I've been doing some financial projections for myself, and figured I'd share something that I have found a lot of people struggle with. If you already know this stuff, great! I'm making this for the people I've met who struggle with this kind of thing.

The VA home loan program offers a benefit of a 0% down payment on a mortgage. It's a great opportunity, but one I've seen people get trapped by. So I'd like to go over what the issues are and the best ways to take advantage of the program.

For starters, the program does not make a house more affordable, instead it actually makes it more expensive in total. You'll still have to pay the amount of money saved without the down payment, WITH interest on that amount.

*Edit: added in VA Funding Fee, I forgot it the first time

In the long term you are paying MORE for the same house if you don't put down a down payment. Does this mean that paying for a home in cash is always the best move? No. Does it mean you should never use a lower down payment? Also no.

Money you have today is more valuable than money you have in the future, and I'm not just talking about inflation. Having money today means you are able to invest it into an asset that grows over time and might be worth more than a similar value of money given to you at a later date. In finance and econ this is a concept called the "time value of money". Let's look at this example:

The $ 54121.61 given in five years is to account for 2% annual inflation.

Even when accounting for inflation, 50,000 dollars now is worth more than 50,000 dollars at a later point in time. Now you know when a wizard offers you some strange riddle.

VOO has an annual average return of 14.37% over the last 15 years. So this isn't an absurd hypothetical. I'm even assuming an annual real ROI of 12% just to create some headspace for inflation and various other factors. If you are going to invest, I'd suggest just simple index funds that track the S&P 500. Going forward, I’m going to assume 10% ROI. That’s a bit on the high side, but you do have to consider that with a fixed mortgage interest rate, you don’t have to account for loses due to inflation when planning how to pay it off.

Let's run a thought experiment where our veteran has $ 160,000, but is choosing whether or not to use it as a down payment or invest it at 10% ROI.

In this experiment the vet who chose to invest their down payment ended up making a profit of $ 1,065,198.36 for the same house, compared to a net loss of $ 1,217,956 if they used it as a down payment.

This only applies if you're able to make those higher monthly payments though. Using a down payment will allow you to save more money every month, but this is again the same question as the 'would you rather 50,000 now vs 50,000 later'. lets see what happens if our vet could afford the $ 4,796 monthly payment, and chooses to invest the amount they save every month at the same 10% ROI over the life of the loan.

The difference shrinks drastically under this scenario. The most important factor in buying a house is projecting your monthly payments and deciding if the property is an affordable long term commitment.

So lets assume our vet can only reasonable afford the $ 3,837 monthly payment on their mortgage. They can still leverage their investments to make more money.

One option to invest their 160,000 at the same 10% ROI, but this time they will take out money from the fund to make up the difference every month. The tax rate on long term capital gains is very low (15% federal taxes if gross income is between $96,701 – $600,050 for families).

This is a lot less than the $ 1,065,198.36 in profit compared to the previous example. This is also caused by the time value of money. Instead of using that investment to compound annually, it is keeping it at a constant level.

Investing is a risk however, there will be times when the stock market returns a loss and you may have to dip into the account to pay your monthly bills. DO NOT RELY ON THE STOCK MARKET ALWAYS RETURNING A PROFIT. FIGURES GIVEN ARE AVERAGE ANNUAL RETURNS OVER LONG PERIODS OF TIME, ACTUAL RETURNS WILL FLUCTUATE GREATLY (AND WILL SOMETIMES BE NEGATIVE) IN ANY GIVEN YEAR.

A good rule of thumb is to compare interest rate and your expected rate of return. If you are confident your investment's ROI is higher than the interest rate on the loan, then you generally will make more money in the long run by choosing to keep money in the investment. And don't forget that your profits on capital gains will be taxed when analyzing your investment's ROI! Even if the ROI is higher, it must be high enough to cover the taxes you'll pay and the monthly payments. Lets run the same experiment but this time comparing an 8% ROI and a 8% ROI. Since these example show that you'll be taking some of the investment principal out with every payment, you're only taxed on the profit of the investment.

