National Guard and Reserves Retirement Benefits Guide (Podcast 011)

The Military Wallet Podcast on iTunesToday’s article and podcast both cover National Guard and Reserve retirement benefits. Retiring from the Guard or Reserves has some similarities to an active duty retirement, but there are some very important differences, including when you will receive your military pension, how much you will receive, when you will receive health care coverage under TRICARE, and a few other important differences.

National Guard and Reserves Retirement Benefits GuideThe podcast and this guide both feature excellent information for current members of the National Guard or Reserves, Gray Area Retirees (members of the Guard or Reserves who have reached retirement, but haven’t reached age 60), and active duty servicemembers who aren’t sure if they will remain on active duty through a full retirement. Military retirements can complicated, so you might even learn something if you already a retired Reservist or Guard member!

Note: If you haven’t considered joining the Guard or Reserves, we have a previous podcast that discusses Joining the Guard or Reserves. There is a lot of great information in both that podcast and article, and this podcast and article.

In our interview, and in this guide, you will learn more about:

  • How to qualify for retirement from the Guard or Reserves
  • Why age 60 is an important birthday for Guard and Reserve retirees
  • Earning Retirement Points
  • Military retirement pension plans – 3 Types
  • How to calculate a Guard or Reserve pension
  • How your Guard or Reserve pay base can grow, even after you retire
  • The power of Cost of Living Adjustments (this is much more valuable than you think!)
  • Health care options through TRICARE
  • Base access, shopping, & activities
  • and other valuable retirement benefits.

The Military GuideFeatured Guest – Doug Nordman. Our guest for this episode is Doug Nordman, military retiree and author of The Military Guide to Financial Independence and Retirement. This book had a large impact on me and helped push me toward joining the Air National Guard after an 8 year break in service. Doug also runs a blog called The Military Guide where he writes about a variety of topics related to military benefits, veterans topics, retirement, and personal finance.

Doug retired from active duty, but his wife retired from the Reserves, giving Doug a good overview of how retirement works from both active duty, and the Guard and Reserves. He offers tips on how to maximize those benefits.

About this guide: The following article covers many of the facts in the podcast, but due to space constraints, leaves out some of the personal anecdotes, specific examples, and additional information. I recommend listening to the podcast if you have the time, and bookmarking this as a resource for future reference.

How to Qualify for Retirement from the Guard or Reserves

In general, you need to serve 20 years to be eligible for military retirement benefits. This is true for those who serve on active duty, or in the National Guard or Reserves. Members of the Guard and Reserves need 20 “Good” years, or “Satisfactory” years to qualify for a military retirement. A Good Year is defined as earning 50 or more points in a year. We will cover earning points in just a moment.

Exceptions to the 20 year rule: There are some situations when you may be eligible to retire a little early. One example is the Temporary Early Retirement Authority, or TERA, which is often used during periods of Force Shaping and Reductions in Force (RIF). Under TERA, some servicemembers are eligible to retire with as few as 15 years of active duty service. However, they also receive a smaller pension, both based on years served, and because there is a multiplier used that decreases the final pension calculation. Other exceptions for early retirement can be made for medical reasons, or under some other limitations. But in general, we are working with the assumption that it takes 20 or more years of service to be eligible for a military retirement.

The Importance of Reaching Age 60

Turning 60 is an important birthday for Guard and Reserve retirees. This is the age when Reserve Component retirees become eligible for all military retirement benefits, including pay and health care. Prior to age 60, retired Guard and Reserve members are only eligible for certain retirement benefits, including base access, shopping at the Commissary and Exchanges, and certain other benefits. These retirees are often referred to as “Gray Area” Retirees. You will hear this term often.

Here are some important age-based notes for National Guard and Reserve retirees:

  • Gray Area Retirees – Under Age 60. Retired members of the Guard or Reserves who are not yet eligible for full military retirement benefits, most notably the pension and health care benefits.
  • Full retirement benefits – Age 60+. Once you reach age 60, you are eligible for all retirement benefits. This includes the military pension and health care benefits.
  • Early Guard or Reserve Retirement Pay. Some members of the Guard or Reserves are eligible to receive their retirement pay earlier than age 60. However, they still have to wait until age 60 to begin receiving health care benefits through TRICARE Prime (see below for more information about health care in retirement).
  • Early Retirement Eligibility. Early retirement pay can be earned by serving at least 90 days on active duty during a fiscal year after January 28, 2008. You can receive your retirement pay 90 days early for each qualifying 90 day activation (but no earlier than age 55). Here is an article that explains early retirement benefits in more detail.

Earning Retirement Points

As mentioned in the previous section, members of the Reserve Corps need 50 Points in a year to earn a Good Year toward retirement.

Members of the Guard and Reserves earn 15 participation points each year and they earn points for serving: 1 Point per Drill Period, and 1 Point for each day on active duty. Each Drill Weekend actually has 4 Drill Periods. Guard and Reserve members have a morning drill, and an afternoon drill, each 4 hours long. So a typical Drill Weekend is worth 4 Points toward retirement.

Points can also be earned through AT days (two week required annual training), being called to active duty for training, being mobilized, deploying, serving in the Honor Guard for military funerals, and by completing correspondence courses. Not all activities that earn Retirement Points also earn pay at the time you earn the points. For example, completing correspondence courses might be required to progress in your career and they earn you points toward retirement, but you may or may not be paid for completing the course. However, doing so is in the best interest of your career.

In any given year, a member of the Guard or Reserves can expect to earn around 75 points or more, depending on Drill participation, annual training participation, whether you were activated, and other factors. While there is no such thing as a “normal year” in the Guard or Reserves, a “base” year might look something like this:

  • 15 Points – Annual Participation
  • 48 Points – 12 Monthly Drills (4 Drill Periods per month)
  • 15 Points – Annual Training (this can vary based on your unit)
  • Additional Points as earned (training, correspondence courses, Honor Guard, mobilizations, etc.).

All your points are maintained by your parent service and work toward calculating your retirement pension. We will cover this in a moment. First, let’s look at how types of military pension plans and other factors used in your retirement calculations.

Military Retirement Pension Plan Types

National Guard and Reserve retirement pay is almost always referred to as “Reserve Retirement Pay” regardless of whether you served in the Guard or Reserves. It is also sometimes referred to as “Non-Regular Retirement Pay. That said, the Reserves use the same retirement plans as active duty servicemembers. The only difference is how the pay is computed. Let’s look through the different types of retirement plans, then discuss how to calculate a Guard or Reserve pension.

There are 3 Main Types of Military Retirement Pay Plans:

  • Final Pay / High Pay – for servicemembers who entered the military before Sep. 8, 1980. Final Pay uses your last pay grade to calculate your retirement pension.
  • High 3 – for servicemembers who entered the military after Sep. 8, 1980. High 3 pay takes the average of your highest three years of base pay.
  • REDUX – an elective retirement option for servicemembers who entered the military after Sep. 8, 1980. REDUX offers servicemembers a $30,000 Career Status Bonus at year 15, in exchange for a lower retirement multiple and lower COLA.

We focus almost exclusively on the High 3 Retirement Plan in the podcast because most current servicemembers and recent retirees are eligible for this plan. REDUX is not discussed other than to say not to take it (REDUX is almost never a good idea).

Military Pensions are from Your Base Pay Only

Military pensions are calculated only from your base pay. This is important to know, because military paychecks often include benefits such as BAH and BAS, and may include other incentive or bonus pay such as flight pay, sea pay, danger pay, or other special duty pays or benefits.

This can cause some sticker shock for many active duty members when they first enter retirement because their pension checks are often much smaller than they anticipated. The sticker shock may not be as large for members of the Guard or Reserves, because they are used to seeing Drill Pay checks, which don’t usually include these other benefits at the full monthly rate, and it can often be years, or even decades before the members begin receiving their pension payments.

Calculating a Natioanl Guard or Reserve Pension

Guard and Reserve pensions are calculated slightly differently than active duty pensions. Active duty pensions are calculated by multiplying the total years of service by a multiplier of 2.5% (High-3 plan). Then you multiply that by your pay base. In the High-3 pension plan, your pay base is the average of your highest 3 years of pay (rough rule of thumb – that will equal about 95% of your final pay).

Guard and Reserve pensions are calculated in a similar manner, but there is an intermediate step that must be completed before you can calculate the final pension. We must first convert Points into years served. To do this, add up all your Points, then divide by 360. This gives you the total number of years served (the military calculates a month as 30 days to make the math easy; so each year served is 12 months at 30 days each, for a total of 360 days).

So take your total number of days served, and divide by 360, then multiply that by 2.5%. Here is a quick example: Say you have 3,150 points. Divide that by 360, then multiply by 2.5%. You get (3,150/360) * 2.5% = 21.875%. Now multiply that by your pay base (average of your high 3 years of salary).

Get a More Precise Estimate of Your Pension: Every service has an online retirement calculator that allows you to put in very granular information, including your Date of Initial Entry Into Military Service (DIEMS), your estimated retirement date, and other factors. It’s important to note that these calculators are often password protected and you need to login to your branch website get this information.

Your Guard and Reserve Pay Base Continues to Grow After Retirement

There is a little known fact about National Guard and Reserve retirement pay. Depending on how you retire from the Guard or Reserves, you can continue earning time in grade and longevity toward retirement. That means the value of your retirement can keep pace with military pay raises and inflation while you await retirement pay. But only if you choose to retire under the right classification.

Congress gives you the option of retiring awaiting pay, or resigning from the military.

Retired Awaiting Pay: Retiring Awaiting Pay is the better option from a financial perspective, but it comes with a (slight) risk. Technically, you are still eligible to be recalled to active duty in the even of a full mobilization. However, it would take a full mobilization of the entire military for you to be recalled from retirement. This is extremely rare, and didn’t even happen post-9/11.

