MoneyCounts: A Financial Literacy Series

1. MoneyCounts: A Financial Literacy Series Military Financial Challenges and Benefits Mr. Matthew Heckman Military Admissions Counselor 128 Outreach Building University Park, PA 16802 wdmilitary@outreach.psu.edu 1-(814)865-5403

2. Learning Objectives • Practical information to help military personnel prepare financially for: • Deployment • Protect investment, Minimize taxes, & Hold down insurance cost • Avoid financial schemes that target military families • Make the most of new GI Bill opportunity & education benefits decisions • Make informed decisions when transitioning into civilian life

3. Challenges • Challenges: • Moving frequently, sometimes on short notice • Deployed for months/years • Financial expenses associated with each move • Separated from family and friends • Special arrangement for family care & support • Disconnect from daily events • Have to handle affairs from a distance • Endure hostile and life threatening environment • Protect self and family from businesses that target military

4. Benefits – Free College • Free College for yourself or for your family members • GI Bill expansion provides free education for yourself, spouse and children • Full cost of in-state tuition and fees for public colleges up to 36 months (4 academic years) or $17,500 per year for private college or foreign schools • Housing, money for books, tutoring • Undergraduate or graduate, certain programs at vocational, trade and distance-learning schools • Eligibility is based on: • Length of time of service for full benefits • 36 months of service • 30 continuous day on active duty • Discharged due to service connected disability • Length of time of service for partial benefits • 90 days on active duty

5. Transferred Benefits • You can transfer free-college benefits to spouse and/or children • Serve at least 6 years and agreed to serve 4 additional years • Spouse can use transferred benefits immediately • Children must wait till you serve 10 years • Serviceman and spouses must use benefits within 15 years after leaving military • Children are not bound by this 15 year limit, but must use benefit by age 26 • You need to apply for transferred benefits as soon as eligible • The 4 additional years start after you get approved for the transfer regardless of how many years you have served prior to approval • You can not add beneficiaries after you leave the military, but you can change allocation of transferred benefits (36 months)

6. Yellow Ribbon Scholarship • Must qualify for maximum GI Bill Benefits • The Yellow Ribbon Program, a Post-9/11 GI Bill provision. It is a collaboration between the Department of Veterans Affairs (VA) and participating colleges to provide extra funds for eligible Army personnel • Varies widely by school or program • More information: • Veterans Benefits Administration: Education and Training

7. Permanent Change of Station • Unplanned Expenses (PCS) • Up-fronting • Damaged goods • Incidentals/Meals • Security Deposits • Lodging and Utilities

8. VA Loans • What is it? • Why use it? • When to buy and when to rent? • Re-use rules

9. Deployment $ • Tax free combat time • Deployed interest account Savings Deposit Program: Special Savings Accounts for Combat Zones

10. Interest Rate Reduction • Service members Civil Relief Act (SCRA) • Interest rate cap at 6% • Mortgage, credit card, car loan, or other debt • Reduce interest to 6% if military service affects ability to pay – income was reduced to go on active duty – reserve or national guard • Debt had to be acquired prior to active duty • Rate resets when active duty is over, higher rate applies to remaining balance only (no retroactive calculation) • You can terminate lease agreements • Apartment lease – deployed for 90 days or more • Car lease – deployed for 180 days or more • Cell phone – deployed for 90 days and no phone reception in new location

11. Military Emergency-Relief Fund • 0% loan through the military emergency-relief fund • Each branch has its own • Small loans with 0% interest for emergencies • Credit union on base • Short term loans at reasonable interest rates • Do not fall victim to payday-loan (36% interest)

12. Active Duty Alert • Place an active-duty alert on your credit report and/or a freeze on your accounts • Service is free for alert, $10 for each freeze and release • Notifies your creditors on your deployment • Protects your identity from theft • Experian.com • Equifax.com • TransUnion.com

13. Emergency Planning • Disaster Relief • War • Estimated costs for family separated • Rule of Thumb: 6-9 months of expenses in a bank saving account