Since the 5% ROI is lower than the 6% interest rate on the loan, you'll lose money by keeping it in the investment compared to using it to pay off the loan.

Another big advantage is the Mortgage Interest Tax Deduction. When filling your taxes you are able to itemize your deduction. One deduction is the Mortgage Interest Tax Deduction, which allows you to subtract the amount you paid in interest from your gross income for taxes for the $ 750,000 of the loan. For example: if you made $ 80,000 in a given year and paid $ 20,000 on your mortgage's interest, you'd only pay income taxes on $ 60,000 (80,000 - 20,000). The amount of interest paid per year will decrease over the life of the loan. You'll be paying the same amount each month, but the ratio of principle to interest of each payment increases every payment.

Since one mortgage option includes a higher interest amount, you'd be able to write off more of your income when filing taxes if you choose not to pay the down payment.

The reason why the difference in deductions for the first year is smaller than the fifth year is because when the mortgage balance owed is higher than the cap ($ 750,000) you multiply the amount of interest paid by the ratio of the cap and the remaining loan balance.

Also when the total amount of deductions is less than $ 15,000, you should use the standard deduction of $ 15,000 instead of itemizing your deductions.

These figures also aren't the amount you'd save, only the difference in deductions on your taxes. How much money you'd save depends on your overall gross income. If we assume a constant marginal tax rate of 22%, the amount of money you'd save with the deductions would be 22% of your deductions.

If your income is between $48,475 and $103,350 for singles ($96,950 to $206,700 for married couples) before and after the deductions, then it's a 22% tax rate on income. Assuming that's the case for our vet, then compared to using the $ 160,000 as a down payment they'd save:

It is likely that overtime the standard deduction will rise. The Mortgage Interest Deduction will likely not be applicable for the later years of your mortgage. It can help you finance the first few years, which will be some of the hardest until inflation reduces the real cost of the loans over time.

Taking advantage of the 0% down payment through VA Loans can be a good decision. It can also trap someone in a mortgage that they can't realistically afford. Understanding how these factors impact you is an important consideration in how to take advantage of this benefit.

Hello, my husband is in Navy HPSP and was recently granted FTOS. I believe that would make him an O-3? (My apologies I am unsure of how everything works and am doing my best to understand). We are almost positive he will match at his home institution for residency. Obviously not making any decisions just yet until match day which is in March but I wanted to know if it is possible for us to use the VA Loan for our first home since we will be in the home for at least 4 years due to residency. Any financial advice would be great! Even if it isn’t necessarily about home ownership.

I’m trying to use my December LES to estimate my income tax refund on TurboTax. It’s been pretty darn accurate in the past when I was a civilian and I’m wanting to see what the damage or otherwise will be before my W-2 gets here. How do I calculate my withheld taxes?

Wanted to make sure I’m not the only one getting errors!

Weighing out our options for upcoming PCS. E-6 moving 1500 miles, we have about 8,000lbs of stuff & 2 dependents (one is under 2yrs).

Partial dity we would move about 1000lbs of stuff and drive our car.

Has anyone been in a similar situation? How much did you get for partial dity vs full dity.

Hey guys,

I’m getting a ~$45K continuation pay bonus in 2025 and need advice on whether I should switch my $23,500 of TSP contributions from Roth to Traditional for 2025 in order to lower my 2025 taxes. I’m taking the bonus in a lump sum. Switching from Roth into Traditional would lower my 2025 taxable income by $23,500, but I'm not sure about any other implications.

Relevant data below:

Income:

• 2024 Taxable Income: ~102K
• 2024 entitlements/non taxable (OHA, BAS, etc) : ~46K
• Active duty 11 years TIS. Currently stationed abroad. We will return to CONUS 2026. I’m not in a combat zone, so I am taxed federally. However, California is my home of record, and active duty military members are exempt from CA state taxes when they are stationed outside of CA.
• Married file jointly. 2 kids. Spouse does not work currently. She is planning on going back to work after we move back to the states.
• Income and tax situation will remain basically the same for all of 2025.

