1. Module 1.3 Evaluate Salary and Total Compensation

2. Learning Objectives
Analyze military compensation and compare to civilian compensation
Compare Compensation Packages from two companies
Understand the basics of health and life insurance

3. Cost of Living Analysis
When relocating, consider what could impact your financial plan
Salary
Housing
Utilities
Taxes (including tax benefits for veterans)
Food
Child care
Commuting costs, clothing, entertainment, school costs, climate, health insurance

5. A Pay Comparison A Difference of $973
Monthly Military Pay (Single E5 > 4 yrs)
Monthly Civilian Pay ($26/hr)
Base Pay $ $
BAH
$948.00
Fed Tax $
BAS
$367.92
State Tax $ $
FICA $
$-32.45
SDI
$-45.07 $
Medical $
Net Pay $ $
A Difference of $973

6. Compensation Comparison
Compare compensation packages and track future job offers.
Include retirement plans, healthcare, insurance, and other benefits.
Consider what you will need for both replacement income and benefits.

7. Benefit Package and Perks

8. Benefit Package and Perks

9. Health Care Choices After Transitioning
Separating from Active Duty
Transitional Assistance Management Program (TAMP)
180 days, premium-free
Continued Health Care Benefit Program
For up to 18 months, can be used after TAMP expires
Quarterly premiums to be paid - $1,275 individual and $2,868 family
Enrollees responsible for co-pay and deductible
Retiring from Active Duty
Tricare for Life
Must enroll within 30 days of retirement date
Annual enrollment fees - $ individual and $ family

10. Types of Coverage Health Maintenance Options (HMO)
Preferred Provider Organizations (PPO)
Point of Service (POS)
High Deductible Health Plan (HDHP)

11. Civilian Health Insurance
Individual or Single Family
Purchased from the insurance company or marketplace
May be more expensive
Health questionnaire or physical exam may be required
More choices on coverage plans
Group
Negotiated group rate, generally through employer
Less expensive
No individual within the group can be denied coverage
Limited choices on plans

12. Life Insurance Types of Life Insurance: VGLI Term Life Insurance
Universal or Whole Life Insurance

14. Summary
Analyze military compensation and compare to civilian compensation
Compare Compensation Packages from two companies
Identify types of health care benefits
PPO, HMO, POS, Cafeteria Plans, and ACA
Other Company Benefits/Perks

15. Module 1.4 Leveraging Resources for Your Financial Future

16. Learning Objectives
Identify where to find TSP information and regulations in order to understand significant restrictions and penalties that can affect your finances
Explain the difference between a Defined Benefit Non-Contribution (Pension) Plan as compared to a Defined Contribution Plan
Describe a common vesting schedule
Understand the concept of compound interest
Analyze investment vehicles such as stocks, bond, mutual funds and other investments

17. Thrift Savings Plan (TSP) Options
Leave funds in TSP account (if balance is more than $200)
Roll your TSP into another eligible account (i.e., IRA, annuity, civilian 401k)
Withdraw your TSP funds completely
Expense ratios considerably lower than other investment funds
Contact TSP:
(1-TSP-YOU-FRST)
Some funds may include tax-exempt contributions!

18. Early TSP Withdrawal
Withdrawal is subject to both income tax and, if the employee is under age 59½, the early withdrawal penalty tax of up to 30%.
Not waiting will cost a minimum of $3,000!

19. Funding Your Retirement
Questions for a potential employer:
“When do company contributions start?”
“When will my account be credited with 100% of company’s contributions as my own?”
“Does your company do a graduated or cliff vesting schedule?”

20. Funding Your Retirement
Defined –Benefit Plan
Traditional company pension plan; ultimate retirement benefit is definite and determinable as a dollar amount
Examples: Military Retirement Pension
Funded mostly by the employer
Responsibility for payment of the benefit & risk on funds invested rests with the employer.

