People who have served in the military can take advantage of a retirement pension earned after 20 years of service. This benefit can provide a comfortable retirement, and there are two different approaches that can be taken.

Since most people join the military when quite young, a service member could retire after 20 years of service and embark on a second career in the private sector, receiving his or her military pension during that time. A retired veteran could save the pension for the future and live on current wages or salary.

When retired veterans put their working years behind them, they would qualify for Social Security benefits as well as the military pensions, and should have nice 401(k) nest eggs waiting for them.

The other possibility is the careerist approach. Members might stay in the service until they are eligible to receive full Social Security benefits. Pension benefits are commensurate with years of service, so a person who retires after 40 years of service would get a significantly higher pension than someone who moves on after 20 years.

Wartime Veterans Pension

The retirement pension is not the only pension available to veterans. The Veterans Pension is a program that can provide monthly income to veterans who served during wartime.

This benefit is often overlooked, because the length of service requirement is surprisingly modest.

For veterans who began active duty before September 8, 1980, the requirement is 90 days with a single day of wartime service. The requirement for people who joined on or after this date is 24 months or the full period of enlistment .

This benefit may be available to veterans who are 65 years of age or older, and totally and permanently disabled veterans of any age.

There is also a financial need requirement. Prior to 2018, decisions were made on a case-by-case basis and there was no etched in stone asset limit. During 2018, legislation was passed that changed the playing field.

there is a limit tied to the amount of the Medicaid Community Spouse Resource Allowance. This is an allowance that gives a healthy spouse the ability to keep half of the shared assets when the institutionalized spouse is applying for Medicaid to pay for nursing home care.

In 2020, the limit was just over $129,000 of combined assets and income. The Veterans Administration has not published the 2021 number at the time of this writing, but there will be a slight increase.

We should point out that a home and one motor vehicle are not counted when administrators determine an applicant’s eligibility. Household belongings and personal effects are exempt, as well.

There are three different Veterans Pension designations: (1) the standard pension, (2) Aid and Attendance (for veterans who need help with activities of daily living), and (3) the Housebound pension.

Cost-of-Living Adjustment

A veteran who is eligible for the standard benefit can receive as much as $13,752 in 2020. The amount for a veteran eligible for Aid and Attendance is $22,939, and the maximum annual benefit for a veteran eligible for the Housebound benefit is $16,805 for 2020.

Annual cost-of-living adjustments increase the monthly benefit received by Veteran Pension beneficiaries. This is based on the Social Security cost-of-living adjustment rate, which calculates the appropriate increases. The increase for 2021 will be 1.3 percent.

Three-Year Look Back Period

The bill that established this hard asset and income limit also established a three-year look back period. Prior to this change, veterans could make gifts to family members to reduce their countable assets and then qualify for benefits. Now, gift giving must be completed at least three years before the application for pension is submitted or a penalty will be accrued.

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