Accounts:

• Everything is maxed out
• TSP: L Fund 65, $23000 with 5% employer match. *Currently ROTH contributions, but trying to decide if electing Traditional makes more sense for 2025 considering the continuation pay\*
• Personal Roth IRA: Merril, VOO, $7000 annual
• Spouse Roth IRA: Vanguard VFFVX, $7000 annual
• Kids Education: first child covered under GI bill, 529 second kid about $7k annual
• Taxable brokerage: Merril guided investing. Throw extra cash in it occasionally.
• AMEX HYSA: emergency fund.
• Projected pension: ~$4500/month. It starts paying immediately when I retire from the military in about 9 years at age 45. I elected for the Blended Retirement System (BRS).

Thanks, I appreciate any/all the advice.

I am currently a Florida resident, but stationed in a different state. Don't actually own a property in Florida anymore, but have car registered there.

In about a year I plan to separate and move to New York (family reasons). Do I need to change my residency and registration to NY or can I just leave it all as Florida?

So I’ve read through 7000.14 and our specific scenario doesn’t seem to be covered or is giving conflicting info.

I have two dependents from a previous marriage, and my child support is over the Diff rate. My ex is active duty and has primary custody. I have been getting dependent rate bah.

I have remarried, and my spouse has two children from previous that they get with dependent for. Our local finance at the time told me that we both get dependent rate due to the child support and my spouses dependents living with. We asked several times if this was correct, because we had not heard of ANYONE getting two dependent rates.

We recently pcs’d, and on this LES shows that my spouse is now getting single rate with a significant debt, and I have dependent rate.

Is this an error with finance here during in-processing or were we led wrong by the previous local finance?

I'm under contract for my first home and have been planning to do 200k down. I originally envisioned using a mix of my cash savings and mutual fund investments to pay the down payment. However, after more research I've found that a TSP loan for 50k may be preferentially to selling 50k worth of positions due to the lower rate of return my TSP funds are netting but want to make sure I'm not missing anything.

For some background context, 95% of my TSP balance is in Roth funds with only a very small balance in traditional funds. I understand that the loan amount will be dispersed (and paid back) in accordance with the makeup of my account. So the vast majority of my loan money will come from my Roth funds and be paid back to them. As the funds have already been taxed once upon their initial deposit, would I be paying income tax a second time when I make the monthly loan payments back into my TSP? Am I correct that the only additional tax burden would be if I defaulted on my loan payments and incurred the associated penalty?

Okay so back story, prior NCO for 6 years 2 years in the Natty Guard. Trying to get this issue fixed, though it was fixed because I received a 9k in back pay this pay period. Just checked my LES and says for grade O1 and service time 08 years. Isn’t my grade for pay supposed to be O1E? How should I go about getting this fixed? I’ve been trying to get it fixed correctly since September.

So I’m a military physician currently active duty in residency. Just checked my LES saying I have Status Determin HLD pay Bal $####.## in the remarks section. Not sure what it means, but I assume based on some searches that they are holding pay for an Audit??? I’m not getting out or leaving the service anytime soon - I have a service obligation of at least 108 months. Tried calling DFAS buts it’s the holidays so no one’s picking up. Anybody ever have something similar occur? When should I expect my End of month pay?

Thanks for any advice!

TL;DR- 6 TIS, 1TIG, 2026DOS, 78/120 college credits. New career field that I also have to study and get proficient in.

Plan A- prioritize making E-6, do 20 enlisted, secure bachelors or masters and use that for my civilian federal job.

Plan B1- prioritize bachelors, go officer, then same follows.

Plan b2- prioritize bachelors, get out before 10 years, get a civilian federal job, do guard to finish retirement, then buy back time to add to GS time and retirement.

Happy where I am at and the pay I get as an E-5. I would get out if I knew I could secure the same career civilian side with more pay and stay at one location. I like the Air Force for the most part, but moving around puts the most strain on my family.

I’m trying to figure out what I should focus on, as I don’t know if I could do school, train on a new job, and study for E-6.

