Helping veterans and military with financial planning

Key Takeaways:

• Veteran and military clients are in the unique position to receive various benefits from the U.S. Department of Veterans Affairs aimed at making education, healthcare, life insurance, mortgages, and retirement more accessible for those who have served.
• Helping your clients navigate these opportunities can be challenging, but the VA.gov Home | Veterans Affairs offers many resources and tools to work through when considering VA benefits.
• It’s important to remember that your veteran and military clients live a very different lifestyle than civilians; typically, military members move more often for various stations and deployments. Veterans and military servicemen and women can also be targeted in benefit scams from companies claiming to be affiliated with the VA.

When engaging in financial planning with your veteran and military clients, there are many unique obstacles and situations to consider. Not only will the lifestyle of military members differ from civilian clients, but there many financial benefits available to veterans from the U.S. Department of Veterans Affairs (VA). VA benefits can include things like money for education, healthcare, life insurance, mortgages, and retirement income. There are also tax benefits that military members can take advantage of.

It’s important to remember that your veteran and military clients live a very different lifestyle than civilians; typically, military members move more often for various stations and deployments. Veterans and military servicemen and women can also be targeted in benefit scams from companies claiming to be affiliated with the VA, so it’s important to make your military clients aware of potential traps.

Financial veteran benefits

Veteran and military clients are in the unique position of receiving various benefits from the VA aimed at making education, healthcare, life insurance, mortgages, and retirement more accessible for those who have served. These benefits can help your military clients by providing additional support when buying homes, pursuing post-secondary education, starting careers, starting a small business, and more. Helping your clients navigate these extensive opportunities can be challenging, but the Veterans Affairs website offers many resources and tools to work through when considering VA benefits.

Education Benefits

The VA offers various programs to help pay for post-secondary education. Financial assistance is available to current students, active-duty military personnel, reservists, and veterans. Veterans are eligible for education benefits from the G.I. Bill; either the Montgomery GI Bill-Active Duty (MGIB-AD), the Post-9/11 GI Bill or the Montgomery GI Bill Selected Reserve (MGIB-SR). The VA also offers a survivors and dependents’ assistance program.

MGIB-AD– this program applies to veterans who served at least 2 years on active duty and can help recipients pay for an approved educational program¹.

Post-9/11 GI Bill– this program applies to veterans who served on active duty after September 10, 2001 and can help recipients pay for school or job training. This bill can cover things like tuition and fees, money for housing, money for books and supplies, and money to help move from a rural area to go to school².

MGIB-SR– this program offers up to 36 months of education and training benefits for members of the Army, Navy, Air Force, Marine Corps or Coast Guard Reserve, Army National Guard, or Air National Guard³.

VA Home Loan programs

VA loans may be available to your veteran and military clients to support their goals of home ownership. VA loans typically have generous terms regarding down payments, mortgage insurance, and penalties. There are two types of home loans available to your military and veteran clients: a VA direct or a VA-backed loan. A VA direct loan means that the VA will serve as your military client’s mortgage lender. They will apply directly through the VA rather than a private bank, mortgage company, or credit union. A VA-backed home loan, however, is still purchased through a private lender. Because the loan is backed by the VA in this instance, your client would be able to possibly take advantage of better terms since the VA is assuming some of the risk⁴.

Your client will need to confirm whether they meet the minimum service requirement before they can take advantage of a VA loan. If your client is currently serving, they must have served for at least 90 continuous days without a break in service to qualify as “active duty.” For veterans, national guard, and reserve clients, the minimum active-duty requirement will depend on when they served. More details are available here: Eligibility Requirements For VA Home Loan Programs | Veterans Affairs. Even if your client doesn’t qualify based on service requirements, it’s important to note that there are various extenuating circumstances like disability, reduction in force, hardship, and more that may apply to your clients that would still allow them to qualify for a VA loan⁵.

Veteran-owned small business

If your veteran or military clients own a small business, they may qualify for the Vets First Verification Program, granting access to resources and support, along with certain advantages when bidding on government contracts⁶. Priority bids on contracts for federal or state government agencies, tax relief, financial support, training and education resources, and more are available to those who are accepted to the program. Program eligibility requirements are available here: Get Support For Your Veteran-Owned Small Business | Veterans Affairs (va.gov).

Veterans pension

The Veterans Pension program pays monthly payments to veterans who meet various eligibility requirements regarding their service, age, and other details like type of discharge and income and net worth⁷. If your client is a surviving spouse or child of a veteran with wartime service, they may qualify for the VA Survivors Pension.

VA Aid and Attendance benefits and Housebound allowance

If your veteran clients get a VA pension and they also spend most of their time at home due to a permanent disability, they may qualify for VA Aid and Attendance or Household benefits. These programs provide monthly payments in addition to regular pension payments for those who need help with daily activities or cannot leave their house. It’s important to note that your clients would not be able to qualify for both VA Aid and Attendance and Housebound benefits at the same time—they would only be able to accept one or the other⁸.

To apply for either of these benefits, your client with a VA pension would be able to apply via form or in-person to their Pension Management Center. For more details on eligibility and how to apply for these benefits, you can send your clients to VA Aid And Attendance Benefits And Housebound Allowance for more information.

Financial scams targeting veterans

Veteran and military clients should be made aware of potential scams aimed at collecting and potentially stealing special benefits. According to the Federal Communications Commission (FCC) veterans who receive calls or recorded messages from “veterans services” should be wary⁹. All military members can be targeted in these scams—active-duty service members, veterans, and reservists. Caller ID spoofing (to appear legitimate) and call back scams (to convince military members to provide personal info) are two ways in which scammers may try to collect data from your military clients. The FCC advises recipients of these types of calls to hang up immediately; if they receive a call back number, they can contact law enforcement to report the scam¹⁰. Additionally, you can educate your military clients on their option to file a complaint with the FCC at consumercomplaints.fcc.gov.

Investing for veterans

The general investing advice from financial professionals to start early, set goals, and follow a plan is still applicable for veteran and military clients. Investments can begin to look different based on the programs that are available to veterans; when investing in a home, for example, veterans have options to apply for VA loans. Being aware of and considering VA benefits is important when financial planning with veterans and military.

According to the SEC, the difference in advice for investing as a veteran vs investing as a civilian is that “affinity” frauds, or frauds targeting specific groups, can happen to military members¹¹. As previously discussed, veteran and military clients need to be aware of scams and know how to protect themselves and their assets.

Additional Resources

In addition to any general financial advice you may give your active military and veteran clients, there are many free resources available to them from the U.S. government. The Office of Financial Readiness is a service for all active-duty, National Guard and reserve service members, their family members and survivors are eligible to receive no-cost financial counseling services here: https://finred.usalearning.gov/pfcMap

This information is general in nature and is not intended to be tax, legal, accounting or other professional advice. The information provided is based on current laws, which are subject to change at any time, and has not been endorsed by any government agency.

Nationwide and its representatives do not give legal or tax advice. An attorney or tax advisor should be consulted for answers to specific questions.