As a military wife whose military family has experienced tragedy, I know first-hand the devastation and sadness that these losses bring. I know what it’s like to get that phone call and then the relief when you find out it’s not your husband, but sadness when it’s someone else’s. I know what it’s like to google, “Downed F-18 Pilot” every morning when I didn’t have an email from my husband and I knew he was flying a mission.
During the most recent military tragedy in Chattanooga I saw a comment that suggested that the family of one of the deceased would be fine because they would receive “death benefits.” When I first saw the comment it made me absolutely angry! And as an MBA with a background in finance and accounting, I was seeing red.
After talking to my friend Theresa who has been through something similar, I realized that together, this was the perfect opportunity to educate people on what REALLY happens in these types of situations. Two points that we want to touch on is the importance of financial planning and military benefits from the eyes of a military widow.
Importance of Financial Planning by Elizabeth Colegrove
For the first part of this story I want to discuss the importance of financial planning and what it would mean to my family financially if my husband left tomorrow morning and tragically did not return. Since I am a numbers girl I want to include our personal numbers and story for the sake of this discussion.
Author’s Note: My husband is alive and well. I am using our family as an example simply for anecdotal numbers.
My husband is a Navy Pilot with six years of service. We have no children other than a eight pound little cat, so unfortunately while she is our princess, she doesn’t count for this discussion. Our take home salary before taxes including base pay, BAS, BAH, and Flight Pay is $7,309.98.
The payment I would receive if my husband passed (found at this link), would be $2,236 which is 31% of his previous salary. This is for an O-3, who was in for 6 years.
So based on this calculator the minute my husband perished is the moment his salary goes from $7,309.98 to $2,236, which is a loss of $5073.98. This is simply because he died during the line of duty. My mortgage payment is $1,415, so if I didn’t work that would leave me with $821 per month on which to live. We have been married five years and have financially planned as a team based on his salary. This number doesn’t include my car payments or any other bills or debt that we had when we were counting on the $7,309.98.
If I used the Death Gratuity to supplement the difference while I was getting my feet on the ground, I would have 19.71 months to restart my career before the $2,236 became my new budget. If I had the SGLI AND the Death Benefits, I would have 98.54 months or 8.21 years to get my feet.
Now, it is true that widows are supposed to receive a $100,000 death gratuity. But, IF and only if you have been paying for the SGLI, would you be entitled to the additional $400,000. This is why financial planning is so critical!
The stories that you don’t hear about are the ones where these benefits aren’t received. SGLI is only provided if you pay for the monthly insurance. If you don’t pay for it you do not get the benefits. If the paperwork is not filled out correctly you do not get the benefits.
There have been lots of stories where the in-laws or someone else who was listed on the form received the benefits instead. While this might sound crazy, I know of many spouses that haven’t received it for one reason or another. Not a single widow I have heard of has received their full allotment. This is why I’m such a stickler for financial planning.
Yes, if I did the numbers based on us having kids or my husband being a different rank, the numbers would be very different. While I have a job, I know many other military spouses who don’t. Because supporting my husband’s career has meant moving three times in five years, my pay certainly wouldn’t be the same as my peers. But consider that some wives may have degrees, but haven’t worked since they left college.
Now, here’s the question YOU need to ask yourself:
If you or your spouse died, how quickly could you restart your career? If you didn’t have SGLI would you be able to create a career in the 19 months it takes for you to be financially self-sufficient on $2,236?
What being a Widow Means: From the Eyes of a Widow by Theresa Jones
Author’s Note: My friend, Theresa Jones became a widow when her husband, Landon was killed in the line of duty. His chocked and chained helicopter was thrown over the deck of the USS William P Lawrence during a maneuver. The full story behind the mishap can be found here.
Why it Matters Financially:
The day your spouse dies is the day their pay stops. There’s no rounding it up to the next month let alone the next day. It’s done. Those days and weeks after, you are now having to make major decisions regarding benefits all while you can barely think straight.
It is true that you do get large lump sum after your spouse dies. A $100,000 death gratuity is paid within 72 hours. If the government is shut down – as was the case 9 days after my husband was killed, that payment can be delayed. This is only paid IF you are listed as the beneficiary. There are many times where the spouse is NOT listed as the beneficiary. I’m aware of instances where the parents were listed as such and kept the benefit instead of giving it to the spouse.
While it can take weeks to months for your monthly annuity to begin, you may also receive an SGLI policy if your spouse has paid for that benefit. Another benefit that is paid out in the beginning is a one year lump sum payment of BAH. If you live in government quarters at the time of death, you can remain there for one year for free or move and receive the BAH payment. If you already live out in town, you will receive the BAH payment automatically. You will also receive a lump sum payment of any unpaid leave and allowances.
After the lump sums are paid out, you will start receiving monthly benefits from three sources: Social Security (SSIA), the VA (DIC), and the DoD (SBP). Things like Social Security are determined by how long your spouse has worked and paid into it, how many children you have and their ages, etc. DIC is set by the VA with specific allowances for your situation and SBP is determined by the DoD as being 55% of the 75% of your spouse’s base pay. Imagine trying to figure that out while grieving!
The caveat here is that the DoD will deduct DOLLAR FOR DOLLAR any amount that the VA gives you and while SSIA and DIC are non-taxable, SBP is highly taxable. If you have children you can choose to give them the SBP to eliminate that offset, and even with taxes being taken out of the benefit monthly, you are most certainly guaranteed a large tax bill come April.
