Author: Joel Schofer, MD, MBA, CPE
Finance Friday Articles
Here are my favorite articles this week:
Common Tax Deductions That Will Save You Money
Venturing Abroad vs Happier at Home (two sides of an argument about investing in foreign stocks vs the US alone, written by the same author)
Here are the rest of the articles:
4 Benefits of Portfolio Rebalancing
9 Easy Steps to Building a Great Investing Strategy Using the Tax-Efficient Waterfall
Asset Allocation (Part 3): The Dream Bucket
Can the 60/40 Portfolio Still Work?
Comparison is the Thief of Joy
Eyeing the Exit – How to Get Out of Investments You No Longer Want
Preparing your finances for parenthood
Private Real Estate – What Fees Are Fair?
Should You Use a HELOC To Invest in More Real Estate?
The New Fed Mandate: Full Employment & Asset Bubbles?
The Worst Financial Gifts to Give Your Kids
Top 5 Factors that Make Financial Independence Easier to Achieve
Want a Peloton But Don’t Have $2K? Here’s How to Make a Cheaper Alternative
What Should I Put In My Roth IRA?
What Your Psychology Says About Your Relationship with Money
KSA Update in September Naval Medical Forces Development Center (NMFDC) Newsletter
Here is the latest on Knowledge, Skills, and Abilities (KSAs) from NMFDC:
Throwback Thursday Classic Post – If You Want to Improve Your Wellness and Reduce Burnout, Read This Article
Wellness.
Burnout.
The articles discussing these subjects are endless. If you want to address your own wellness/burnout or that of others, read this article and take it to heart:
Reaching Peak Wellness – Most of It Is Nonsense. Here’s What Actually Works.
Military Times Article on Payroll Tax Deferral and a Cheat Sheet
Here’s a cheat sheet developed by Dr. Dustin Schuett* for the issue discussed in the article below:
Here’s a link to the Military Times article:
More than a million troops to get temporary pay hike with payroll tax deferral — but there’s a catch
*Note: The views expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Department of the Navy, Department of Defense or the United States Government.
Admiral Announces Plan to Restart Navy Fitness Tests
Here’s a link to this article:
Guest Post – Servicemember’s Group Life Insurance (SGLI) and an Important Note Regarding Individual Disability Insurance Eligibility
Understanding the value of maintaining life insurance to protect loved ones, the military makes group term life insurance available under the Servicemember’s Group Life Insurance (SGLI) program to the following service members:
- Active duty
- Ready Reservists or National Guard who are assigned to a unit and scheduled to perform at least 12 periods of inactive training per year
- Commissioned Members of the National Oceanic and Atmospheric Administration and the Public Health Service
- Cadets or Midshipman of the U.S. military academies
- Members of the Reserve Officer Training Corps engaged in authorized training and practice cruises
If you are on this list, at the end of this article provides a link on how to enroll. This coverage is not free as you must pay a monthly premium. This article will provide you the information you need to make an informed decision about life insurance.
SGLI is group term life insurance which means it will pay your beneficiary, a person or entity you choose, who will suffer a financial loss in the event of your death. If you can’t think of anyone, for example if you are single with no dependents, you can stop reading because you probably don’t need life insurance. However, if you are married with children, mortgage, etc., this protection is extremely important. Financial planning calculators indicate that an insured individual should maintain 7-10 times their annual income in life insurance until their youngest child is 25 years old.
SGLI provides up to $400,000 of coverage regardless of health and age for $24 per month. A similar private policy from the open market issued on a 30-year-old non-smoker will cost between $22-$32 per month, so the SGLI policy is competitively priced. This is because most active duty military are young, healthy and retire fairly young so the liability for the insurance company, Prudential, is mitigated.
Upon separation from service, SGLI can be converted to Veterans Group Life Insurance (VGLI) within one year and 120 days from separation. If done within 240 days of separation, no health qualification is required. Thereafter you must meet good health standards. Unlike SGLI, VGLI is not competitively priced and rates are determined by age and increase in five-year increments. A $400,000 VGLI policy is $40 per month between ages 30-34, $68 per month at age 40, $144 per month at age 50 and increases every five years to $1840 per month at age 75. Similar individual policies are approximately 60% of the cost of VGLI but you must qualify medically.
