Financial Direction Assistance ~   "When it comes to preparing for the golden years, veterans and their families have many resources at their fingertips. They include pensions, a civilian income, Social Security (or possible disability income), VA healthcare and tax-advantaged savings.  Find out what benefits are available to you and how eligibility is determined."

Qualifying for Military Benefits

Military veterans may be eligible for tax-free monthly monetary benefits based on their current circumstances, discharge conditions and record of service. While the U.S. Department of Defense offers a variety of benefits to meet health and income needs, three of the most common are disability, veterans and retirement pensions.

VA Disability Payments

Veterans with disabilities related to a disease or injury that occurred or was exacerbated during active military service may be eligible for disability benefits. Benefits are available for mental and health conditions. Compensation may also be available for disabilities suffered after military service that are considered related to disabilities suffered in service. Covered disabilities may also happen after service that are presumed related to the circumstances of service. The level of compensation is related to the degree and severity of disability. Medical records should show evidence of how the disability connects to service. Additional special monthly compensation is available to veterans with special circumstances, such as needing an attendant or a specific disability, such as the loss of use of a hand or leg.

Veterans Pension

The U.S. Department of Veterans Affairs (VA) offers a needs-based, tax-free paid benefit, known as the Veterans Pension, to qualifying applicants. This is considered supplemental income for wartime veterans. Veterans discharged under dishonorable conditions are ineligible. You must have served at least 90 days of active duty, including at least 1 day during a period of war. The amount of benefit is based on yearly family income. If you entered active duty after Sept. 7, 1980, you must have served at least 24 months or the full period in which you were called or ordered to active duty, with at least one day during a wartime period.

In addition to meeting the service requirements, to qualify for the pension, the veteran must also meet one of the following conditions:

Your net worth also has to be less than the level set by Congress to qualify for a Veterans Pension benefit. For 2023, that amount is $150,538.

Your maximum annual pension rate (MAPR) amount is based on the number of dependents you have; whether you’re married to another Veteran who qualifies for a pension; and the level of your disability, if applicable.

Military Retirement Plan

As of Jan. 1, 2018, the military retirement system underwent major changes. The former system was a defined pension benefit, with no requirement from participants to pay in. The new system requires military members to contribute to their own retirement. Members of the military enrolled as of Dec. 31, 2017, were grandfathered under the legacy system were not be switched automatically to the new system. However, service members with fewer than 12 years since their pay entry pay date and members of the reserve who have accrued fewer than 4,320 retirement points as of Dec. 31, 2017, had the option of participating in the new system. The opt-in period ended Dec. 31, 2018. Nearly 1.6 million service members at the time were eligible to make this choice or remain in the legacy plan.

Automatic Enrollment

All service members who entered the military as of Jan. 1, 2018 were automatically enrolled in the new system, referred to as the Uniformed Services Blended Retirement System (BRS.)

To those who have the option, Defense Department suggests service members use training and informational tools, including the BRS Comparison Calculator and numerous online BRS resource materials. The new plan will allow the 83 percent of service members who do not stay in the military the full 20 years required to get a pension to save some money toward retirement.

Similar to 401(k)

The Department of Defense says the new system blends a smaller, traditional defined benefit pension with a defined contribution system of automatic and matching government contributions through the Thrift Savings Plan (TSP). A TSP is similar to a 401(k) in the civilian world. The new system decreases the pension by 20 percent and decreases the disability retirement calculation in order to prove a 5 percent government match to TSP accounts. The matching will end after 26 years of service.

Legacy System

Under the legacy system, veterans who served in the military for 20 or more years are eligible for a retirement pension based on percentage of basic pay. How this is calculated also depends on what year you entered the service. Changes were made for those who entered after September 1980 and August 1986.


Many former service members are eligible for money to put toward education. Eligible veterans can receive up to 36 months of education benefits under the Post-9/11 GI Bill. Benefits are available for 15 years since the last period of active duty of at least 90 consecutive days. The Forever GI Bill, which became law in August 2017, expanded these benefits. One expansion under the law was to remove the 15-year restriction for those discharged on or after Jan. 1, 2013.Veterans and their dependents are eligible for in-state tuition rates in all 50 states if they enroll within three years of discharge.