Here is the pay off – while you are retired awaiting pay, your clock is still running on your longevity and time in service. So if you retire awaiting pay as an E-7 at 20 years, your clock keeps running to the maximum for that rank, which is 26 years of service. So you get pay increases for 6 more years in service, just for being on call. To top it off, you will receive the pay scale in effect when you turn 60, not the pay scale when you retire. So your pay has the potential to increase substantially while you wait to turn age 60.

Resigning from the Guard or Reserves: This has no risk of being recalled, however, resigning from the military will lock in your retirement check with the years of service and the pay scale in effect the year you retired. This can have a hugely negative impact on your pension, especially if you have a couple decades to wait before turning age 60!

Retired Awaiting Pay is the Way to Go! Retired members of the Reserve Corps haven’t been involuntarily recalled to active duty since WWII. Yes, it is possible to be recalled, but the odds are very small. And the financial gains can be huge.

COLA Adjustments

Your military pension is indexed for inflation through Cost of Living Adjustments (COLA). Military pensions are tied to an annual COLA based on the Consumer Price Index, or the average cost of inflation over a variety of consumer goods. This varies from year to year. In some years there is no COLA increase to retirement pay, and in other years it could 1%, 2%, or even higher.

Many people underestimate the value of these pay raises. While 1% or 2% seems like a small pay increase, these are cumulative, and they add up quickly. For example, Doug shared that his military pension has increased 27% over the last 12 years, just from COLA increases. 27% is huge!

It’s important to understand that while your pension will increase over time, it should be enough to roughly keep pace with inflation. So while the dollar amount is a lot larger, the purchasing power should be similar as when you retired. However, this is an incredibly powerful benefit, because most civilian pensions plans aren’t indexed to inflation.

Guard and Reserve Health Care in Retirement

Retired Guard and Reserve Health Care OptionsMembers of the Guard and Reserves have different health care options than active duty servicemembers and active duty retirees. While still serving in the National Guard and Reserves, members are eligible for TRICARE Reserve Select (TRS), which is a premium based health insurance program. It’s cost is very affordable, coming in at roughly $50/mo for a member, or around $205/mo for a family plan. However, you lose TRS eligibility when you retire or otherwise leave the Guard or Reserves.

Your health care options in retirement depend upon your age (Gray Area Retirees are not eligible for TRICARE Prime or Standard), where you live, and other factors. Here are the basics (and we have a full-length article listed at the end of this section which gives much more information).

  • Retiree health care options – under age 60. Gray Area Retirees are eligible for TRICARE Retired Reserve (TRR), which is similar to TRICARE Reserve Select, without any subsidies. The retiree must pay 100% of the premiums if they wish to participate in the plan. TRR premiums are roughly $361/mo for the individual, and about $961/mo for a family plan. Other health care options include employer-sponsored health care plans, or an individual health care plan, such as those you might find on the health insurance exchanges. eHealthInsurance.com has a lot of great options.
  • Retiree health care options – age 60-65. Guard and Reserve retirees become eligible for TRICARE Prime at age 60. This is the same health insurance plan open to active duty military members and retirees. However, retirees are only eligible for TRICARE Prime if they live within a certain distance of a military installation or regional health care center. If the retiree lives out of the area, they would only be eligible to receive TRICARE Standard.
  • Retiree health care options – age 65+. At age 65, Reserve Corps retirees are eligible to receive TRICARE for Life, which is a Medicare Supplemental Insurance Program. There are no monthly premiums for this plan.

Which plan is the best? This is where it’s a good idea to listen to the Podcast episode. Doug goes into each of these plans in more detail, and explains the associated pros and cons of each plan. Additionally, you can contact a TRICARE Ombudsman who can help you decide which plan is best for your situation. There should be one at each Military Treatment Facility, or you can contact TRICARE, and they will have someone explain things to you and help you choose. Finally, we have a full-length article discussing Retired Guard and Reserve health care options.

Additional Health Care Info Covered in the Podcast:

  • Health care for dependents
  • What if you don’t live near a Military Health Care Facility?

Other Retirement Benefits

Doug and I discuss other military retiree benefits, including access to base facilities such as the:

  • Commissary
  • Base Exchanges
  • Gyms
  • Hobby activities where available, such as the Auto Hobby Shop, Woodworking Shop, MWR facilities, movie theater, etc.

These base activities can be a great way to save money, participate in hobbies, and continue to be a part of the military community.

Military Hops – Space-A Travel: Military hops and Space-A travel are another topic we discussed. These can be a great way to see the world on the cheap. Basically, flying Space-A allows you to jump onto a military transport if there are available seats. You pay a nominal fee (usually only a few dollars). You can often find trips going all over the world, and many of the flights go out on a regular basis. There are some downsides, however. Because you are flying on a space-available basis, you may not be able to get the flight at the day or time you want. Flexibility is the key if you use Space-A travel!

There are a few differences for Space-A availability for Guard and Reserve retirees. The member is eligible to fly Space-A if they are a Gray Area retiree, but their dependents may not be eligible until the servicemember reaches age 60, which is when their retirement is on par with an active duty retirement.

Benefits for Spouses & Dependents

Benefits for your dependents, including your spouse and children, are similar going to be similar to when you were on active duty, with the exception of your health care which will depend upon your specific situation (whether you are eligible to use TRICARE Prime, or are required to use Standard). Spouses and Dependents still maintain base access and access to the Commissary, Exchanges, MWR facilities, and other base activities.

Did we miss anything? Military retirement is a huge topic, and we tried to cover as much as we could in the 40 minutes or so that we talked. I also did my best to get the main points down on paper for those who prefer to read. Please leave a note in the comments if we missed anything and we’ll address it. Thanks!

Retired Guard and Reserve Health Care Options – TRICARE & Private Health Insurance

Retired Guard and Reserve Health Care OptionsMembers of the Guard and Reserves have different health care options than active duty servicemembers and active duty retirees. While still serving in the Guard and Reserves, members are eligible for TRICARE Reserve Select, which is a premium based health insurance program. It’s cost is very affordable, coming in at roughly $50/mo for a member, or around $205/mo for a family plan.

There are very reasonable annual deductibles, coming in at $150 for an individual, and $300 for a family. The maximum out of pocket cost (also referred to as the Catastrophic Cap) is also very reasonable, coming in at $1,000 per family, per fiscal year. These rates are much more affordable than many plans you will find through an employer, and are much lower than what you would find on one of the health care exchanges (the maximum out of pocket expenses for plans on the exchanges often range from around $6,000 for an individual, up around $12,600 for a family plan).

Unfortunately, once you retire from the Guard or Reserves, you lose access to TRICARE Reserve Select. You can still participate in a TRICARE health care plan, but you would have to transfer to another plan. Let’s take a look at some of your health care options once you retire from the Guard or Reserves.

Note: Click here to learn about your health care options after leaving active duty.

Guard and Reserve Health Care Options in Retirement

Retired members of the Guard and Reserves have several retirement plans available to them, depending upon their age, and believe it or not, where they live. Let’s break this down by age, because it isn’t until age 60 that retired members of the Reserve Corps are eligible to receive TRICARE Prime, the same military health care offered to active duty retirees. Prior to age 60, retired members of the Reserve Component are referred to as “Gray Area Retirees” because they are eligible for some military retirement benefits, but not all of them (notably the pension and TRICARE Prime).

Retiree health care options – under age 60. Once a member retires from the Reserve Component, he or she loses access to the subsidized TRICARE Reserve Select plan. They become eligible to participate in the TRICARE Retired Reserve plan, which is similar to TRICARE Reserve Select, but without any subsidies, and a higher Catastrophic Cap. The retiree must pay 100% of the premiums if they wish to participate in the plan. And it’s fairly expensive, at least compared to what you may be used to. Without subsidies, TRICARE Retired Reserve comes in at roughly $361/mo for the individual, and about $961/mo for a family plan. The Catastrophic Cap for TRICARE Retired Reserve is $3,000 per family, per fiscal year. This is more expensive than TRICARE Reserve Select, but it may or may not be more affordable than anything you can find through an employer or on one of the health insurance exchanges.

Non-military health care options – under age 60. It may pay to shop around for less-expensive health insurance if you find the premiums for TRICARE Retired Reserve to be too expensive. The obvious choice is to check with your employer if they offer health insurance. You may be also able to find a less-expensive health care option on the Health Care Exchanges. eHealthInsurance.com has a lot of great options on the Exchanges (this is where I go to find my health insurance).

Instant Health Insurance Quotes

Retiree health care options – age 60-65. Guard and Reserve retirees generally aren’t eligible to receive health care benefits until they turn age 60, at which time they would be eligible for TRICARE Prime, which is the same health insurance plan open to active duty military members and retirees. This includes access to health care at a Military Treatment Facility on a space-available basis. However, retirees are only eligible for TRICARE Prime if they live within a certain distance of a military installation or regional health care center. If the retiree lives out of the area, they would only be eligible to receive TRICARE Standard. TRICARE Prime and Standard both have monthly premiums, and associated copays, but there are some important differences.

Retiree health care options – age 65+. At age 65, Reserve Corps retirees are eligible to receive TRICARE for Life, which is a Medicare Supplemental Insurance Program. There are no monthly premiums for this plan.

*Retirees living overseas. I recommend you contact the TRICARE customer service line to find the best option for you. There are different rules and programs for retirees living overseas, and each situation is unique.

Finding the Right Plan for You

Your choice can almost be made for you, depending on your age, and where you live. The biggest question mark for most people is how to handle health insurance coverage as a Gray Area Retiree. If you find yourself in this situation, I would sit down and compare TRICARE Retired Reserve with the options available through your employer, or through one of the health care exchanges (eHealthInsurance.com lists everything you will find on the exchanges, but in my opinion has a more user-friendly interface and better tutorials that explain your options).

