Roth IRA – Why I Love It, and Why You Need One

You’ve probably heard about a Roth IRA before; it’s one of those terms that gets bandied about on TV or the radio with great frequency. And with good reason – a Roth IRA is a retirement account which is one of the best ways to prepare for retirement. I’ll give you an introduction on Roth IRAs – what they are, why they are essential to good retirement planning, and a few other tips about Roth IRAs.

Why You Need a Roth IRA

Roth IRA - the best retirement plan available

Roth IRA – One of the Best Retirement Tools

Retirement planning is something everyone needs to do. Even if you serve in the military long enough to earn a military retirement and pension, it might not be enough for your golden years. It is essential for most veterans, even retirees, to take retirement planning into their own hands, and retirement accounts such as the Thrift Savings Plan, 401k plans, and IRAs are a great way to do that.

Types of IRAs, and Why a Roth IRA Rules

There are two types of IRAs available to most people – Traditional IRAs and Roth IRAs. They are fairly similar, but have one important distinction – when you pay taxes on your contributions and withdrawals. Here is a quick primer about the differences between them:

  • Traditional IRA: Contributions are tax free, withdrawals are taxed in retirement years. There are Required Minimum Distributions (RMD) once you reach a certain age.
  • Roth IRA: Contributions ome from income that has already been taxed, withdrawals in retirement are tax free. There is no RMD.

Let’s break this down in simple terms. With a Traditional IRA, you can take a tax break on your income now, but you will have to pay taxes in the future when you withdraw your retirement funds. You will also have to begin taking withdrawals from your account once you reach the RMD age, whether or not you need the income.

With a Roth IRA you make contributions from income which has already been taxed, making you eligible to receive tax free withdrawals in your retirement years. This is a great deal, especially if you are in a lower tax bracket now than you anticipate being in retirement. It also takes the guess work out of retirement planning since you will know that the money you have in your account will not be subjected to taxes. Finally, you aren’t required to take distributions, so you can leave your money in your account and continue to let it grow (this can also be a great advantage when it comes to estate planning).

Roth IRA Eligibility and Contribution Limits

There are a few things to be aware of before starting a Roth IRA. First, you need to be eligible to contribute. To be eligible, you need to have earned income, and meet income requirements. There is also a special provision for military members: the HERO Act. The Heroes Earned Retirement Opportunities (HERO) Act allows military members with tax free income to be able to contribute to Roth IRAs and other retirement plans.

The next thing to consider is how much you will be able to contribute to your Roth IRA. If you meet income requirements, then you will be able to contribute up to $5,000 if you are under age 50, or $6,000 if you are age 50 or older (the additional $1,000 represents a catch-up contribution to help those closer to retirement better reach their investment goals). Here are the IRA contribution limits.

The tax avantages for IRAs are incredible, so the government limits them to people who fall within certain income brackets. If you don’t meet the income requirements to get the tax benefits from the Traditional IRA, or contribute directly to a Roth IRA, you can still contribute to a non-deductible Traditional IRA, then convert it to Roth IRA at a later date. It’s kind of like a back door which enables just about anyone to contribute to a Roth IRA.

Once You Go Roth, You Never Go back

The prospect of having a tax free nest egg in retirement is very attractive, and something I don’t recommend you pass up. There aren’t many opportunities for tax free income, especially when it comes to investments. And the longer you have before you reach retirement age, the more time you have for compound interest to increase your nest egg. If you are eligible, I highly recommend opening a Roth IRA and maxing out your contributions each year.

Take action! For more information on Roth IRAs, you can check out the Roth IRA Movement or the #RothIRAMovement on Twitter. If you are interested in opening a Roth  IRA, then check out this list of recommended places, or you can visit the Mint.com IRA Finder as another option.

I’m a Qualified Veteran, Why Can’t I Find a Job?

I’ve been using LinkedIn a lot more frequently lately. It’s a great place to connect with people, offer advice, and ask for assistance if you need it. If you are on LInkedIn, I recommend joining some of the many veterans groups on there, which offer a lot of great support and advice for finding a job. I was scanning through one of the veterans groups last week and I read a question from a veteran and was looking for a job, but hasn’t been able to find anything. Here is his question:

Why am I having such a hard time finding a job in San Diego? I have my degree lots of certifications to go along with my military experience. What am I doing wrong; any advice?

