People that serve in the United States armed forces are entitled to a retirement pension after 20 years of service. The amount that you receive will increase if you stay in the military for a longer period of time. This pension gives military personnel the ability to retire in comfort if they take the right steps.
If you are in the service, you could choose to stay in until you are old enough to collect Social Security. You can then get out of the workforce entirely and live comfortably on your pension and your Social Security direct deposit. Health care insurance will be provided Medicare in combination with your military medical benefits.
Another approach can be more appealing to some people. After putting in the 20 years, you could retire from the military and save your pension payouts every month while you are working a new job in the civilian sector.
You could pay into a 401(k) plan at work to top it all off, you would be well-positioned for retirement when you are old enough to collect Social Security.
Wartime Veterans Pension
There is another pension that sits aside from the retirement pension that is simply called the Veterans Pension. You do not have to serve for 20 years to qualify for this pension.
The time in service requirement is 90 days with at least one of the days beginning or ending during a time of war. This benefit is available to disabled veterans of any age and others that are 65 years of age and older.
You do not necessarily have to need help with your activities of daily living to qualify for this core benefit as long as you are at least 65 years old. At the time of this writing in 2021, the maximum benefit for someone that is receiving the Veterans Pension is $13,931.
If you do need living assistance, you can get a larger benefit if you qualify for the Aid and Attendance version of the pension. The maximum monthly benefit is $23,238. For housebound veterans that are qualified, the maximum annual payout is $17,024.
Your benefit would increase if you are married. For the basic Veterans Pension, it goes up to $18,243 at maximum, and for Aid and Attendance, it is $27,549. The top benefit for a married housebound veteran is $21,327 at the time of this writing.
The Veterans Pension is a need-based benefit, so there are income and asset limits. Up until 2018, determinations were made on a case-by-case basis, but there is now a set limit on countable assets. It stands at $130,773 this year.
All of these numbers are subject to change on an annual basis to account for inflation.
We used the qualifier “countable assets” because some things that you own do not count. These would include your home, your vehicle, personal belongings, and household effects.
Three-Year Look Back Period
When the guidelines were changed to include a hard asset limit, a three-year look back period was installed. Before this, a veteran could simply give gifts to loved ones and apply for the benefit immediately. Now, all gift giving must be completed at least three years before the application is submitted.
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