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August 2018 News from MOAA National

Dateline: 8/2/2018

Military Pay Raise, No New TRICARE Fees or BAH Cuts: A Win for MOAA Advocacy

The recently released final report on the FY 2019 National Defense Authorization Act (NDAA) released by Congress yesterday was a major win for MOAA's advocacy efforts across the board.

The bill is on track to be signed before the start of the fiscal year. This is a major achievement, especially considering the last time this happened was over 20 years ago in the FY 1997 NDAA, according to Politico's Morning Defense briefing July 24. Early passage of the bill would also prevent the need for another continuing resolution and provide much needed stability to DoD; defense leaders have been asking for this for years.

Some wins in the final defense legislation that align directly with MOAA's key legislative goals are:

MOAA's success at achieving these important goals in the final legislation came from working closely with congressional leadership and staffs, support at the grass roots level from our membership in answering our calls to action, and a concerted effort with our partners in The Military Coalition.

As House Armed Services Committee Chair Rep. Mac Thornberry first stated back in May, “Restoring readiness while increasing the capability and capacity of our armed forces is a key focus of this year's defense policy bill.”

Likewise, members of Congress consistently emphasized readiness and increasing capacity throughout their preparation of this year's defense authorization bill. They kept as their focal point our nation's new defense strategy released under Secretary of Defense Jim Mattis back in January.

MOAA joins with our coalition partners to thank the leadership of the armed services committees and their staffs in Congress for their hard work on behalf of our servicemembers and veterans and their families.


How to Manage Investments During a Crisis

Do you ever find yourself worrying about what will happen to your investment portfolios based on world events?

Your portfolio management should not need to flex to the crisis du jour. If it does, you need a better plan. An investment plan based on crisis management or the emotions stirred by a crisis is a plan that won’t work.

Good portfolio management expects the unexpected. Proper portfolio management is about managing to the risk (e.g., the British exit from the EU, a financial bubble, or a terrorist attack).

Your money serves different purposes. Some must be available for short-term needs like emergencies. Some is for mid-term needs like saving for a home. Some is for long-term needs like retirement. Another might be to generate income. Each of these financial objectives requires a different strategy of money management.

Short-term savings must be stable and liquid at all times because when you need them, they must be available for use. Sure, you aren’t making a return on your short-term savings, but that’s not the point. The point for short-term money is stability and availability.

Long-term money, on the other hand, requires a return that allows you to offset the damage of taxes and inflation over time and earn excess returns to build wealth. You won’t be touching this money for a long time. Short-term volatility is not the point; the long-term gains are the point.

For average people to build wealth for long-term needs, the investment markets must go down. You need a portfolio strategy designed to take advantage of the short-term drops in the markets. Short-term drops are our only chances to buy at sale prices before the markets continue their constant movement upward.

So are world events and crises a big deal? Absolutely. They can drive down the markets so our next contribution to our 401(k)s, Thrift Savings Plans, or IRAs can take advantage of lower prices. You should expect — even want — a market drop (the reason doesn’t matter), plan for it, and take advantage of it.

New GI Bill Provisions Offer Veterans Technical Training and Education

The Harry W. Colmery Educational Assistance Act of 2017, commonly referred to as the “Forever GI Bill” contains 34 sections covering educational, vocational, and disability benefits to support veterans, active duty servicemembers, National Guard and Reserve members, and dependents. Two of these provisions are aimed at focusing on careers that provide former servicemembers and military retirees education and training benefits that should lead to high-paying employment.

The first program (Provision 111, More Benefits for Science, Technology, Engineering and Math (STEM) Programs), which premieres Aug. 1, 2019, will provide the opportunity for up to an additional nine months (and maximum of $30,000) of GI bill benefits for eligible beneficiaries enrolled in programs focused on STEM fields. These fields typically require more than the traditional credit hour requirements to earn a degree. Priority will be given to those who are entitled to 100 percent of the GI bill benefit, already have enrolled in a STEM program, and have completed 60 semester credit hours.

 The second program (Provision 116, Pilot Program for Technology Courses or VET TEC) is a five-year pilot program with opportunities to enroll in high-technology programs of education that provide skills needed for in-demand employment. These programs include computer software and programming, information science, media application, and data processing.  The VA will provide employers or training programs with GI bill funds to offset training expenses and a housing allowance for the beneficiary, with the expectation that employment is the end game. This program also is expected to premiere sometime in 2019.  

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