Here are a few general tips that I gave in response (this version is expanded over the response I gave in the thread).

why can't I find a job?

Are you a qualified veteran? Use these tips to find a job.

You have to know where to look for work

The job market is tough right now, but not impossible. One of the most important things to know is that most jobs aren’t listed publicly. They are part of the “hidden job market” which means they simply aren’t advertised when they become open – they are typically filled internally, through referrals from current employees, or through headhunters. Why? Because most jobs posted publicly receive anywhere from 50-100 (or more) applications. Hiring managers use these three methods to screen potential employees. This saves employers time and money.

Networking is essential for finding a job in today’s economy

The best way to find a job in the current economy is through your professional network or through a recruiter. Start by contacting someone in your professional network and ask them to peer review your resume. This will give you a good idea of where your resume can be improved. They may also let you know about potential job openings at their employer if there are any. If most of your peers are still in the military then consider joining some professional organizations or clubs, doing volunteer work at your church or with a charity, or finding other ways you can expand your network and show other people your skills.

You may also benefit by reaching out to a staffing agency or head hunter. Some of the jobs they offer are only temporary positions, but they are still worth taking as it helps put money in your pocket and keeps your skills fresh. You may find that one of these positions lead to a full time job, or they may give you the opportunity to learn new skills or gain additional experience which will make you more likely to be hired into a full-time job.

Seek out positions where you can use your military skills

Your military experience is incredibly valuable, especially for government agencies and contractors who work with the government. Many people have the skills you have, but don’t speak the “same language” the military speaks. That was the selling point I used when I landed my first post-military job. It’s often easier to teach vets specific skills than it is to teach non-veterans how the military operates.

A security clearance can also be a very valuable tool in helping you get a job. There are even career sites which specialize in posting openings for people with a various levels of security clearances. If you have a security clearance, try to keep it active long enough to use it at your next job. You may also be able to reactivate an expired security clearance in less time than it takes for someone to get one from scratch – which is an expensive and time consuming process for employers. This gives you a leg up over someone who doesn’t have a security clearance.

Review your resume and LinkedIn profile

It is essential to take care when crafting your first post-military resume. Pay special attention to translating your military skills into civilian terms so that a layman can understand what you bring to the table. When writing a resume, it’s also essential to create a unique resume for each job application and include specific skills and keywords from the job description to ensure it is selected by the automatic filters many companies use to screen resumes.

Take some time to go through your LinkedIn profile and any other digital profiles or resumes you may find ways to improve your digital profiles to make them more attractive to employers. You may find some ways to improve them.

Look into government employment and programs

There are many government programs for veterans, including the new Veterans Job Corps, which will create public service jobs for veterans. Other veterans career programs include My Next Move for Veterans, the Veterans Job Bank, and the Veterans Gold Card. You may also consider a job with the civil service or a state agency, many of which give a veterans preference for veterans with certain classifications, such as those who served in a war zone or those with a disability rating.

Consider further education

If you still have education benefits available to you, then consider going back to school on a full or part time basis. The GI Bill can help you obtain a degree or other certification which can help you enhance your employability. If you are unemployed and meet the requirements, you may also be eligible for the VOW to Hire Heroes Act, which gives GI Bill benefits to unemployed vets.

I hope these tips help.

Do you have any additional tips?

10 Reasons to Join the Military

Have you ever thought about joining the US Military? If the answer is yes, then read on. These benefits of joining the military may be enough to persuade you to take the leap. If you have n’t considered joining the military, then treat this article as a primer for some of the benefits which may be available to you if you decide to take that next step. And the benefits can last a life time!

10 Reasons to Consider Joining the Armed Forces

Whether you are considering the military out of a sense of Patriotism or duty, for action and adventure, or for a steady job in a depressed economy, there is something for everyone. Here are 10 reasons the military may be a good fit for you.

Reasons to join the military

10 great reasons to join the military

1.  Jobs in a down economy. The US has experienced a difficult economy over the last few years, including high levels of unemployment, rising costs, and the outsourcing of many jobs. If you are looking for employment, consider the military, which continues to offer jobs for those who are qualified medically and academically, and who do not have an extensive criminal record.

