Navigating the changes to military retirement and disability pay can feel like decoding a foreign language, especially for veterans transitioning back to civilian life. Understanding these changes is critical for financial security. Are you leaving money on the table by not fully grasping how these updates impact your benefits?
Key Takeaways
- The Blended Retirement System (BRS), effective since 2018, requires opting in and matching Thrift Savings Plan (TSP) contributions to maximize benefits.
- Concurrent Receipt allows eligible veterans to receive both full military retirement pay and disability compensation without reductions.
- Regularly review your disability rating with the Department of Veterans Affairs (VA) to ensure it accurately reflects your current health conditions and maximizes your compensation.
1. Understand the Blended Retirement System (BRS)
The Blended Retirement System (BRS) represents a significant shift in military retirement. Implemented on January 1, 2018, it affects service members who entered the military on or after that date, as well as those who opted into the system. The BRS combines a reduced defined benefit (pension) with a defined contribution (Thrift Savings Plan or TSP) component. This means you get a slightly smaller pension after 20 years of service, but you also get a government match on your TSP contributions.
Pro Tip: If you were eligible to opt-in to the BRS, but didn’t, consider the implications carefully. The legacy retirement system offers a larger pension, but only after 20 years. The BRS provides some benefit even if you don’t reach 20 years.
2. Maximize Your Thrift Savings Plan (TSP) Contributions
The TSP is the cornerstone of the BRS. The government automatically contributes 1% of your basic pay, and they will match up to an additional 4% of your contributions. That’s free money! To maximize this benefit, you need to contribute at least 5% of your basic pay to the TSP. You can manage your TSP account and contribution elections on the TSP website.
To change your contribution percentage, log into your MyPay account, navigate to the TSP section, and adjust your contribution elections. Make sure to allocate your contributions appropriately between the various TSP funds (C, S, I, F, and L Funds) based on your risk tolerance and investment goals. I generally recommend younger service members allocate more heavily to the C and S funds for higher growth potential.
Common Mistake: Many service members don’t contribute enough to the TSP to receive the full government match. This is essentially leaving money on the table. Even contributing just 1% more can significantly increase your retirement savings over time.
3. Explore Concurrent Receipt
Concurrent Receipt is a provision that allows eligible veterans to receive both military retirement pay and VA disability compensation without a reduction in either. Before concurrent receipt, veterans were often forced to waive a portion of their retirement pay to receive disability benefits. This is no longer the case for many, thanks to Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Pay (CRDP).
CRSC is for veterans whose disabilities are combat-related, while CRDP is for those who are at least 50% disabled and have 20 or more years of service. To determine your eligibility, review your VA disability rating and your military retirement paperwork. Contact the Department of Veterans Affairs directly for clarification on your specific situation.
Pro Tip: Even if you think you might not qualify for CRSC or CRDP, it’s worth investigating. The rules can be complex, and a qualified veterans’ benefits attorney can help you navigate the process. I worked with a veteran last year who was initially denied CRSC, but after appealing with legal assistance, he was approved and received a substantial back payment.
4. Understand Disability Ratings and the VA Claims Process
Your disability rating from the VA directly impacts the amount of compensation you receive. The higher your rating, the more you’ll be compensated. It’s crucial to understand how the VA assigns these ratings. The VA uses a Schedule for Rating Disabilities, which assigns a percentage based on the severity of your condition. You can find this schedule on the VA website.
When filing a disability claim, be thorough and provide as much supporting documentation as possible, including medical records, service records, and lay statements from family and friends. The VA requires specific forms, which you can download from their website or obtain from a local VA office. In the Atlanta area, the VA Regional Office is located near the intersection of Clairmont Road and I-85.
Common Mistake: Many veterans underestimate the importance of providing detailed medical evidence when filing a disability claim. A lack of documentation is a common reason for claim denials. If you’re filing in Georgia, be sure to familiarize yourself with the requirements outlined in the O.C.G.A. Section 38-2-1 and related statutes concerning veterans’ benefits.
5. Regularly Review Your Disability Rating
Your health conditions can change over time, and your disability rating should reflect those changes. If your condition has worsened since your initial rating, you can file a claim for an increased rating. Conversely, the VA can also reduce your rating if your condition improves, but they must follow specific procedures. It’s important to separate fact from fiction regarding VA benefits.
To request an increase, submit a new claim with updated medical evidence. The VA will likely schedule you for a Compensation and Pension (C&P) exam to assess your current condition. Be sure to attend this exam and accurately describe your symptoms and limitations. We had a case at my previous firm where a veteran’s benefits were drastically reduced simply because he didn’t attend the scheduled C&P exam. Don’t make that mistake.
6. Utilize VA Resources and Programs
The VA offers a wide range of resources and programs to support veterans, including healthcare, education, housing assistance, and vocational rehabilitation. Take advantage of these resources to improve your quality of life and achieve your goals.
For example, the Post-9/11 GI Bill can help you pay for college or vocational training. The VA also offers home loan guarantees, which can make it easier to buy a home. To learn more about these programs, visit the VA website or contact a local VA benefits counselor. The Georgia Department of Veterans Service is also a valuable resource, providing assistance with navigating the VA system.
Pro Tip: Don’t be afraid to ask for help. The VA system can be complex, and there are many people who are willing to assist you. Connect with other veterans through support groups or online forums to share experiences and learn from each other. Here’s what nobody tells you: navigating the VA is often easier with a buddy.
7. Seek Professional Advice
Navigating changes to military retirement and disability pay can be complex, and it’s often beneficial to seek professional advice. A qualified financial advisor can help you develop a retirement plan that takes into account your military benefits and your civilian income. A veterans’ benefits attorney can assist you with filing disability claims and appealing unfavorable decisions.
Look for advisors and attorneys who have experience working with veterans and understand the nuances of military benefits. Check their credentials and ask for references. While many services are available for free, particularly through the VA, paid professionals can offer personalized guidance and advocacy. I recommend interviewing at least three professionals before making a decision.
Many veterans wonder if they are sure about their benefits. Take the time to review everything.
What is the difference between CRSC and CRDP?
CRSC is for veterans whose disabilities are combat-related, regardless of years of service. CRDP is for veterans who are at least 50% disabled and have 20 or more years of service.
How often should I review my VA disability rating?
You should review your rating whenever your health condition changes significantly, either for the better or worse. The VA may also schedule periodic reviews.
Where can I find the VA Schedule for Rating Disabilities?
The VA Schedule for Rating Disabilities is available on the Department of Veterans Affairs website. Search for “VA Schedule for Rating Disabilities” to find the most up-to-date version.
What is the Thrift Savings Plan (TSP)?
The TSP is a retirement savings plan for federal employees, including members of the military. It’s similar to a 401(k) plan in the private sector, offering various investment options and tax advantages.
Can the VA reduce my disability rating?
Yes, the VA can reduce your disability rating if your condition improves. However, they must follow specific procedures, including providing notice and an opportunity to be heard.
Understanding and acting on the changes to military retirement and disability pay is not a one-time event, but a continuous process. Take control of your financial future by proactively managing your benefits and seeking professional guidance when needed. The updated BRS offers tools and options that, when used strategically, can substantially improve a veteran’s financial well-being. Don’t wait to start planning: your future self will thank you. You can also secure your future after service with smart financial planning.
