Touchpoint Curriculum First Edition Table of Content

TC 1 Introduction to Touchpoint Curriculum

TC 2 First Duty Station

TC 3 Permanent Change of Station (PCS)

TC 4 Promotion

TC 5 Vesting in the Thrift Savings Plan (TSP)

TC 6 Entitlement to Continuation Pay (CP)

TC 7 Marriage

TC 8 Welcoming Your First Child

TC 9 Preparing for Divorce

TC 10 Disabling Sickness or Condition

TC 11 Leadership Training

TC 12A Pre-Deployment Preparation

TC 12B Post-Deployment • Student Manual • Instructor Guide • PowerPoint Slides

TC 1 Introduction to Touchpoint Curriculum

Introduction to Touchpoint Curriculum Student Manual TC 1 SM I. INTRODUCTION

Purpose and Scope of Touchpoint Curriculum

Touchpoint Curriculum is designed to meet financial readiness Common Military Training (CMT) requirements as outlined in Directive Type Memorandum (DTM) 19-009. These CMT requirements provide Service members the common knowledge, skills, and behavior standards to enable them to manage their financial affairs in a manner that enhances financial readiness. Military Departments must provide Service members financial literacy training in accordance with the personal and professional touchpoints across the military life cycle identified in Section 992(a) of Title 10, U.S.C. Table 1 of this DTM establishes standard minimum Terminal Learning Objectives (TLOs) required at each touchpoint, consistent with DoDI 1322.31.

Touchpoint Curriculum is used by the US Navy to provide a life cycle/career cycle approach to financial literacy training, ensuring just-in-time information is provided to Service members where and when they need it. The PFM program is recognized as the strongest link between a member and his or her successful financial future. As a CFS, you will be the subject matter expert at your command. You will provide counseling, referrals, and proactive financial education and training.

Touchpoint Curriculum Chapter Layout

TC 1: Introduction to Touchpoint Curriculum TC 2: First Duty Station TC 3: Permanent Change of Station (PCS) TC 4: Promotion TC 5: Vesting in the Thrift Savings Plan (TSP) TC 6: Entitlement to Continuation Pay (CP) TC 7: Marriage TC 8: Welcoming Your First Child TC 9: Preparing for Divorce TC 10: Disabling Sickness or Condition TC 11: Leadership Training TC 12A: Pre-Deployment Preparation TC 12B: Post-Deployment

II. LEARNING OBJECTIVES:

• Be familiar with the Touchpoints identified in the DTM • Be familiar with their Touchpoint Toolbox • Demonstrate proficiency using Touchpoint Checklists and Handouts, Videos and Video Discussion Guides, and PowerPoint (PPT) Slides and Instructor Guides. • Demonstrate proficiency with skills learned in previous sessions to include financial counseling, mechanics of the FPW/eFPW, and instructional techniques. • Understand how financial literacy training requirements are tracked from NSIPS to FLTMPS.

Introduction to Touchpoint Curriculum 1-1 III. REFERENCES

Note to CFS: You will not be expected to teach this chapter. However, you may find it useful to inform your leadership. We are including the PPT and IG so you have it for reference or use.

FORMS provided in Student Manual:

• DTM 19-009 • FINRED Road to Financial Readiness • CFPB Five Principles for Financial Literacy • How to Access Touchpoint Training on Navy e-Learning

Touchpoint Curriculum may be accessed on the following websites:

• Office of Financial Readiness (FINRED), Navy Resource Page: https://finred.usalearning.gov/SPL/Training/NavyResource

• PFM milSuite site: https://www.milsuite.mil/personal-financial-management-program-wfl/

• CNIC website: https://www.cnic.navy.mil/ffr/family_readiness/fleet_and_family_support_program/work-and-family-life/ personal_finances/pfm-touchpoint-checklists.html

Introduction to Touchpoint Curriculum 1-2 IV. ACRONYMS AND ABBREVIATIONS

Acronym/Abbreviation Full Name Definition

DTM Directive Type Memorandum It is designed to meet financial readiness Common Military Training (CMT) requirements to provide Service members the common knowledge, skills, and behavior standards to enable them to manage their financial affairs in a manner that enhances financial readiness.

TC Touchpoint Curriculum Touchpoint Curriculum is the Navy’s version of financial literacy to meet the requirements of DTM 19-009. It includes Checklists and Handouts, PowerPoint (PPT) training slides with Instructor Guide (IG), and Videos with Video Discussion Guides (VDGs).

