15,040 grads of the Ultimate Military Credit Cards Course already know why
The Platinum Card® from American Express is my #1 recommended card
Military Money Manual has partnered with CardRatings for our coverage of credit card products and may receive a commission from card issuers. Some or all of the cards that appear on this site are from advertisers and may impact how and where card products appear on the site. This site does not include all card companies or all available card offers. Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Thank you for supporting my independent, veteran owned site.
Listen to The Military Money Manual Podcast on Spotify, Apple Podcasts, Amazon Music, Audible, YouTube, or Stitcher.
Your Military Family’s Confidently Prepared™ Life Binder: https://www.katehorrell.com/confidently-prepared-life-binder/
Retirement checklist: https://www.katehorrell.com/military-retirement-checklist/
Separation checklist: https://www.katehorrell.com/military-separation-checklist/
Military Money Manual Podcast Episode #91 Links
- Free 5-day course to maximize your travel benefits and learn all about military credit cards
- The Military Money Manual book
- Daniel Kopp Estate Planning for Military Families | Military Money Manual Podcast Episode 83
- MMM article | TSP max contribution 2023 article
- Comprehensive Military Separation Checklist
- Comprehensive Military Retirement Checklist
- Kate Horrell Article | 10+ Places To Learn About The Survivor Benefit Plan (SBP)
- Department of Defense Office of the Actuary
- Navy Mutual Aid Association
- Navy Mutual Aid Association SBP brief
Outline of Episode:
- TSP
- Lifecycle Fund
- Comprehensive Separation Checklist
- Comprehensive Retirement Checklist
- Kate’s takeaways on the other side of military retirement
- GI Bill
- SBP
- Confidently Prepared Lifebinder
Military Money Manual Podcast Episode #91 Transcript
[00:00:00] Kate: Exactly. I encourage people to look at SBP, investments, and insurance like a knife, a fork and a spoon. They're different tools. They do different jobs. I can eat peas with a knife, it's not going to go well. I can try to stab peas with a fork, but sometimes they pop off your plate. But if I just use a spoon, I could probably get those peas into my mouth.
[00:00:49] Spencer: Hello and welcome to the Military Money Manual Podcast. I'm your host Spencer from militarymoneymanual.com. Joined by my co-host Jamie.
Today on the podcast we have Kate Horrel. Kate Horrel is an accredited financial counselor, AFC, and personal finance educator who helps the military community make the most of their pay and benefits.
She has also roamed the globe with her now retired sailor for 28 years, carting four kids and two cats to wherever the Navy sent them. She shares the most up to date information in understandable terms and highlights how rules, programs, and laws will directly impact your personal finances. Over 15 years of working with thousands of military families, she understands the concerns of currently serving, retired, and veteran families.
You can find more about her at KateHorrell.com. And I'll just mention besides her official bio, she is an all around great person and a huge advocate and protector for military families and service members and very excited and happy to have her on the show.
[00:01:52] Jamie: Today's show, we're going to talk about investing, GI Bill,
SBP and some amazing resources that Kate has on her website, like her confidently prepared life binder, which is well worth the small cost and a number of free but equally amazing checklists like her PCS and packout checklist.
[00:02:09] Spencer: Kate, thank you so much for coming on the podcast.
[00:02:11] Kate: I am so excited to be here.
[00:02:13] Spencer: We'll start off with a topic that might be one of the easier ones we address today. We'll talk about the thrift savings plan, TSP, and the blended retirement system. We were chatting a little bit before we hit record about automatic contributions, and I'll let you take that wherever you want to, but I'll tee up that topic for you.
[00:02:33] Kate: Yeah, this is an important one for people's long term planning for those of you who don't know if you're in the blended retirement system, you are automatically contributing some level of money into your Thrift Savings Plan. You get auto enrolled. It was 3%. Now it's 5%. But a lot of people, if they're not really fully engaged in their finances, might think my branch has already auto enrolled me.
That's all I need to think about. But that three or 5% may not be where you really want to be with your TSP. At one point in my husband's career, he was contributing 15% of his base pay to TSP. And that 15% is one of the reasons he was able to choose not to work when he got out of the military. Just don't assume that whatever the Department of Defense has automatically enrolled you in is going to help you reach your goals.