21. Funding Your Retirement
Defined-Contribution Plan
the contribution is defined yet the ultimate benefit to be paid is not
Examples are 401(k) and 403(b) plans, TSP, SIMPLE IRA, Roth IRA, SEP, Employee Stock Ownership (ESOP), and profit sharing
Contributions are from the employee.
A portion may/may not be matched by employer
Each participant has an individual account
The benefit at retirement depends on amounts contributed + investment performance of account
Investment risk may rest solely with the employee due to opportunity to choose from a number of investment options

22. Social Security
Social Security entitlement is based on age and amount withheld from paycheck during your working life
Open a “My Social Security” Account
Social Security Administration Retirement Estimator

23. Investment Pyramid

24. Cutting Taxes While Investing
Tax-deferred accounts allow the investor to delay paying taxes on earnings. Traditional 401(k), IRA, TSP are some pre-tax contribution examples.
Immediate benefit is that the contribution is deducted from a paycheck before income taxes are calculated, so taxable pay is reduced today.
After-tax contributions are taxed now so those contributions do not lower your taxable income, you pay more taxes now.

25. Compound Interest
$228,033
Thousand $
$83,673
$36,000

26. The Effects of Compound Interest and Time: Plan A
(Assuming a growth rate of 10%)
$1,047,608

27. The Effects of Compound Interest and Time: Plan B
(Assuming a growth rate of 10%)
$403,898

28. Summary Evaluate your TSP options
Research retirement considerations and plans
What is your Social Security entitlement?
Investments and taxes
Compound Interest

29. Module 1.5 Evaluate the Cost of Living

30. Learning Objectives Evaluate costs of moving to the new location
Calculate housing costs including rental vs. home ownership
Evaluate your relocation needs and seek assistance at your installation Family Center regarding your move

31. Cost of Relocation How much will a relocation cost you?
Moving truck, supplies, people
Transportation (gas, car repairs, lodging, food)
Down payment or first/last month rent
Costs to set up residence (paint, curtains, tools, state vehicle registration, etc.)
Utility deposits
Family expenses (children or pets)

32. Rent vs. Home Ownership

33. Relocation Resources Transportation Management Office (TMO) and
Personal Financial Manager (PFMs) can assist with information regarding:
Entitlements
Allowances
Needs
Costs

34. Summary Relocation expenses to consider Calculate housing costs
Rental vs. home ownership
Mortgage concerns and resources
Installation Resources
TMO, PFM

35. Module 1.6 Understand How Taxes Change

36. Learning Objectives
Navigate resources to include irs.gov, VITA, state tax calculators, and military pay
Locate and contact personal financial educator located in military family service centers
Contact installation legal offices for Wills, Powers of Attorney, Estate/Tax Planning and other legal documents, as applicable

37. Understanding Tax Issues
Tax Advantages
FICA (Social Security)
Federal taxes
State taxes
Withholding
Marital status
Exemptions
Use VITA, state calculators

38. Difference of $280.67 per month
Tax Changes
Monthly Military Pay
Monthly Civilian Pay
Single, E 4, North Carolina
Annual Salary:
$42, or $20.50 per hour
Base Pay
$ 2,238.00 $
BAH $
BAS $
Gross Annual
$3,553.92
Tax Deductions
FICA
$234.00
$414.00
Social Security
$138.76
$220.34
Medicare Tax
$32.45
$51.53
Total Federal Deductions
$405.21
$685.87
Net Income after taxes
$3,148.71
Net Income After Taxes
$2,868.05
Difference of $ per month
NOTE: This does not include state tax or health insurance, both of these will lower the net income on the civilian pay.