Introduction to Touchpoint Curriculum 1-3 V. TOUCHPOINT TOOLBOX: MATERIALS AND RESOURCES TO TEACH TOPIC

As a reminder, TC1 is an administrative chapter designed to provide an overview of Touchpoint Curriculum. It is not an actual Touchpoint, therefore, it will not have any products (Checklists/Handouts) other than the PowerPoint and Instructor Guide used during your CFS course.

All materials are available on PFM milSuite, CNIC and FINRED websites (listed above), and DVD. Links to curriculum may change or vary locally.

Delivering the right financial training at the right time helps ensure that Service members understand the financial implications, considerations, and decisions that need to be made at each Touchpoint. The tools listed below teach the same story but let you, the CFS, tell it different ways, depending on your audience, your time allotted, or your particular teaching style. They can be mixed and matched to provide the best learning experience.

REMEMBER: Every Counselee should receive a signed, dated copy of the Counselee Checklist to verify training completion and, most importantly, to ensure they have a reference to help them navigate the financial decisions required at each Touchpoint.

1. One-on-One Counseling Checklists and Handouts (Service Specific) • Counselor Checklist – Not applicable for TC 1 • Counselee Checklist – Not applicable for TC 1

Handouts: • All Handouts listed on Checklist – Not applicable for TC 1

2. Classroom Training Materials (Service Specific) • Touchpoint Checklists and Handouts – Not applicable for TC 1 • PowerPoint (PPT) Training slides and Instructor Guide (IG) CFS will not be required to teach this class; however, you may find this brief useful to inform leadership. You are being provided a copy of the CFS Instructor Guide for informational purposes only. • Videos and Video Discussion Guides (VDG) – Not applicable for TC 1

3. Online Training • Touchpoint (Navy e-Learning, My Navy Portal or your service-specific e-Learning site) – Not applicable for TC 1

Introduction to Touchpoint Curriculum 1-4 VI. ADDITIONAL LEARNING AND ACTIVITIES

Section 6 of each chapter provides additional ideas for conversations and activities to have with your clients or audience. Encourage Service members to attend PFM Standard Curriculum courses (PFMSC) at the local Fleet and Family Service Center (FFSC) or Installation Family Service Center to learn more about financial considerations for each Touchpoint.

Banking and Financial Services Car-Buying Strategies Consumer Awareness Credit Management Developing Your Spending Plan Family Financial Planning Financial Planning for Deployment Gambling Awareness Home Buying How to Survive the Holidays Financially Marriage and Money Military Pay Issues Money and the Move Paying for College Paying off Your Student Loans Planning for Your Retirement Raising Financially Fit Kids Renting Saving and Investing Smart Transition Planning Survivor Benefit Plan The Thrift Savings Plan Your Insurance Needs

VII. FORMS

• DTM 19-009 • FINRED Road to Financial Readiness • CFPB Five Principles of Financial Literacy • How to Access Touchpoint Training on Navy e-Learning

Introduction to Touchpoint Curriculum 1-5 OFFICE OF THE UNDER SECRETARY OF DEFENSE 4000 DEFENSE PENTAGON WASHINGTON, D.C. 20301-4000

PERSONNEL AND READINESS

August 13, 2019 Incorporating Change 1, Effective August 12, 2020

MEMORANDUM FOR CHIEF MANAGEMENT OFFICER OF THE DEPARTMENT OF DEFENSE SECRETARIES OF THE MILITARY DEPARTMENTS CHAIRMAN OF THE JOINT CHIEFS OF STAFF UNDER SECRETARIES OF DEFENSE CHIEF OF THE NATIONAL GUARD BUREAU GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE DIRECTOR, COST ASSESSMENT AND PROGRAM EVALUATION INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE DIRECTOR, OPERATIONAL TEST AND EVALUATION CHIEF INFORMATION OFFICER OF THE DEPARTMENT OF DEFENSE ASSISTANT SECRETARY OF DEFENSE FOR LEGISLATIVE AFFAIRS ASSISTANT TO THE SECRETARY OF DEFENSE FOR PUBLIC AFFAIRS DIRECTOR, NET ASSESSMENT DIRECTORS OF THE DEFENSE AGENCIES DIRECTORS OF THE DOD FIELD ACTIVITIES

SUBJECT: Directive-type Memorandum (DTM) 19-009 – Financial Readiness Common Military Training Requirements

References: See Attachment 1.

Purpose.

In accordance with the authority in DoD Directive 5124.02, this DTM establishes policy, assigns responsibilities, and provides requirements for the organization, management, and implementation of financial readiness common military training (CMT) requirements in accordance with Section 992 of Title 10, United States Code (U.S.C.).