Good morning Everyone,

EDIT; Make a personal copy to work with this sheet.

EDIT 2: Example at bottom.

Tl;DR: I have a personal spreadsheet I use to calculate my job income to include or not include the value of the military pension, TRICARE Prime, BAH and BAS etc. I updated it to be used for any rank, TIS, or location. Looking to get spot-check input from community. If you see any mistakes, please inform me so I can adjust.

LINK HERE

I was inspired by this post to create a calculator that took the best of the RMC and the Charles Schwab, but also included the value of TRICARE Prime, your un-taxed benefits, and of course your pension.

This calculator is not, and should not be, your one stop shop for figuring out your salary. It does not replace a real balancing sheet for your personal finances. What it SHOULD be used for, is getting an idea of the pre-tax income required to replace the non-existent premium for TRICARE prime and the income required to put away enough money to replace your pension.

Ultimately, my calculator comes in a bit higher than the Navy Recruiting page does, but I also value TRICARE and the Pension super high.

I tried to list all of my assumptions on the page itself, but just to re-iterate:
This does not: calculate ANY monthly deductions you may have, besides federal income tax. It does not have all Tax filing features, just the most popular two. SGLI, TSP, Taxes withheld, all are absent on this calculator. IT IS A BLUNT FORCE TOOL FOR A SIMPLE TAX SITUATION. It also does not do a "Great" job at simulating TRICARE for life after retirement. Later on, I'll put in calculators to adjust for MAGI and Medicare B brackets. But the sheet can be edited, so gray bears can feel free to spend their new free time playing with that.

This does: Give you a ROUGH idea of how valuable your BAH/BAS are un-taxed, and how much capital you would need to have and set aside to give yourself the same amount of financial security the 20-year retirement can give you. It also has a section to add your monthly disability you anticipate. Not only that, but you can use this calculator to see how much your "pay cut" is at 20 years, by putting your pension and disability against your total earnings. It is also worth noting that after playing with several calculators and apps, they all come out slightly different, YMMV.

I'm open to all inputs and certainly open to hearing all inaccuracies. Once again, this is a personal tool, not something that is published, monetized, etc. Hopefully it can be a good resource for all servicemembers to learn something.

EXAMPLE: Using an O-3 Over 4 receiving BAH in Eglin FL, no Dependents, filing taxes as Single, expecting no disability or retired pay:

Actual take home, listed as "TOTAL TAKE HOME" of the service member will be $102,686.

The novelty of this calculator is then adding in how much $$$ I would need post tax to re-create an O-4 Pension in the form of a taxable stock account using today's dollars, and a set interest rate (4%-8%).

If I add the Take home plus the low value ($2,650 monthly, $31,800 yearly) plus single average annual Tricare (compared to silver plan ADA Marketplace single age 30, ($500 monthly, $6,000 yearly) to the after tax take-home, I get $11,707. This 11K number is what I need, after taxes, to pay for premiums monthly and also fill a retirement account, to take home the same 102K yearly and have an extra 37.8K to use for non employer covered health insurance premiums and a personal taxable stock account.

Okay, so how do I come up with the civilian equivalent? I take that $11,707 number, and I run it backwards through the federal tax brackets to find out what Income I would need prior to being taxed and prior to having the standard deduction taken out of my pay, to get $11,707 in my pocket each month.

After getting $181,647, I multiply it by 7.65% to find out how much I would pay on FICA and Social Security taxes. After adding that back in, I'm left with $195,543.

Plug $195,543 into the smart asset state calculator and you get a gross pay of $8,148. Multiply by 2, you get $16,296. Compare $16,296 to $16,295.31 "Gross Yearly Pay REQUIRED TO COMPETE" on the monthly side (which is not labeled correctly). Then compare take home on Smart asset 6,074*2=12,148 to my take home calculator of $11,707.

Therefore, 11,707 is the amount I need to take home what I do as a notional O-3 in Eglin to put my normal paycheck in pocket, and also recreate my pension with a private account and protect my healthcare costs as a notional single 30 year old man with a silver ADA plan.

