People who serve in the United States armed forces have access to certain benefits, including a retirement pension that becomes available after 20 years of service.
There are different guidelines depending on the era, and some veterans have multiple options. In all cases, the amount of the pension that will increase when a service member stays in uniform for more than the minimum 20 years.
Military service can definitely lead to a comfortable retirement. A veteran can combine Social Security benefits with the pension and enjoy a nice, steady stream of monthly income for life.
Some veterans will go in another direction and embark on a career in the civilian world after serving for 20 years. This can also be quite beneficial from a retirement planning perspective.
In addition to this retirement pension, there is another veterans pension that is available to some former service members.
VA Aid and Attendance or Housebound Benefits
There is a standard Improved Pension for wartime veterans that did not serve for at least 20 years. The length of service requirement is a total of 90 days with at least one day taking place during a time of for people that started serving before September 8, 1980.
For others, the minimum length of service is 24 months with the one day during wartime requirement. To qualify, you have to be at least 65 years of age unless you have a permanent disability, in which case there is no age requirement.
Veterans that meet these requirements and need help with their activities of daily living can qualify for an added benefit that is called the VA Aid and Attendance benefit. There is also a Housebound designation that is designed for qualified veterans that cannot leave their homes.
These Improved Pension benefits are only available to veterans who can demonstrate a certain level of financial need. Your home and one motor vehicle are usually not counted; but when it comes to countable assets, the limit is $129,094. This figure is increased to account for inflation on an annual basis.
New rules were adopted in 2018 to set this hard limit, and the three-year look back period was also installed. Until the rules were changed, veterans could give away assets so they could qualify for this benefit. They could potentially have given gifts one day and qualified the next.
Now, all gift giving must ordinarily be completed at least three years before the application for the pension is submitted.
The maximum annual pension for Improved Pension with Aid and Attendance is $22,939 at the present time. For Housebound eligible veterans, the figure is $16,805. The benefits increase by about $2000 per year if the veteran in question has a spouse. A lesser pension amount may be available for a widow of a veteran.
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Our firm has prepared an estate planning worksheet that you can go through to gain a more thorough understanding of the process. It is very easy to complete, and it is being offered free of charge. To get your copy, visit our worksheet page and follow the simple instructions.
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Whether you are a veteran or not, you should definitely prepare in advance to be able to absorb assisted living costs. The vast majority of elders will need help with their day-to-day needs, and more than one third of older folks will eventually reside in nursing homes.
Medicare does not pay for the custodial care that these facilities provide, and they are extremely expensive so this is a big deal. Medicaid will absorb these costs, and if you position your assets wisely, you can gain eligibility at the right time while protecting assets.
If you would like to explore your options, you can set up a consultation appointment in Charlotte, North Carolina or Huntersville, North Carolina if you call us at 704-944-3245. The number in Ashland, Kentucky is 606-324-5516, and the number in Florence, Kentucky is 859-372-6655. You can also use our contact form if you would like to send us a message.