This DTM is effective August 13, 2019; it will be converted to a new DoD instruction (DoDI). This DTM will expire effective August 13, 2021.

Introduction to Touchpoint Curriculum 1-6 DTM 19-009, August 13, 2019

Applicability. This DTM applies to OSD, the Military Departments, the Office of the Chairman of the Joint Chiefs of Staff and the Joint Staff, the Combatant Commands, the Office of the Inspector General of the Department of Defense, the Defense Agencies, the DoD Field Activities, and all other organizational entities within the Department of Defense (referred to collectively in this DTM as the “DoD Components”).

Definitions. See Glossary.

Policy.

Financial readiness CMT requirements provide Service members the common knowledge, skills, and behavior standards to enable them to manage their financial affairs in a manner that enhances mission readiness.

Financial readiness CMT requirements, in accordance with Section 992 of Title 10, U.S.C. and DoDI 1322.31, provide a functional baseline of common knowledge, skills, and behavior standards for all Service members across all Military Departments.

The Military Departments may decentralize the assessment, planning, conduct, and evaluation of CMT requirements in this DTM. The CMT requirements in this DTM are a minimum standard and the Military Departments may use them as a framework to consolidate, reduce, and eliminate their own mandatory training requirements.

Unless otherwise directed, leaders at all levels will use the terminal learning objectives (TLOs) established in this DTM to meet financial readiness CMT requirements and will use their individual and collective training assessments to identify subject matter gaps consistent with DoDI 1322.31. Leaders will have the latitude to determine how best to achieve the CMT requirements consistent with this DTM.

Responsibilities. See Attachment 2.

Procedures. See Attachment 3.

Releasability. Cleared for public release. Available on the Directives Division Website at https://www.esd.whs.mil/DD/.

Summary of Change 1. The changes to this DTM are administrative, update the references, and extend the expiration date.

CHANGE 1, 08/12/2020 2

Introduction to Touchpoint Curriculum 1-7 DTM 19-009, August 13, 2019

Attachments: As stated

CHANGE 1, 08/12/2020 3

Introduction to Touchpoint Curriculum 1-8 DTM 19-009, August 13, 2019

ATTACHMENT 1

REFERENCES

“Blended Retirement System Training for Continuation Pay Provision Training Development Guide” Deputy Secretary of Defense Memorandum, “Implementation of the Blended Retirement System,” January 27, 2017 DoD Directive 5124.02, “Under Secretary of Defense for Personnel and Readiness (USD(P&R)),” June 23, 2008 DoD Instruction 1322.31, “Common Military Training (CMT),” February 20, 2020 DoD Instruction 1332.35, “Transition Assistance Program (TAP) for Military Personnel,” September 26, 2019 DoD Instruction 1342.22, “Military Family Readiness,” July 3, 2012, as amended DoD Instruction 1344.07, “Personal Commercial Solicitation on DoD Installations,” March 30, 2006 United States Code, Title 10

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Introduction to Touchpoint Curriculum 1-9 DTM 19-009, August 13, 2019

ATTACHMENT 2

RESPONSIBILITIES

1. ASSISTANT SECRETARY OF DEFENSE FOR READINESS (ASD(R)). Under the authority, direction, and control of the Under Secretary of Defense for Personnel and Readiness (USD(P&R)), the ASD(R) will:

a. Develop and monitor the implementation of policy, procedures, and information requirements relating to financial readiness CMT requirements.

b. Advise the USD(P&R) on matters related to financial readiness CMT requirements.

c. Ensure the Military Departments effectively implement financial readiness CMT requirements, in accordance with this DTM.

d. Adjudicate any requests for an exception to policies established in this DTM.

2. DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR FORCE EDUCATION AND TRAINING (DASD(FE&T)). Under the authority, direction, and control of the ASD(R), the DASD(FE&T) will:

a. Provide direct oversight of financial readiness CMT requirements by monitoring compliance with this DTM.

b. Establish minimum TLOs for financial readiness CMT requirements through the entirety of the military life cycle and review TLOs regularly to address changes in training needs in accordance with DoDI 1322.31.

c. Develop and distribute appropriate standardized training content and other educational products as necessary, in coordination with the Military Departments.

d. Coordinate with the Deputy Assistant Secretary of Defense for Reserve Integration (DASD(RI)) and the Deputy Assistant Secretary of Defense for Military Community and Family Policy (DASD(MC&FP)) to ensure financial readiness CMT requirements are integrated in applicable programs, as necessary.