Veterans and Social Security

Most veterans are eligible for both Social Security payments and benefits tied to their military service. In 2019, more than 9 million veterans received Social Security benefits. The majority of beneficiaries served from 1955 to the end of the Vietnam War in the mid-1970s. Qualifying for these benefits requires working for a minimum number of years, although in some cases military pay may qualify for Social Security earnings during active duty or training.

Extra Earnings

If you were in the active military service from 1957 through 1967, special extra earnings are added to your earnings record when you apply for Social Security retirement benefits. If your active duty was after 1967, the extra earnings are already on your record.

Social Security Earnings

If you were in the military from 1940 through 1956, including attendance at a service academy, you did not pay Social Security taxes. However, your records are credited with special earnings that may help you qualify for Social Security and Medicare or increase the amount of your Social Security benefit. There is no reduction in Social Security retirement benefits because of military retirement benefits.

Some disabled military veterans are able to receive Social Security disability insurance benefits, as well.


Like all Americans, veterans can start receiving benefits at age 62. But the earlier you start getting them, the more the monthly amount is reduced. If you can wait until full retirement age, which changes depending on the year you were born, you can receive full benefits and income.

Former service men and women can qualify for additional benefits. The SSA evaluates military records when claimants apply for benefits, and qualifying veterans can get a lifetime earnings credit for wages during service. Eligibility is based on length of service.


A veteran’s best strategy for a financially healthy retirement includes double-dipping, which means collecting veterans retirement benefits while still working full-time (or as a contractor) in the private sector. Critics of this practice argue that veterans are compensated enough without income from a second (or third) job, either in a civilian or government position.

Others see the ability to earn extra income as a benefit of the hard years of service. Although the law generally prohibits drawing two salaries from the federal government, military retirees are exempt. People on terminal military leave may work as civilian federal government employees, collecting both their military pay and their salary in their new government job.


The Government Accountability Office reported that in 2014 nearly 60,000 disabled veterans received cash benefits from three federal programs simultaneously. Some received up to $200,000 in benefits from federal salaries, military pensions, disability income and Social Security payments.

It’s legal to access benefits on multiple fronts like this, but this may eventually put a strain on disability programs and other government benefits.

Taking Advantage of Veterans Savings Plans

The federal government sponsors a special veterans savings and retirement plan called the Thrift Savings Plan (TSP). The TSP is a defined contribution plan, similar to 401(k)s.

Established as part of the Federal Employees Retirement System Act of 1986, the plan includes tax incentives and professionally managed funds. Because this account is designed for long-term savings, it carries penalties for early withdrawals.

Veterans can also choose a Roth-type TSP, which can include contributions from tax-exempt combat pay and can draw interest over a period of years.

Providing for Dependents and Survivors

The VA pays eligible survivors of those who die in the line of duty or from service-related injuries and diseases. This benefit, known as Dependency and Indemnity Compensation (DIC), can extend to parents of deceased service members.

Another VA benefit available for survivors is the survivor pension program. This is for low-income, un-remarried surviving spouses and unmarried children of deceased veterans with wartime service.

Military employees have the option of paying premiums to participate in the Survivor Benefit Plan (SBP), an insurance plan that helps account for lost income when the service member dies. Eligible survivors receive inflation-adjusted monthly payments.

The government also offers life insurance options for veterans, including Service Disabled Veterans Insurance, Veterans Group Life Insurance and Family (SGLI), Traumatic Servicemembers’ Group Life Insurance (TSGLI), and Veterans Mortgage Life Insurance. These low-cost options allow veterans to provide financial security for dependents.

The government pays a death gratuity of $100,000 to the next of kin for armed service members who die on active duty or while traveling to or from active duty. This payment is also available for the family of service members who die in other circumstances, such as while training or traveling to or from training.

Steering Clear of Scams That Target Veterans

A 2017 study by the AARP Fraud Watch Network found twice as many veterans as non veterans lost money to scam artists over the previous five years. The study, based on a survey, found that 16 percent of veterans had lost money to scams, compared with 8 percent of nonveterans. A whopping 78 percent of veterans said they had received scam pitches related to their military service.