Once you reach age 60, it makes sense to go with TRICARE Prime or Standard. Once you reach age 65, you are no longer eligible for Prime or Standard, and must move to TRICARE for Life if you wish to continue receiving health care through the military.

More help is available: You can always contact a TRICARE Ombudsman who can help you decide which plan is best for your situation. There should be one at each Military Treatment Facility, or you can contact TRICARE, and they will have someone explain things to you and help you choose.

Here are some plan details, and links to the website:

TRICARE Reserve Select – Premiums (~$50/ mo for member; ~$205 for family plan):

TRICARE Retired Reserve – Premiums (~$391/ mo for member; ~$961 for family plan):

  • Available to Retired members or the Guard or Reserves
  • Equivalent to TRICARE Reserve Select, however, there are no premium subsidies, so you pay entire cost of premiums.
  • Available until age 60, at which time you are eligible to TRICARE Prime or Standard
  • Link to TRICARE Retired Reserve website.

TRICARE Prime – Premiums ($50/ mo for member & dependent):

  • $12 copay off-base
  • MTF – space available, but no Copay
  • Prescriptions
    • Formulary – free
    • Local pharmacy – variable
  • Only available until age
  • Only available within 40 miles or 30 minutes from a military base (cost-cutting measure) There are waivers for this.
  • Link to TRICARE Prime website.

TRICARE Standard:

TRICARE for Life age 65:

Hopefully this helps you understand your options and points you in the right direction!

2015 Military Pay Dates – Active Duty, Guard, and Reserves

One of the first steps in creating a budget is knowing how much money you have coming in, and when. That’s why it’s important to know when you get paid. In general, military pay dates are easy to remember: you usually get paid on the 1st and 15th of each month.

Military Pay DatesThere are exceptions when those dates fall on a weekend or holiday. In those cases, you would get paid on the weekday preceding that weekend or holiday. So if your pay date would be on Sunday the 15th, you would actually receive your pay on Friday the 13th. (I guess sometimes Friday the 13th can be lucky!).

Pay Periods: You get paid for the previous work period. In this case, you get paid on the 15th for work from the 1st – 15th of the month. The pay on the 1st of the following month is for work done from the 16th – the end of the month.

What about partial months? The military considers a month to be 30 days long – this makes it easier for calculating pay and benefits for a partial month of service. So each day of pay is worth 1/30th of your monthly pay and benefits. If you only work part of a pay period you would receive 1/30th of your normal pay and benefits for this period. This is important to know for those times when you PCS, are away on an extended TDY or deployment, or when you separate or retire from the military.

Tracking Your Pay and Benefits:

The military gives service members two forms to track and understand their pay and benefits: Leave and Earnings Statements (LES) and Net Pay Advice (NPA). These can be viewed or downloaded from your myPay account. It’s not a bad idea to keep a copy of these forms to ensure accuracy of your pay and benefits.

Here is the information found on these forms:

  • LES: Everything you need to know about your pay and benefits should be found on your LES. It includes your end of month pay information, including gross pay, net pay, state and federal taxes paid, Thrift Savings Plan contributions, other pay & benefits (including BAH, BAS, Per Diem, tax-free pay, Family Separation Pay, Hazardous Pay, bonuses, and other pay and benefits), Days of Leave, and more.
  • NPA: Mid-month pay information.

2015 Military Pay Dates

Here are the military pay dates for 2015, including the day you should receive your pay, and the dates your Leave and Earnings Statements (LES) and Net Pay Advice (NPA) should be available through myPay.

Pay PeriodMid-Month Pay DayNPA AvailableEnd-of-Month Pay DayLES Available
January 2015Jan. 15Jan. 8Jan. 30Jan. 23
February 2015Feb. 13Feb. 6Feb. 27Feb. 20
March 2015Mar. 13Mar. 6Apr. 1Mar. 25
April 2015Apr. 15Apr. 8May 1Apr. 24
May 2015May 15May 8June 1May 25
June 2015June 15June 8July 1June 24
July 2015July 15July 8July 31July 24
August 2015Aug. 14Aug. 7Sep. 1Aug. 25
September 2015Sep. 15Sep. 8Oct. 1Sep. 24
October 2015Oct. 15Oct. 8Oct. 30Oct. 23
November 2015Nov. 13Nov. 6Dec. 1Nov. 20
December 2015Dec. 15Dec. 8Dec. 31Dec. 18

The above military pay dates are applicable to all branches of the military, including the Air Force, Air Force Reserves, Air National Guard, Army, Army National Guard, Army Reserves, Marine Corps, Marine Corps Reserves, Navy, Navy Reserves, Coast Guard, Coast Guard Reserves, and the Public Health Service.

The Guard and Reserves are listed with the same pay dates: this only applies to those who are serving in the active Guard or active Reserves. Those who serve as Traditional members of the Reserve Corps may have different pay dates for their drill duty or their AT days.

When Will I Receive My Military Paycheck?

Your Military paycheck will normally be available on your payday. However, it may be available a day or two earlier or later, depending on your financial institution. For example, some Military Banks offer military deposits a day or two earlier than the actual pay date. This is common with Navy Federal Credit Union (if you use the Active Duty Checking Account) and USAA Federal Savings, among others. Here is the pdf with the NFCU pay days. Here are the dates military paychecks are available through USAA.

Top Military Banks: Here is our list of the top military banks and credit unions. You may consider choosing to bank with one of these financial institutions if receiving your pay earlier is important to you.

BAH Rate Cuts: 99% BAH – The New Reality & The Future of BAH

BAH Rate CutsThe DoD recently announced the there would be BAH Rate cuts in the 2015 budget. Instead of the 100% BAH rate which has been the norm since 2005, the Department of Defense announced they would reduce BAH to 99% of expected costs. This is part of a larger, long-term goal of implementing BAH Rate cuts to cover only 95% of expected costs.

Don’t fret about this change yet. BAH Rate Protection protects your BAH Rates, so you shouldn’t see an immediate decrease in your BAH check each month, except under a few circumstances, which will will cover in a bit. Let’s take a look at the new 99% policy, why it has come to be, and discuss BAH Rate Protection.

Why Move to 99% BAH?

The DoD, along with the rest of the government, is hurting for money. They are looking for places to cut back spending. And since BAH affects majority of the military population, it is a prime target for cuts. This 1% cut is expected to save the government approximately $200 million per year.

The 2015 defense budget called for plans to cut BAH to 95% of expected costs over the next several years. So this is only the first step. While many servicemembers and their families will start seeing more money out of pocket in the coming years, this is still a much better situation than the 1990’s, when BAH only covered 80% of expected housing costs.

BAH Rate Protection

We have a full-length article covering BAH Rate Protection, but here are the basics. Your BAH Rate is protected from the time you arrive on your installation, until you leave, with the exception of three circumstances:

  • Permanent Change of Station (PCS)
  • Reduction in paygrade
  • Change in dependent status

In other words, your BAH rates can only increase, not decrease, unless you move to another base via a PCS, you receive a reduction in paygrade, or your dependent status changes from with dependents to without, or vice-versa. For the rest of your assignment, your BAH will be the higher of the published BAH Rate on January 1, or the BAH Rate you held on December 31 of the previous year.

I will say it again: Your BAH Rate will not drop during the middle of your assignment, even if the rates for your location decrease in any given year.

Note about a PCS moves: If you live in an area with two bases close to each other and you receive a permanent change of station assignment to the other base, you could possibly remain in the same home, but still face a decreased BAH because it would officially be a PCS move.

How Much Will This Cost Me When I Move?

At the time of this publication, the DoD hasn’t announced exactly how the cuts will take place. They could do one of several actions, including decreasing BAH 1% across the board, calculating the total cuts across the entire DoD and applying an average cut to everyone who receives BAH, or some other calculation.

Andrew Tilghman of the MilitaryTimes reported,

“Military officials do not want to create a new incentive for troops to prefer rural areas over costly urban ones, so it is likely that the Pentagon will calculate some sort of single across-the-board cut for all BAH checks.

For example, they might take the average of all 1 percent reductions nationwide and use that to determine a single dollar amount to shave from every BAH check. For example, regardless of the location and actual BAH rates, each service member may face a reduction of about $200 a year.”

Let’s look at an example: We’ll look at two different BAH rates for an E-5 with dependents. The first is the rate used for the Post-9/11 GI Bill when you take classes exclusively offered online (in-residence classes are based on the ZIP code for your school). The other BAH Rate is an E-5 in Chicago, chosen to illustrate the difference in a high-cost of living location:

  • E-5 with Dependents Rate (non-location, used for Post-9/11 GI Bill): $714.50, *99% = New Rate of $707.36, a difference of $7.14/month, or $85.68/year
  • E-5 with Dependents Rate (Chicago): Current Rate: $1,977.00, * 99%, New Rate = $1,957.23. Difference of: $19.77/month, or $237.24/year.

When put in the context of a monthly cut, $7 – $20 is noticeable, but not a massive cut. Especially if you don’t see it due to BAH Rate Protection. When you PCS to your next base, you should have a good idea of the BAH in your new area and can use that BAH when setting your budget for your new location.

BAH Rates Can and Do Change for Other Reasons

It’s also important to note that BAH Rates change when cost of living in a local area changes. In general, the BAH should increase as the cost of living increases, and the BAH may decrease when the cost of living in an area decreases. Falling BAH Rates were common after the real estate markets crashed in 2007-2009. This is when BAH Rate Protection was helpful for many servicemembers. It’s also possible that you may see increased BAH payments, even with BAH paid out at 99% of the calculated rate. The important thing to remember is that your BAH Rates should not decrease, regardless of what happens to the published rates. Your rates should only increase throughout the duration of your tour.