2.  Pay and benefits. A new second lieutenant starts at over $36,000 a year plus full benefits, not including added monthly allowances of up to $3,000, depending on where he or she is stationed. An enlisted person starts at around $20,000 a year plus full benefits, not including added monthly allowances of up to $1,500 depending on where he or she is stationed. Enlistment and re-enlistment bonuses can be over $20,000. After serving only 3 years, some nuclear trained enlisted members in the Navy receive bonuses of $90,000 for re-enlisting. Student loans can be relieved by up to $65,000. The military is also one of the few places where you can get a full pension after serving 20 years or more. Military retirement can reach 50-75% of the average of your final three years base salary. In some instances, you can receive more than 75% of your base pay in retirement.

3.  Full medical coverage for you and your family. Military members are immediately eligible for full health care benefits for themselves and their immediate family members as soon as they enter the service, and if you stay through until retirement, you and your family can take these benefits with you when you leave the military. These health benefits extend to immediate family (e.g. spouses and children, and sometimes dependent parents). You may also be eligible for temporary military healthcare benefits after you leave the service.

4. Skills and training. The military provides advanced technical training in a variety of career fields and also offers opportunities for additional training when you are off-duty. Many military members are able to attend college that is often paid for by tuition assistance. You can use your training opportunities to advance within your career field, earn certifications or degrees, or prepare yourself to transition back into civilian life.

5. Leadership opportunities. Military leadership is a great way to get your resume on top of the pile for your next career. If you were to hire someone, would you want to hire someone with proven skills and experience and a degree, or someone right out of high school/college? Give me the experienced professional any day of the week! (More tips for creating your post-military resume).

6. Travel opportunities and vacation time. The military has installations all around the world and pays for you and your family to get there and back. Your off duty time is yours and you are free to travel and see the world. The military gives you 30 days of paid leave per year, not including weekends and federal holidays, depending on your job.

7.  A lifetime of benefits for your survivors. One major reason many students don’t consider the military is the perception of a high mortality rate. This is primarily caused by the media. In the unlikely event of a service member’s death, the surviving family is given an immediate $100,000 death gratuity benefit, a $400,000 lump sum (if elected) life insurance benefit, social security and indemnity monthly pays for years, and the transferability of many VA benefits. The military member’s time served is not taken for granted.

Benefits After Leaving the Service

8.  Education opportunities after you leave the military. The new GI Bill pays veterans who served at least 36 months a monthly living stipend and full tuition to pay for college, after they leave the military. Depending on how long the service member commits, this GI Bill can be transferred to spouses and children.

9.  Buy a home with no money down with a VA Loan. The Veterans Affairs office offers veterans a way to purchase a home with no money down through the VA Loan. This makes it easier to purchase a home while you are serving, or after you have left the service.

10.  A military retirement is worth millions. An officer with 20 years of service, who earns over $100,000 per year, could retire with a pension of over $48,000 per year for life in his or her 40′s and start a second career. Imagine earning over $4000 per month for the rest of one’s life, starting at age 42. This equates to an accumulative pay of $480,000, $960,000, $1.4 million in 10, 20, and 30 years, respectively, in addition to having full health care coverage and an income from a second job, if desired. (Oh, and those numbers don’t account for annual cost of living adjustments which increase your monthly pension).

Bonus Benefit

Membership into one of the world’s oldest clubs. Being a military veteran makes you an automatic member in one of the world’s oldest clubs. It is easy to share stories and recollections with other members of this special group of people, and can help you gain acceptance, join clubs, find employment, and gain other benefits. Being a veteran is something no one can ever take away from you.

About the author:  Romeo Clayton has served as enlisted and officer in the US Navy. He is the author of How We Prevent Wealth: A Personal Finance Reflection, a free online book that details his theory of why so many people lose out on the opportunity to build wealth. He is also active on his own personal finance blog, www.romeoclayton.com.