Veteran-specific scams included solicitations to:

Following are some of the top scams targeting veterans, according to the AARP:

Bogus sales

A scammer claiming to be a deploying service member posts a large ticket item on a classified ad website that he needs to sell right away and at a steep discount. The scammer asks for upfront payment with a wire transfer or gift cards.

VA phishing

A caller claiming to be from the Department of Veterans Affairs calls to update your information.

Dubious investment advice

An “advisor” will tell the veteran she is missing out on benefits, and wants to review her investment portfolio. He’ll then want to put the veteran’s investments in a trust, so she’ll appear to have fewer assets and therefore be eligible for an additional pension.

Benefits buyout scam

Scammers will target veterans in need of money by offering cash in exchange for their future disability or pension payments. These buyouts are typically a fraction of the value of the benefit.

Among the tips offered by the AARP is to check charities on or before giving any money and make donations directly to the veterans’ organizations you know.

Avoid Bad Investments

All veterans should be wary of insurance company representatives or other professional who use high-pressure tactics to induce them to invest in a product. This includes annuities that are not appropriate for their situation. While annuities can be a useful tool for securing retirement income, they’re not a good fit for everyone.

Some insurance agents and financial advisors push people to purchase annuities because they have high commissions, which may make the policy too costly.

Prevent Income Penalties

Be aware of advisors who manipulate your income reports to make you eligible for tax benefits and low-income pensions. The falsehood will manifest later when you want to access annuity funds only to find out that it is locked up and can be withdrawn only after paying a large penalty.

The National Association of Insurance Commissioners (NAIC) and other regulatory agents work to prevent agents from preying on veterans and exploiting their hard-earned benefits.

Planning for Medical Expenses in Retirement

Eligible veterans and their dependents have access to health benefits through the Tricare program offered by the government. They are provided with hospital and outpatient care based on whether treatment is considered a “need.” VA health care will be based on factors including income level and length of service. Retired service members and their families have a variety of options to select from in choosing which Tricare plan is best for their needs. Plans are also available for retired National Guard or reserve members.

Veterans should dedicate a portion of their savings from pensions, civil income, annuities and other retirement accounts to medical expenses that are not covered by the VA or health insurance.

Birch Gold Group -  "Despite their service to our country, veterans often struggle to find financial security or stability upon their return to civilian life. Whether a veteran was enlisted for a few years or for their entire career, adjusting to life after service and learning how to successfully manage money as well as navigate debt can be challenging. Unfortunately, there is a very wide range of challenges veterans may face.These challenges can result in financial mismanagement, both during service and immediately following, that can cost veterans. Paying off debt, fighting the effects of fraud, and trying to build up some savings can take many years, leaving veterans insufficiently prepared for and therefore vulnerable when they retire. A lot of the resources here are geared towards helping veterans minimize debt and maximize savings so that they are well-positioned for retirement."

How Prevalent is Financial Difficulty Among Veterans?

Veterans are sometimes at a competitive disadvantage when it comes to finding a job and settling down. They might have sustained injuries during service and have to deal with the consequences, sometimes unaware of the range of government and private services available to help support them. Further, veterans can be the target of fraud due to limited financial knowledge, debt burdens, or struggles with mental health. Their loved ones may want to help but might not know where to start in building an adequate support system to help their veterans through.

The data on how veterans fare financially in comparison to their civilian counterparts emphasizes these challenges further. According to the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation, veterans are:

There are also differences within the veteran community that can influence the severity of a person’s hardship as well as the support available to them. Various aspects of the veterans’ experience in service can affect the obstacles they face as well as some of the resources available to them, including:

Homelessness is one pervasive issue in the veteran community. According to the National Coalition for Homeless Veterans, homeless veterans make up roughly 11% of the homeless population. Homeless veterans also tend to be younger than the overall veteran population, and are more likely to suffer from disabilities, mental illness, and/or substance abuse issues. It is critical to look for resources that can help with these issues in parallel to financial help and financial literacy education.