What is the Future of BAH?

Right now, we can only go from the information we have at hand, which is from the recent budget talks. The DoD wants to decrease BAH to 95% of the actual cost of housing, but Congress limited to cut to 1%. This 1% decrease could just be the first step. Right now we don’t even have the full picture on the implementation. But going forward I would expect the decreases to continue on an annual basis for the near future. The DoD won’t implement the full 5% overnight, and the BAH Rate Protection should protect a large portion of servicemembers over the next few years. The largest impact to most servicemembers probably won’t be felt for the next couple years.

BAH Rate Protection – What You Need to Know About BAH Changes

Each year the DoD adjust BAH Rates across the board. They use a host of information to calculate how much they should provide servicemembers. In some locations BAH Rates increase, and in others they decrease.

BAH Rate Protection RulesThankfully, the BAH Rate Protection policy ensures your BAH rate won’t decrease in the middle of your assignment, even if BAH Rates for your location decrease. This is important to know, with the recent news that the DoD is decreasing BAH to 99% of the expected cost of housing in your area.

Let’s take a look at BAH Rates and how the BAH Rate Protection policy maintains your BAH rates, even if they decrease in your area.

How BAH Rates Are Calculated

Determining BAH Rates is actually a fairly complicated process, so we will simplify it to the basics here. You really need to know two things: how the data is collected, and how it is processed.

BAH data is based on rental prices, the cost of utilities, and the price of renter’s insurance. Rental costs are collected on apartments, townhouses/duplexes, and single-family rental units of varying bedroom sizes. This information is then mashed into a complex formula that is designed to give service members housing based on their pay grade and dependent status.

The process is a bit complicated and is repeated each year. Sometimes the BAH rates increase, other times they decrease.

You can learn more about BAH Rates in the DoD BAH Primer, a 13 page pdf which explains everything in detail.

BAH Rate Protection

The good news is you shouldn’t see your BAH Rate drop during the middle of your assignment, even if the rates for your location decrease in any given year. There are certain exceptions to this rule, which we’ll cover in just a moment.

Individual BAH Rate Protection: This prevents decreases in your housing allowance, as long as your status doesn’t change. Servicemembers are entitled to the greater of the published BAH rate on January 1, or the BAH they were paid on December 31 of the previous year. This rate protection is in place from the time a servicemember arrives on an installation until the status of the servicemember changes due to:

  • Permanent Change of Station (PCS)
  • Reduction in paygrade
  • Change in dependent status

Two important notes: The Change in dependent status on means “with dependents” or without dependents,” not the number of dependents. So you won’t see a BAH decrease if you have another child or if one of your children moves out of your home (provided you still have dependents).

Receiving a promotion also doesn’t hurt your BAH, only a reduction in pay grade will potentially decrease your BAH. So if you are promoted in a given year, you should be eligible for an increased BAH, again using the higher of the BAH Rate on January 1 of the given year, or the previous protected rate.

Summing Up BAH Rate Protection

To sum it up, BAH Rate Protection ensures that servicemembers will receive published increases in BAH Rates, but not decreases, unless any of the 3 previously mentioned conditions apply. Decreased BAH Rates should only affect servicemembers who PCS into a new area, have a change in dependency status (change from with dependents to without, or vice-versa), or to those who receive a reduction in pay grade.

Should You Join the National Guard or Reserves? (Podcast 009)

The Military Wallet Podcast on iTunesWhen I separated from active duty, I was burned out. I served for 6.5 years, during which I completed 5 deployments and a year long special duty assignment with no fixed base (I lived out of a suitcase for a full year). During my career, I literally spent more time away from home station than at home station. I needed a break, and joining the Guard or Reserves was the last thing on my mind.

Several years after leaving the military, I came around to the idea of serving again.  Earlier this summer, after an 8.5 year break in service, I joined the Air National Guard. And I love it. And I’ve learned that joining after a long break in service isn’t that uncommon.

Join Guard or Reserves

Should you join the National Guard or Reserves?

In today’s podcast we discuss joining the National Guard or Reserves. Joining the Guard or Reserves certainly isn’t for everyone. But there are many benefits to joining, including pay, access to affordable health care, education benefits, working toward a retirement pension, and one of the most important for me – being part of the military mission again.

Rob AeschbachJoining us in our podcast is a special guest, Rob Aeschbach. He is a retired Marine officer (12 years on active duty, and 10 years in the Reserves). Rob is a financial planner in the VA area. His financial planning practice focuses on helping military members and their families. If you wish to learn more about Rob, or get in touch with him, you can find him at the following online locations:

Rob was also our guest for podcast #3 – Podcast 003: Force Shaping and Involuntary Separations – How to Handle Being Laid Off from the Military.

Should You Join the Guard or Reserves?

I’ll start this off by saying this podcast and article aren’t trying to recruit you. I’m excited about the Guard and Reserves because I recently joined the Guard. But I’m also excited because I had many misconceptions about the Guard and Reserves. And to be honest, I think many active duty members do. Our goal is to help you look at the option of joining the Guard or Reserves in a different light. I was someone who dismissed the Guard and Reserves without a second thought – primarily because I was burned out from active duty. Today, I’m grateful I gave the idea a second chance.

Let’s discuss some of the benefits, pros & cons, and misconceptions about serving in the Guard and Reserves.

What Are the Guard and Reserves?

In short, the National Guard and Reserves are a reserve component designed to back up the active duty military. Members of the Reserve Corps typically work on a part-time basis in order to maintain proficiency in their career field.

Both the Guard and Reserves are very similar, but members of the National Guard and Air National Guard can be called upon by their state governor for civil relief actions, such as natural disaster relief, to help with terrorism threats, riots, etc. Guard and Reserve members can also be called upon by the Federal government to relieve active duty members, fulfill deployment needs, and more.

Similarities of Guard and Reserves:

  • Both serve in reserve capacity for active duty
  • Typical service requirement = One Weekend a Month, Two Weeks a Year

Difference between Guard and Reserves:

  • Guard = State Mission that can be called to both state and federal missions, depending on the orders.
  • Reserves = Federal Mission.

Your Commitment: 1 Weekend a Month, Two Weeks a Year

This is more or less your commitment when you join the Guard or Reserves. But you may find that your requirements may vary by unit. If you are prior service you may be able to join for as short a time period as 1 year. Or you can join for up to 6 years, or longer, depending on your contract.

Most Guard and Reserve units drill the first full weekend of the month, and have a two week Active Training (AT) period each year in which the entire unit drills. Some Guard units have a little more flexibility. For example, my unit has two 3 day drill weekends during the year, and we take one month off in the summer. This is a little more friendly for vacation time.

Individual Mobilized Augmentees (IMA) in Reserves: The Reserves also have IMA slots in which members are able to backfill active duty slots on an as-needed, volunteer basis. IMAs typically don’t have the traditional one weekend a month, two week a year schedule. The benefit is a little more flexibility, and ability to write your own ticket.

You’ll hear more about this in the podcast, where Rob discusses some of the benefits of having an IMA slot.

Guard & Reserve Drill Pay

Members receive Drill Pay based on the days they serve. Pay is based on the active duty pay scale. However, pay is based on the time you serve. Let’s break down the pay for Guard and Reserve members that works the “one weekend a month, two weeks a year” schedule.

For each Drill weekend, you actually get paid for 4 drills, or 4 days of work, even though you only work 2 days. The pay for each drill is 1/30th of the base pay for your rank and years of service. The reason you get paid for two days of work, even though you only work one day is because you don’t receive pay for BAH and BAS when you are on Drill Duty.

You do receive BAH and BAS on the days you serve your annual AT days (your two weeks of annual training). However, you will receive Reserve Component BAH (or Non-Locality BAH), not BAH for your location. You can find this here.

How much will you get paid?  It depends on your rank and time in service, of course, but you should make several thousand dollars per year. Many servicemembers volunteer for extra days and can easily bring in over 5-figures per year in additional income. Here is a list of Guard and Reserve Drill Pay charts, or you can use the NationalGuard.com Drill Pay calculator.

Guard & Reserve Retirement Benefits

Retirement is based on earning 20 good years of service. Your active duty time will count toward a good year of service. And if you served a partial year of active duty, it may give you an additional year of service. For example, I extended 6 months on my active duty contract, finishing with 6.5 years on active duty. I immediately transferred into the Individual Ready Reserve (IRR) to finish my 8-year commitment. That half a year of active duty, plus the other 6 months in the IRR gave me a good year of service toward retirement. So I have 7 good years already.

What is a Good Year of Service? A good year of service equals 50 points. You will earn 1 point for each drill served (remember, you earn 4 drills per drill weekend, so 12 drill weekend per year is 48 points). You also earn 15 participation points per year, and 1 point for each day of AT time (your annual training, which is usually around 12 or 13 days per year). So you can easily earn about 75 points per year with regular service (48+15+12 = 75).

Earning additional points toward retirement. You can also earn more points for each day you serve, for performing burial duty and certain Honor Guard functions, and for completing correspondence courses, including Professional Military Education, or even non-military courses.

Retirement Benefits Start at Age 60

In most cases, retirement benefits start at age 60, including the Pension, and health care benefits. There are a couple of important points to note: you will be a Gray Area retiree until you reach age 60. During this time you will have base access, can use base facilities, and can shop at the BX, PX, NEX, Commissary, etc. You just won’t receive pay or health care until age 60.

Receive early retirement pay: In some cases you can receive your pension before age 60, provided you were activated for at least 90 days during a fiscal year after January 2008. The details are case specific, so I recommend reading more about early retirement to get all the details.