You need to figure out what is actually the right level for your situation.
[00:03:31] Jamie: And it could change from year to year or situation dependent and so if you decide 10% is right as an E-3, that doesn't mean 10% is right as an E-7. So you have to continually assess it based on your goals and your family.
[00:03:46] Kate: That's very true.
I will say one thing I encourage people to do is to take advantage of when they get a promotion or an annual pay raise or a time in service raise and just bump up their contribution one percent. If you do it at those times that you're getting an increase in income, you're not going to have a decrease in your take home pay.
You're still going to have a little bump to your take home pay, but you're also going to have a bump to how much you're saving. And that's how we were able to get to 15%. We 100% could not afford 15% out of the gate. I think we might have started at 1%.
[00:04:25] Jamie: It's a good place to start. Everyone's got to start somewhere.
What about the life cycle? Nowadays, people are automatically enrolled in the Life Cycle Fund. Are there any kind of tips or gotchas on lifecycle funds, especially as people get closer to retirement?
[00:04:38] Kate: Absolutely. The lifecycle fund is a great default, and it's much better than where they used to put people's default money.
But again, the lifecycle fund may not be right for your specific situation. Life cycle funds are by their nature designed to get more conservative as you get closer to your retirement date, depending on your big financial picture, that may be a great idea for you, or it might be a terrible idea for you.
Nothing in TSP is going to be terrible, but if you earn a military pension, that's a huge amount of very conservative money, maybe you don't need so much of your TSP to be invested conservatively or maybe you have a highly paid second career or your spouse has an excellent income or you own substantial assets perhaps rental property and you really don't need to have that conservative component in your TSP.
[00:05:35] Spencer: Yeah, I think for myself personally, I never used the life cycle funds. I set my own asset allocation, but that's because I went down the rabbit hole when I was in my twenties and read all the Bogleheads and Rick Ferry's asset allocation books. I see a lot of people out there, presenting the idea of, Oh, this much C, this much S, this much I, but at the end of the day, I think the important thing to focus on is the savings rate and the contributions.
And It is very good. Now that the automatic investment allocation is not all G funds. I think that was a real disservice that the TSP board and the military retirement people gave to our service members. But I understand why they were doing it. We're coming out of the death of equities in the 70s and the 80s, where people thought stocks were extremely risky and they are, they can be extremely risky.
And so it made sense to invest retirement savings into government bonds. But if we look at how they performed over the last 10-40 years, It's barely kept up with inflation, so I think it's really important, if somebody's listening to this and they're like, I don't know where or how my TSP is invested, use this as a big flashing neon sign, go log into tsp.gov and look at how your money is allocated and if it's in a life cycle fund. Make sure it's appropriate for your projected retirement date or make sure it's appropriate for What your investment goals are and if it's all in the G fund I think you need to think really hard about is this how I want my retirement savings invested and I think a lot of investment advisors out there again, it depends on your family situation, but it would be hard pressed to recommend that you should be an all in the G fund.
[00:07:32] Kate: Yeah, and I do tend to think of it similarly to if you have a brokerage account, whether it's an IRA, you have to allocate where that money is going to go. When I make a contribution to my IRA at Vanguard. It goes into what's like a G fund, right? It goes into a money market fund until I give them further instructions.
So I think that was part of why it was set up the way it was. But as you said, absolutely a disservice while people are checking their TSPs to make sure their money is invested properly there. If you have other investment accounts go check those too.
[00:08:07] Spencer: And Kate, you mentioned how when your husband was on active duty, you guys were contributing 15% and I've got a TSP max contribution 2023 article on my site and I'll make a new one for 2024 as well, but it basically lays out for the BRS you have to make sure that you contribute every month of the year or you're not going to get your 5% match because the match is paid monthly. So for instance, for an O-3 with over four years. Would be a 29% contribution in order to max your TSP by December 31st of the year. And now if you're getting a late start, you're going to have to increase that even more.
So it can be focusing on maxing your TSP, especially if you're just getting started in your personal finance journey can be overwhelming, but I think just like you were saying, if you're if you've got a time in service or you've got a grade promotion coming up, just use that opportunity to increase your contribution by one or 2% and your take home pay is still going to increase.