Fraud is yet another issue faced frequently by veterans. A survey from AARP found that veterans are targeted for consumer fraud more often than civilians. Specifically, the survey found that 16% percent of veterans have lost money to fraudsters compared to 8% of nonveterans, making veterans twice as likely to fall victim to financial fraud. A whopping 78% of veterans reported being targeted for scams in the past five years that specifically targeted their status as a vet.

Common Obstacles Faced by Veterans

As touched upon earlier, veterans may face a number of unique challenges upon retirement from duty. Adjusting back to life as a civilian can be difficult. Their experiences in the military, combined with the potentially limited civilian education and “conventional” work experience they have, may result in a competitive disadvantage when trying to apply to a job, get back in school, or just settle down into a regular routine—all of which impact their financial stability.

A strong understanding of the challenges faced by veterans—and the specific problems each challenge poses—can help pinpoint the types of resources that could be most helpful.

Obstacle #1 —Frequent Moves

Frequent moves can make it difficult for veterans and families to make progress on selected careers and can impact total household earnings over time.

Obstacle #2—Managing Finances Overseas

Managing finances during overseas deployment is difficult. Service members and veterans become subject to everything from late payment fees to credit score damage.

Obstacle #3—Fixed Career Paths

Service members may have less say in the progress of their careers and their level of pay than civilians, as they are subject to the military’s linear promotion hierarchy and the federal budget.

Obstacle #4— Civilian Job Market Works Differently

Finding a job and assimilating back into civilian life after active duty poses challenges. The training veterans received as part of their service may not easily translate into skills sought by civilian recruiters.

Obstacle #5—Rollbacks of Government Programs

Rollbacks of government programs that assist service members can have huge consequences. For example, the proposed rollbacks of provisions under the Military Lending Act of 2006 might expose military personnel and families to financial fraud, predatory loans, and credit gouging by catering to the interests of those groups.

Obstacle #6— Physical and Mental Health Issues

Many veterans retire from service with physical and/or mental health issues without knowing about all the resources available to help them cope.

Obstacle #7—Financial Fraud

Veterans are often the targets of financial fraud, commonly due to their service training, their military status and benefits, or the presence of negative life events.

Obstacle #8—Poverty and Homelessness

A high proportion of veterans experience poverty and homelessness when they return to civilian life.

When to Seek Help

For veterans and civilians alike, it’s all too easy to ignore the warning signs and not seek financial help until it’s too late. Additionally, many veterans don’t know where to turn for help, especially since there isn’t a one-size-fits-all solution, and they need to seek services geared specifically for their situation.

Types of Veterans

Veterans experience a variety of challenges based on their age, their experience, the amount of time they spent in the military, their disability status, and the branch in which they served. Consequently, there isn’t a one-size-fits-all financial solution; veterans need access to the resources that will specifically benefit them. There are three main types of veterans, each requiring different retirement and investment savings plans.

Junior Enlisted

This group of veterans joined the military young, often fresh out of high school. They have never known any other type of adult lifestyle, and so entering civilian life after service can be especially daunting. They don’t have a college education or any work experience and often have trouble finding a job and settling down.

Common financial problems

What to do

 Career Enlisted

These veterans have been in the military for the majority of their adult lives, often having achieved high-ranking and decorated positions. While regulations differ depending on the branch of the military in which a person served, twenty years of service allows a person to retire with lifetime pension.

Common financial problems

What to do

Disabled Service Members

According to the U.S. Bureau of Labor Statistics, 25 percent of veterans had a service-related disability as of August 2018. Disabled veterans face unique challenges upon retirement. They receive disability retirement money, but this amount differs based on the years of service, the branch of the military, and the severity of the disability (disability ratings range from 0 to 100 percent).

Common financial problems

What to do

Even more resources

What resources can a veteran turn to in order to become financially literate and stable? Getting a job, seeking further education, and consulting a credit counselor are good first steps, depending on the veteran’s interests and needs. Veterans, particularly those in debt, should learn how to balance a budget, manage money, and make smart financial decisions moving forward. The resources below, ranging from financial help to general reintegration assistance, can help veterans get started on their journey to financial success.

General financial resources

Veteran-specific resources

Financial resources



Mental illness, homelessness, and poverty