Do you have your money matters in order for your next deployment? It’s important to make sure that all aspects of your finances are lined up to be able to give your family and yourself peace of mind while you are deployed. This is the final part of a continuing series. The items on the checklists from last week and from this week will make all the difference in minimizing stress not only for yourself, but for your loved ones as well.
- Servicemembers Civil Relief Act
In addition to legal protections, the Servicemembers Civil Relief Act (SCRA) provides certain financial protections for active duty members of the regular forces,
A servicemember’s protections under the SCRA are not automatic and require that the servicemember requests the protections such as limitation on interest rates, and payment schedules. You will likely have to prove you’re your military service may make an impact on your ability to pay.
All interest rates can be reduced to 6 percent for accounts established before active duty and can include mortgages, car loans, credit cards and even some student loans. This only applies to loans before you became an active duty servicemember, it does not include loans you received after becoming a servicemember.
The SCRA also protects from foreclosures and repossessions and helps with termination of residential leases and auto leases. These are before military service or if you receive PCS orders from CONUS to OCONUS or a deployment for a minimum of 90 days.
- Savings Accounts
It’s important to build a personal savings account of 6 to 12 months worth of income
Calculate how much you’ll need by this formula (BAH + ME) x 6 = Goal Savings
Never use PAYDAY LOANS to supplement your savings because in these you pay 200% to 500%. Instead, go to PentagonFoundation.org for a $500 loan with a $3 service charge and no interest for one month. It’s called the ARK (Asset Recovery Kit) program.
The Savings Deposit Program – SDP – While deployed and after 30 days in a combat zone, service members may be eligible to participate in the Savings Deposit Program (SDP). The program is available to service members during assignments and deployments to specified locations. The SDP pays back a guaranteed 10 percent annual return on investment (2.5.percent.quarterly) on up to $10,000 contributed from un-allotted current pay and allowances. Upon withdrawal, a service member’s contributions to SDP will not be taxed, but the interest earned will be. Interest continues 3 months after the servicemember is out of the zone.
- SBP – Survivors Benefit Plan – This program provides monthly payments to the servicemembers elgible beneficiaries in the event they
Cost – no cost while you are activeduty. But during retirement there’s a monthly deduction which can be no more than 6.5 percent of your gross retired pay.
Beneficiaries – spouse, legal child, former spouse (if court ordered), the child must be under 18, if over 18, then in college (up to 22).
- SGLI Servicemembers’ Group Life Insurance
SGLI is a low-cost term life insurance protection policy offered through the Department of Veterans Affairs (VA) for servicemembers on active duty. Even though SGLI coverage is automatic, before servicemembers deploy, they should confirm that their beneficiary(ies) designation is up to date.
Servicemembers are automatically covered for the maximum amount of $400,000 unless coverage is declined or elected at a lower amount and this costs $26/month plus $1/month for traumatic for a total of $27.
Family Servicemembers’ Group Life Insurance (FSGLI) automatically provides life insurance coverage to spouses and dependent children when the service member is covered by SGLI up to $100,000 for the spouse and $10,000 per child unless the servicemember declined the coverage in writing. Coverage amounts for FSGLI cannot exceed the coverage amount selected for the servicemember under SGLI. The cost is very affordable for the spouse such as $5/month for a female 35 or under and it is free for children under 18.
Whether you are single or married, it’s important to check off the above items to make sure you and your family are financially ready for deployment. Thank you for your service please know that America appreciates both you and your family.