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Veteran Services: Finance Questions

Finances

You're working, and you've got a family that depends on you - both now and down the road. Where do you invest your money? Do you borrow against the equity in your house? Through a preferred provider relationship with USAA, The American Legion can provide expert financial advice to just about any question.

Questions & Answers

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Debt - Education - Estate Planning - General - Investing
Real Estate - Retirement - Small Business - Taxes

Retirement

I will be 70 on Oct. 27, 2013. And I will reach 70 1/2 on April 27, 2014. Can I take my first withdrawal on Dec. 31, 2014, based on my 2014 year-end balance of my traditional IRA? And then take my subsequent year distribution on Dec. 31, 2015, based on my 2015 year-end balance? -Alice

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I am a retired government employee with a Thrift Savings Plan (TSP) and an Individual Retirement Account (IRA). Since 2009, the Obama administration has had hearings on taking over all IRAs and 401ks and giving a small additional amount to Social Security checks. With the reelection and the vast amount of executive orders circumventing Congress and increasing taxes, I am worried if I do not withdraw my TSP funds or transfer some of them to an annuity that I will lose all my hard earned savings and be left with nothing. My thought is to take half in cash and the other half in an annuity. I want to pass on some of it to my children. I know I will get hit hard on taxes on the cash withdrawal, but I will get zero if they take my money. What options do I have? Thanks. -Alan

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I am currently receiving Combat Related Special Compensation (CRSC). As of Oct. 1, I went from 60 percent to 80 percent service-disabled rating. Of the 80 percent, the first 60 percent was combat related. The new 20 percent doesn't qualify for CRSC. Defense Finances and Accounting Services (DFAS) is taking $1,602 out of my retirement pay. But CRSC is only giving me $1,102. So I am losing $500 a month. Looking at my taxable liability, I am better off going back to Concurrent Retirement and Disability Pay (CRDP). Is there an "open season" in CRSC that allows me to go back to CRSC? -Eugene

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I have try to rollover the funds from an Employee Stock Ownership Plan (ESOP) with a company I no longer work for to a Thrift Savings Plan (TSP) with my new employer. I was told I have to wait until I’m 65, and then can only do it in installments. Is this true? -William

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I will be retired from my civilian job, and I will start collecting my reserve retirement pay at 60 and be eligible for Medicare at some point. My wife is seven years younger and will not be eligible for Medicare. I understand I get TRICARE for Life to supplement my Part-B Medicare, but I am confused on how I cover my wife's insurance requirements until she is eligible for Medicare. Will I need to and can I continue some kind of TRICARE policy on her? Or do I have to get a civilian policy for her? I am only aware of gray-area reserve TRICARE policies available as a family which stops at Medicare age. Thanks.

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My IRA has been with an investment manager since 1999. What should have been a reasonable return? The IRA was split 50 percent equities and 50 percent fixed. -Donald

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I receive my healthcare through VA but do not have any service-connected disabilities. I turn 65 in October. Should I take Medicare part B and Part D or consider an advantage plan? I will be signing up for Medicare part A, but do I need any of the other Medicare options? -James

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Can a person who started taking Social Security benefits at age 62, and is now 65, pay those benefits back and then apply for full benefits when reaching full retirement age? -John

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Will my Air Force medical benefits or retirement pay go down when I turn 66 and become eligible for Social Security? If so, how much will change? How (if at all) are my medical benefits affected by Medicare? - Wally

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I want to retire, but I still carry a mortgage. Would a reverse mortgage be the thing to do? - Pablo

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Both my wife and I will be retiring this year. We have approximately $150,000 in savings and are debating whether to use it to pay off the balance of our mortgage, which is approximately $135,000. This would save us nearly $680 per month in principle. - Jack

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I am 56 years old. What is better: take a large lump sum or have the company give me monthly payments? Where can you put that money in that you don’t have to pay taxes but can get a monthly check? – Greg

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I would like to know if my wife, who is 63 years old, could draw Social Security now on her earnings and then switch to half of mine when I turn 66 on 7/25/12. Also, would this be the best way to maximize our Social Security benefits? – Duane

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What is the advantage of rolling over my 401(k) into an annuity? – Michael

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My FRA is 10/1/2012, my wife’s 10/1/2016. We have the resources to defer taking my benefit until age 70. Will it be possible under the current regulations for her to draw on her earnings in 2016? Will I be able to draw spousal benefits then? – Jonathan

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We are looking at an asset based long term care (LTC) solution. Basically, we will have a life insurance policy which has a LTC rider that allows you to get money for home care. What do you know about this plan, or does USAA sell such a plan. – Charles

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Can I file for my ex wife’s social security benefits even though we have been divorced for many years? We are both in are 70’s. We both were teachers in New Mexico. I retired early she retired FRA. We would like to increase my benefits. – Joseph

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I am retired and my wife is retiring in a year. We have a retirement fund with TIAA-CREF there is $145,000 in this fund at this time. Does USAA Offer any programs that may be better than what we have now. We earn about 7 percent on our money now. – Bill

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I am upside down in my fixed rate mortgage by about $300,000. I am already retired and my wife would like to retire in the very near future. However we can’t refinance or sell the house for what is owed. We don’t know of any options that will work.