Health Care & Related Benefits

Members of the Guard and Reserves are eligible for affordable health care through the TRICARE Reserve Select program. You must be in a drilling status to be eligible for this program (not in the IRR). There is also a Dental program. Here are the rates and more information:

TRICARE Retired Reserve: You can also sign up for TRICARE Retired Reserve while you are awaiting full health care coverage when you turn age 60. These rates are unsubsidized and run approximately $390 for an individual and $961 for a family. You can learn more here.

TRICARE Prime & Standard. When you turn age 60 you will be eligible for either TRICARE Prime, or TRICARE Standard. You will be required to transition to TRICARE for Life when you turn age 65.

Education Benefits in Guard & Reserves

The Guard and Reserves offer Education benefits, including the Montgomery GI Selected Reserve (MGIB-SR). The rates for the MGIB-SR are lower than what you would earn on active duty, so you may want to look into the MGIB if you are prior service. You may also earn access to the Post-9/11 GI Bill if you are activated.

Some states have their own benefit for Guard Members: I happen to live in Illinois, which is one of the few states that offer free college tuition at a state college for members of their state Guard units. I believe there are only 5 states with a similar benefit. However, many other states offer scholarships, tuition reductions, or other benefits. Be sure to look into your state’s benefits.

Career Options in the Guard and Reserves

More often than not, you have more career flexibility in the Guard and Reserves than you do in the active duty military. I was able to change career fields when I joined the Air National Guard. It’s also not uncommon for Guard and Reserve members to work in multiple career fields during their career. Availability is dependent upon your base mission and the needs of your unit.

My recommendation is to contact the recruiter at your local unit(s) to ask which jobs are available, and what kind of promotion opportunity is there.

You may also find that you are able to fill a billet with promotion potential. Some units will allow you to serve in a billet either one pay grade above or below your current pay grade. But other units may allow you to fill a billet two grades above your current pay grade. This gives you an immediate opportunity for career advancement, provided you meet the time in grade requirements and other qualifications for promotion.

Travel Requirements

You might be surprised to know that many Guard and Reserve members travel long distances to perform their drill duty. I counted license plates from about 7 neighboring states at my last drill. This isn’t uncommon. The good news is your unit may put you up in a hotel room if you live outside of commuting distance. You won’t get reimbursed for mileage traveled, but you can claim mileage and other travel expenses on your taxes. You can also claim half the cost of your meals on your taxes. Those benefits don’t negate the cost of travel, but it certainly helps when you file your taxes.

Miscellaneous Benefits

Other benefits include base access, ability to shop on base, use base facilities, military discounts, etc. And for me, the biggest benefit is being part of the military again. I missed being part of something bigger than myself. Being part of a unit and a mission and that satisfaction that comes from a job well done.

There is a lot more covered in the podcast, so I hope you give it a listen.

To subscribe you can visit our podcast on iTunes and Stitcher Radio:

Military Forcing Some Officers to Retire with Enlisted Pay

Update: Rep. Glenn Thompson (R-Penn.) is stepping up to introduce the Proudly Restoring Officers of Prior Enlistment Retirement (PROPER) Act. The bill would modify existing discharge authority to allow military officers appointed from the enlisted ranks with at least 20 years of service to retire as an officer with only four years of service as a commissioned officer. Source: MOAA.

Very few military members remain on active duty long enough to earn a military pension. The latest numbers show that only about 17% of servicemembers reach the full 20 years required for an active duty pension. It’s a wonderful achievement and a testament to the hard work and dedication it takes to make a career of the military.

That’s why it’s disheartening to read about certain service members who are being forced out of the military due to Force Shaping. It’s difficult for anyone who is forced out of the military, particularly when they have chosen to make it a career.

Officers forced to retire with enlisted pay

Some officers are being forced to retire before reaching enough service time to retire as an officer.

Some military members are being forced to retire early under the TERA program. This is unfortunate, as many retirees under TERA wish to complete their full 20 years of service and receive their full pension (retirees under TERA take a reduced pension equal to the number of years served * 2.5%, times a reduction factor based on the number of years they retired early).

But there is one class of servicemembers who arguably have it worse than others: some officers are being forced to retire from the military, but they don’t have the minimum service time to retire as an officer.

Rules for Retiring as an Officer

The normal rules require military members to serve 10 years as an officer to be able to retire as an officer. However, due to Force Shaping, there is currently an exception written into Title 10 of the US Code (the law that governs military pay and benefits), that allows service members with only 8 years of service as an officer to retire as an officer. Here are the applicable laws (note: these showcase the Army laws, as this is affecting more Army members than other services; the laws for the other services are similar):

  • Title 10 U.S. Code section 1370: “a commissioned officer […] will “be retired in the highest grade in which he served on active duty satisfactorily, as determined by the Secretary of the military department concerned, for not less than six months.”
  • Title 10 U.S. Code section 3911: “the Secretary of the Army may, upon the officer’s request, retire a regular or reserve commissioned officer of the Army who has at least 20 years of service computed under section 3926 of this title, at least 10 years of which have been active service as a commissioned officer.”
  • Title 10 U.S. Code section 3911: “The Secretary of Defense may authorize the Secretary of the Army, during the period specified in paragraph (2), to reduce the requirement under subsection (a) for at least 10 years of active service as a commissioned officer to a period (determined by the Secretary of the Army) of not less than eight years.”

But there are many officers being let go just shy of the required 8 years. In some cases, officers are allowed to get a waiver to extend their service up to 60 days or so to reach the required service time. But others aren’t so lucky, and are being forced from the service just short of reaching the requirement time served to retire as an officer. In fact, some of them are  just months shy of reaching the required 8 years.

And the difference is huge.

Impact on Retirement

There are two major impacts on retirement. The first, is these servicemembers retire as enlisted members, not officers. Their paperwork and retiree cards will be in the enlisted ranks. The other impact is to retirement pay.

The immediate impact on the pension is obvious – these soon-to-be-retirees will be earning substantially less in their retirement checks than they would have had they been able to serve an additional year or two. I’ll give an example in just a moment. But here is the worst part: these servicemembers’ pensions will be paid based on their previous enlisted pay.

Using High-3 rules, you have to go back to their highest three years of pay at their enlisted ranks. So not only do you have to take away their Officer Pay as though it never happened, these servicemembers’ pensions will be based on old pay scales at their previous rank. To add insult to injury, these servicemembers are artificially held at their last pay grade. So someone who served as an E-7 is forever an E-7 for pay and retirement purposes, even if they became a Captain.

Let that sink in a moment. These servicemembers didn’t have the same opportunities for promotion through the enlisted ranks. Its very possible many of these officers would have been able to promote one or two times as an enlisted member. Some of them may have been able to max out their pay scale and become E-9’s.  But they weren’t given that opportunity.

Reduced Pension for Enlisted Vs. Officer:

Here is a sample based on an E-7 pay grade and O-3E at 20 years service (7 as an officer)*.

  • Enlisted Base Pay (E-7, 18-20 years service): $4,323.90
  • Enlisted Retirement: $2,161.95
  • Officer Base Pay (O3-E, 18-20 years service): $6,726.00
  • Officer Retirement: $3,363.00
  • Difference: $1,201.05 per month

As you can see, there is a large difference – an approximate cut of 35%.

*These numbers are actually rough estimates. High-3 rules average the pay for the last 3 years of service at the highest grade held. So it would be an average of these salaries and the preceding two years.

The primary benefit these servicemembers received for being officers was increased pay while they were officers (increased base pay and BAH, however they had reduced BAS and were required to pay for all uniforms out of pocket).

Additional Reading on This Topic

Being forced out of the military is difficult for anyone, regardless of how long you served. There are many who are lucky, and are simply able to retire with full benefits, even if they were forced to retire earlier than they wished. Others may have to retire with a reduced pension under TERA rules. And then there are the unlucky few who rose from the enlisted ranks, answered the call to become an officer, and were later forced out before they could retire as an officer. This is an unfortunate situation, and unfortunately, one I don’t have answers for.

Here are some additional articles about this topic:

News Reports Blast Veterans for Triple-Dipping Benefits

Military and veterans benefits are often seen as overly generous by those who don’t understand what it takes to earn them. While it is true that some military benefits are generous, servicemembers have to go through a lot to earn them.

Veterans Triple-Dipping BenefitsTake military retirement, for example. A military member can retire after 20 years on active duty, and pull down 50% of their base pay for the rest of their life. There aren’t many similar retirement programs anywhere in the U.S. But there is a reason it is so generous – it is incredibly difficult to achieve. Only about 17% of servicemembers remain on active duty long enough to earn a military pension. The job is difficult, and attrition is high.

Injuries sustained in the line of duty contribute to the low-percentage of military members reaching retirement. As military members, we work in hazardous conditions, both in and off the battlefield. Congress and the Department of Veterans Affairs recognize this. That is why they award veterans service-connected disability compensation benefits for injuries or illnesses that occurred or were made worse while they served on active duty. The disability compensation is awarded to servicemembers due to their reduced capacity to work. I don’t think anyone has a reasonable argument that this benefit isn’t earned.

So why write this article?

Because these are two of the three benefits that the Washington Times recently bashed in an article entitled, “Veterans caught triple-dipping on benefits.”

The third benefit? Social Security Disability Insurance (SSDI) benefits. This benefit is only awarded to severely disabled individuals who are unable to work. Individuals must have paid into the Social Security system to be able to receive this benefit. Because military members pay into the Social security system*, they are eligible to receive Social Security benefits, including SSDI. (Note: some military members may be eligible to receive Social Security Disability benefits for Wounded Warriors, which is a variation of the SSDI benefit specifically tailored to military members).

*Military members used to be exempt from Social Security contributions, but that changed years ago; military veterans who are eligible for Social Security may be eligible for increased benefits depending on when they served.

Is There an Issue with Triple-Dipping?

