Managing Transitional Stress

Transcription

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2 Chapter Overview Managing Transitional Stress Transition Planning Steps Managing Personal Finances Building Savings Salary Considerations Furthering Your Education Loans Relocation Compensation Payments Retirement Additional Considerations 2

3 Managing Transitional Stress Change in career, identity and finances Review DoD Preseparation Guide Recognize symptoms of stress overload Seek assistance if needed Stay healthy physically and financially Approach transition with a positive attitude Sell yourself when seeking employment 3

4 Local Resources for Coping With Stress Marine and Family Services Counseling Center: Chaplain s Office: CFS: PFM: Medical Treatment Facility (MTF): 4

5 Transition Planning Steps Preparation is key - start early Take crucial planning steps Schedule a pre-separation counseling appointment Review the pre-separation counseling checklist Create an individual transition plan Follow recommended timelines for each step Address the financial transition 5

6 Step 1: Schedule an Appointment Contact Transition Assistance Office for pre-separation counseling with the UTC At least 180 days before separation Within 90 days of separation contact immediately Schedule and appointment with your CFS or PFM, as well 6

7 Step 2: Review the Checklist DD Form 2648 (Active-component) DD Form (Reserve-component) Mandatory legal requirement; filed in personnel file once completed Many items affect your finances Support provided by transition assistance counselor about benefits and career guidance 7

8 Step 3: Create an Individual Transition Plan Short and long-term goals and key action steps DD Form 2648 useful in developing plan Three decision points to consider, all affect finances Money decisions Benefit decisions Job decisions Develop and review ITP with spouse ITP your responsibility; make it a top priority 8

9 Managing Personal Finances During Transition Plan for changes in pay and benefits Consult CFS or PFM Complete three documents before transition Net worth statement Cash flow statement Spending plan Information evolves as finances change Be financially sound before, during, and after transition 9

10 Financial Planning Worksheet (FPW) Helpful throughout the transition period Prepare two budgets Current situation Future situation Aid in developing spending plan Gather financial information concerning income, expenses, and debt 10

11 Statement of Net Worth Total Assets Total Liabilities Net Worth Track on a regular basis during transition If needed, seek financial assistance to decrease debt 11

12 Cash Flow and Spending Plan Cash Flow Spending Plan Plan conservatively Actual Projected Want a positive cash flow! 12

13 Financial Planning Ratios Add up total debts owed Calculate debt-to-income ratio Total debt divided by net income and multiplied by 100 Debt should be no more than 20% of income Follow guideline 70% living expenses 20% debt repayment 10% savings Surplus or deficit? Consult a PFM or CFS 13

14 Creating a Positive Cash Flow Create an action plan Decrease living expenses Increase income Reduce debt Decreasing living expenses has most immediate result After you take action, recalculate your FPW 14

15 Credit Reports Impact lending ability and future employment Obtain a copy of own and spouse s prior to transition Review and immediately correct all errors Track on a yearly basis Seek assistance to improve credit rating 15

16 Building Savings Have an emergency savings account; use only for emergencies; $ $2000 Start a transition savings account; save 1-3 months of net income Keep savings separate from checking account Goal: put $ in and don t take it out! 16

17 Ways to Begin Saving Choose solutions unique to your situation and lifestyle Start today Consider tips from Loose change Update tax status Money from cutting expenses Automatic deposit 17

18 Financial Drains According to Bankrate.com: Coffee Cigarettes Alcohol Bottled water Manicures Car washes Weekday lunches out (eating out in general) Vending machine snacks Interest charges on credit cards Unused memberships 18

19 Salary Considerations Replacement income should incorporate base pay and cost of military benefits (including facilities) Check LES or use quick assist websites to determine both cs/calculators/rmc.aspx ator.aspx Evaluate skills, training and education 19

20 Military to Civilian Pay Determine salary range based on current military pay, allowances, benefits and future career Consider a salary comparison calculator Realistically assess the worth of your skills and experience Consult BLS for national wage data Take advantage of free resources now Use handout to keep track of information 20

21 Compensation Comparison Use Compensation Comparison handout to compare compensation packages, and track future job offers Include retirement plans, healthcare, insurance, and other benefits Consider what you will need for both replacement income and benefits 21

22 Furthering Your Education Education Office SMART Veteran s Coordinator Distance Learning First stop before transition Saves time and money Link between college and VA Complete education off campus Provides many services College credit for military education and training Assist with educational funding and guidance Many disciplines and major degrees 22

23 Educational Benefits VEAP Financial Aid Programs Post- 9/11 GI Bill MGIB 23

24 Post-9/11 GI Bill VEAP Financial Aid Programs Post- 9/11 GI Bill MGIB Authorized for Marines who served a minimum of 90 days of cumulative duty following Sept. 11, 2001 Provides assistance for college tuition, housing, and books Allows career Marines to transfer benefits to immediate family members Yellow Ribbon Program provides relief for in-state tuition rates 24

25 VEAP and MGIB VEAP MGIB Contributions matched $2 for $1 Benefit entitlement 1 to 36 months Must use within 10 years of separation Unless declined writing Up to 36 months of education benefits Must use within 10 years of separation 25