39. Tax Considerations State Income Tax All Income is taxable
No longer eligible for automatic filing extension
May need assistance for TSP tax issues
Must pay property taxes (car, home, etc)
Separating Veterans have one year from separation to view/print their MyPay W-2

40. Contact Installation Legal Office
Update:
Will
Power of Attorney (POA)
Trusts (as needed)
Medical directive or medical POA
Living Will
Ensure information on designated beneficiaries is current and correct

41. Accessing myPay Time to access: Separating – 13 months
Retiring – always with new login credentials
To maintain access:
log on using a personal device to:
Update and physical address
Update security questions and review personal settings
Print/save a copy of all W2s for the last 13 months

42. Disabled Veterans' Standard Homestead Exemption
Reduction in a property's EAV to a qualifying property owned by a veteran with a service-connected disability.
Beginning in tax year 2015: $2,500, at least 30% but less than 50%
$5,000 at least 50% but less than 70%;
At least 70% are exempt from paying property taxes on their primary residence. 
Disabled Veterans' Standard Homestead Exemption
The Disabled Veterans' Standard Homestead Exemption provides a reduction in a property's EAV to a qualifying property owned by a veteran with a service-connected disability. Beginning in tax year 2015, a $2,500 homestead exemption is available to a veteran with a service-connected disability of at least 30% but less than 50%; a $5,000 homestead exemption is available to a veteran with a service connected disability of at least 50% but less than 70%; veterans with a service-connected disability of at least 70% are exempt from paying property taxes on their primary residence.  This exemption is available to the unmarried surviving spouse of a service connected veteran provided that the veteran was in receipt of the exemption prior to his/her death.  Additionally, beginning in tax year 2015 and thereafter, the unmarried surviving spouse of a service member killed in the line of duty is exempt from paying property taxes on the primary residence.  Once approved, qualifying veterans and surviving spouses must file an annual application by their counties' deadlines to continue to receive this exemption. To apply for this exemption, please contact or visit your local County Assessor's Office.

43. Credit Reports www.annualcreditreport.com
Spend Responsibly, Protect Your Credit!
Free FICO score provided by FINRA Investor Education Foundation
(scroll through banner to free credit score and analysis tool)
FINANCIAL EDUCATOR CODE: RRNaZC6y
Valid Thru: 1 Jun-3 Jul 2016

44. USAA Car Buying Service

45. Deceptive Insurance and Financial Reporting Agencies
BBB Military Line
military-line/
State Insurance Regulatory Agency
Federal Trade Commission/OSA
Federal Deposit Insurance Corporation
BBB Military Line
Complaint and Dispute Resolution - Filing a complaint with BBB helps military consumers resolve disputes and alert us to issues affecting the military community at large.
State Insurance Regulatory Agency/Commission
State insurance departments are the best sources for company and agent licensing information. The link below provides additional state contact information for specific issues.
Office of Servicemember Assistance
If you’ve experienced difficulties with a financial product, we want to hear from you. We’ll forward your issue to the company and provide you status updates.
FDIC
Any consumer having a complaint regarding a State member bank is invited to submit it to the Federal Reserve System. The complaint should be submitted in writing, if possible, and should include the following information:
(i)  A description of the act or practice that is thought to be unfair or deceptive, or in violation of existing law or regulation, including all relevant facts;
(ii)  The name and address of the State member bank that is the subject of the complaint; and
(iii)  The name and address of the complainant.

46. Summary Preparation is key
Understand how much of your income could be withheld for federal and state taxes from your future civilian paycheck
Understand property taxes on your home, land, car, and recreational vehicles
Utilize installation legal resources to prepare wills, POAs, etc., before transition
Understand your withholdings and exemptions

47. Day 1 (PM) Review (Career Readiness Standards )
ITP pages 1-8 AND applicable Tracks Completed
MOC Crosswalk/Gap Analysis Completed
ONET Career Completed
Registered on ebenefits.va.gov- Premium Account
Developed 12 month post separation budget
Members are not to leave for lunch until pages 6 – 8 are completed. You will need to verify the completion…..this is not an option.
Make an appointment with A&FRC Counselors if necessary to assist you with Transition requirements.

48. Complete online assessment for the following areas:
OSD ASSESSMENT
Transition Assistance Program
Complete online assessment for the following areas:
Personal Financial Planning for Transition
Members are not to leave for lunch until pages 6 – 8 are completed. You will need to verify the completion…..this is not an option.