The Washington Times article is written as though veterans are scamming the American taxpayer. Just look at the title – Veterans caught triple-dipping on benefits.

Caught, as in they were doing something wrong. But they aren’t. Everything is within the scope of the law.

Let’s look at the three benefits again:

  • Military retirement: Is this an earned benefit? Absolutely. And I don’t think we need to go into any deep discussions about what it takes to earn a military pension. Fewer than one in five active duty members remain in the service long enough to earn it.
  • VA Disability Compensation: Is this an earned benefit? Sadly, yes. The VA wouldn’t award this benefit if it wasn’t “earned” through the injuries or illnesses sustained during the servicemember’s time on active duty. There are checks and balances in place to review the veteran’s claims, and the award is given based on medical evidence and decreased quality of life. No benefit is awarded as a hand out.
  • Social Security Disability: Is this an earned benefit? Sadly, yes. Similar to the VA disability compensation, the Social Security Administration has checks and balances to ensure someone is qualified to receive the benefit. People receiving SSDI don’t choose to get injured to the point of being unable to work.

The “Problem” with Triple-Dipping

The reason these veterans are receiving extra attention is because most people aren’t eligible to receive two forms of disability compensation. For example, there is a clause that prohibits people from receiving SSDI if they earn more than $13,000 a year. But Social Security rules don’t count income from military pensions or VA disability compensation. So some veterans who are receiving both a military pension and VA disability compensation may also be eligible to receive SSDI, even if they have income over the $13,000 threshold.

A Deeper Look at Triple-Dipping

The article went on to state, “nearly 60,000 triple dippers collected $3.5 billion in benefits,” and, “Of the $3.5 billion spent in 2013 on the triple dippers, $1.4 billion came from the VA, $1.2 billion came from the Pentagon, and $937.4 million came from Social Security.”

On the surface, that is a huge number. But the article went on to quote two specific examples:

Veteran 1: A 54-year-old who retired in 1997 after 20 years in the military, who had lung disease, vascular disease and lost use of his feet, collected $122,887 in benefits in 2013 — nearly three times the $43,808 someone of his pay grade would have made in the military.

Veteran 2: Meanwhile, a 59-year-old who retired in 2004 after 26 years, who lost his feet, is blind in one eye and has renal problems, collected $152,719 in 2013 — more than twice the $72,824 salary of someone at his final military pay grade. Most of his benefits — $85,958 — came from VA disability, while $46,396 was military retirement, and $20,365 was from Social Security.

These are serious illnesses and injuries.

What the article fails to mention is that Veteran 2 receives the maximum special disability award of $85,958. That is only given to severely disabled veterans who require full aid and attendance in their home. In other words, the money is to be used for home nursing care.

The funds aren’t going into the veteran’s bank account. They are being used to provide health care for service-connected injuries.

Budget Cuts Are Important – But Find them Elsewhere

I know the government is trying to balance the books and cut redundancies. But I think they should look elsewhere. The thing is, veterans rely upon their earned benefits, and in the case of the veterans called out by the Washington Times, these veterans are simply trying to hang on to life.

Are there some veterans who game the system? I’m sure there are. But the vast majority of veterans simply want to receive the benefits they earned. They aren’t getting rich off the fat of the land. They don’t want to be labeled as freeloaders. They simply want to go on with life. And for those who are so severely disabled that they can’t work, or that they require hospice care, I think that is the least we can offer them. Without the vitriol and politics, please. We owe them that much. And a whole lot more.

Story: Washington Times.

Additional Commentary: DisabledVeterans.org.

Podcast 008: Using Tuition Assistance Benefits and Taking Classes While on Active Duty

Today I’d like to tell you how I used the military Tuition Assistance Program to pay for my Bachelor’s Degree while I was on active duty. My goal was to achieve my Bachelor’s Degree by the time I completed my first enlistment. This would give me many options going forward: I could remain in the enlisted ranks with a complimentary degree, I could apply for a commission to become an officer, or I would have my military experience and a degree, and I could try my hand in the civilian world.

My goal was aggressive. By the time I started working on my degree, I had been in for about 3 and a half years on a six year enlistment. That left me with two and a half years to complete my 4-year degree. In this podcast, I share exactly how I leveraged the Tuition Assistance program to accomplish my goal. I also discuss the military Tuition Assistance program benefits, eligibility, how to test out of college classes, and how to take classes while working a full-time military job.

Military Tuition Assistance Benefits

Tuition Assistance is one of the most valuable benefits you have available to you!

Whether you plan on making the military a career, you want to go from the enlisted ranks to the officer ranks, or you want to improve your prospects in the civilian sector, formal education is an excellent investment in time and money. And if you play your cards right, you can get most, if not all, of your degree paid for by the military.

In this episode I lay it all out on the line, starting with how Tuition Assistance benefits work, how to test out of classes, and the strategies I used to complete my Bachelor’s Degree while I was on active duty. I hope you’ll find this educational and inspiring!

Tuition Assistance – One of the Most Valuable Benefits Available

You don’t need me to tell you that a college degree is a valuable thing to have. It can help you promote within your military career, and it can help you in your post-military career as well. You may even decide to get a degree for personal knowledge. Whatever your reason, a college degree is a valuable. And getting it for free makes it an even better deal.

Here is one more value play many people don’t think about: Getting your degree now gives you the option to use your GI Bill later – either for yourself for a higher level degree, or you may even be able to transfer it to a family member. Being able to transfer your GI Bill can save you or your family members tens of thousands of dollars in tuition payments.

Who Can Use Tuition Assistance & When

Tuition Assistance is available to most active duty military members. In general, you must have served a minimum of 181 days on active duty before you are eligible for Tuition Assistance Benefits. However, it would be rare to join the military and start taking classes 6 months later. Most branches have a minimum service requirement before members can take classes. You usually can’t use TA while you are in an official upgrade training status, either. So that means you can’t use TA while you are in basic training, or AIT, or Tech School. You generally can’t use it while you are in an official upgrade training status beyond those schools either. There may be other minimum service requirements depending on your branch of service.

For example, Army policy prohibits Soldiers from taking college classes until they have completed 1 year of service after completing AIT (their tech school). They may also have to get supervisor’s approval before taking classes.

When I was in the Air Force, I wasn’t allowed to begin taking college courses until I had reached my 5-level status. To put that in perspective, I had 2 months of Basic Training, followed by 6 months of tech school. Then I had about a year of upgrade training where I learned my job and received my 5-level skill certification. So it was roughly 20 months into my tour before I was even able to take college courses. I actually didn’t start for over a year after that point. But I bring that up to illustrate how long it could take before you are eligible to begin taking classes.

If you aren’t eligible for Tuition Assistance benefits, it’s probably because you haven’t completed your initial training yet, or you already have a degree that is covered under Tuition Assistance (new rules often prohibit service members from using TA to achieve a lateral degree program or a lower degree than what you currently have).

Each Branch Has a Budget – and  Slightly Different Rules

Each branch of the military is given an education fund by Congress. How they use it is up to them. But I will tell you this benefit has come under the chopping block, and we have seen recent changes to this benefit as a direct result of budget issues (we’ll cover these later in this episode). In fact, Tuition Assistance benefits were cut from almost all branches during the sequestration. The benefit was later reinstated, but many people missed out on classes.

New rules limit the benefit on many levels, including who can take classes, when they can take them, which classes they can take, and more. The Marines actually offer their benefit on a first-come, first-served basis. Once they run out of funds, Tuition Assistance is done until the following year. So it makes sense to front-load classes in the hope of using your annual benefit and completing your degree more quickly without having to dip into your GI Bill or pay out of pocket expenses.

All of these limits sound draconian, but they aren’t. Tuition Assistance is still an excellent benefit.

How Much Does Tuition Assistance Cover?

In general, all branches except the Coast Guard offer 100% tuition assistance, up to a set dollar amount per credit hour – usually $250 per credit hour. The total amount one can receive in any given year or over their lifetime is determined by each branch.

The exception is the Coast Guard, which currently offers 75% TA, up to $187.50 per credit hour, for a total of $2,250 per year.

What Tuition Assistance Covers

Tuition Assistance can be used for approved college courses, certain exams (such as the GRE, GMAT, SAT, ACT, etc.), and for some professional certifications. Not all professional certifications are covered, there may be limitations on which programs you can use TA for, and limits on when you can use TA for a certification. For example, you may have a lifetime cap on the benefits you can receive for a professional certification. Or you may have an annual Tuition Assistance benefits cap that applies to both certifications and college courses. You will need to contact your education office for more specific information on what you can use TA for.

Also, the DoD no longer allows the Tuition Assistance programs to cover lab fees or certain course fees.

Tuition Assistance Reimbursements

A new DoD Instruction requires servicemembers to repay their branch of service if they fail to maintain satisfactory scores on the coursework. For example, you may be required to repay the cost of your classes if you earn a D or lower in an undergrad course, or a C or lower in a graduate level course.

Maintain good grades. The military retains the right to suspend your TA benefits if you don’t maintain high enough scores. You would then have to pay for classes out of pocket or use the GI Bill to bring your GPA up to acceptable levels before you would be eligible to receive TA benefits again.

Tuition Assistance Benefits for Each Branch of Service

Here are the current TuitionAssistance rules for each branch:

Testing out of Classes – CLEP, DANTES, & More

Another related benefit related to Tuition Assistance is college placement exams. These are tests you can take to test out of college classes and the cost is covered under the Tuition Assitance program. They can be a huge time- and money-saver!

Some examples of placement exams that you can take through the military include CLEP tests, or the College Level Examination Program, and DANTES Exams. DANTES is a DoD program, that stands for Defense Activity for Non-Traditional Education Support.

When I received my degree there was another program called Excelsior exams. The program is still around, but the exams are no longer free for military members. They can still be worth taking if it saves you from taking the actual college course. Just be sure to look at the CLEP and DANTES options first.

