Dr. Charles Patterson, WCI Columnist
Deployment is an everyday occurrence for those who serve in the military. Whether they are doctors, pilots, or munitions specialists, military personnel are tasked with carrying out America’s wars. In fact, everything we do (at least in the eyes of the Pentagon) in peacetime or on the U.S. side is just practice for the next conflict. Although there are many benefits (financial and other) that come with deployed status, it is imperative that the military doctor develop a well-thought-out financial plan before shipping.
The following paragraphs highlight the most important considerations and should serve as a stepping stone to your financial preparation.
Create a will before assignment
This is mandatory for all military personnel. It is very important that the Department of Defense issue a will prior to deployment. These are available by appointment at most base law firms and are completely free. We found the service to be exceptional (especially for the price). It was thorough, professionally done, and perfectly suited to the size of our family’s estate. Beyond wills, base legal often helps with estate planning and powers of attorney. The extent of these services varies by location, but think about how much you could save in attorney fees by doing this on this basis.
Of course, predeployment is not the only way to edit or amend a will. It is also important to do so after each PCS (movement), temporary obligation or humanitarian mission, family change (children, marriage, etc.), promotion, and change in legal status (residence), at least once a year. It’s wise to start over with him. It may also be wise to touch the executors and bases before leaving for deployment.
Similarly, preparation for deployment should include a thorough review of insurance policies. While it’s important to make sure your coverage includes wartime, it’s equally important to know what’s not covered. Many insurers do not issue new policies within 90 days of departure for deployment, but it is essential to know what your life or disability insurance covers and what does not.
The harsh reality is that the deployment is dangerous, even for doctors. The thought exercise of considering worst-case scenarios goes hand-in-hand, and bolstering advanced directives has turned out to be one of the most encouraging financial moves I’ve ever made. .
A will is a document that will be used one day and hopefully into the future. It’s important for everyone, but it’s especially important for military personnel.
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insure a military doctor
Budgeting and household planning
A typical deployment project is 3-18 months. However, when it says 6 months, the military actually means 8 months. If you say 1 year, plan for 15 months. Allow room for possible delays when planning your family’s care.
Life at home goes on without you. You have to make a plan to carry out your responsibilities on your behalf. The Servicemembers Civil Reef Act is an absolute must-read as it details benefits that can have a significant impact on your mortgage, rent, credit card and student loans.
If you have a family and household to run, creating a comprehensive and flexible plan for their care is very important. To return to the original home during the deployment. How will travel expenses be paid? where does your family stay Who is going to pay the bills and balance the budget? What does that budget look like? If there is a mortgage or rental housing in your place of work, who will manage it?
Also, make a plan for your return home. Returning to “normal life” can be difficult for families, especially children. After returning home, it’s often healthy and good to take a few weeks off to renew ties. This allows everyone to readjust and reset the tempo of the new dynamics. I also need money. where does it come from?
While it’s not impossible to perform many of the home management functions from a deployed location, connectivity and times are not guaranteed. As such, this can be a great time to sync up with your spouse or create a power of attorney to carry out your affairs in your absence.
Click here for details:
Preparing for Tragedy: Allowing Your Partner to Cope Without You
Take advantage of the Military Savings Deposit Program
The Savings Deposit Program is a deployment-specific benefit. Service members can donate up to $10,000, with an annual interest rate of 10% thereafter. It’s a relatively easy way to earn 1000 yen. To be eligible, a military member must have been paid for hostile fire/imminent danger and must be in a combat zone for at least 30 consecutive days (or every 3 consecutive months he has 1 day). there is. This is most commonly met when deployed to support OIF/OEF and/or the Arabian Peninsula.
There are no earnings strings attached, but opening an account requires planning and foresight. This program is run by the Office of Defense Financial Accounts and it is important to know the rules regarding eligibility, execution, and withdrawal. Below are some highlights.
- Active duty or Guard members who meet the above stipulations are eligible
- Deposit can only be made at the time of deployment
- Interest accrues up to 90 days after deployment is complete.
- Withdrawals are made through DFAS
The Savings Deposit Program is a great way to get 10% guaranteed up to $10,000. You can deposit this amount from your tax-exempt earnings, further minimizing your tax burden. Note, however, that this is due to unallocated payments. In other words, it will be credited after the donation to TSP. This fact becomes more pronounced next.
Donation at the time of introduction of Thrift Savings Plan
The military’s 401(k) system, the Thrift Savings Plan (TSP), has an annual contribution limit of $22,500. [for 2023] If not deployed stateside or otherwise. For the Blended Retirement System (BRS), this does not include his 5% match. However, military personnel can contribute up to $66,000 if they receive tax-exempt salaries while deployed. Certainly, this amount is difficult to achieve unless the deployment is long-term or the cost of returning home is minimal.
Your first $22,500 donation will be [should] Go to the Roth TSP space and add contributions from the Department of Defense if they are in the BRS. The rest (approximately $43,000 depending on rank) should go into the traditional space. Not optimal, but if you can swing, this is probably the best play.
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Thrift Savings Plan (TSP) has a new look and I don’t like it
All of these best savings plans are made in a sober, real-life context. Practicing medicine in a war zone is dangerous. Generally speaking, doctors aren’t on the “front lines,” but the wars in Iraq, Afghanistan, and Syria have taught us that the front lines can be anywhere. Military doctors can and do die in war.
Contingency planning for deployment is not much different than planning for catastrophe in the civilian world. You need to make sure your insurance is up to date, sufficient and covers your family’s needs. Also, very clear instructions should be in place in case the worst happens.
In addition to will, having a ready-to-use reference sheet identifying resources is a thoughtful addition to your contingency plan. This worksheet contains important plans and contact information you don’t want your loved ones looking for. This is neither a will nor a legal document. It can include, but is not limited to:
- insurance policy number
- How to access your account
- Service and utility provider accounts
- A contact within the unit, such as a sergeant first class
- Helpful resources within the military, such as Military OneSource
- Access to written financial plans
- Funeral and burial wishes (if not already in the will)
- Financial Advisor Contact Information
- CPA contact information, if applicable
- GI bill administrator information
- Creditor (mortgage, etc.) contact information
Again, this worksheet is just an aid to centralizing important information and does not need to be done by the family. [quickly] Unraveling the intricacies of the financial house. Some of us choose to share this information with trusted relatives and friends to keep the initial financial burden off our families. (for a fee, I’m sure). A contingency plan is more than just a recommendation. It is an act of compassion.
Why create a pre-implementation financial checklist?
Some in the military would argue that making such plans violates the unwritten superstition of warding off evil spirits in deployed environments. Financial planning stays true to where it belongs: mission. Combat care can be done very well in this modern era of military medicine. If you’re obsessed with wondering if your water bill will be paid, you’re taking bandwidth away from where it should be.
In the world of personal finance, we tend to see insurance, wills and survivor benefits as somewhat fantastical ventures to build tower upon tower. Thinking about the dangers of deployment changes mindset. It shakes you out of the comfort of routine and pushes you into the reality that unfolding (read: life) can be dangerous. It tells you what you need to do if it’s not there.
I don’t want to burden my wife with my lack of planning, but I do want my plans and resources to be clear, concise, and effective. Deployment can be difficult for you, your family, and your support network. But it can also be very good for your finances.
What was on your financial checklist before deployment? Did it give you and your family peace of mind? why not? Comment below!
The views expressed in this article are those of the author and do not reflect the official position of the Department of Defense or the U.S. Government. These works are not endorsed, endorsed or endorsed by any of the above organizations.