSPs is answering five basic questions: who, what, where, when, and why.
Who: The thrift savings plan is available to federal employees and members of the uniformed services. It is managed by BlackRock, a financial planning and investment firm headquartered in New York City.
What: TSP is a retirement savings plan similar to a private sector 401(k). Federal employees and military personnel can contribute up to a certain percentage of their base pay to their TSP. BlackRock assigns a broker to manage TSP accounts. Brokers are not held to the same standards as fiduciaries in that a broker has no vested interest in your funds; rather a broker’s only job is to invest money in suitable securities.
When: If you are a federal employee who joined your agency after 2010, you’re automatically enrolled in TSP with 3 percent of your base pay sent to your TSP; your agency matches this contribution automatically. If you joined your agency before 2010, an automatic 1 percent of your base pay is sent to TSP; your agency matches your additional contributions above the 1 percent. Military members must set up their own contributions and there is no matching contribution from the military.
Where: Military members can set up contributions to TSP through MyPay. Which type of funds you decide to invest in will determine when you can access the funds from that investment. There are L Funds, which are “lifestyle funds” that you can withdraw from at a predetermined time. Then there are G, F, S, C, and I funds, which rely on you to make your own investment decisions with a broker, according to the government’s TSP summary.
Why: A thrift savings plan gives you the ability to participate in a long-term retirement savings and investment plan. Additionally, you can choose between a regular TSP and a Roth TSP. Traditional TSP is tax free as you contribute, but you’ll pay taxes when you withdraw the funds. A Roth TSP allows you to pay taxes upon investment, and withdraw at a later date tax free. The upside to utilizing the government’s TSP is that you won’t pay fees to invest, and you’ll have a broker to manage the funds.