The tests work like this: you visit your Education and Training Office, sign up to take a test, and if you pass, you can receive college for the course.

A couple notes – these aren’t accepted by every college, but they are accepted by most community colleges and state schools, and by many private universities. They are also accepted by the Community College of the Air Force, which makes them popular for Airmen who want to receive their Associate’s Degree from the Air Force.

Before taking these exams, you want to make sure they are accepted by your school, and that they will work toward your degree plan. Some schools won’t allow you to test out of classes that are directly related to your major or minor. And some schools may only accept these test for elective credits. Other schools may have a limit to the number of credit hours you can transfer in, and another limit for how many classes you can test out of. I’ll share how I used these test toward my degree in just a few moments.

Test Taking Tips

Most people study for placement exams the wrong way. They go to the base library and borrow a study guide, which is usually just a few practice tests. They try to memorize as many questions as they can, then they take the test. It’s no surprise many people fail. You don’t learn anything from studying questions. You need to learn the material. The practice tests aren’t bad. Just don’t use the test alone and expect to pass.

I passed about 10 of these tests, and had zero failures. I also didn’t spend a dime on any training manuals. This isn’t because I’m exceptionally smart. I simply learned how to study for these exams. Here is what I did:

Each of these companies has an associated website. You can visit the site, search for the test you want to take, and look at the test information. The companies show the test name and how the test questions are broken up. For example, if you wanted to take a US History I test, it would give the breakdown as US History, 1500 – 1877. Here is the site.

  • 30% covers 1Early Colonization through the Revolutionary War
  • 70% covers the dates after the Revolutionary War through the end of the Civil War and into the Reformation.

There are further breakdowns on the page that list percentages of what the test covers, 35% covers political institutions and public policy, 25% covers this, 15% covers that, etc.

The page also lists 20 or so themes you need to know to pass the test.

Use this information as your study guide. Print out that screen, grab a spiral notebook, and spend a couple hours on Google and Wikipedia learning all the information on the study guide you just downloaded for free. Once you have a handle on the information, you can spend some time with the practice tests. Just don’t expect to pass the test with the practice tests alone. It probably won’t work well.

What Happens if you fail a placement test? The tests are free for active duty members, but if you fail you have to wait a few months before you can take the class again, and you may have to pay to take it. So be sure to know the material before you sit for the test!

Here are more tips for testing out of college classes.

Putting this all together

Now I’d like to tell you my story – how I used Tuition Assistance benefits to complete my Bachelor’s degree while I was on active duty.

I had been in the Air Force for 3 and a half years, which was just past my halfway point on my 6 year enlistment. I decided I wanted to complete my Bachelor’s Degree before my 6 year mark so I had options when it came time to decide whether or not to re-up.

Getting my degree was a great strategic move as it gave me the option of staying in the military as an enlisted member, the option of applying for a Commission as an Officer, or getting out of the service with my experience and a Bachelor’s Degree.

I had already completed one year of college when I joined the military, so at most, I was looking at taking 3 years of college to complete my 4-year degree. I knew about College Placement Exams, so I figured I had enough time to complete my degree if I got lucky and passed a few tests.

It actually took me just over a year and a half to complete my degree, and that included a PCS and two 4-month deployments.

Create an Education Plan – Then Execute

The first thing I did was visit the base education office to see my options. There were a couple colleges there, and I spoke with the representative from Embry-Riddle Aeronautical University. They have an excellent program, and they have satellite campuses on many military installations. I made an appointment with a counselor to get a degree plan made, and found out that a lot of my Air Force training would count as college credits toward either a technical management degree, or a degree in Professional Aeronautics, which is basically a management degree with a heavy emphasis on the aviation field.

Between my year of college and my military training, I had almost two years of credits on the books (the Air Force has  the Community College of the Air Force, which is an accredited community college). I also received college credits for professional military education, which was required when I became an NCO. With my credits, I needed to take just over 2 years worth of classes to receive my Bachelor’s Degree. The counselor was kind enough to show me exactly which classes I could test out of, and we made a list of the classes I would need to take to get my degree.

Armed with this knowledge, I scheduled some CLEP tests and studied them using the method I outlined earlier. I passed all of them.

As for the required courses through Embry-Riddle, I completed those through a combination of in-residence classes and distance learning while I was deployed.

Balancing School & Full-time Military Requirements

Embry-Riddle had a satellite campus on our base, which only offered night classes. I was single, and education was a priority for me, so I volunteered to work the midnight shift for almost two years while I worked toward my degree. I went to class from 5 – 9pm, had dinner, then went to work around midnight. I went to bed when I got home, then studied and wrote papers in the afternoon before going to class again. I worked with my supervisors to ensure I could remain on the midnight shift. They loved that because they had an NCO on the late-shift, and I loved it because it allowed me to take classes.

I also took online classes when I was deployed. We often worked 14 hour days while deployed, but there was always some down time here and there. I was an aircraft mechanic, an we had to ride the launch truck in case there were ay last-minute emergencies. Riding launch could take anywhere from 15 minutes, to well over an hour. Much of that time we were on stand-by. While everyone on the truck was cutting up or reading Maxim Magazine, I was reading about the history of flight or a book about aviation management. I also used my random days off to study and write papers.

Using a combination of my previous college credits, my Air Force training, taking placement exams, and taking classes through Embry-Riddle, I was able to complete my degree in about 20 months. It would have taken longer if I didn’t have the year of college already under my belt, but I also would have doubled-up on more classes and tested out of other classes. I’m confident I could have completed it in around 2, to 2.5 years.

Applying this to Your Degree

My situation was unique because I already had a year of college and I received a lot of credits for my Air Force Training. Your situation will be your own. So you need to be strategic with your planning.

I chose the degree that was best for me at the time. I had hopes of being an Air Force officer, so a degree in Professional Aeronautics was a great fit. It worked well with my experience and gave me options going forward. It was also the easiest for me to achieve because of the credits I received for my Air Force training.

You may or may not be in a situation where you can apply your military training toward your degree, but you should at least look into it. You should also look into testing out of classes. They will save you a lot of time, money, and heartache. Sit down with your guidance counselor and determine which classes you must take, and which you can test out of. It’s reasonable to test out of one or two classes per month if you keep to a schedule.

Here are more tips for taking classes while on active duty.

Final Note – You Must Maintain Your Military Standards

Finally, you need to maintain your work standards and be flexible with your work situation. Most units require a supervisor’s permission to take classes. They aren’t likely to give you permission if you are still in upgrade training or your work isn’t up to par. You also won’t be able to take classes if you have an unfavorable information file. So make sure you pass your PT tests, show up to work on time, and maintain the expected performance.

As to your work schedule, you may need to get creative. The classes offered on our base were in the evenings. So I offered to work the midnight shift in order to take classes. Things can get tricky if your only option is the day shift and your school only offers classes in the day time. If that is the case, you may need to get creative with scheduling and offer to work an extra hour here or there, eat a 10 minute lunch everyday, or take classes online. You might even consider attending classes at a different school. But don’t let those little details stop you from taking classes. Tuition Assistance is a very valuable benefit and achieving your degree can pay dividends long after your military career ends.

Podcast 004: Funny Math – VA Disability Ratings. When 30 + 20 Doesn’t Always Equal 50

The Military Wallet Podcast on iTunesIf I asked you the answer to 30 + 20, you would quickly tell me 50. And you would be right in just about every instance. But for veterans with service-connected disability ratings, the math doesn’t always work out quite so easily. In fact, 30 + 20 might only equal 44, which rounds down to 40. Or it might equal 48.4, which rounds up to 50. Confused yet? Welcome to the world of VA Math!

VA Math - combined disability ratings

Understanding VA math is essential for understanding your benefits.

The VA Service-Connected Disability rating system is complex. There are many reasons for this, and that’s a topic best left for another day, and another website. But there is one aspect I would like to address today: the somewhat confusing math used to determine the final service-connected disability rating awarded to veterans. This is the rating used to determine compensation payments and access to certain other benefits. It’s enormously important you understand how your rating is determined so you can make sure your benefits are calculated properly. The difference can literally be worth hundreds, or even thousands of dollars a year in compensation payments and other benefits.

Let’s dive in.

What Do Disability Ratings Represent?

The first thing to understand is what your disability rating represents. In short, the VA takes each individual injury or illness into consideration and gives it a numerical disability rating. Each rating is represented by a percentage divisible by 10 (ex: 10%, 20%, 30%, 40%, etc.). These disabilities are racked and stacked, then the VA does “VA Math” to determine your overall disability rate. We’ll get to the math later in this article.

A good way to look at this is to consider how the disabilities affect your ability to perform work and daily activities. To do this, the VA takes into account your overall efficiency after the disability or disabilities are considered. Let’s say you are a normal 40 year-old retiree with no major service-connected injuries or illnesses. Your efficiency would be rated at 100%. Now let’s assume you just retired from the military after 20 years of service and had some service-connected disabilities.

For example, let’s say you tweaked your knee while you were deployed and had arthroscopic surgery. You still have some pain and stiffness in that knee and the VA grants you a 10% service-connected disability rating. Assuming this is your only service-connected disability rating, your service-connected disability rating would be 10%. This is determined by looking at your efficiency, which is 90% (efficiency rating of 100, times 10% disability rating = 10%. You subtract 10% from 100% and end up with 90%). The math is simple when you only have one disability rating to consider. We’re going to come back to the math in a moment because it changes dramatically with each new service-connected rating we consider.

More than one disability rating? Each injury or illness is rated by itself, without consideration of other illnesses or injuries, unless they contribute to further injuries. We will also need to take into consideration whether or not the injuries are bilateral, which means they affect limbs on both sides of the body (for example, disabilities on both arms, or both legs). All of your disability ratings are listed in descending order, then the VA math begins.