26 Financial Aid Programs VEAP Financial Aid Programs Post- 9/11 GI Bill MGIB Includes federal student aid and scholarships Can apply for certain types of aid while still on active duty VUB program helps refresh academic skills; specific requirements to qualify Many scholarships available to veterans, their children, and active-duty personnel 26

27 Loans Many government programs available for veterans Loan amount based on highest income at time of approval Consider which pre and post-transition income is best Review credit report first; obtain report at least six months before transition 27

28 Small-Business Loans Community Express SBA Express Patriot Express Express Programs 28

29 VA Home Loan Eligible veterans and unmarried surviving spouses Used to purchase or refinance Has many advantages Interest rates vary among lenders Home must be primary residence Must qualify in terms of income and credit Funding fee can be reduced with 5% down and VA disabled are exempt Contact a VA benefits counselor for more information 29

30 Other Government Loans FHA-Insured Mortgage Loan Provides mortgage insurance for the construction, purchase, and improvement of homes Special terms available to qualified veterans Rural Development Loan Preferential processing to veteran s applications Used in rural areas 30

31 Relocation Take advantage of RAP services to reduce stress Consider job potential, affordability, community, and environment when choosing where to live Utilize online cost of living calculators to compare location expenses 31

32 Transportation and Expenses Contact DMO when orders issued MCO P outlines guidance and requirements Plan and save for typical relocation expenses 32

33 Permissive Temporary Additional Duty (PTAD) Used for pre-separation job search, and house hunting due to relocation Authorized for Marines who are involuntarily separating under honorable conditions or retiring from active duty Length of PTAD varies depending on individual circumstances 33

34 Compensation Payments Separation Pay 10% yearly base pay multiplied by number of years of active service Several eligibility requirements Must be listed on separation orders Contact IPAC to verify eligibility Considered taxable income 34

35 Unemployment Compensation Helpful for separatees if unable to find a job Provides weekly income for limited time Must have separated under honorable conditions Requirements vary by state Spouses may be able to receive 35

36 Retirement Defined Benefit Plan Defined Contribution Plan Benefit amount determined by a formula based on salary and years of service Benefit based on contributions and return on investment Funded by employer Employee contributes; sometimes employer matches Example: Military retirement pension Examples: 401(k), 403(b), TSP 36

37 Retirement Pay Three plans Final Pay High-3 CSB/REDUX Determined by start date of obligated active duty Use OSD online calculators to estimate future retirement needs Contact IPAC for more information 37

38 VA Disability Pay Monthly benefit paid to veterans due to service-related injuries or diseases Eligibility determined by VA; amount paid based on VA disability rating scale Exempt from taxes Veterans Administration benefits workshop available through TAP 39

39 Social Security Funded through payroll taxes (FICA) Provides protection in five areas: Retirement income Spousal benefits Disability insurance Medicare medical insurance Survivors insurance Use transition period to check account information for errors; correct as soon as possible 39

40 Thrift Savings Plan Can leave funds in TSP account or choose other options Must follow withdrawal deadlines or forfeit account balance to the TSP Withdrawal taxes may apply Some funds may include tax-exempt contributions Contact ThriftLine (1-TSP-YOU-FRST) or visit for more information 40

41 Savings Deposit Program Funds stop accruing interest after 90 days return from combat zone Withdrawal funds as soon as possible to maximize growth Request withdrawal through mypay, , fax, or regular mail Funds returned through EFT to direct deposit account on record Ensure allotment stops before requesting withdrawal 41

42 Survivor Benefit Plan Voluntary option available to retirees Provides an annuity to eligible beneficiaries Inflation-protected Premiums depend on base amount chosen by member Provides beneficiary with 55% of elected amount Premiums deducted from retirement pay Paid up after 360 months AND age 70 42

43 Additional Considerations Transition Plan Life Insurance Investments Taxes Estate Planning 43

44 Life Insurance SGLI In effect for 120 days after you separate Disability extension for 2 years TSGLI Payment of $25K - $100K for traumatic injury prior to separation VGLI Conversion of SGLI available for 1 year days after separation Consider your options. Take the Insurance class. 44

45 Other Types of Insurance S-DVI Life insurance for those with a serviceconnected disability Also a supplemental program available VMLI Home mortgage insurance for veterans with a severe serviceconnected disability FLTCIP Long-term care insurance sponsored by the federal government ltcfeds.com Do your homework prior to transition. Take the Insurance class. 45

46 Investments Know about payment fees Do your homework before selecting an investment professional Shop for a professional that matches your financial goals and objectives Get referrals from others Check for professional registrations Take your time when selecting 46

47 Taxes April 15 th extension will not apply after transition Seek assistance for TSP tax issues If relocating, factor state tax laws into salary considerations and monthly budget Separatees have one year from separation date to view and print W-2 from mypay 47

48 Estate Planning Determine distribution of assets during lifetime and at death Includes several items: Will Trusts (as needed) POA Medical directive or medical POA Financial plan to care for survivors Ensure information on designated beneficiaries is current and correct Update every couple of years or when major life changes occur 48

49 Resources Career Resource Management Center (CRMC) PFM Specialists TurboTAP.org Other government resources including VA counselor, and Military OneSource 49

50 Summary Preparation is key Develop a solid Individual Transition Plan Use tools to manage your finances Take advantage of available benefits Use your resources before transition 50