The Army is having a difficult time recruiting enough troops to meet mission needs. The war in Iraq and Afghanistan is making it difficult to not only keep good troops, but also to recruit new troops. To help combat these problems, the Army is offering new recruitment incentives to help recruits accrue up to $45,000 in tax free incentives to start their own business or purchase a home. The money can also be used for college tuition or to pay off student loans. The Army does not give any more details about how the money can be earned, or how quickly it will accrue.
The opportunity to earn $45,000 tax free toward a business, home purchase, or college, is an enormous benefit.
What can you do with that $45k?
Buy a house: $45,000 is more than a 20% down payment for the median value of a single family home in the US ($217k). Although military members are eligible for the VA Loan and do not need to pay 20% down, it would probably be a very good idea to do so. Reducing the amount of money you borrow allows you to do 2 things – either pay off your home more quickly or buy a more expensive house. I would hope most people choose to pay the mortgage off more quickly, as that is the smart thing to do.
Start a business: Veterans are eligible for business loans from the Small Business Administration. A $45,000 jump start greatly reduces the amount of the initial loan needed, and gives you a little breathing room to handle the first few months when overhead costs generally outpace revenues. There are also pilot programs in place to help military veterans own franchises from many different companies. Read about more franchise opportunities for veterans.
Education: I can’t stress enough how important education is. It is your biggest asset. $45,000 is a lot of money to repay student loans, or put toward college after you separate from the military. While the GI Bill helps, it doesn’t always cover everything – especially tuition at a private university, or many master’s programs.
Will this help recruiting efforts? I don’t know if this will make the Army meet its recruiting goals, but it surely can’t hurt. From what I understand this is going to start off as a pilot program and may expand. If you are interested in more information, talk to a recruiter. But remember, get everything in writing before you sign anything!!!
* Important Note: Please don’t join the military just for the financial benefits. The military can be a wonderful experience, but only join after doing your research and making the decision that the military way of life is for you. Make sure you talk the decision over with your family, friends, or someone whose advice you respect.