Photo credit: United States Forces – Iraq (Inactive)

How to Dress for a Civilian Job Interview

Civilian clothing – it’s not exactly a pressing issue for service members. As a matter of fact, it’s rarely a point of contention at all while on active duty. But once an Airman, soldier, sailor, guardsman, or marine transitions to the private sector, the art of civilian dress can seem extremely difficult. Gleaning uniform regulations from fiery-eyed drill instructors, a new recruit becomes well versed in the military dress code rather quickly. There are rules and standards. When “Irish pennants” (a loose thread on a uniform), and other minor imperfections in one’s Battle Dress Uniform, elicit streams of profanity, people tend to listen/learn. With time, most service members become outstanding examples of uniform taxonomy. But what about civilian attire?

how to dress for an interview

Military bearing + professional attire = winning combination!

First Impressions Are Everything

A sharp uniform, close shave, polished appearance, and attention to detail can mean success in the military. Similarly, it’s no different in the civilian world. Instead of BDUs, Dress Blues, and flight suits, we’re talking blazers, blouses, and wool suits.  When the time comes to move on or retire from military service, one should be prepared to enter the private sector. One of those provisions should include a plan regarding appropriate civilian attire. Specifically, a wardrobe geared towards a post-military career. As in the military, first impressions in the private sector can make or break you. Job interviews are prime examples of this.

The job of your dreams or the unemployment line can hinge on your appearance during an interview. It’s a sad but true fact – looks matter quite a bit. Depending on your field of work, a well-tailored suit is a staple for your interview. Something dark, well tailored, and manufactured from quality materials (wool or silk), is a general rule for men’s suits. Assure the aforementioned garb is appropriate for the occupation sought. Remember, simple is better.

In regards to the female persuasion – slacks, conservative skirt and blouse, are suggested. When combined with an oxford shirt and blazer, you’re guaranteed a professional appearance. Keep the high-heels and stilettos for a night out on the town, and stick to something mid-heel for interviews. Make certain to go light on the perfume and traditional with the cosmetics. Of course, these recommendations are generally geared towards executive/managerial positions. Again, adjust your attire to meet the job you seek.

Professional Attire, Business Casual, and Campus Casual

The current culture of business today, allows for three main categories of attire. They include:

Professional Dress – as the name suggests, it consists of professional attire (i.e. suit, slacks, and tie). For women, business/pants suit is acceptable.

Business Casual – essentially a relaxed version of professional dress. Women should sport moderate length dresses or skirts, and men can go sans coat and tie.

Campus Casual – relatively new on the scene, campus casual is modern take on business attire. Although one won’t wear this often, it is in actuality, everyday apparel. Informal office gathering and networking events may call for this type of business wear. Lean towards the conservative side, such as dark jeans, polo shirt, clean sneakers.

Tips for Your Civilian Wardrobe

The most important thing to remembers is that you need to present a professional image. But that doesn’t mean you need to spend a lot of money on your wardrobe. Start by purchasing basic wardrobe items that work well with other items so you can mix and match. For men, that includes a dark suit, several plain colored shirts (white, off white, and blue are versatile), several ties, and a dark pair of high quality shoes. Women can start with similar items, and by mixing in a few skirts or pant suits.

Here are some wardrobe Do’s & Don’ts:

  • Tailor your outfit.
  • Invest in a quality wardrobe.
  • A fresh haircut adds to a sharp look.
  • Use a lint remover.
  • Remove any political emblems from your attire.
  • Learn what colors and clothing flatters your specific body-type.
  • Cover visible tattoos and piercings.
  • Polish your shoes.
  • Keep a stain remover pen handy.
  • The tip of your tie should fall atop your belt.
  • Wear conservative jewelry.
  • No overpowering cologne or perfume.
  • Don’t combine horizontal lines with vertical lines.

And as always, make sure your clothing items are clean, wrinkle free, and serviceable. Once you nail down your wardrobe, you are ready for the interview!

Military to Civilian Resume – Tips & Examples to Show off Your Skills

The military equips its personnel to handle a variety of situations. It’s not uncommon to see a junior military member managing millions of dollars worth of equipment, or making life and death decisions. In many ways, military members handle decisions and responsibilities of a far greater magnitude than their peers in the corporate world. But how to do you get that across in a resume?

