College waiting to be paid

Our son's college has really been very patient with the VA. They have charged us late payment fees of about $20 per month, but overall there haven't been any harassing phone calls or nasty letters. Our son did talk to the veterans affairs office and they advised him to continue to be patient while the processing gets done.

The issue now is registration for the spring schedule. Without his account paid, he will not be allowed to sign up for classes. We're hopeful that the VA can take care of this soon, and that they'll begin his living expense payments and pay them retroactively to August when he completed the requisite paperwork.

Eligibility Certificate Arrives!

Sixty days after we submitted the VA forms, our son's benefit eligibility certificate arrived. We immediately sent that to his university as instructed on the certificate. Once they verify his enrollment, the payments will begin. His school is waiting to be paid, so the sooner they act the sooner they'll receive the money.

I'll keep you informed of our progress, so keep an eye out.

VA Check arrives!

Our son received his first VA check today, the $3,000 advanced payment while they complete his initial claim. He will take the check to the registrar and pay his first installment. It's great to see this actually happening.

Kiplinger's Military Money Site

Kiplinger.com has done a service for military members by building a web site just for us. The information on their site offers a wide range of topics of interest to the military, such as preparing for deployments, investing, avoiding scams, and purchasing a home.

One particularly helpful area is a list of 28 web sites that you can reference for even more information. Unfortunately you won't find "Your Military Money" there yet, but we'll keep working on it.

Request for immediate GI Bill Payment

My son used the online form to request his initial $3,000 payment. The VA is supposed to cut the check and mail it within three days of the request, so he should have the money next week.

I also sent a letter to the OK VA office requesting their action to obtain his eligibility certificate. No words back from them yet.

More soonest...

Homeowners Assistance Program

Many of my colleges found themselves PCS'd overseas with a home in the CONUS that they couldn't sell or rent for enough to cover their mortgage. They've been looking for assistance from the DoD Homeowners' Assistance Program. This program was designed to help military members leaving bases that were being closed, has been extended to others who are stuck with the homes because of an ordered move.

My friends are trying to cope with one significant issue right now. The benefits are apparently taxable, which for some who are underwater (owe more than their home is worth at fair market value), they won't have enough at closing to release the title to the new owners. Congress has excused the taxes for families that have gone through a foreclosure (loan forgiveness results in a 1099 which was previously taxed as ordinary income). We encourage veterans support groups to lobby congress to make the Homeowners' Assistance Program proceeds tax free.

VA offers interim $3,000 payment because processing is so slow

If you're like I am, you're frustrated that it's taken so long for the VA to process your VA educational benefits. If you've applied for your benefit and haven't received the payment for the Fall 2009 term, you can log onto the VA website beginning at 12:00 AM ET on Friday, October 2. The payments will be issued within 3 days of your request.

Good job Secretary Shinseki!

Changes to your TSP

The TSP Web Page just announced several changes and proposed changes to the program. Three of them were interesting to me.

The first was the approval of the ROTH TSP option. Beginning in 2011, TSP will have a ROTH option that will allow military members to contribute post-tax money into their retirement account. Instead of growing tax deferred, proceeds to the ROTH TSP will be tax free when withdrawn.

Many of you have seen my posts recommending that military members fully fund their ROTH IRAs before contributing to the TSP because of the tax treatments. This option might not change that guidance, since TSP investment options are not that interesting, but it will allow you to contribute a lot more money to these tax-favored accounts.

Speaking of investment options, the second interesting bit of news is that the administrators of the TSP have been granted permission to open a “Mutual Fund Window” to give participants access to a wide variety of funds. There are concerns about the complexity and costs associated with this option, however, so we’ll have to see how this goes. I suggest that military members and organizations like the Military Officers Association of America, the American Legion, the VFW, and other military support groups send letters and e-mails supporting the Mutual Fund Window to the TSP.

Finally, there was news on “Automatic Enrollments” into the TSP. Here’s the quote on the topic from the TSP News:

"Automatic Enrollment
The original impetus of the new law was the automatic enrollment provision that was studied and subsequently recommended for legistlative action by the members of the Federal Retirement Thrift Investment Board. The new law authorizes automatic enrollment for new Federal vicilian employees. In deference to concerns within the Department of Defense, the final legislation was amended by the Congress to exclude members of the uniformed services from the automatic enrollment provision..."

I personally believe that automatic enrollment would be an excellent move for the uniformed services to implement. I’ve read that people are usually not inclined to turn down enrollment if it’s automatic, but often do not enroll if they must actively “enroll.” For 18-24 year olds, a 1 – 3% allotment to the TSP account tied to the government insured “G-Fund” would be painless, and provides them with a foundation for future savings. Now many veterans leave the service after one or two tours of duty with no retirement savings at all.

I believe that the DoD should allow automatic enrollment, but that it should also include a bonus for first and second term enlistees/officers equal to amount of the automatic enrollment amount. For example, if the automatic enrollment is for 3%, then the government should match all of that.

This powerful program would dramatically improve the number of military members participating in TSP and provide all of them a real opportunity to save for retirement outside of waiting 20-years to be vested in the program.