So you're not even going to really feel the sting, as it were, of increasing that TSP contribution. And the other thing is, humans are lazy. We default to whatever the scenario is, right? So if you log in once and you bump your TSP contribution up 5%, maybe on the next paycheck, you'll notice it, but you'll get used to it.
And then that's what most people find is that they spend the amount of money that's in their checking account and somehow they make it to the next military payday.
[00:09:39] Kate: One other thing I will say to people who really are questioning, Oh, can I afford this extra percentage or this extra 2% or even this extra 10% they're feeling very aggressive today, is that the timeline to change your TSP contributions isn't terribly long.
So if you say you are feeling really gung ho today and you want to increase your contributions by 10%, maybe in three months, you realize that you actually can't sustain that. This isn't a lifelong decision. You can throttle it back. And we don't recommend that you do that if you don't have to, but it is absolutely possible.
[00:10:20] Spencer: We did something very similar when we moved to Hawaii, where our savings rate, when we were living overseas in the United Arab Emirates, was something absurd, like 30, 40, 50%. And we decided that, okay, we did two years of that. We saved up a lot of money. We were well in our journey to financial independence.
And when we got to Hawaii, we wanted a house with a pool and it was going to be a little bit over BAH. And so we just, we decided, my wife and I, as a family unit. Hey, if our savings rate drops from 40% to 30% and it delays our financial independence date by a couple of months or a couple of years, that's okay, because we're making the conscious choice that we want to live in Hawaii.
We want to have a house with a pool. And I think when you have those intentional conversations, especially if you're in a relationship and you have a and you have a spouse or a partner. That can be extremely actually liberating and exciting because you can say, okay, yes, this is going to delay our financial independence date by maybe a couple months or a couple years.
Think of the quality of life increases that we're going to have. And like you said, it doesn't have to be forever. If you live in that house with a pool for a couple of years, and the next time you PCS, you have an opportunity to have a house with a pool, but you say, you know what, we didn't even use the pool, right?
We use the backyard, but we never went swimming. It's okay. You can adjust your lifestyle and you're literally not married to the choices you make. And I like what you said about the TSP that you can bump it up, get crazy, add another 10% to it. And if you're really feeling the pinch in a couple months, dial it back.
And you've got that wiggle room. You've got that flexibility in your budget to do that.
[00:11:53] Jamie: Kate, you're now on the other side of military retirement as a spouse. I know not everyone's goal is to get to military retirement and earn a pension, and that's okay. But what are some things you've learned or some things that you would like to highlight to the listeners from your perspective now on the other side of military retirement?
[00:12:11] Kate: I think whether you leave the military, separating or retiring, don't underestimate what a major life change this is. I hear a lot of people who their plan, I won't even say their plan, but they don't plan because they say, Oh, it's just my spouse's job, or it's just my job. And I think that underestimates how much impact military life has on so many things in your life.
It's not just your job and your income, but it's also your health care. It's quite possibly where you choose to live or don't choose to live, your children's school may be impacted, if the spouse is employed, their employment may be impacted if you move or maybe they suddenly have the capacity to take on a job that they couldn't take on while their husband or wife was on active duty.
Also, for the service member, what I have observed, Is that it takes a while to decompress. Those of you who hang around in the personal finance world may be familiar with the name Doug Nordman and Doug really likes this phrase, the fog of work that you're so busy doing your military job that you don't see a lot of other things that are going on.
And I would say that my husband is two years out from when he left the military. And I think he's still processing how this is going to unfold and what the long term picture is going to look like. So that is my big takeaway.
My other big takeaway is that it's almost never too early to start preparing, even in the smallest ways, if it means you keep those little sheets of paper that they give you when you go to medical and you put them in a file, so you're not fighting with medical to get them when you leave the service, or having conversations with your spouse about what each of your visions look like and where are places that they are similar and where are places that they are different.
The thing that caught me very off guard, we had a 10 year plan. I have a huge checklist at my website. I think it's called the complete comprehensive retirement checklist. And also there's a separate one for separation. And I'd been dutifully going through this checklist for years before my husband retired, and we still had a terrible time picking our dental insurance at the last minute. It was such a silly thing, but that was the thing that we got caught up on.