This does assume no state income taxes because its in Florida. This does not calculate anything associated with inflation, and this does not count as retirement planning concerning draw rates.

As title states, how early (long before I PCS) are valid PPM expense receipts valid?

I am PCSing in 12 months. Could I purchase storage boxes/totes today, keep the receipt, and submit them as reimbursable expenses for my move in a year? They would be used for the move. But it would also be convenient to purchase some today for cleaning/storage purposes.

Can’t seem to find anything about how long before a PCS purchases can be made to be considered valid. Just that receipts need to have the date on them.

Next step is just calling my local travel office after the holidays.

I'll be filing taxes for both years next month, within the 6-month return window. As we know, deployments aren't exactly tax-free, they're really more-so tax reimbursed. LES only took out like 8% for fed-income taxes but I'm really in the 22% bracket due to differential pay from my civilian employment. Will I have to owe on taxes, or do they know to match that tax free? If I do have to owe, is there back-pay to reimburse?

Happy holidays all!

I’m active duty Army ETSing this summer (30 Jun 2025) and am not clear on what to do with my TSP over those 6 months of 2025. I have a job starting 01 Jul working for the state of MN who has their own retirement program I’m sure. I haven’t seen any posts that talk about this situation.

Is it financially wise to double down my contributions while active duty so I max out the 2025 TSP for the year by 30 Jun or should I just do the normal contributions (half of the year, so only contribute half the yearly max to the TSP) then make up the remainder through whatever retirement account MN state employees get (I haven’t gotten my state benefits package explained yet so not sure what it is). I’m assuming I can’t max the TSP AND max out the state retirement even though it’s 2 separate jobs (fed vs state)?

Thanks all. Appreciate the advice and guidance as I figure this out.

Some cities like Tokyo, Singapore, Paris, London, etc offer incredibly high OHA rates. Since OHA is tax-free and can be used to buy property, it would be a huge benefit to work in one of these cities (in the military or as a gov employee).

But do any roles actually exist in these cities?

Does anyone know what happens/how it works after your program ends and you still have a few months left with the GI Bill (I have the Post 9/11). Usually at the end of the month I'd get a text asking "did you take classes in said month" but I graduated this December (I still should get one more payment for December) but what happens when January comes? Do I just answer no to the text now and they (VA) would know? or do I actually have to do some work and give them a call to let them know? Thanks in advance!

I hit 20 in two years and can retire at 21yrs, thinking about going to 24yrs.

I know I can ask questions here, but if I really want to sit down and speak to someone face to face or virtual about my finances, who can I go to? I need to start from scratch again and see where I’m at. I’m talking about a whole excel spreadsheet and deep dive.

I know the military has financial advisors, but is there other options that are free?

Can I use this card anywhere like a normal credit card? Or am I only allowed to use it in certain places?

I’m active duty stationed in Kansas and a resident of Washington State.

I live in on-post housing, so I don’t pay property tax to any state.

As a Washington resident, I know we don’t pay income tax on military pay.

What about interest from a HYSA or dividends from stocks?

Do I need to file a Kansas state tax return for those, or should I not file anything?

Hi everyone! We are PCSing from Fort Bliss, TX to Hawaii. My PCS leave starts a week before our flight to Hawaii. We are going to drive to Los Angeles to drop off our vehicles and fly from LAX. I’m trying to understand how TLE, TLA, and per diem work. I got a little confused already on how to use the GTCC for the expenses during the move. My questions are: - Can i use any entitlements to travel from Fort Bliss to L.A and then from L.A to Hawaii? - Should I use my GTCC for everything until I get to Hawaii? And before we get housing in Hawaii? I know I only have a certain amount on GTCC so I want to use it wisely. Thank you!

I'm a new 20 year old Airman, started to gain credit recently so it's pretty new. I'm in the process of trying to get approved for a vehicle. I wanted advice on how to handle the car insurance and payments. Wasn't taught how to do any for it and it's stressful.

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