Financing a Homestead

[Ken Scharabok]

http://articles.news.aol.com/news/_a...09100609990001

Note article's reference to up to a $40K signing bonus for certain fields.

This is just a concept. Say someone wants to homestead and lacks funds to do so. Say bonus was $20K. That, after taxes, is still a pretty substantial down payment on acreage, particularly if other income was limited that year.

During tour it offers two benefits. Military pay is fairly generous today (when I was an E-2 in 1964 it was $95 month plus room and board). Also, services has the matching college education funds which can be up to about $40K for a four-year tour if used to the maximum.

Someone might purchase acreage with the signing bonus and then make both payments and college education deposits during the tour. Or, have the goal to pay off the acreage during the four years.

Be aware though of the tax implications on the bonus. If the check is drawn on 12/31 it is 2006 income. If drawn on 1/1 it is 2007 income, plus other income for the full year.

Just something to think about.

And, yes, last paragraph in cite may be why they are making their recruiting goals. And, please, don't turn this into an anti-Army or anything else thread. If it does, I will ask it be removed.

[michiganfarmer]

I think military service is great for young people. There are skills to learn, there are opportunities to see the world, there are college monies available, it is a great opportunity to learn about other cultures, and races wich helped me a LOT to dispell the racism I was raised with. I knew a farmer who was in WWII. He sent ever penny home and when he got back his farm was bought and paid for. He milked cows the rest of his life with not morgage payment. Money shouldnt be th eonly motivaton for serving. There are many benefits. I met my best friend, and a few very good respectable people while I was in the marine corps.

Whatever you think about the current conflicts the US is involved in, I think Ken's idea is a good one.Most kids dont know what they want to do with their lives when they first get out of highschool anyway. I hope my kids serve. My wife is totally against it. Im not pushing my kids to serve, but I tell them what I think about it.

[dennisjp]

Ken, I was in the 82 airbourne in the seventies. The boys and girls also that are in there now deserves everything they can get. That is the ones that comes back home. Many of them don't get to in one piece.

[bare]

I don't know all the in's and out's, but just what do you get when you sign up for four years anymore? My neighbors son did his time and has so far spent another four years in the service, supposedly against his wishes. Not all in one go understand, but he gets out, goes to work and gets called back in, twice so far.

40,000 doesn't look like such a deal when the commitment is spread over an unending time period.

[Pony]

Originally Posted by bare

I don't know all the in's and out's, but just what do you get when you sign up for four years anymore? My neighbors son did his time and has so far spent another four years in the service, supposedly against his wishes. Not all in one go understand, but he gets out, goes to work and gets called back in, twice so far.

40,000 doesn't look like such a deal when the commitment is spread over an unending time period.

Is he regular army or reserves? I have a friend in the reserves, and his experience sounds similar to your neighbor's son.

Pony!

[jnap31]

I was thinking about writing an article for countryside about this very topic for sometime.

[nwbound]

I spent 1 year with the Army Rangers and 3 with the 82nd Airborne and got out in 2004. I got $17,000 to join and after taxes i got maybe $9,000 plus $50,000 for college. I haven't been able to use because i have to work just like everyone else. So beware of what seems great. Not that the Military wasn't a great choice. I learned alot grew up and served my country. Bought my first car found the love of my life and was blessed with my first child. And belive me the troopers coming back from Iraq need all the support they can get. I got plenty from my friends and family and it helped the healing process.

[jnap31]

I spent 4 years in the 90's no bonus at all but I did get a 40k army college fund I got out and finished a 3 year elementary ed degree had a year of college before I went in so did two more with the army $. the army paid me a total of about 1k a month while I was in school, I was pleased with it the pell grant paid for school and we lived on the army $. Now they are a lot more generous a lot of the guys here in Kosovo are signing up for 6 more years for 15k tax free! I could do the same but I am getting out as family and homesteading are more important to me now, but for a single guy with out kids the army is a great way to make the $ for a homestead to buy with cash if your lucky and come home alive and save the $ instead of spend it.

[jnap31]

"OH" forgot to mention just since I got out in 2000 till I got back in in june of 2004 The pay has gone up 29% since I had gotten out back then imagine that I cant believe it, now that I am married this time around and getting the Housing $ and pay tax free, I dont see how any one can do an overseas tour and not come home with a paid off house (course you would have to look for an older place in a cheap rural area like me)

[mbeaser]

Originally Posted by bare

40,000 doesn't look like such a deal when the commitment is spread over an unending time period.

An initial military commitment is X number of years active service (usually 4, but as little as 2 and as much as 6) + however many years reserves needed to make 8 years total. So, most are 4+4. NCS (National Call to Service) is 2+6. For the Navy (my area of familiarity) anyone going into an Advanced Electronic Field category will have 6+2 (it is actually 4 years active enlistment with a 2 year extension of active enlistment + 2 years reserves). The reserve years for those other than NCS do not have to be in a drilling status. Those non-drilling folks are called IRR (Individual Ready Reserve). When my hubby got out 5.5 years ago, he didn't even have to update them when we moved. Now, they have to check in yearly. Drilling reserves are going to be called up long before IRR. Unless there is a highly needed speciality (special forces, some of the medical types) I don't think that the Navy has called up any IRR. Although there is a common misconception that military can retire after 20 years, they actually just become a part of a different type of the reserves (the Fleet Reserve for Navy). Until they pass the 30 year mark, the Navy calls it retainer pay because they can still call the person up. At the 30 year mark, it becomes retired pay and there has to be some serious stuff going on for the retiree to be called up directly by the President. Of course, the Navy isn't paying those boku bonus bucks like the Army.

