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Financial Information for Senior Military Officers

TRICARE Young Adult (TYA) Premiums to Increase...A Lot

TRICARE Young Adult, the insurance coverage for prior dependents of Military Members under age 26, will become significantly more expensive starting on January 1, 2016.

Premiums for the Prime version of TYA will increase 47% from $208 per month to $306 per month.

Standard version of TYA will increase 25% from $181 per month to $228 per month.

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SBP and Your Long-Term Care Insurance...It Really Does Have an Impact

Granted...probably no surprise there, but I found out something today that further convinces me that the standard GI issue family should think long and hard before turning down the Survivor Benefit Plan (SBP).


I was trying to place Long-Term Care Insurance (LTCI) for someone.  I received quotes from the Federal LTCI program and talked to my trusty LTCI specialist.  The commercial market couldn't match what the Federal LTCI program could provide.  Comparing comparable benefits the least expensive commercial product was nearly $1,200 (43%) per year more.  The most expensive policy was nearly $2,000 (73%) per year more expensive.  Why?

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TSP/401(k) Loan? Step Away From the Paperwork, Please…

Let’s say you’re sitting on $10,000 of Credit Card debt and you can take a loan from your TSP/401(k) to pay it off. The credit card is at 12% interest and the interest on the loan from your retirement plan is only 7%. Take the loan right? Simple math…7% interest is less than 12% interest so take the lower rate. Well, you’ve not finished reading the “story problem”. Your not sure of the train from Philadelphia’s speed (so to speak).

 There is more to the story problem. The first issue is opportunity cost and the second (and bigger issue) is tax ramifications. Let’s look at the numbers.

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Give away $14,000, No Problem! Right?

If you spend much time reading financial publications (you know the names) or watching financial TV shows, you’ve probably heard, “You can give away $14,000 to anyone in a year and have ZERO gift tax ramifications and if you’re married your spouse can too!” I b2ap3_thumbnail_charity-2_20140701-112953_1.jpgdon’t know how many times I have heard that. The problem is, it isn’t exactly true.

The reality is that you can gift up to $14,000 in a present interest per year and exclude the gift from any gift tax. What is a present interest? It means the person who receives the gift can use the money now. If you put the money into something where the recipient can’t get the money now, you lose the exemption and the gift becomes potentially subject to gift tax (since the current lifetime Unified Tax Credit is large most people won’t owe taxes) and you must file a gift tax return.

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Beware the Short Sale Tax Bite


Due to the financial crisis/great recession many Americans found themselves under water on their mortgage — they owed more than the house was worth. One way out of this situation was to execute a “short-sale”. In a short sale the lender agrees to accept the proceeds from the sale of the house as payoff for the loan. Any remaining debt was forgiven. Fortunately, a lot of homeowners are now back above water, but some of you may still be considering a short-sale. But, before you do you need to realize that the tax treatment of a short-sale changed on 1 Jan 14.

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