So don't be surprised when it feels like you're running down the hill in front of an avalanche, but the more stuff you can get out of the way, the smaller that snowball avalanche is going to be.
[00:15:03] Spencer: I'll make a plug here. So when I separated at 12 years after duty service, the one thing well, I messed up a lot of things. But one thing that could have gone really poorly was I didn't get my VA disability application submitted within 90 days of separation. So I think I was literally 89 days. And because I missed it by that one day, The VA doesn't have to adjudicate. They don't have to make a determination on your disability application before you separate. So if you do it in that 180 to 90 day window, they do something that's called a benefits delivery at discharge, which allows you to file your VA Disability claim and then they'll make a judgment on it.
And you should have it set up so that you go straight from your last military paycheck to receiving your VA disability compensation if you're eligible for any. And so I missed that by one day. And so I separated in April and went on 60 days of terminal leave until May. And I didn't receive adjudication on my VA disability package until September.
So for me, I had plenty of savings. I was prepared for that. But for Someone who's in not such a great financial situation that could be really meaningful, and that could really move the needle in terms of their quality of life or in terms of what their options are after they separate. So what you were saying about being intentional, working your way through the checklist.
Ahead of time, even before you think that you should be thinking about it, and I think for me, if I could go back and tell my past self, I think the answer would be to start working. Start thinking about it a year out. Anything before that might be a little bit too early, except for taking the tap program because you can take that multiple times throughout your separation process.
So if you know that you're gonna be separating and in two years, Go to TAP. That's the transition assistance program. Go with 18 months to go and then go again with a year to go and because they fire hose so much information through those programs that the first time you do it, you're just gonna be like, “Whoa, my takeaway from this is that there's a lot of things to do, and I don't know what any of them are.”
And then the second time you go through it, you'll actually be able to know which questions to ask and You'll be able to understand what information they're trying to fire at you. So I think that's great. Yeah, you've got the comprehensive military separation checklist on your website. KateHorrell.com and the comprehensive military retirement checklist.
So two fantastic resources there for military service members who are approaching retirement or separation to check out.
[00:18:53] Jamie: Another one of those big decisions is what to do with their GI bill. So a lot of us are. aware of the limitations of transferring it to a spouse or child and the service commitment that comes on the other side of that.
But then when we get close to retirement, we have to actually decide how to use it and who's going to use it and when, and all those things that come with GI Bill.
Where do we start or any kind of common mistakes or gotchas on GI Bill, Kate?
[00:19:17] Kate: Great question. And I love talking about this. I don't know if you guys know, we have four kids.
The youngest is just starting their senior year of college. So we have three undergraduate graduates. One's already done with grad school, and we're almost done. And the GI Bill has been part of our funding plan. And because we have four kids, I really had a vested interest in learning how to make the GI Bill work for us.
And there are so many ways that you can stretch that benefit or get more out of it with a little bit of strategy. I talk to a lot of families who say, we have two kids, each one's going to get 18 months, end of story. And I just want to go no. Let's have a little bit more conversation here.
First of all, I encourage families to make sure that they remember that GI bill, if it's been appropriately transferred, can also be used by the spouse. And of course it can always be used by the service member. In many situations, the service member or the spouse getting a little bit extra education may have a longer and a bigger long term benefit for the family than saving it for their kids.
Let's just say that one parent currently is working in a job that getting that master's degree is going to give them an extra $20,000 a year. $20,000 a year over the rest of their life will not only pay for the kid's college, but it will continue to give them long term benefits. So that's a big factor for me is don't mentally limit this to just being used by your kids.
The second question is to think about which kid on the basis of a bunch of factors is going to get the most from the GI Bill. When you take into account things like the amount of tuition it's going to pay varies based on school, the amount of the housing allowance varies based on the location of the school, and it can be anywhere from about $1,000 a month up to almost $5,000 a month.
That's a huge range of money also because the GI Bill is the last payer of tuition. If you have a student who's academically successful and has offered significant merit aid, they are probably not going to get as much benefit out of the GI Bill as someone who isn't getting as much merit aid. Same thing is true with need-based aid.