How the VA Rates Multiple Disabilities

The above example covers the most basic situation – a single disability rating. In the previous example, it seems like you can just subtract the 10% from 100% and come up with 90%. But notice that we didn’t do the math that way. Things get more interesting when you have more disability ratings. Let’s run through an example, building on the previous profile.

Example profile: We’re going to stay with our example of a 40 year old military retiree. Above we said he had a disability in his knee. Let’s add a few conditions and do some math.

Let’s say our retiree has the following service-connected disability ratings:

  • 30% rating for a back injury,
  • 20% rating for right shoulder injury,
  • 10% rating for his right knee, and
  • 10% for hearing loss.

Now for the math: The VA uses a descending efficiency scale for its calculations. The VA will rate each injury or illness, giving each a numerical rating. When it comes time to determine the overall rating, the VA will start with the highest rating, then work its way down. You start with an efficiency rating of 100, then work your way down. Each new disability gives you a new baseline.

We start by racking and stacking the disabilities.  In the example above, we have ratings of 30%, 20%, 10%, and 10%. We start with the 30%, then factor in the 20%, the 10%, then the final 10%. Again, we aren’t subtracting here, we’re doing VA math. At the bottom of this article is the VA Combined Ratings Table, which we will use to complete our calculations (you may find it easier to open this article in two browser tabs so you can follow along, or download and print the Combined Ratings Table, which we have a link to).

We start with the 30% disability. Look at the Combined Ratings Table and scroll down the left column until you find the number 30. Then go to the right column until you find the 20. The 30 and 20 combine for 44. If those are your only two ratings, you would have a 44% Va service-connected disability rating, which would round down to 40%. But we’re not done. We still have to add two 10% ratings.

Start on the left column again. This time, you will look for the 44 in the left column. Then find the intersection point with the 44 and 10. Your new rating is 50%. Repeat this one more time, starting with 50, and meeting up with 10. Your new combined rating is 55%, which rounds up to 60%.

How does this add up? Again, we aren’t doing normal subtraction here. We are doing VA math. You start with your efficiency rate of 100, multiple it by your disability rating, then subtract the result from your original rating. In this case, you would multiple 30% times 100, and get 30. You subtract that from 100 and come up with 70. Your new efficiency rating is 70 and your disability rating is 30. This is the starting point for the next calculation. You repeat the process for the next rating. You take 20%, multiply it by 70, and come up with 14. You subtract 14 from 70, and you get 56. Your new efficiency rating is 56, and your disability rating is 44. You repeat the process for each additional disability rating.

The math can be a bit confusing if you try to do it manually. The best thing to do is use the VA Combined Ratings Table, which does the math for you.

How Bilateral Disabilities Affect Your Rating

There is one more issue we need to consider – the bilateral factor. The bilateral factor can have a big impact on your rating, so don’t dismiss it.

What is the Bilateral Factor? The bilateral factor is considered when the veteran has disabilities on both limbs (for example, both arms, or both legs, or of paired skeletal muscles). The disabilities don’t have to mirror each other. For example, they don’t need to occur on both knees to be considered bilateral. A left foot disability and a right knee disability satisfies the requirement they injuries be on both legs.

With the bilateral factor, the VA combines two or or more ratings, adds a bilateral factor to the outcome, and considers them as one rating when using the Combined Ratings Table (found below). It’s best if I quote the regulations the VA uses, then we’ll use this in an example:

§4.26 Bilateral factor (Source).

When a partial disability results from disease or injury of both arms, or of both legs, or of paired skeletal muscles, the ratings for the disabilities of the right and left sides will be combined as usual, and 10 percent of this value will be added (i.e., not combined) before proceeding with further combinations, or converting to degree of disability. The bilateral factor will be applied to such bilateral disabilities before other combinations are carried out and the rating for such disabilities including the bilateral factor in this section will be treated as 1 disability for the purpose of arranging in order of severity and for all further combinations. For example, with disabilities evaluated at 60 percent, 20 percent, 10 percent and 10 percent (the two 10’s representing bilateral disabilities), the order of severity would be 60, 21 and 20. The 60 and 21 combine to 68 percent and the 68 and 20 to 74 percent, converted to 70 percent as the final degree of disability.

(a) The use of the terms “arms” and “legs” is not intended to distinguish between the arm, forearm and hand, or the thigh, leg, and foot, but relates to the upper extremities and lower extremities as a whole. Thus with a compensable disability of the right thigh, for example, amputation, and one of the left foot, for example, pes planus, the bilateral factor applies, and similarly whenever there are compensable disabilities affecting use of paired extremities regardless of location or specified type of impairment.

(b) The correct procedure when applying the bilateral factor to disabilities affecting both upper extremities and both lower extremities is to combine the ratings of the disabilities affecting the 4 extremities in the order of their individual severity and apply the bilateral factor by adding, not combining, 10 percent of the combined value thus attained.

(c) The bilateral factor is not applicable unless there is partial disability of compensable degree in each of 2 paired extremities, or paired skeletal muscles.

Example using the Bilateral Factor

Let’s stick with the example profile from above, but let’s add another knee disability, one on each leg. This would qualify for the bilateral factor. The disability rating for each knee was 10%, but when combined, they equal 21%, according to the VA’s Combined Rating Table. Here is how we apply the bilateral factor:

Bilateral Factor Applied:

A 10% disability combined with another 10% disability = 19%,

Then you add 10% of 19, or 1.9%.

19% + 1.9% = 20.9%, which rounds up to 21%.

The combined rating for both knees is now 21%, and the VA will use 21% as the rating for those disabilities. It is possible to have more than two disabilities combined in the bilateral factor.

New example with Bilateral Factor: We’ll stick with the previous example, but add the other knee injury and see how it affects the final outcome. Let’s say our retiree has the following service-connected disability ratings:

  • 30% rating for a back injury,
  • 21% (10% rating for his left knee, and 10% rating for his right knee, with bilateral factor applied),
  • 20% rating for right shoulder injury, and
  • 10% for hearing loss.

Using the Combined Rating Table, we start with the 21% and the 30%. This takes us to 45. Follow the left column down to 45 and find where it intersects with 20. You get 56. Repeat the process for 56 and 10, and you get 60. This overall service-connected disability rating for this veteran is exactly 60%.

The previous example was 55%, rounded up to 60%, and this example was exactly 60%. As your disability percentage increases, it takes more disabilities with higher ratings to move the needle. This is the impact of the math the VA uses to determine disability ratings. Here is another example using a bilateral factor.

VA Combined Ratings Table

The VA Combined Ratings Table is where all the math magic happens.

Instructions: List all disabilities in descending order. Start with the highest disability rating, find it in the left column, and find the intersecting point with the next highest disability rating. This is your combined rating for these two disabilities. If these are your only two disabilities, you can round to the nearest number divisible by 10 (anything 4.9 and lower are rounded down; 5 and higher are rounded up). Repeat this process until you have run the numbers for all disability ratings.

(Article continues below table):

102030405060708090
19273543516068768492
20283644526068768492
21293745536168768492
22303845536169778492
23313846546269778592
24323947546270778592
25334048556370788593
26334148566370788593
27344249566471788593
28354250576471788693
29364350576572798693
30374451586572798693
31384552596672798693
32394652596673808693
33404653606773808793
34414754606774808793
35424855616874818794
36424955626874818794
37435056626975818794
38445057636975818894
39455157637076828894
40465258647076828894
41475359657176828894
42485459657177838894
43495460667277838994
44505561667278838994
45515662677378848995
46515762687378848995
47525863687479848995
48535864697479849095
49545964697580859095
50556065707580859095
51566166717680859095
52576266717681869095
53586267727781869195
54596368727782869195
55606469737882879196
56606569747882879196
57616670747983879196
58626671757983879296
59636771758084889296
60646872768084889296
61656973778184889296
62667073778185899296
63677074788285899396
64687175788286899396
65697276798386909397
66697376808386909397
67707477808487909397
68717478818487909497
69727578818588919497
70737679828588919497
71747780838688919497
72757880838689929497
73767881848789929597
74777982848790929597
75788083858890939598
76788183868890939598
77798284868991939598
78808285878991939698
79818385879092949698
80828486889092949698
81838587899192949698
82848687899193959698
83858688909293959798
84868789909294959798
85878890919394969799
86878990929394969799
87889091929495969799
88899092939495969899
89909192939596979899
90919293949596979899
91929394959696979899
92939494959697989899
93949495969797989999
94959596969798989999

Source: 38 CFR 4.25 – Combined ratings table. Downloadable PDF: You can download this table here (pdf, courtesy of PurpleHeart.org).

Online VA Disability Ratings Calculator: It’s great to know how to use the Combined Ratings Table so you can verify your disability rating for yourself. But it’s also nice to be able to use a calculator that takes all of these factors into consideration. Here is a great online calculator that will help you determine your disability rating. This calculator seems accurate for the most part. However, it doesn’t seem to account for the bilateral factor. So you may wish to use the Combined Ratings Table to determine your overall rating if you have bilateral disabilities.

Summary: VA Math can seem confusing at first. But it makes sense when you take some time to run the numbers. When in doubt, use the Combined Ratings Table to do the math for you. If you have further questions about your specific case, then I recommend contacting the VA for clarification, or contacting a Veterans Service Officer at a Veterans Service Organization. VSO’s will help you with your claim free of charge.

Oh, and as for the examples with the 30 + 20: The combined ratings table shows us two disabilities rated at 30 and 20 equal 44%. This rounds down to 40% disability rating. If you apply the bilateral factor to disability ratings of 30 and 20, you would get 48.4% (44% + 4.4%). This rounds up to 50%.