The Greatest

Q: Where can I find out how many World War II veterans are still living?

--John, Dania, Fla.

A: The Greatest Generation. It still sends shivers up my spine to think about the sacrifices made by so many during WWII. I couldn’t find a definitive answer to your question, but according to the 2000 census, there were 5.7 million WWII vets. Unofficially, I found several sources that put the current number at around three and a half million…unfortunately that number is shrinking rapidly, so find one and say thanks for us all.

Into the Blue...Maybe??

Q: My boyfriend has told me that he has to be married to join the Air Force if he has a child. Is that true?
-Dominique

A: Believe it or not, that’s correct! According to one of my colleagues who recently served as a U.S. Air Force recruiter, they will review each case, but generally speaking they do not allow a single parent to join “the Blue.” All branches of the service have different requirements, so you two might check around. Be advised, they may also check his credit score.

Spouse VA loan rights

Q:  If a retired spouse passes away and the home mortgage is a VA under that person’s benefits, can the surviving spouse do anything with that mortgage? The deceased continues to get notices to refinance their VA at a better rate, but can the spouse take the deal?  Thank you.

--Marilyn, San Antonio

A:  I get offers in the mail on a regular basis to refinance my Veteran’s Affairs loan, too.  The thing is I believe most of those are not affiliated with the government at all.  Be sure to read the fine print, ask a lot of questions and if you choose to proceed, do so with caution. 

A surviving spouse who has not remarried may be eligible for a VA loan if the servicemember died in service or from a service-connected disability.  Based on the information you presented, the spouse may or may not be eligible to use a VA loan for a refinance.  However, keep in mind the spouse is not limited to using a VA loan for a refi.  A survivor with equity in the home and good credit may be eligible to refinance with a conventional loan. 

When it comes to refinancing, I always caution folks to keep an eye on costs, look to save at least 1% on the interest rate, honestly assess how long you’ll be in the home (a good rule of thumb is at least three years), and then crunch the numbers to see if there really is potential savings. Smart decisions are crucial especially during tough economic times like these!

Military pension worth hanging in there!

Q:  My husband has 23 years of service in the Air Force, and we were planning on retiring in June 2010, at just over 24 years, with the option of staying in if we needed to. However, we just received orders to a base that we definitely do not want to go to, and are considering taking the 7-day option. This would allow him to finish his service commitment to June 2010, but that's it. If we take the orders, we would stay in until September 2011, which would bring him up to 26 years (because of his deferred enlistment date) (using E-8 pay for all 3 years of his High-3). So that would increase our retirement pay by about $5,000 per year. Our military retirement is the ONLY retirement plan we have - no TSP, 401K, or life insurance other than SGLI, etc. Stupid on our part, but that's the cold, hard facts. I've been staying home raising our kids. We are planning to use the Survivor Benefit Program but I am unclear on how that is calculated and how much I will receive each month. We are both 41 years old. What should we do to secure our financial future this late in the game? Thank you!

--Sahm

A:  Yours is truly a good news/bad news story.  The bad news first -- you’ve done a poor job of saving (promise me you’ll do better in the future!).  And it doesn’t appear that you’re financially prepared to retire and hit the civilian job market.  I read recently that it’s taking approximately five months to find a job these days with unemployment running well over 6%.  What that should tell you is that you need to have at least six months of emergency reserve money set aside to cover lifestyle expenses while the hunt is on.  It would certainly make sense to dip your toe in networking groups and start the job search now while paychecks are still coming in.

As far as retirement benefits go, the good news is that you couldn’t be in a better place than the military given “the cold, hard facts.”  Unlike much of the civilian world, the military continues to offer a great pension benefit that’s adjusted for the cost of living (COLA) each year.  An additional $5,000 per year is substantial – especially considering it’s the only retirement you have!  I’d say it’s probably worth an extra year of service and here’s why:  It would take approximately $125,000 in savings earning about 5% per year to replace $5,000 in pension benefits with an annual COLA.  For an annual 5K bump in income for the rest of my life, I could stand on my head in a corner for a year.  Or, live in a place I don’t like.  I’m sure after 24 years in the military, you’ve gotten tired of bouncing around and living in temporary housing, but I’d gut it out one more year for the greater good.  I would definitely recommend you reconsider your decision to get out in 2010.  Hang in there!

Regarding SBP, I think it’s one of the great deals of the century.  Considering you are a stay-at-home mom, I definitely think your husband should opt for the full SBP amount.  In a nutshell, SBP would provide income to you should something happen to your husband and he passes prematurely.  It costs 6.5% (pre-tax dollars!) and the maximum benefit will be 55% of his pension.  That will help you carry on your lifestyle without him.  Here’s a link to learn more.  You should also be shopping for SGLI replacement life insurance.  Check out online calculators to figure out how much you need.

Good luck and thank you for your family’s service and sacrifice.