The GI Bill always is the last payer of tuition. Different schools also will apply some certain types of aid in different ways, and I'm just going to make up an example here. But let's say the blue university awards a student a $5,000 scholarship, but they'll let that be used for room and board. Then the GI Bill will pay more there.
But red university awards a $5,000 scholarship that can only be used for tuition. That's going to have no net effect on how much money that family pays out of pocket. So there are just so many different considerations in how you use it. And I will say in our family, we've used the GI Bill pretty selectively a semester here, a semester there, this one for grad school, right?
Did we get it a hundred percent right? We didn't, and that is something I think people need to accept is that when you're making these decisions, you don't have all the information before that you're going to have at the end, and there's no way to have it. So you make the best decision you can with the information available at the time, and you be very thankful that the GI Bill exists and that you have it. And if you left a few dollars on the table, so be it.
Did you guys, cause I know this is a question in your life. Are there any big GI Bill questions that you've had come up?
[00:23:17] Jamie: I have a couple. So I have three kids. My oldest is pretty smart. They're all pretty good. But my oldest is, he's pretty smart and he'll be in that situation where I think he has a lot of options.
But I have no idea where we're going to be when we start to use the GI Bill. And so when do I need to decide? Is it a fall semester of senior year? Or what does the timeline look like to really nail down our plan?
[00:23:43] Kate: So when I work with clients with their GI Bill, my ideal timeline for them is that we start working in the summer before senior year.
Really to have a conversation almost like this. And then in the fall, we look at the schools that they're interested in, and we just make a few notes. For example, in some schools, there is a law that says if you're using VA educational benefits, schools have to give you in-state tuition. Doesn't matter where you're an in-state resident.
Some schools/school systems will let you keep that in-state tuition even if you only use the GI Bill for one semester. So those are the kind of things we want to know about schools as families are making their application decisions.
Then as the school year progresses, usually in December, January, February, the students will get not only their acceptances, but their financial aid packages.
And then we want to lay the financial aid package down together with what the GI bill will offer and see how they mesh. And if we have questions, then we go to the school and we ask them, Hey. Would you be willing to take this financial aid and apply it to room and board, or is that against your policies?
Can you confirm for us that if we use the GI Bill for one semester, we'll get to keep in-state tuition, even if we don't use it in the future? Things like that. The other thing for you, Jamie, to think about is if you have other college resources, whether it be a 529 plan or… Maybe grandmom and granddad wanted to help out a little bit, whatever the case may be.
Think about which one of the total family's assets are really family, community property and can be moved around, and which one of them are tied to your, to the student. So if you have an academically competitive kid, they may be awarded some scholarships or some financial aid that can't be moved from them.
So how do you work around that and then adjust the things that you do have control over to fill the big picture in the best possible way.
[00:25:56] Jamie: Is the GI Bill benefit part of the consideration for FAFSA at all when you get to filing that? Does it limit your ability to get aid?
[00:26:06] Kate: Being eligible to use the GI Bill does not change your aid eligibility.
Actually using the GI Bill may change your aid eligibility because when schools are calculating your need, how much money your family has available to contribute to school. If you are using the GI bill, obviously your need goes way down because the GI bill is filling a whole bunch of that gap. I have talked to many families and myself included who always feel if we disclose, we have the GI bill, we're going to be penalized if we don't use it because they're going to say you have this benefit and you're not using it.
I think that's a valid concern. I have not yet seen that play out to be true in all of the people I've worked with. I haven't seen any situation in which it appears that there was some sort of penalty for the financial aid calculation just because you have the GI Bill. But when you use it, it is absolutely going to change the calculation.
[00:27:15] Spencer: Kate, we just had Brian O'Neill on the podcast from WinkWealth, and he brought us a great discussion about the Survivor Benefits Program and the unique opportunity this year where you can actually opt in. If you hadn't previously and the SBP, this forever benefit program is a huge topic, so we don't want to get into all of it today, but there are any resources that you point people to or introductions to the SBP because again, this is one of those things that they'll cover in TAP and about probably.
30 minutes when really this is probably a couple hours of research and decision making process that you need and a conversation that you need to have with your spouse.