That is considered your child’s “unearned income” (although I feel they earned every single penny). Once a year, you will also get a letter from Social Security asking how much of your children’s SSIA you used for them. I know one widow who admitted to Social Security that she saved some of the money for her kids and did not spend all of it. When her children turned 18, she was sent a bill from Social Security and had to pay all of the unused portion back. Other things to keep in mind include the fact that if you get remarried before the age of 57, you lose most of your benefits. This includes the “appearance” of a marriage as well (a very gray term the VA uses). Also, If you work or get a job and make more than $14,000 annually, they will also start deducting that from your benefits.
Long-Term Financial Planning:
So with all these numbers, you’re rolling in the dough right? Nothing to worry about here! But that couldn’t be further from the truth. When you are looking at your life as a whole, these numbers don’t take you as far as you think. At the end of the day, the money (like much of the initial support), slowly wanes and eventually stops altogether. Some of the monthly benefits stop after the first 2 years. Most will stop as your children age out of them. If you do have children, you are lucky and unlucky because they will bring in a majority of the monthly benefits, but they are also the most innocent victims in this scenario.
- Babysitting. Even if your monthly benefit income is close to that of your spouse’s, your living expenses increase dramatically. Childcare is a big one. Whether it’s because you work, need to go back to work, or just want a night out with friends, a good babysitter will become your best friend. But babysitters cost money. Lots of money.
- Life Insurance. You are now the sole provider for your children. They have already lost so much and the thought of them having to go through losing you too is nauseating. So you figure out how much it costs to take care of them and how long it will be before they can take care of themselves and you make sure that you find a policy that will cover that. It’s not cheap.
- Mental Health and Therapy. You can all but guarantee that mentally you will be altered for life. Whatever that looks like for each situation depends on the person. Even with Tricare benefits, therapy still costs money and therapy isn’t a “one and done” type of deal. Sometimes therapy just becomes a part of the new norm.
- Other Expenses. Other expenses include lawyers for wills and trusts, financial advisors, and more. You will find that the list goes on and on.
These items don’t even begin to scratch the surface. Other expenses in my life at the time of my husband’s death included my car needing new brakes and tires, money to buy bins to pack up all of my husband’s things, expenses associated with my husband’s memorial that the Navy did not cover, my son’s school activities that were costly, and rental properties that we owned in depressed markets that were costing us more than we made each month. I also had an infant that required an endless supply of diapers and wipes, and pets that needed to go to the vet.
I think it’s impossible to accurately describe the feeling you have when the CACO team shows up at your door. Utter devastation is about as close as I can get to describing that. Dealing with that feeling is enough to take you out on its own. Now couple the feelings of losing your spouse and watching your children (if you have them) suffer through the lose of a parent, with financial uncertainty.
To add insult to injury, when I called the bank that carried our credit card to update them on my husband’s death, they wanted to reduce me from a card I shared with my husband that had a very high limit, to a prepaid credit card. Because despite paying student loans and having my name on two different mortgages, my husband had been the main source of our credit and I had been a stay at home wife and mom for quite some time.
Re-Entrance to the Work Force:
Before I got married, I was a Software Engineering Analyst for Northrop Grumman. Our first duty station was in Japan and that job did not transfer. As time went on with moving and having children, even with the best intentions, it was difficult to maintain a career in that field.<
Even entering back into the work force as a widow seems futile sometimes. I went back to work part time earlier this year. It certainly wasn’t for the money as every single dime I made went to paying for a nanny for my youngest. In fact, I lost money every day I went to work as I had to pay for the time commuting to and from work. I did not get a paid lunch time at work, but I was still paying a nanny during that time, so I didn’t take lunch, I would just eat a granola bar at my desk.
I’d do work on the weekends and ask friends to babysit my kids so I could just make SOMETHING. I was getting up at 4:45 am and crashing at 10 pm. My home life began to suffer, but I needed to step up to provide for my kids. Six weeks into my new job, my youngest suffered an injury to his eyes and we were in and out of the hospital for a week.
The next week he had follow-up eye appointments that caused me to go into work late. Shortly after that, my boss told me that if I was going to continue to work, I really needed to be there. She asked if I wanted to essentially quit my job and said she would then use me on an “as needed” basis. Because everything was crumbling around me, I took her up on the offer. I am now back to square one.
As you can see, when it comes to benefits and money after the death of a spouse, it is incredibly unpredictable. Benefits are temporary, but death is permanent. At the end of the day, money doesn’t comfort your children as they cry for their father. It doesn’t warm the empty spot in the bed next to you and it doesn’t take away the tears as you watch your mother-in-law unpack her firstborn’s sea bag and put it into bins. And money certainly doesn’t stop you from crying upon waking every morning that first year when you realize that it’s not just a bad dream. As life goes on, the money dwindles along with any support you once had. What always remains is the pain that can still feel as raw as that first day.
Final Words From Elizabeth
The point Theresa and I are trying to make is that financial planning is critical. Being a widow has many challenges without adding the burden of financial issues. Both of our husbands were and are officers, and they are and were in a different situation than people of other ranks. While no one is trying to ask for money or donations out of anyone, it means a lot whether or not the money is needed or just the emotional support.
PLEASE, for the sake of your family, plan for your future. If the unfortunate should happen, you need to be prepared!21