Bonuses are also usually divided up. For a signing bonus with the Navy, one agrees to take more of the initial 8 year commitment as active. Say a $4000 signing bonus for a 5th year active (the remaining 3 still IRR unless the person wants drilling reserves). When the person completes their initial training (AKA "A" school in Navyese) some 2-22 months after bootcamp, they get their bonus. It is automatically taxed at 28% (well, sorta, they take the 28% out for withholding and then when the sailor files taxes they may/may not get some back). IMHO, the medical benefits are as much of a seller as the potential bonus. I'll be having my 3rd child by the end of the year and it has cost me $42, so far, for the 3. That might jump up to $60 total after delivery (since I'm active duty they charge me for meals regardless of whether they allow me to eat them or not, I can't even tell you how hungry I was after my first, 22 hour, delivery). Of course, there are a lot of things to weigh. I'm not very fond of excessive heat, and I am very fond of seeing my children, so I can't say Iraq is somewhere I'm looking to go (and don't think the Navy isn't in Iraq, nearly 10% of the Navy on shore duty is on IA-Individual Augmentee-status for GWOT and they are starting to pull from the ships as well). We were told to expect 15,000 "boots on the ground" by the end of the fiscal year, from 5,000 a year ago. And, that doesn't include the extra, surprise deployments sea duty folks have been going on lately. I honestly don't know if I'd recommend joining to someone at this point. I'm probably going to get out in 20 months at the end of this contract (I've got medical issues, though). If I go reserves I'm going wait a few years and see how things look.
Missy, IT1 type, USN

[ET1 SS]

Originally Posted by bare

I don't know all the in's and out's, but just what do you get when you sign up for four years anymore? My neighbors son did his time and has so far spent another four years in the service, supposedly against his wishes. Not all in one go understand, but he gets out, goes to work and gets called back in, twice so far.

40,000 doesn't look like such a deal when the commitment is spread over an unending time period.

I retired in 2001. the most that I was offered [SRB] for reenlisting for an additional four years was $65k. In 2000 they bumped that up to $90k.

The last time that I checked they are paying as high as $20k for initial enlistments.

Currently an E-6 with 6 years in the Navy makes:
Base = $2465.10/month
BAS = $272.26/month
BAH = $734.40/month
sub = $375.00/month
sea = $450.00/month
Female separation = $250.00/month

Which subtotals = $4,546.76/month

And $288/year for uniform replacement

Which adds up to $54,273.12 annually.

Now I used to get both a 'continuous-Sea-pay-kicker' and a 'career-sub-pay', which were around $200 each /month. but right now I could not find those on the DFAS website for their current levels.

And all nuclear-trained sailors also get 'pro-pay' each month.

Of course that is tax-exempt, has been [at least in my case since 1983].

[ET1 SS]

Originally Posted by bare

I don't know all the in's and out's, but just what do you get when you sign up for four years anymore? My neighbors son did his time and has so far spent another four years in the service, supposedly against his wishes. Not all in one go understand, but he gets out, goes to work and gets called back in, twice so far.

40,000 doesn't look like such a deal when the commitment is spread over an unending time period.

He signed an eight year contract. Four years on active duty and four years on 'recall' status.

It is not an unending time period.

Had he not wanted to sign that type of contract, he did not have to.

[ET1 SS]

Hey missy, good post.



I forgot to sign my posts, Ooops

I am ET1 {SS} USN - retired

Hah hah hah

[bare]

Originally Posted by ET1 SS

He signed an eight year contract. Four years on active duty and four years on 'recall' status.

It is not an unending time period.

Had he not wanted to sign that type of contract, he did not have to.

I get the impression that wasn't spelled out to him real clearly, but I understand that is pretty common with recruiters.

So are you saying that after eight years they will let him out if he wishes, without going past his contract date? Or are there other tricks up their sleeves? Stop loss is one I've heard of and don't understand.

I am an Air Force retired E-7 (2001 with 21 years in). Sometimes it was worth it. Sometimes not. The pay now is HUGE compared to the years that I was in. Can I see a person joining? Yes. Can I see a person getting a bad deal? YES!!! Are there areas of the service to stay away from? Yes. If my son were to join, I would press for the Coast Guard or AF. I would press for an occupation that has civilian counterparts. Specifically diesel engine repair or better yet, power generation or medical. I would stay away from anything fighter aircraft, chemical, weapons loading, security, or food service. With the new laws, a disabled veteran will make alot more money per year than in the past. I will actually get paid my AF retirement and my % of disability in a few years. It is currently being phased in.