[00:27:58] Kate: You're right that it's a lot. I will point out a few resources that I personally have found super duper helpful. There's a military nonprofit called Navy Mutual Aid Association.
They teach SBP classes frequently, they're the presenters at TAP classes, but they also offer this, their class virtually twice a month on the third Friday of the month. I think it's at noon and 7pm. So if you go to the Navy Mutual Aid Association website and look for their SBP brief. It is factual, it is concise, it is well constructed, it's laid out in a way that makes sense.
And that's also a great resource. If maybe one of the two spouses wants to go back and revisit their information, one of the posts at my website is like 10 plus places to learn about SBP. And I break it down into three sections. One section is how to learn about it. One section is how to think about it. And then the last section is how to apply that information to your specific situation.
When you're thinking about it/applying it to your situation, the Department of Defense Office of the Actuary has great calculators that you can put in your family specific information and it will show you things like here's how much SBP is going to cost, here's how much benefit you'll get, but it will then extrapolate those things out over a lifetime and it will show you if you pay in for this many years and the service member dies in this year, and the survivor lives this long, this is where the breakeven point is, and this is how much the total benefit is, and it adds in the tax benefit versus the tax cost.
It's super robust and it gives you data, which is something that I think frequently doesn't come into the SBP conversation. A lot of people I know they're just getting the ward room gouge or what their insurance salesman buddy wants them to think about SBP or what their grandmother did when it was a totally different program. And the DOD actuary site is like actual numbers specific to your situation. They're great resources.
A question I ask people when I'm talking to them about SBP, and I have to give a hat tip to Heather Walrath who teaches this class for the Navy Mutual Aid Association. If you're in a situation where you are struggling with the SBP decision because it feels expensive and you think, Ah, 6.5 percent. How is my family's budget going to work if I lose 6.5% of my military pay? Fair question. I would turn that question around and ask you, how are your survivors going to get by on 0% of your military pay? If you're struggling to figure out how your family's going to survive on 93.5%.
[00:31:02] Spencer: Yeah, I think that's a great way to look at it is flip the question on its head and say, okay, it's not a question of can you afford to do this? It's a question of can you afford not to do this and not really can you not afford to do this because if it's activated you're gone as the service member and it's and you're leaving a legacy of there's not much guaranteed in life but a military pension from the US government is probably the closest thing that we have. And if you're choosing not to leave that to your surviving spouse, then you need to have some other kind of game plan in place, whether it's term life insurance, whether it's other assets or other income that they can rely on, or maybe it's not. And maybe it's just going to be social security for them.
But that's if you're somebody who's listening to this podcast, you're probably the kind of person who's not planning on having social security there when you're in retirement, or if you are, it's just a bonus, right? You're probably someone who's planning on paying for your own retirement versus having it completely subsidized by the government.
[00:32:13] Kate: Yeah, it's such an interesting question. And one of the things that I hear and sounds logical, but maybe is less logical is I hear a lot of people say, Oh everybody's just pushing SBP on you and I firmly don't believe that every person on the planet needs to take SBP. But I do firmly believe that if you don't have that backup plan, and when I say that backup plan, a backup plan that is in place, not a backup plan that exists based upon some action that's going to occur in the future.
I talked to people who say we don't need to take SBP because I'm going to work for another 20 years for a giant DoD contractor and make big bank and we're just going to invest that all that's not a plan, something that's going to happen in the future. Is not a plan, or I'm going to get term life insurance, never count on that being a guaranteed thing, and it's going to be enough.
One of the challenges I have really come to understand better the more I work with clients with this is that if you are comparing SBP to insurance, maybe term insurance is not the right insurance to be comparing it to because SBP is basically a lifetime policy. And so if you're going to compare SBP to insurance.
Maybe you need to compare it to permanent life insurance. And then we get into a whole nother cost thing. I encourage people. Yeah, exactly. I encourage people to look at SBP investments and insurance like a knife, a fork and a spoon. They're different tools. They do different jobs. I can eat peas with a knife.
It's not going to go well. I can try to stab peas with a fork, but sometimes they pop off your plate. But if I just use a spoon, I could probably get those peas into my mouth. If you need a lifetime stream of income, SBP is probably the right tool for the job. If you need a lump sum to pay off a mortgage, SBP might not be the best tool for that job.
