| Receiving cash for your military pension can provide | | | | typically require you to: |
| access to more of your money to meet your | | | | - Presently be receiving a minimum monthly pension |
| immediate financial needs. Instead of waiting to | | | | payment of $400 dollars after taxes |
| receive monthly pension payments, you can | | | | - Have credit scores of at least 580 from all three |
| exchange your military retirement for a large lump | | | | credit bureaus: TransUnion, Experian and Equifax |
| sum. You could spend the money on anything: debts, | | | | - Be currently employed or have a secondary income |
| a new car or house, a business venture, your child's | | | | that allows you to meet your monthly expenses |
| college education, or even a much-needed vacation. | | | | without your pension payments |
| The good news is you don't have to repay the | | | | In addition, some pension purchasers require life |
| money because it's not a loan. And, you don't have | | | | insurance. Generally, any active insurance policy is |
| to sell your entire pension; you can sell part of your | | | | acceptable, even if it existed prior to the sale of |
| payments. You can receive cash for your military | | | | your military pension. Also, there's generally no age |
| pension payments for a select time, plus retain any | | | | limitation placed on pensioners making the sale. But, |
| future increases in payments. Then once the | | | | ultimately, underwriters will evaluate each submission |
| specified time passes, you can continue receiving | | | | on a case-by-case basis to determine eligibility. |
| your full retirement payment, as you did prior to the | | | | Steps to Getting Cash for a Military Pension |
| sale. | | | | Receiving cash for a military pension is a relatively |
| Keep in mind that military and non-military pensions | | | | straightforward procedure. Most pension fund |
| can easily be converted into a lump sum of cash, but | | | | purchasers provide free, no obligation quotes. And |
| it's a very expensive process. For example, discount | | | | most don't charge any up-front fees. Here are some |
| rates for regular pension payments run 20 percent | | | | general steps to the process of getting cash for |
| for assignable pensions and 30 percent for | | | | your military pension: |
| non-assignable ones. Therefore, you should only sell | | | | Step 1: First, you provide information about how |
| your pension if there are no other options available to | | | | much you receive each month from your military |
| you. | | | | pension and any deductions for taxes, child support, |
| Consider this: As an active-duty military member | | | | alimony, etc. You also must indicate who is making |
| retiring after 20 years of service, you will receive | | | | the payments to you (DFAS, GE, IBM, State of |
| retirement pay for the rest of your life. The payout, | | | | Florida, etc.) and when you receive those payments. |
| which is based on your years of service and rank, | | | | (You'll need a copy of your most recent Retiree |
| could be substantial. For example: veterans retiring | | | | Account Statement or VA Award Letter, or VSI |
| after 20 years of service in 2006 as an E-8 a usual | | | | Earnings Statement.) |
| rank for retiring non-commissioned officers would get | | | | Step 2: Next, the underwriter determines the total |
| 50 percent of their base pay or $2,035 per month. | | | | amount you would receive from your pension for the |
| Over the next 30 years, these retirement payments | | | | number of years you wish to sell. Let's say you want |
| could add up to more than $730,000. | | | | to "cash in" the next eight years of your military |
| Eligibility for Receiving Cash for Your Military Pension | | | | pension. If you're an E-8 receiving $2,035 a month, |
| You may be eligible to receive cash for your military | | | | then you would receive $195,360 over the next eight |
| pension if it meets federal guidelines concerning | | | | years. |
| Veterans Administration disability. If you're a veteran | | | | Step 3: Then, if approved, a lump sum would be |
| whose military income comes solely from VA, you | | | | calculated for your offer. You could expect an offer |
| cannot sell your payments. However, you can get | | | | of around $98,000 for your eight years of |
| cash for your payments if the VA Disability portion | | | | non-assignable pension payments. (The 30-percent |
| makes up no more then 40 percent of your total | | | | discount rate works out to only about half the original |
| military income. This restriction is part of a federal | | | | payment due to the lower future value of dollars). |
| legislation (HR 2297) that is designed as a protective | | | | Step 4: The entire process takes from four to eight |
| measure to prohibit pensioners from selling their V.A. | | | | weeks to complete. |
| pension streams. | | | | Converting some or all your military pension into a |
| Besides the disability issue, pension fund purchasers | | | | lump-sum payment can be an excellent tool for |
| use a variety of other factors to determine eligibility. | | | | enhancing your cash flow and lifestyle. |
| While requirements vary among purchasers, they | | | | |