Military families often lead a much different lifestyle than other families and encounter a number of unique financial challenges. To reward military members for their service, and to compensate for the sacrifices that their families must make, the military and other private entities offer a number of financial benefits. Here are the top financial perks that military families can take advantage of.
1. Free Education
For military veterans serving at least 90 days of aggregate active duty since September 11, 2001, the Post-9/11 G.I. Bill program offers a wide range of educational benefits. In addition to assistance for college tuition, veterans can receive financial assistance for vocational and technical training, licensing and certification reimbursement, and other types of career training. For approved programs, the bill provides up to 36 months of education benefits, generally payable for 15 years following release from active duty. The bill pays up to the full cost of in-state tuition and fees for public colleges for up to four academic years, or up to $17,500 per year for private colleges and foreign schools. The bill can also cover a monthly housing allowance, and annual books and supplies stipend of up to $1,000 a year.
Military families are also eligible for the benefits. However, one person in the family must be a member of the uniformed services to transfer benefits to his or her spouse and dependents. Generally, they must agree to serve four more years when transferring benefits, according to the U.S. Department of Affairs.
2. Low-Cost Housing
Military members with dependents may have the option of living on base in military housing for free, if it’s available. Families also have another option to receive Basic Allowance for Housing—a tax-free monthly subsidy that covers all or a part of a family’s monthly rent or mortgage payment. The allowance is intended to provide service members equitable housing compensation based on housing costs in local markets, and is payable when government housing is not provided. It’s based on geographic duty location, pay grade and dependency status. Each year, the military releases allowance tables between December 15 and January 1. Service members with dependents will typically get a larger allowance. You can find out your allowance using the Department of Defense’s BAH Calculator. In addition, if a service member has to relocate where dependents are not allowed, such as a basic training camp or an overseas assignment, they may live in military housing for free, and still continue to receive the housing allowance for the location of their dependents.
3. Cheaper Insurance
Military members and their families are eligible for several insurance benefits, including access to the lowest-cost auto, renter’s, homeowner’s and life insurance. For example, the United Services Automobile Association is an insurance company offering banking, investing and insurance to people, and their families, that serve or have served in the military. Service members’ Group Life Insurance, supervised by the U.S. Department of Veterans Affairs, is another life insurance option for active duty and reserve members of the uniformed services. Veterans’ Group Life Insurance is a similar product available to veterans. These insurance options are a major financial benefit because they offer significantly lower costs than other private insurance companies. USAA, for example, offers auto loan rates as low as 0.89 percent on vehicles purchased through the bank’s car-buying service. The company saves military families an average of $409 annually, according to the company’s website.
4. Cheaper Retirement-Savings Plan
In addition to cheaper insurance options, service members and their families also have access to one of the lowest-cost retirement-savings plans. While many annual fees and expenses for 401(k) plans typically range between 1 percent and 2 percent of assets, the Thrift Savings Plan charges an annual expense ratio of 0.029 percent. The plan is a defined contribution plan for civil service employees and retirees and members of the uniformed services. It’s one of three components of the Federal Employees Retirement System and closely resembles the structure of a 401(k). Service members also have access to a Roth Thrift Savings Plan, which is similar to a Roth IRA, but without income restrictions.
5. Banking Benefits
Military families have access to lower-cost banking services from military banks and credit unions, such as USAA, Navy Federal Credit Union, Armed Forces Bank, Pentagon Federal Credit Union and Air Force Federal Credit Union. USAA, for example, offers no-fee checking accounts and ATM rebates for all incurred fees. The credit unions offer military families low interest rates on loans as well as retail discounts and other perks. Private banks, including JPMorgan Chase and Bank of America, also offer special benefits to service members and veterans. These include waiving minimum balance requirements and service fees.
In addition, the military’s Savings Deposit Program offers great savings plans for deployed members. The plan allows service members to invest up to $10,000 in the program each time they are deployed, with a guaranteed return of 10 percent, compounded quarterly. The program lasts up to three months after they return from deployment.
6. Other Perks
There are a number of other perks and benefits for military families. Those that live in military housing are able to save a lot of money on day-to-day activities. For example, families can buy cheaper groceries at the commissary and other discount stores on base. They also have access to free gyms, pools and other recreational centers.
Off base, military families can take advantage of a number of other financial perks. Many retail stores, such as the Gap, Overstock.com and Banana Republic, offer discounts on store purchases. Restaurants, like Chick Fil A, KFC and Pizza Hut also offer discounts on food purchases. In addition, hotels, theme parks, museums, cell phone plans and sporting events often have some kind of military discount. The options are endless. You just need to have your military ID with you.
If you aren’t sure whether you’re eligible for a benefit, you can visit the U.S. Department of Veterans Affairs website or the Military Benefits website. And if you’re out to dinner or on vacation, in never hurts to ask if there’s a military discount. Chances are, you’ll end up saving a few bucks here and there.