Season 4 Episode 151: Navigating the Financial Decisions of Transition with Todd Nelson

Lessons Learned for Vets

On this episode of the Lesson Learned for Vets podcast, we welcome Todd Nelson. Although not a veteran himself, he has dedicated his career to helping service members navigate their finances as a financial advisor for Edward Jones. There are often unique financial challenges that accompany transitioning service members into their next career. Todd is the host of Transition 30, a network that uses quarterly Zoom calls to connect service members to resources and organizations that support the military transition process.

Todd lays out 3 considerations every service member must make as they exit the military. 1) How much money do I need to replace? 2) How much money do I want and how much money do I need? 3) How am I going to get from what I need to what I want? Having mentors and talking to subject matter experts in taxation can become a valuable piece of establishing your financial foundation.

The first consideration when thinking about SGLI to VGLI is knowing what your needs are when it comes to insurance. Speak to your spouse, significant other and family members before you start the VA disability process. During the VA process, everything is documented. If you start your insurance research after you have already started the VA process, there may be some exclusions to your policy because of the VA documentation. The second consideration is realizing that VGLI is there for a reason. Sometimes private life insurance companies won’t cover you because of your service-related injuries.

When it comes to the Survivor Benefit Plan (SBP), it’s important to realize that it’s a personal decision that should be based off several factors. Research the SBP at militarypay.defense.gov prior to out-processing. During out-processing, you will be asked if you want to opt out of SBP because by default, you are opted into the plan. An alternative to SBP is life insurance.

Another priority when transitioning from the military is knowing how your tax bracket will be influenced. Your pension and new job will affect your tax bracket. Start setting money aside for this reality.

VA disability payments are tax free. It is a benefit that you have earned and can be viewed as a lifetime annuity. You are guaranteed that income with a cost-of-living adjustment each year. With just a 10% disability rating, you are eligible for a VA home loan. Service members who are separating and plan to file for disability compensation can file their claim before separation through the Benefits Delivery at Discharge (BDD) program. The BDD program allows service members to apply for VA disability compensation benefits between 180 to 90 days prior to separation. If your disability rating is 30% or higher, you will have preference when it comes to jobs in the federal government.

There are many considerations when it comes to accepting a job offer. Look at the total compensation package, not just the salary. Benefits might include a 401K or a 403b and stock options. You will want to consider starting a Roth IRA or a traditional IRA. Do your research and seek assistance and advice to help you navigate your financial situation.

Subscribe to our YouTube channel at https://tinyurl.com/llforvets22

Connect with Todd at https://www.linkedin.com/in/todd-nelson-edward-jones/
Transition 30 LinkedIn Group:

AAFMA, the American Armed Forces Mutual Aid Association is the longest-standing nonprofit association offering life insurance, wealth management, mortgages, survivor assistance and more.

AAFMA is dedicated to helping servicemembers be ready for life after the military. AAFMAA would like to offer you their free Transition Timeline, a guide to help you create a solid military transition plan. Let AAFMAA help you get ready for your next step by visiting www.aafmaa.com/ll4v.