If you serve in the United States military, you have the opportunity to set yourself up for retirement. After 20 years of service, you are eligible for a pension, and the amount that you receive will go up if you continue to serve beyond the 20-year threshold.
You could choose to remain in the military until you are old enough to collect Social Security. At that point, you will have two sources of income, and you can live comfortably during your golden years.
Another option is to retire after 20 years, start collecting the pension, and then embark on a second career in the private sector. You can live on your salary while you save your pension benefits and contribute into a 401(k) plan at work.
When you are ready to stop working, you will have a sizable nest egg and the military pension to go along with your Social Security benefit.
In addition to the retirement pension, there is another pension that is potentially available to wartime veterans, and many people are not aware of this benefit.
Veterans Aid and Attendance Pension
The Veterans Aid and Attendance Pension is available to some veterans that have served during times of war. For people that started serving before September 8, 1980, the length of service requirement is 90 days with at least one day beginning or ending when the country was at war.
For those that began their service after that date, the requirement is 24 months or the full agreed-upon service period with one wartime day of service.
This benefit is available to veterans that need help with their activities of daily living. There is also a standard Veterans Pension for wartime veterans that are 65 years of age that are permanently and totally disabled.
Need-Based Benefit
This pension is for veterans that have a particular level of financial need, so there is a net worth limit. It is $138,489 in 2022, and it includes your annual income along with assets that are countable.
The “countable” qualifier is meaningful, because your home and items in it that you would not take along if you moved are not countable along with one motor vehicle.
Prior to October 18, 2018, there was no hard asset limit and decisions were made on a case-by-case basis. Plus, traditionally, there was no look back period. As a result, you could give assets to loved ones to develop a financial profile that will lead to immediate eligibility for the pension.
Now, there is a three-year look back period. The VA will look at your financial transactions going back three years, and you will be ineligible for the benefit if they find that you transferred assets out of your name during this 36-month period.
2022 Benefit Levels
The maximum benefit for a single veteran that qualifies for the Aid and Attendance Pension is $24,610 this year. If you are a qualified veteran with one dependent, the figure goes up to $29,175. You add $2523 annually for each additional dependent.
When two married veterans both qualify for this pension, the maximum annual payout is $39,036 this year.
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This benefit will help some veterans that need help with their day-to-day needs, but long-term care planning is essential for non-veterans as well. Most seniors will incur assisted living costs eventually, and Medicare will not pay for custodial care.
Medicaid will cover the costs if you can qualify, but there is a low asset limit. However, it is possible to gain eligibility if you take the right steps at the right times, and we can show you how.
If you are ready to get started, you can schedule a consultation at our Cincinnati elder care planning office if you call us at 513-721-1513, and you can use our contact form to send us a message.
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