14. Saving Programs • Save for retirement • Thrift Savings Plan – low fee, tax deferred • Between $17,000 - $50,000 per year depending on deployment • IRA Accounts • Up to $5,000 plus an additional $1,000 if age is 50 by end of the year • Military Saving Deposits Program • $10,000 that pays 10% interest per year – deployed + 3 months after return

15. Strategies for Deployment • Steps to prepare family finances • Put together a compilation of key financial information that might be needed in your absence • Review Estate-Planning documents and beneficiaries –power of attorney designation • General or specific • Save on auto insurance and phone service • Bill paying plan • Spouse or set automatic withdrawals • Increase emergency fund

16. State Tax Situation • Service members can choose a domicile state and pay state income tax based on their domicile state (not deployed location) • Texas, Florida, Tennessee, Pennsylvania, Arizona, etc., • Delayed tax filing • Automatic extension – combat zone

17. Re-enlistment & Signing Bonuses • 5K to 125K • Taxed – enlistment and re-enlistment • Investment Versus Spending • Establish an emergency family fund • Invest in marketable securities/stocks/Bonds • Open retirement account • Pay off mortgage

18. New Vehicles • Military Discount • NATO Discount • Discount Versus Negotiation • Do I “Want” this versus do I “Need’ this • Are my finances in check • Cost of ownership • Interest, fuel, insurance, maintenance, taxes

19. Service Member Group Life Insurance • How much do I need? (SGLI) • Should I choose payments or lump sum? • Do I need to buy more? • Term versus whole?

20. Military Retirement • How much will I make? • Formula • How much will I really need? • Can I live off of that now? • Will I have to make changes? • How will I make additional income? • Education – new skills • Experience – new career

21. Civilian Life • Key financial decisions as you return to civilian life • Prepare for a bigger tax bite • More costly insurance • Replace your life insurance • Replace your health insurance • Re-assess emergency fund (6 months versus 3 months) • Re-assess retirement savings

22. Penn State Resources • Military Education Benefits [Penn State World Campus] • GI Bill • Yellow Ribbon Program • Tuition Assistance Top-Up

23. GI Bill at Penn State • GI Bill • Veterans may use GI Bill benefits to cover all or part of their educational expenses. If you are a student interested in using your GI Bill benefits, please visit or contact our admissions counselors in the Office of Veterans Programs. • They can help explain how to apply for your benefits, describe different financial programs, and discuss which benefit may be the best fit for you. • To view the programs currently eligible for the GI Bill, view our list of online degrees and certificates.

24. Yellow Ribbon Program • Yellow Ribbon Program • Penn State World Campus, as a part of the Penn State University Park Campus, is proud to be a participant in the U.S. Department of Veterans Affairs (VA) Yellow Ribbon Program. • Since the World Campus tuition rates for all degree programs are under the state match, Yellow Ribbon payments are not needed for any of our degree programs.

25. Tuition Assistance Top-Up • Tuition Assistance Top-Up • You may use your Chapter 30 or 33 GI Bill benefits with Tuition Assistance, called Tuition Assistance Top-Up. • Students on active duty, who are eligible for the Chapter 30 or 33 GI Bill and approved to use federal tuition assistance, can elect to receive their benefits for all or part of the remaining expenses when the military does not cover 100% of the tuition and expenses through tuition assistance.

26. Other Resources • Financial Aid — Beyond your military education benefits, Penn State World Campus provides grants and scholarships to support our military students and their dependents. • Watch for student loans – Use benefits to finance education • Transfer Credits — You can transfer credits for academic programs at Penn State World Campus, whether from other regionally accredited universities, for military work experience, or life experience. • Become a Penn Stater — Penn State alumni are active and proud, and there are 500,000 of us all across the globe. Put this powerful network to work for you.

27. Executive Summary

28. MoneyCounts: A Financial Literacy Series Thank You! Comments & Questions Mr. Matthew Heckman Military Admissions Counselor 128 Outreach Building University Park, PA 16802 wdmilitary@outreach.psu.edu 1-(814)865-5403