Every one of those three things has their place. And don't try to use the wrong tool when the right tool's available.
Why now we talked about before you guys asked what our family did. And my husband did elect full SBP. We at some point in the process discussed our options and did we need, quote unquote, to take SBP?
Maybe not. That's a debatable thing. If it's debatable, again, I defer to… Why would you not take it? If you're not sure the answer to this question, my financial advisor said, Hey, if you're really not sure, maybe we discussed not taking the full SBP. A lot of people think SBP is a yes or no question, and it's not, you can elect to cover a portion of military retirement pay.
So that was a path that we briefly strayed down, what would an actual number be that would allow me to sustain the standard of living that I wanted if something were to happen to my husband and it probably isn't full SBP for our family, but we have a special needs kid. And ultimately, it was a no brainer for us to take full SBP.
Now, because of the way that the DFAS rules are written regarding incapacitated adult children and the survivor benefit plan, we don't actually know that she would actually, would get this benefit. Surprisingly, the DOD's criteria for a child to be an incapacitated adult versus the VA uses the term helpless child, I think, or helpless adult child.
And then the DFAS criteria are all different. And the DFAS one as best as I can tell, and I say this is the parent of a special needs child, we won't actually know if DFAS is going to pay out to my kid until something happens to my husband and to me. In part that is because she is more of an edge case.
She is not severely disabled. She's just incapable of self support. But for families that have special needs kids, it's almost a no brainer. And I also think with SBP, one thing that people sometimes write off the child coverage because their children are perhaps close to aging out. And they think, Oh they're going to lose coverage anyway in six months.
Why would we add them? I do know families who in that six month period, there was some sort of catastrophe. They were in a motorcycle accident. They came down with a very severe lifelong illness. And because they didn't take the coverage for their kids for those six months, that would have cost them 18 cents or something.
They've lost the ability to potentially have those benefits for their kids.
[00:38:59] Jamie: Kate, your website is full of great resources. I think the very first time I found you before we met in person I was looking up USAA pay dates and trying to figure out when my pay was going to hit the account two days early. So I personally just want to say thank you for all that you put out there.
One of my recent purchases that I got from you was the Confidently Prepared Lifebinder, which is incredibly thorough. I thought I had a good legacy plan. We've even had episodes about it. At least two episodes where we talked about legacy binders and things like that of how to be prepared for your family should something bad happen.
And then I saw how thorough yours was. Can you tell us a little bit about… The life binder that you developed and where people can find that.
[00:39:42] Kate: Sure. I'll give you a quick bit of background on how it came about. We have been on both sides of family emergencies. Every family has emergencies, right? We've been the family that somebody had to step in and help.
And we've also been the family that stepped in and helped. And both times I thought. If somebody had just written some stuff down, this would have been a lot easier.
[00:40:02] Jamie: I'm sure you said stuff, yeah.
[00:40:04] Kate: I 100% said stuff. And so I went on the internet and I bought an In Case of Emergency Binder. It's a great product.
Wholly support this product. I bought it for my mother and other people. It did not reflect our life as a military family. It did not really factor in the fact that you might not know your neighbors, or that you might not know your last address, or that one or both spouses could just be gone for periods of time, or that you might not have lived in your house very long, right?
There were so many aspects of the binder that I felt like I was adding in pages or trying to imagine would my sister, if she had to come fill in for me. Would she actually know that I'm actually a legal resident of Florida, even though I'm living in Virginia, would she know what to do with that? So I started this little personal project of making a product that was gonna help out my family, and then it turned into this whole journey, and as you said, became incredibly comprehensive, but it's out there.
And right now, if you go to my website, katehorrell.com, you can click on the link. It'll take you to purchase the binder in its current format. You have to print it out. I did lay it out so that you could just print out the pages hopefully that you needed. So if you don't have pets, don't print out the pet pages.
If you don't have kids in school, don't print out the kids in school pages, whatever. But I am literally like three proofreads away from having a fillable PDF. It's written, it's ready to go. I just don't want to release it to the wild until I'm confident that I've broken it every way that I can. So that is coming soon, and you will get a copy as a previous purchaser.
