If you are a veteran and you are working on your retirement plan, you need to consider the different types of financial support you are likely to receive during your lifetime. Two of the most common types of financial benefits available for veterans are pension benefits and compensation benefits. In this post, we will discuss important aspects of Los Angeles veterans retirement benefits that should be considering during your retirement planning.
Understanding the Differences in Veterans Compensation and Pension Benefits
When it comes time to plan for financial support in retirement, veterans may have only a few options. Compensation and pension benefits are very different types of resource. Pension benefits are awarded to veterans who served in the military during congressionally defined times of war and who are permanently and totally disabled, regardless of whether the disability stems from military service. Unlike employment-based pensions, veterans pension benefits do not accrue based on length of service. Instead, veterans pension benefits are paid monthly to eligible veterans with a disability.
Compensation benefits, on the other hand, are paid to veterans who are disabled as a result of their military service. These types of benefits are, therefore, not income-based but are based instead on the severity of the disability and the veteran’s ability to work. It is important to understand that not all disabled veterans are eligible for compensation benefits simply because not every disability is service-connected.
The Eligibility Requirements for Veterans Pension Benefits
In order to be eligible for disability pension benefits, a veteran must not have been dishonorably discharged, must have limited income, must be permanently and totally disabled, and that disability must not be the result of willful misconduct. If you joined the military after 1980, you must have served at least 24 months of continuous active duty, must have served continuously for 24 months or the full period called or ordered to active duty.
What is the Purpose of the Veterans’ Pension Program?
The veterans pension program was originally established as a way to provide supplemental income to veterans who were required to change their career goals in order to serve in the military. In light of the financial security most veterans had to relinquish when serving, the pension program was created as a need-based program. It was meant to supplement the social security income totally disabled veterans receive.
Automatic Eligibility for Veterans Over the Age of 65
Veterans over the age of 65 are presumptively permanently and totally disabled and therefore, in most cases, automatically eligible for pension benefits. On the other hand, a veteran cannot receive both pension and compensation benefits. So, if you qualify for both types of benefits, you must choose which type of benefit you would prefer to receive. In order to establish eligibility for pension benefits, veterans are generally required to submit to a physician’s examination, referred to as the Compensation and Pension Exam. If you have questions about establishing eligibility, our Los Angeles veterans retirement benefits lawyer is here to help.
We Encourage Veterans to Plan for Retirement
Many clients operate under the misconception that social security benefits and a basic 401K will be sufficient to support them during retirement. The truth is, it is important to create a real retirement plan, so you won’t need to be dependent on government benefits, in order to have a comfortable retirement. Social security may not be as secure as you think. That’s why you need a retirement plan. Our Los Angeles veterans retirement benefits lawyer can help you to include your pension benefits in your retirement planning for the best possible outcome.
Start Setting Aside Sufficient Savings as Soon as You Can
A huge part of retirement planning is being sure you have sufficient money saved up to support your financial needs once you retire from the workforce. It should go without saying that, the sooner you start putting money aside, the more you can have saved up by the time retirement actually rolls around. So, if you haven’t already, open a savings account and start making your regular deposits immediately. The sooner the better because you will be able to benefit from more compound interest.
Update Your Retirement Plan When Necessary
It is important to occasionally review your retirement plan to be sure that necessary changes are made. Just like an estate plan, a retirement plan needs to be reviewed sporadically so you can make necessary revisions and adjustments that will address changes in the market. Those changes could potentially have a negative effect on your investments. If they are not addressed, you could lose out on a lot of income. You may also need to adjust your plan when there is a change in your income or expenses that may alter your overall plan.
Join us for a free seminar today! If you have questions regarding estate planning, trust contests, or any other trust administration issues, please contact the Schomer Law Group either online or by calling us in Los Angeles at (310) 337-7696, and in Orange County at (562) 346-3209.
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