Consumer Protection And Investor Education: Programs
Investor Education Resources for Military Service members
Defend Yourself Against Investment Fraud
New Mexico Regulation and Licensing, Securities Division regulators are thankful for the service and sacrifice of military services members and their families. Unfortunately, unscrupulous scam artists often prey on military families. Education and awareness are the best weapons against investment fraud.
TEN-HUT! UPDATED “FINANCIAL FIELD MANUAL” FOR MILITARY FAMILIES’ PERSONAL FINANCES NOW AVAILABLE
More than 800,000 copies of the second edition of the “Financial Field Manual: The Personal Finance Guide for Military Families” will be distributed on military bases around the world and directly by state securities agencies, under a partnership of the Investor Protection Trust (IPT), the Investor Protection Institute (IPI), the Council of Better Business Bureaus (CBBB) and Kiplinger’s Personal Finance Magazine.
Written in Kiplinger’s style by contributing editor Kimberly Lankford (a military spouse), the January 2012 guide from IPT, IPI, CBBB and Kiplinger’s focuses on the key issues that can help military families make informed investing decisions, protect their money and their families, and take charge of their financial lives. Over 800,000 of the updated guide have been printed. The first 710,000 print copies of the guide will be distributed directly to military bases in the U.S. and around the world. In addition, 29 states and the District of Columbia have ordered 100,000 additional copies to use as part of education programs with service members and their families in their states.
An online version of the guide is available at: www.kiplinger.com/money/military/pdfs/Military_Families_Final.pdf
The 20-page booklet features success stories from service members and their families, and provides comprehensive guidance on a wide range of timely personal finance topics, including:
• Investing for the Future. Members of the military have access to special investing plans that can help them save for the future, but they’re also frequent targets of scam artists and identity thieves. The guide shows them how to make the most of their special savings plans, make smart investing decisions, and avoid the new generation of scams
• Protecting Investments and Family. Military families have some unique risks—especially when they’re deployed—but they also have access to special programs to help them protect their savings and their families. The booklet guides them on how to make the most of these resources in areas such as insurance, estate planning, and new tax rules.
• Special Home-Buying Resources. Military families, who tend to move frequently and sometimes with little notice, have been hit particularly hard by the housing downturn. But they also have access to special mortgage programs and tax breaks. The guide addresses these valuable resources and some key investing decisions to protect them from housing troubles that can jeopardize their financial situation.
• Protecting Investments When Leaving the Military. Service men and women need to make some key investing decisions after leaving the military. The booklet provides guidance to help ensure that the savings they have built throughout their service lasts through retirement – which is particularly timely as they enter a challenging civilian job market.
• Special Benefits for Military Families. Members of the military have special legal rights and access to other valuable benefits, such as a GI bill that can help service members, their spouses and their children pay for college. The guide shows them how to make the most of those benefits to help protect their savings.
The 30 states and jurisdictions distributing copies of the new IPT-IPI-CBBB-Kiplinger’s guide are: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Virginia, Washington, and West Virginia.
Thrift Saving Plan
The federal government’s Thrift Savings Plan, or TSP, is a retirement plan much like civilian and corporate 401(k) retirement plans. The plan allows federal employees and military personnel to contribute a portion of their salary for retirement. Contributions can be a set amount or a percentage of pre-tax income.
Since the money contributed to your TSP is transferred from your income before taxes are taken out, the IRS has set rules on the contributions and withdrawals. In 2011, the maximum annual contribution to a person’s TSP is $16,500. Also, any pre-retirement withdrawals from your TSP are penalized at a much higher tax rate than other types of income.
Since the contributions to your TSP occur before taxes are deducted from your paycheck, your tax liability is less than if you made no contributions. The more you contribute to your TSP, the less in taxes you pay each year. Once you reach retirement age and can start withdrawing from your plan, you will most likely be in a lower tax bracket and, therefore, pay less in taxes on the income you receive from your TSP retirement funds.
For more information on the Thrift Savings Plan, visit:
Savings Deposit Program
Another retirement savings opportunity for military personnel during deployment is the Savings Deposit Program. Troops deployed to a designated combat zone can contribute up to $10,000 to a Savings Deposit Program account that guarantees 10% return per year. Contributions can be made for 90 days after leaving the official combat zone.
Emergency Relief Funds (Interest Free)
Payday lenders are found around military bases throughout the country. These lenders offer high-interest, short-term loans for emergency situations such as car repairs. If the loan is rolled over repeatedly, however, the effective APR can skyrocket – for a full year, the APR can be 300% to 500%. Instead of spending exorbitant amounts of money to pay for a loan, each branch of the armed forces has an Emergency Relief Fund with NO interest to assist troops with those same needs. These organizations offer interest-free loans to cover emergency situations including food, rent, utilities, medical expenses, car repair, emergency travel, and more. If a loan would cause undue financial hardship, it may be turned into a grant, which wouldn’t need to be repaid, or a combination loan and grant. For those who meet certain eligibility requirements, aid societies also provide educational scholarships for children and spouses, including surviving spouses, of military personnel.
Credit Report: Active-Duty Alert
While you are deployed, it is important to make sure your valuables are secured. One important valuable to keep safe is your credit score. A good credit score takes a while to build, but it can be quickly ruined by someone taking advantage of you. You can place an active-duty alert on your credit report that requires creditors to verify your identity before granting credit in your name. You may even have the option of providing a family member’s or trusted friend’s telephone number for the credit agency to call when any application for credit is submitted in your name.
To place or remove an active-duty alert, contact each of the three credit reporting agencies:
P.O. Box 740241
Atlanta, GA 30374-0241
P.O. Box 2104
Allen, TX 75013-0949
P.O. Box 1000
Chester, PA 19022