Translation is the Key

Times are tough. It’s no secret jobs are hard to come by, but as a service-member you posses a unique capacity that can set you apart. In order to highlight these wholly unique skill sets, you need to understand a few basic points. First and foremost, civilians rarely understand the scope that a military career field covers. It is your job to inform them. Secondly, you need to translate those military responsibilities into civilian friendly summaries. Limit your acronyms – employers rarely understand them.

Translating an infantryman’s skills:

It’s a late night on the dark streets of Sadr City, Iraq. Visibility is low due to heavy cloud cover. And for some odd reason, your GPS went black. But you manage to hit your final checkpoint utilizing a map and compass. Directing your section out the rear-hatch of an LAV – assuring a solid headcount, you stack against the pockmarked remnants of a cinderblock wall. Assuring the biometric iris scanner is good-to-go, you make liaison with air-support, lock/load a trusty M-16A4, and signal the flash-bang man to make ready. As a Staff Sergeant in the United States Marine Corps, you’re moments away from leading a dozen young men into hostile territory – an apartment complex abutting the Tigris River.

The US Military labels such individuals as “Infantrymen.” But the breadth in which they operate demonstrates skills way beyond a simple one-word expression. Therein lies the rub – how can a service-member equate their military service into civilian terms? Whether writing a military to civilian resume or introducing oneself in the professional realm, the ability to convert the vast array of skills gleaned from military service is essential.

Types of Resumes

The three general types of resumes include: Chronological, Functional, and Combination.

  • As the word denotes, a Chronological resume focuses on listing work experience in reverse order (most recent job first). This is perfect for service-members who’ve consistently been employed – military or otherwise. It’s important to account for lapses in employment, as companies tend to look for consistency.
  • Moving on, a Functional resume highlights an individual’s skill and experience first and foremost. So-called “Skills Translators,” are great tools to utilize when writing a Functional resume. Military.com has an excellent skills translator. Also, www.onetonline.org offers another excellent free MOS decoder. For example, rather then simply denoting yourself as an “Infantryman,” the skills translator suggests you “operated weapons and equipment in ground combat operations.”
  • And finally, Combination resumes are just that – a combination of both Chronological and Functional. Numerous examples of the aforementioned resumes can be found online here: www.resume-resource.com.

When writing your resume, be sure to include all specialized training received while serving. This can include your MOS training, NCO or officer training, computer or technical skills, etc.

Attention to Detail – The Military Way

All the effort you’ve spent polishing your presentation, won’t matter much if you don’t keep in mind the basics. We’re talking proofreading. Nobody likes misspelled words. It conveys a sense of incompetence and a lack of attention to detail. Plus, in this day and age, there is no excuse for grammatical errors. Two words: Spell Check – it’s there for a reason. Use it.

And don’t forget your contact information. A proper resume includes: name; address; apartment number; city; state; zip code; phone number (including area code); and email address. A small note on emails – save the pimpdaddy99@yahoo.com for personal correspondence. If possible, use your first and last name. A good example is First.Last@gmail.com, or any other free e-mail provider like Yahoo, Hotmail, AOL, etc. Ultimately, professionalism is of utmost importance – your dream job could depend on it.

Putting it All Together – Further Resources

Transitioning to a new career can be a time-consuming task. It is a good idea to treat your job search as a full-time job, and dedicate as much time and resources to it as you can. Remember, you now hold the keys to your future in your hands.

For further reading on writing a resume, we recommend this excellent resume writing tutorial. The article is over 4,000 words and includes tips and examples for writing and improving your resume. You can see a great overview with this slideshow:

 

Combine these tips with your decoded military experience and your military bearing, and you should be in a good position to enter the civilian workforce.

The Music Will Go On… Thoughts on Military Bands and Budget Cuts

The military has a variety of special duty assignments and jobs which fall under the radar. Some of them are assignments many service members aren’t even aware of. I had the pleasure of serving in one such duty assignment while I was in the USAF. In 2002 I toured with a group called Tops In Blue, which is an Air Force entertainment group which travels around the world putting on performances for military members and their communities. During our tour, we performed over 140 times at over 120 locations in 20+ countries and 30+ states – all in the span of about a year. It was, to put it mildly, the opportunity and experience of a lifetime.

military band budget cuts

Bands are part of our military heritage

During my tour with TIB (I was the lighting director), I had the pleasure of serving with 25 other Airmen, all of whom I consider to be good friends to this day. I have remained in touch with most of the people I toured with, and it’s fun to see how they are doing in their lives. Some have gone on to retire from the service, others, including myself, have separated to pursue other goals, and some are still serving in the USAF, Reserves, or ANG. Most are still pursuing their love and passion of music.