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I am a retired officer and currently have seven years left on a 15-year/4.875 percent mortgage amounting to about $200,000 on our residence valued at about $450,000. I’m considering refinancing the mortgage. What do you think? – Jon

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My Social Security statement says if I start receiving benefits at age 62, I’m entitled to $433 a month. I tried applying for my benefits but was told because of my current earnings, I’m not entitled to receive any benefits. Is that correct? – Antonio

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I am looking at retiring at age 65; my full Social Security retirement age is 66. I have savings of a guaranteed annuity and a 403b of $225,000. Should I apply for early Social Security at a decreased benefit or live on my savings the next year? – Lynda

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I am debating whether or not to start receiving my Social Security at age 62. I am now 61. My husband is retired military (23 years). He is past 75 years old. I will not receive SBP. I am wondering if I will receive any part of his SS? – Cheryl

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Is there an online free retirement pay calculator for a person to enter such data as age, select an age to receive social security (SS), income and other necessary information to determine the best age at which to initiate payments from SS? – Joseph

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My wife began collecting her social security at age 62. She will reach full retirement age 6 months. after I begin collecting higher benefits. When should she refile to collect higher benefits? – Toni

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At 60 years old, I recently changed companies and have $55,000 still in my previous company’s 401k program. I currently draw $1,400 per month from my Navy retirement and make $80,000 a year as a professional project manager. – Randy

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My wife has a retirement account and a CMA account that has quarterly maintenance fees instituted this year. We need to find a local reputable financial planner for advice. – Steven

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I am retired Navy and now a working FED. I will shortly turn 70 and my SBP will be paid up. I am considering combining my fed service, requiring giving up my Navy retirement. Will my wife still be covered by the SBP? – Joe

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I unexpectedly retired in April due to arthritis and am on Social Security Disability. After the bills I have $85 left for food and gasoline. Is there somewhere I can get assistance? My pension starts in 18 months; I’d like to hang on until then. – Dave

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I receive long term disability benefits from a previous employer’s insurance coverage. The company is now offering a buyout. Is this something I should consider? – David

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My family was under the impression that our mother would still receive retirement benefits after our father died, but the Air Force said a certain form was not signed in time. Could you please clarify what form was not signed? – Devonna

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I will retire in three years and have paid my required 44 units to Social Security. My employer does not deduct Social Security from our pay. I was told my Social Security pay will be reduced by a percentage when I retire. Is that true? – Nicolas

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I am a retired military member, so I get a monthly retirement check. I am federally taxed on this amount. But since it is a retirement check, could I put that money in an IRA or some other retirement plan so I don’t get taxed on it? - John

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My husband retired from the USMC in 1976 and passed away in 2002. I am now 65, as of this year, and have TRICARE For Life. If I remarry, will I lose my benefits? - Jenny

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I will be 62 in December. Do I have to file for Social Security, or does my VA disability continue until I do file for Social Security? Can I claim both, or do I have to give up my VA disability? - Samuel

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Having just turned 65, I have put off drawing Social Security in order to raise my monthly amount. How does Social Security affect my retirement check? - John

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My mother is the widow of a retired Marine officer. She keeps telling me that she wants to go live in a Retired Officers Wives Home in Virginia. Is there such a place? I’ve looked but have had no luck finding anything. – Karen

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I retired from the USAF in 1994. I am now 52 and receiving my military pension, as well as a 10-percent disability-rated payment. When I qualify for Social Security, will I continue to receive all three benefits in their entirety? – Ben

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I am a federal employee. At retirement, I will have approximately $250,000 in my Thrift Savings Plan (TSP), which I plan to convert to an annuity. Is that a smart thing to do?– Anna

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I understand (just recently) that when I get to 65, I will not be able to collect both Social Security benefits and my military benefits. How so? – Ruben

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I am a retired military regular officer and am currently working for a company, but I might want to get a federal civil-service job instead. When I finally retire from working, will I be able to collect all three pensions without penalty? – Mike

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I married my husband after he retired from the military. I signed up for survivor benefits and have been making the payments for eight years. We have thought of getting a larger life-insurance policy and canceling my survivor benefits. Can we? – Kellie

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I was told that my time in the reserves – serving on active duty for training and on active duty for such things as the Los Angeles riots, earthquake and fires – is not eligible for additional Social Security benefits. Who can I contact at the VA? – Joe

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