Getting out of the military can be an exciting and daunting time mixed into one. In addition to starting new careers, potentially moving to a new location, and shifting your identity away from service member, there are VA disability compensation, military retirement pay, and tax planning to conquer.
In this episode, Curt Sheldon a former fighter pilot and highly respected financial expert, dives into the essential financial and tax considerations for service members and veterans navigating VA disability compensation and military retirement. Curt explains the key differences between VA disability compensation and military retirement pay, breaking down how programs like Concurrent Retirement and Disability Pay (CRDP) and Combat-Related Special Compensation (CRSC) work together. Plus he sheds light on the little talked about Strickland Decision.
Curtis (Curt) Sheldon is a CERTIFIED FINANCIAL PLANNERTM Practitioner, Enrolled Agent, Accredited Investment Fiduciary® Designee and President of C.L. Sheldon and Company, LLC. He also is the author of Well and Faithfully Discharged: Financial TTP for Military Retirement.
Curt provides comprehensive financial planning, including integration of Military and Veterans Administration benefits, tax planning and preparation, college and retirement plans. He specializes in working with transitioning Senior Military Officers.
The primary distinction between VA disability compensation and military retirement pay lies in taxability:
VA Disability Compensation
Military Retirement Pay
Understanding how these benefits interact is crucial.
Offset Rules
Related podcast: Gaining Actionable Intelligence on Veteran Disability and Other Benefits
One critical yet under-discussed topic is the Strickland Decision. It allows retirees rated less than 50% disabled to reduce taxable retirement pay by the amount of VA disability compensation they should have received while their claim was being processed.
Prepare for Tax Changes
Build a Financial Buffer
Understand Benefit Limits
Survivor Benefits Planning
Related content: 4 Effective Ways Service Members Can Use the TSP F Fund
Transitioning from the military requires careful planning, especially when it comes to VA disability compensation and military retirement pay. With the right knowledge and tools, service members can optimize their benefits, minimize tax liabilities, and create a stable financial future.
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