It was with pleasure that my wife and I got to see our good friend, SSgt. Angie Johnson still pursuing her dreams on NBCs The Voice. My wife and I both served with Angie and have followed her music through the years. Angie is still serving in the Missouri Air National Guard, with the band, Sidewinder, part of the 571st Air Force Band, 131st Bomb Wing, Air National Guard.

Angie’s journey to getting chosen to perform on The Voice is an interesting one. She transferred to the ANG band after separating from active duty, and during that time, she sang and recorded music in and around Nashville. She was even getting close to giving up her dream of making it big in the music industry and moving on with life, when something unexpected happened – an audience member shot a video of Sidewinder performing Adele’s “Rolling in the Deep” from a deployed location. That video, shot on a cell phone, and uploaded to YouTube, has been viewed over 2.7 million times at the time of this publication. You can see it below:

Angie Johnson and Sidewinder Performing “Rolling in the Deep”

The Power of a Story

The YouTube video going viral brought Angie and Sidewinder a lot of attention. From there, the press caught on, and Angie, and Sidewinder, became instant hits, with guest spots on Entertainment Tonight, The Ellen Degeneres Show, and several others. Staff Sgt. Brian Owens, a male vocalist from Sidewinder, was invited to perform “God Bless America” at the first game of the World Series. Angie was invited to perform the Nationl Anthem at a Seattle Seahawks game when the Seahawks had their Military Appreciation day. The door was opened, and the members of Sidewinder didn’t look back.

The Voice Came Calling

Angie was invited to try out for The Voice, and she was selected to perform on team Cee Lo. I had never watched the show before, but I became an instant fan – and not just because of Angie. There are a lot of talented performers on the show, and it’s very entertaining. Angie held her own alongside some of the best unsigned musical talent in the US. She has the ability to perform on stage with anyone.

Angie was on TV again last night, and though the results weren’t what her fans were hoping for, she sang well and brought a special energy to the performance. She has made all of us proud and she has brought a lot of positive attention to the military at a time when a lot of the media is focused on the negative. I can’t stress how proud I am of Angie and her band mates, and I wish all of them them the best as they go forward.

Air National Guard Bands Facing Budget Cuts

Unfortunately, they may soon be going in separate directions. Budget cuts are taking their toll, and 6 ANG bands, including Sidewinder, will get the ax by 2013. It’s an unfortunate side effect of troop draw downs and budget cuts. One fan set up an online petition to keep the bands going but it didn’t gain enough signatures to be elevated. Even if it had, it may not have been enough.

The military bands, in all branches of the military, perform a special service for troops. I recall seeing the bands and other MWR shows perform while I was deployed in Qatar and Afghanistan, and recall the effect the performances had on me. I also remember the experience of being a member of Tops In Blue as we traveled and performed throughout the Middle Eastern region, including performing in a bombed out building in Afghanistan less than a year after September 11th. Troops were perched on armored personnel carriers, on top of flat bed trailers, or sitting on pallets of military equipment. The breaks between the songs were filled with the sound of distant mortars and machine gun fire. There wasn’t a dry eye in the house by the time we closed the show with “God Bless the USA.” Even the full bird Colonel standing next to me didn’t try to hide his tears.

There is a reason these bands and other military groups exist – and it is for the morale of our troops who are stationed in places most performers don’t want to go. I understand the bean counters in Washington see these bands as an easy way to cut funds, but I doubt most of them have been to places where they are really needed.

The Music Will Go On…

I know the members of Sidewinder and the 5 other bands which are being disbanded will continue to perform music. It’s part of who they are, and I wish them all the best in pursuit of their personal and professional goals. There are also other military bands and performance groups which will continue to visit the deployed locations and serve as morale boosters for the troops. I just hope this cut doesn’t lead to another cut, which leads to another cut, until the bands are gone. Military bands are a tradition, and they should be preserved.