Taking into consideration the incomes of most military physicians and dentists, not only is SGLI inadequate in terms of need but it can lead to providing a false sense of security and result in the postponement of establishing an adequate personal term insurance program early in one’s military career before the development of health issues, nicotine use, avocations, or deployment. The only exclusions on individual life insurance policies are suicide during the first two years so war is covered but you cannot initiate coverage if you are stationed outside the country or have received orders to do so. Once again, the sooner you apply for coverage the wiser.
It is prudent to examine your individual life insurance options sooner rather than later. Please contact our office with any questions and don’t forget to ask about the disability insurance discount for new policies.
Important Note Regarding Eligibility for Individual Disability Insurance
Receiving orders for deployment outside the USA will prevent you from being able to apply for a non-cancelable and guaranteed renewable to age 65 policy until you return to the USA. This would mean paying a higher rate for the duration of your career. Since OCONUS PCS orders are given when you are at the end of training, it is prudent to explore establishing coverage prior to that time period. Avoid this potential pitfall and others by working with us and our extensive experience with military physicians and dentists today.
Andy G. Borgia CLU
D.K. Unger
888-934-4637
858-523-7518
SGLI Online Enrollment System (SOES) – Life Insurance https://www.benefits.va.gov/INSURANCE/SOES.asp
SOES is the Servicemembers’ Group Life Insurance (SGLI) On-Line Enrollment System. It replaces the paper-based SGLI/Family SGLI (FSGLI) enrollment, maintains elections and beneficiary information, and provides 24/7 self-service access to SGLI information. SGLI provides insurance coverage to eligible members of the active and reserve components.
Navy CBD Product Ban Expanded to Include Lotions, Topical Applications
Here’s a link to this Navy article:
CBD Product Ban Expanded to Include Lotions, Topical Applications
Two USU Chair Positions – IM and Psych – CAPT(s)/CAPT
Anyone interested in applying for these positions needs to send their CV, military bio, and letter of intent to me at joel.m.schofer.mil < at > mail.mil by COB 15 SEP 2020. Here are the calls for nominations:
Support the Blog by Donating to My Brother’s Run Across the US to Fight Cancer – Run Forrest, Run!
My brother Jarad is famous for having run every street and alley in Washington DC:
A DC Man Ran Every Single Street (and Alley) in DC
He scored a sabbatical from his teaching job and will be running across the entire US, Forrest Gump style, to fight cancer. If you’ve ever appreciated the blog, you can show it by donating to his cause here:
Info on Social Security Payroll Tax Deferral for Active Duty
BLUF – If your monthly basic pay is less than $8,666.66 per month you are going to get extra money deposited in your accounts for the rest of the year, but they will take it back in early 2021.
Here’s the military relevant text from the DFAS page discussing this COVID related Presidential initiative:
In order to provide relief during the COVID-19 pandemic, a Presidential Memorandum was issued on August 8, 2020 and guidance followed by Internal Revenue Service on August 28, 2020, to temporarily defer Social Security (Old Age, Survivors, and Disability Insurance (OASDI) tax withholdings. This change is effective through the end of the 2020 calendar year.
Military Members – Effective for the September mid-month pay, DFAS will temporarily defer the withholding of your 6.2% Social Security tax if your monthly rate of basic pay is less than $8,666.66. If your monthly rate of basic pay is at or above this threshold, your social security tax withholding will not be affected by the temporary deferral. Military members can use their August or prior LES as a good reference for their typical Social Security tax amount. The Social Security tax is labeled as “FICA-SOC SECURITY” on the LES and is calculated as 6.2% of basic pay.
Military members are not eligible to opt-out of the deferral if their Social Security wages fall within the stated limits. The deferral will happen automatically.
Per IRS guidance, collection of the deferred taxes will be taken from your wages between January 1 and April 30, 2021 for both military members and civilian employees. Additional information on the collection process will be provided in the future.
If a military member or civilian employee separates or retires in 2020 before the Social Security tax can be collected in 2021, they are still responsible for the Social Security tax repayment. Additional information on the collection process will be provided in the future.
For questions on the temporary deferral of the 6.2% OASDI withholding:
- Visit the IRS page: https://www.irs.gov/newsroom/guidance-issued-to-implement-presidential-memorandum-deferring-certain-employee-social-security-tax-withholding.
Still have questions? See the FAQs for more information.
Joel Schofer's Career Planning Blog 