[00:41:54] Jamie: Yes, thank you. Can't wait to see it.
[00:41:57] Kate: Absolutely. Was there anything about it that you think has been really helpful so far?
[00:42:02] Jamie: One of the things I loved about it is we were pretty prepared of here's our bank accounts, and here's where our will's located, and here's the title for our car. But there were a lot of those details of military life that we didn't have captured.
So that's really what I value is the comfort items, the kids’ favorite stuffy, those kind of things for young kids that no other product I've ever seen covers and that we didn't even think to write down and that if my closest siblings or parents came, they probably wouldn't even know they'd figure out where the kids go to school and the kids would know what time to brush your teeth and some of the basics.
But there's so many details from military life that only you have been able to capture for our family so far. So that was very special to me. I appreciate that resource and the time you put into creating it.
[00:42:49] Kate: You give me such warm fuzzies.
[00:42:52] Spencer: And then, Kate, besides the Lifebinder, you've also got a PCS checklist, which I've utilized a few times before.
And what kind of information can people expect to find in the PCS checklist?
[00:43:06] Kate: So the PCS checklist I just want to throw out here right now that all of these things we're talking about are free, except for the life binder. So don't think I'm not going to go get her PCS checklist because I don't have the budget for it right now.
So far, everything else is free and it's likely to remain that way into the future because I'm not really doing this for the money, but I had to pay my graphic designer for the binder. So the PCS checklist includes really everything you can imagine from. When you get orders, or maybe even a little bit before you get orders, if you know they're coming down the pipe, and that particular checklist kind of ends at the end of packout.
And then I have another shorter checklist for moving into your new home. But it's everything from making sure you've refill your prescriptions in case there's a delay. Getting set up with medical care to your new place. To lists of what you might want to put in your unaccompanied baggage if you're moving overseas.
[00:44:07] Jamie: We just moved this summer and again we use this. So I'll give you the warm fuzzies again. It's just so many details. I think the way you describe it on your website is My shockingly long guide to packing up your house and life for a permanent change of station move. And the reason it is shockingly long is because it's thorough and it needs to be because there's so many details of PCSing with the military that most people don't get or they get but it causes stress in their life.
So identifying those ahead of time helps the family be prepared when you have the time to lay it all out and make sure you have your immunization records printed and that your important documents are accessible in your car that's another thing that you talked about to make sure we had that in our carry on bag because you can pack it and you have it in a smart spot, but if it's packed deep in the car and you can't get it out when it's time to register the kids for school, then it does you no good.
Those are some of the other things that I took away from the PCS checklist as well.
[00:45:01] Spencer: Kate, thanks so much for coming on the podcast and sharing with us your deep well of knowledge on all of these very esoteric but important military topics. Where can people go to find out what you're doing, read what you're writing?
And follow your future projects.
[00:45:23] Kate: Yeah. So the website is Kate Horrell and it's Katehorrell.com. And while you're there, you will probably get a pop up at some point that says sign up for my newsletter that allegedly comes every two weeks or when they happen. Sometimes it's a little longer.
And I also love to hear from people. So when you sign up for the newsletter, I close every newsletter saying, “Hey, hit reply and tell me what's going on.” And I really genuinely, I may not be able to respond, but I read every single one of those.
[00:45:56] Spencer: Thanks again to Kate Horrell for coming on the podcast, katehorrell.com. Lots of great stuff that she shared with us about the GI Bill, TSP, BRS, SBP, and so many other military acronyms.
Listener, if you're getting value from the podcast, a five star review on Spotify or Apple is the best way to say thanks. We really appreciate it. We're nearly up to 200 reviews on Spotify and 100 reviews on Apple.
So let's see if we can get over those new numbers with over 120,000 downloads of the podcast. We're super stoked to take it soon to episode number 100. And we hope that you'll join us on that journey. Podcast@MilitaryMoneyManual.com is the email address. If you want to reach out to us or we're on Instagram @MilitaryMoneyManual.
We'll see you on the next episode.
[00:47:06] Jamie: The views and opinions presented here are those of the speakers and do not necessarily represent the views of the DoD or its components. Reference to any commercial products or services does not constitute DoD endorsement of those products or services.