By Debbie Gregory.
Are you taking advantage of some of the best financial benefits afforded to military families? A quick review of the following list will help you answer that question:
- Tuition-free college-Thanks to the Post-9/11 GI Bill, the cost of in-state tuition and fees at public colleges are covered for up to 36 months, or up to $21,970 per year for private colleges and foreign schools. Another added bonus is the housing stipend and money for books and supplies. Choosing a yellow ribbon school will stretch the benefit even farther.
- Veterans Administration loans – VA loans allow you to buy a house with no money down, and without having to purchase private mortgage insurance.
- Tax-free BAH- The monthly subsidy covering all or part of your monthly rent or mortgage payment as long as you’re in the military is tax-free.
- Low interest loans- Each branch of service has its own emergency-relief fund that offers small, interest-free loans for emergencies.
- Low-cost life insurance- Servicemembers’ Group Life Insurance costs a mere 7 cents per $1,000 of coverage/ month. This totals $336 a year for the maximum $400,000 coverage.
- Legal protection- The Servicemembers Civil Relief Act provides special legal benefits, including an interest-rate cap of 6% on any loans you took out before you were called to active duty and the right to terminate a lease due to PCS.
- Guaranteed return- The military’s Savings Deposit Program lets deployed servicemembers invest up to $10,000 in the program each time you are deployed. You receive 10% annual interest, compounded quarterly; the program lasts for up to three months after your return.
- Tax-Free Roth IRA- Servicemembers who are receiving tax-free combat-zone pay can deposit up to $5,500 into a Roth IRA, tax-free, and earnings come out tax-free as well.
- Low-cost retirement savings plan- The Thrift Savings Plan charges an annual expense ratio of just 0.029% of assets — whereas annual fees and expenses for 401(k) plans average between 1% and 2%.
- State tax breaks- If your legal residence is in a state that has no income tax, you can be shielded from taxes if you move to another state while on active duty.