[YoungOne]

My brother is finnishing up his first 7 in AF intelligence and he says he is looking at a 6 figure reenlistment bonus. He already owns two house's were he is at (lives in one, rents the other). He still doesn't know what he wants from life but he sure knows how to handle money.

Languages (linguist) seems to pay well outside of military and if you stay in, they seem to bonus well for it.

[mightybooboo]

A Navy Corpseman(medical) can just as easily be a Marine Corp. beach stormer.
Somehow they dont mention that,LOL.Or that you get to carry an extra pack instead of a gun.Or that corpsmen are prime targets and have very high death rates.

Just pointing that out as an FYI.

I believe Air Force medics also serve as army medics IIRC,know my Buddy did in VN.

So medical can mean front line when you might think it doesnt.

FWIW,just some info,and the AF stuff may be outdated,i dont know.

BooBoo

[ET1 SS]

Originally Posted by bare

I get the impression that wasn't spelled out to him real clearly, but I understand that is pretty common with recruiters.

It is also pretty common among servicemembers who enjoy complaining to conveniently 'forget' about it, when in the company of civilians. To make it sound as if the obligation were something more than what it is.

So are you saying that after eight years they will let him out if he wishes, without going past his contract date? Or are there other tricks up their sleeves? Stop loss is one I've heard of and don't understand.

Maybe yes, maybe no; generally yes.

You see, each command has a set number of billets. Or slots that need to be filled, each with a sub-specialty. Maybe they need six computer-networkers, and seven system-analysts, and four cooks, and ...

Well over all in the Navy these numbers are truly well managed, and the detailers know exactly how many are getting out each month, so they project ahead and workout how many are graduating each school each month, so the numbers match, then they continue to project these numbers, all the way back to the recruiter's quotas.

So ideally when a command loses one cook, within a week or two the replacement cook shows up. Unfortunately sometimes maybe the guy gets arrested in a strip-bar in Japan on his route to the command, or something, so that replacement sometimes may be up to 6 months late. But this is normal.

With 'stop loss' a command can complain that they really need these three people to keep their billets filled, until they have been relieved on scene. and if their admirals agree and authorize it, then the contracts on those three guys can be 'extended'.

Remember that 'stop loss' went into effect before the WTO attacks. I was in a position where due to [HYT] 'high-year-tenure' policy says that I MUST leave, being too old in rank. But at the same time, if the internal politics within the command sees my position as too important to allow being empty waiting for replacement, then they could be authorization to hold me, even against the written policy saying that I had exceeded the HYT criteria. Now in my case, I squeaked by and returned stateside to retire. But even at the base where they did my paperwork for retirement, there were a bunch stationed there who were also at their HYT points and they had been 'stop-lossed'.

As a sice-note: Overall we did see this coming, and we did try to take action to shore-up the overall security of the nation; but it did not work. Intelligence analysts made a listing of possible 'targets' that was HUGE. Sand-bagging, guarding, replacing windows with bullet-proof, installing jersey-barriers to hold back truck bombs, it all takes time and effort and money and just does not happen instantly. And in this case, the attack came in a method that had not been fully anticipated.

Just as today, every state wants to be fully 'protected' but then committees generate lists of places to fortify that grow each month. It is crazy.

Back to your question. If he makes himself vital to the command where he is stationed, then it is more likely in the politics of the fleet, that he may be 'stop-lossed'.

Sorry about the long answer.

[ET1 SS]

Originally Posted by Ken Scharabok

... Note article's reference to up to a $40K signing bonus for certain fields.

This is just a concept. Say someone wants to homestead and lacks funds to do so. Say bonus was $20K. That, after taxes, is still a pretty substantial down payment on acreage, particularly if other income was limited that year.
...

That might be a good down-payment, though during his career, all the other bonuses, pays and allowances, could well pay-off the acreage entirely.

Someone might purchase acreage with the signing bonus and then make both payments and college education deposits during the tour. Or, have the goal to pay off the acreage during the four years.

Some states have programs where a vet attends college for free too. [Texas, and Ct come to mind]

Be aware though of the tax implications on the bonus. If the check is drawn on 12/31 it is 2006 income. If drawn on 1/1 it is 2007 income, plus other income for the full year.

Just something to think about.

A good deal of money paid to servicemembers [i.e., all ‘allowances’] is not reported as taxable income.

Many circumstances wherein a servicemember could be serving are tax-exempt entirely. I was only obligated to paying income taxes for a small portion of my career.

It is all changing, and each service is completely different, as they have to convince congress to get their tax-status updated.

I was serving in Europe, completely tax-free, at a multi-service base, and the AF members also stationed there [in fact in housing, an AF family was next to us and we socialized commonly], did not begin to get tax-free status until after I had already been there two years. Now I would assume that the tax-free status for the Navy had been in place for years previous to me getting there, but it was not for the other services.

I am not saying this against any service in particular, this is something that all services must deal with.

[bare]

I appreciate the long answer! Some things aren't easily explained. I'm not very close to these folks, they're just neighbors. Their level of frustration is HIGH over it all. The entire family started out as extreme supporters of the War on Terror and now are the loudest detractors around, all because of their perception of unfairness to their child.