Free Webinar: Are you in trouble with payday loans?

Are you in debt? Or know someone who has fallen victim to payday lenders? Check out this webcast hosted by Pam Kreuger and Jack Gallagher from Money Track on PBS.

In uncertain economic times, military service members become targets for unscrupulous lenders. It’s not because they earn big incomes, but because of their steady, predictable paychecks and tendency to need quick cash. In today’s military, financial troubles become an issue of national security because they can keep service men or women from being deployed overseas.

Tips for protecting your family's finances are provided by Tom Bradley, Air Force Aid Officer and Financial Consultant for Travis Air Force Base; Andrew Roth, Director of Education and Outreach for California Department of Corporations; and June Walbert, Certified Financial Planner practitioner for  USAA Financial Planning Services and a lieutenant colonel in the U.S. Army Reserves.

Adjusting to military life challenging

Q: Okay, so thanks for taking the time to read this...well, my husband, child and I just got PCS’d to Schofield Barracks in Hawaii. My husband just joined the army and we had NO IDEA what to expect. Well, needless to say we are already $1,100 in the hole. Are there any services available to help us get money now? We are staying in a hotel 25 minutes away from Schofield. Gas alone costs more money than we have. I have looked and looked but can’t seem to get a yes or no answer. Thanks again.

--Megan, Honolulu, Hi.

A:  Thank you and your family for your service!  As I’ve told a lot of folks over the years, it will get better!  I recommend you head straight over to the Army Community Service office on Schofield Barracks today.  Lay out your story and ask for help. That’s why they are there and sometimes it’s as easy as asking.  They might be able to arrange a pay advance or give you a loan or help you to get settled soon.  I hope you don’t have too many more surprises on the horizon.  I also would recommend you join the local military spouse group. You’ll make new friends (who are in the same boat) and I’m sure they will have a lot of tips to share that will surely make your adjustment easier.  I really wish you the best.

Another entrepreneur!

Q:  I am trying to find the information on the VA
$50,000 business loan program with no collateral
required. Can you tell me how to get to that application on this
website? Thanks.

-- Howard, Louisville, Ky.

A:  The Small Business Administration (SBA) recently introduced the Patriot Express program.  Checkout the link for a host of information on the new program and the October 17th posting on this topic.  Ultimately you will apply through a bank or lender that offers SBA loans.  The loans are guaranteed by the SBA and may not require any collateral.  Good luck with your endeavor.

USAA offers financial Webinar

This coming Wednesday, Oct. 29, USAA will present its third in a continuing series of financial Webinars.

The topic will be “Planning Your Retirement in Today’s Economy.”

Hosted by Certified Financial Planner™ practitioner J.J. Montanaro and Chartered Retirement Planning CounselorSM Laurel Bragg, the Webinar will focus on how you can take control of your investments and plan for retirement—during these turbulent times.

The program will air on the Internet between 7-8p.m. (Central Time).

It’s a great opportunity to get some retirement advice, whether you’re just starting out in your 20’s…or closer to the mark, in your 50’s or 60’s.

You can learn more about the Webinar at usaa.com or register here.

Debt settlement better than bankruptcy

Q:  Do debt settlement and/or debt negotiation work as an alternative to bankruptcy?

--Tom, Norristown, Pa.

A:  Debt settlement or debt negotiation may be a better alternative to reducing your debt load than is bankruptcy, but make no mistake about it: all can have a negative impact on your credit score for 7+ years.  But, you’re right, settlement will affect your credit score less. One major negative that’s often unknown or overlooked with settlements is that if $600 or more of a credit balance is “forgiven” then a Form 1099 will be sent to the IRS and taxes will be owed the following April 15th. 

According to the IRS, taxes on credit card debt may be forgiven under the Mortgage Forgiveness Debt Relief Act of 2007, if the “cancelled debt [was] used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion.” 

A better alternative might be to contact a local agency that belongs to the National Foundation for Credit Counseling (www.nfcc.org).  This type of counseling can help you turn things around, prioritize your cash flow and make prudent financial decisions.  If your problems are serious, they will help you set up a Debt Management Plan to meet your obligations and right your financial ship. Best of luck.

SBA offers business help to veterans

Q:  Hello June, I have a vending business that I would like to expand.  I want to know if there is any truth to the government-backed business loans available to veterans?  And, if so, how do I go about getting one?  Thanks.

--Michael, Texas

A:  Yes, there’s help out there for entrepreneurs like you!  The U.S. Small Business Administration has a program called the Patriot Express Pilot Loan Initiative which might be just what you’re looking for.  These loans are guaranteed by the SBA and have favorable interest rates.  Here’s a link to more information: http://www.sba.gov/patriotexpress/index.html.  There never seems to be a vending machine close at hand when I’m having chocolate attacks!  So good luck with your expansion.