5 Financial Benefits for Military Members

U.S. military members have access to some great benefits that can go a long way toward making their financial lives (and those of their family) a lot better.Here are some of the best financial benefits that service members have available to them:Inexpensive Retirement PlanThe Thrift Savings Plan has a low annual expense ratio of 0.038 percent of assets, making it a far better retirement plan for military members than 401(k) retirement plans, which have annual fees and expenses of 1-2 percent.In 2019, military members can contribute up to $19,000 to the plan"and up to $56,000 if receiving tax-free income while deployed.Free CollegeThe Post-9/11 GI Bill covers the full cost of in-state tuition and fees at public colleges for up to four academic years, or up to $23,671 per year for private or foreign schools. A housing stipend and money for books and tutoring are also included.Longtime service members can transfer their benefits to a spouse or children.Mortgage HelpThe Veterans Administration (VA) offers home loans to military members with no down payment required. Veterans and surviving spouses are also eligible for these VA home loans, along with other housing programs from the VA.The VA guarantees a portion of the loan, which is provided by private lenders. A potential downside of not making a down payment on a home, or even a small down payment, is that you could owe more on the home loan if housing prices drop and you have to move and sell your home.Housing AllowanceFor as long as you’re in the military, you’re given a tax-free housing allowance. The monthly subsidy covers all or part of your monthly rent or mortgage. The amount is determined by your rank, location and if you have dependents.A military pay stub lists a “Basic Allowance for Housing,” along with other benefits.Guaranteed Return on SavingsIt’s unlikely that you’ll ever find a savings program as good as the Savings Deposit Program run by the Department of Defense (DOD).Deployed members in designated combat zones can deposit up to $10,000 each time they’re deployed and earn 10 percent annual interest, compounded quarterly. The program lasts up to three months after returning from combat.Since military pay during deployment is tax-free income, members receive more take-home pay, and can put that extra money into the DOD’s savings program.This article is intended for informational purposes only and should not be construed as professional or legal advice.Published with permission from RISMedia.