Find More of Angie Online

This article is about military bands in general, not just Angie. But if you are interested in learning more about her, you can find her online at the following locations:

Best of luck to, Angie, Sidewinder, and all the military bands out there. Thanks for being such an inspiration to hundreds of thousands of troops, and millions of others across America and around the world!

Photo credit: The U.S. Army

How to Add or Remove a Dependent from VA Compensation Benefits

Military veterans with a service-connected disability rating of 10% or more are often eligible to receive VA disability compensation benefits. Veterans may be eligible to receive a higher compensation rate if they are rated at 30% or higher and have one or more dependents, including a spouse, child, or a parent in their care. Veterans with a service-connected disability rating of 20% or lower are not generally eligible for additional payments, except in limited circumstances.

Add a Dependent to VA Disability Compensation Claim

How to Add or Remove a Dependent from your VA Disability Compensation Claim

The status of your dependents is recorded by the VA when they process your initial disability compensation claim, but they are not able to automatically make changes to your dependent’s status. It is up to you to notify the VA when something changes which affects the eligibility of your dependents – this can include both adding or removing one or more dependents from your VA disability compensation benefits. Some reasons for these changes in dependents status include a birth, adoption, or death, marriage or divorce, a child no longer being eligible due to age restrictions, marriage, or other restrictions, adding a parent to your claim, etc.

When these changes occur, you need to contact the VA with this information so they can update your file. Keep in mind this may either increase or decrease your compensation rate, and in some cases, the benefits will be back dated to the effective date. This can result in an overpayment in which the recipient has received more money than they were eligible for, or they could receive a higher one time payment to make up the shortfall. The sooner you notify the VA, the better. It’s also important to note that when adding a child due to a birth or adoption, you need to wait until you have their Social Security Number before filing your claim. So you may need to wait a couple months from the time of birth before you can add your new dependent.

Change Declaration of Status of Dependents for VA Compensation Benefits

There are two ways to change the status of your dependents:

  • Paper via VA Form 21-686c, Declaration of Status of Dependents, or
  • Electronically via VONAPP

VA Form 21-686c, Declaration of Status of Dependents. VA Form 21-686c is a two page paper form, which according to the VA, should take approximately 15 minutes to fill out. The form is fairly straight forward, and requests the standard information, such as the veteran’s personal information and VA File number, marriage status, information regarding your unmarried children, including their name, SSN, age, schooling status, etc. Then you simply need to sign the form and mail it in to the VA center which handles your claim.

You can download the form here: VA Form 21-686c (pdf).

VONAPP. The VA is making an effort to move more features and services online, which is faster and less costly in the long run. That is where Veterans On Line Applications (VONAPP) comes in. Veterans are now able to use VONAPP to apply for VA compensation, pension, education, vocational rehabilitation and employment, burial benefits, and more. Veterans can also use this online tool to update the status of their dependents, file claims for increases in service-connected disabilities, add disabilities, and more.

Questions about submitting online forms:

  • Should I file a paper form and via VONAPP? No – choose one or the other. The electronic form may be processed more quickly, provided all the information is complete. Otherwise, there is no difference between the forms, and submitting multiple claims can delay the process.
  • How do I sign it? Some forms require veterans to certify the information they entered is accurate – this serves as your signature. VA Form 21-686c is included in this list of forms which can be “electronically” signed.
  • How do I follow up with my claim? The VA automatically sends an e-mail when they receive your claim, and another when your claim is downloaded and the claim is being processed. The information includes your name, date of submission, and which regional VA office received your form (including their contact information). You should contact the regional VA center which is processing your claim for more information or updates on the status of your claim.
  • More VONAPP Claims FAQs.

Find more information at the VONAPP Home Page.

Want to learn more about filing your claim online? Check out our tutorials on how to create a VONAPP account and how to file a claim with VONAPP.

I can’t stress enough how important it is to file these changes as soon as they occur. The last thing you want to happen is to receive an overpayment to your VA compensation benefits for several months, only to have the money deducted from future payments.