3. ASSISTANT SECRETARY OF DEFENSE FOR MANPOWER AND RESERVE AFFAIRS (ASD(M&RA)). Under the authority, direction, and control of the USD(P&R), the ASD(M&RA) will coordinate with the ASD(R) to integrate appropriate financial readiness CMT requirements into programs under the purview of the ASD(M&RA).

4. DASD(RI). Under the authority, direction, and control of the ASD(M&RA), the DASD(RI) will:

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Introduction to Touchpoint Curriculum 1-10 DTM 19-009, August 13, 2019

a. Coordinate with the DASD(FE&T) to integrate appropriate financial readiness CMT requirements into programs under the purview of the DASD(RI), such as the Transition Assistance Program and Yellow Ribbon Reintegration Program.

b. Ensure relevant curricula in these programs include the appropriate TLOs.

5. DASD(MC&FP). Under the authority, direction, and control of the ASD(M&RA), the DASD(MC&FP) will:

a. Coordinate with the DASD(FE&T) to integrate appropriate financial readiness CMT requirements into family readiness programs, resources, and information, as well as into the services provided by Military and Family Support Centers in accordance with DoDI 1342.22.

b. Require such resources to be available to Service members and spouses.

6. DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR MILITARY PERSONNEL POLICY. Under the authority, direction, and control of the ASD(M&RA), the Deputy Assistant Secretary of Defense for Military Personnel Policy will provide information and updates on military compensation and entitlements to the DASD(FE&T) to support establishment of related financial readiness CMT requirements.

7. SECRETARIES OF THE MILITARY DEPARTMENTS. The Secretaries of the Military Departments will:

a. Monitor compliance with this DTM by personnel under their respective authority, direction, and control, and issue appropriate guidance implementing the requirements of this DTM.

b. Develop and deliver training, at a minimum, in accordance with Section 992 of Title 10, U.S.C., and this DTM.

c. Develop plans to deliver financial readiness CMT requirements identified in this DTM. Such plans must be submitted to ASD(R) no later than 3 months after publication of this DTM, and include the following information for each mandatory touchpoint:

(1) Organization(s) responsible for delivery;

(2) Point of delivery;

(3) Delivery method;

(4) TLOs;

(5) Schedule for delivery of training;

(6) Outline of training material(s); and,

Change 1, 08/12/2020 6 Attachment 2

Introduction to Touchpoint Curriculum 1-11 DTM 19-009, August 13, 2019

(7) Description of how training assessments and/or evaluations will be performed.

8. CHIEF, NATIONAL GUARD BUREAU. The Chief, National Guard Bureau will coordinate with the Secretaries of the Army and Air Force to ensure compliance with this DTM for Service members in the National Guard.

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Introduction to Touchpoint Curriculum 1-12 DTM 19-009, August 13, 2019

ATTACHMENT 3

PROCEDURES

1. REQUIREMENTS. The Military Departments must provide Service members financial literacy training, in accordance with the personal and professional touchpoints across the military life cycle identified in Section 992(a) of Title 10, U.S.C. Table 1 of this DTM establishes standard minimum TLOs required at each touchpoint, consistent with DoDI 1322.31. The Military Services are not required to directly replicate the TLOs in Table 1, but must show correlation to the required TLOs appropriate to the specific touchpoint in terms of learning outcomes.

a. Frequency.

(1) Training must be provided:

(a) When a Service member reaches a personal or professional touchpoint; or

(b) On an annual basis when several touchpoints occur 6 months before or after the time of delivery. Training conducted on an annual basis must include TLOs for all touchpoints the Service member has reached since the previous training, as well as those anticipated to be reached within 6 months after the time of delivery.

(2) TLOs associated with the following touchpoints may not be combined with training provided on an annual basis, as described in Paragraph 1.a.(1)(b) of this attachment, and must be provided during:

(a) Initial entry training;

(b) Leadership training;

(d) Transition.

(3) At the Military Department’s discretion, TLOs required to be provided at a Service member’s first duty station, in accordance with Table 1, may be delivered during a Service member’s initial entry training.

b. Delivery.

(1) Point of Delivery. Determining the appropriate point of delivery for required training is at the discretion of the Military Departments, and may include institutional training, professional military education, or unit training.

Change 1, 08/12/2020 8 Attachment 3

Introduction to Touchpoint Curriculum 1-13 DTM 19-009, August 13, 2019

(2) Method of Delivery. Training methods of delivery may include, but are not limited to, instructor-led, computer-based, web-based, or structured self-development training, as well as training received as part of one-on-one financial counseling.

(a) If training is delivered as in-person classroom training, instructors must be adequately trained and familiar with the content to be delivered. Training pertaining to a Service member’s rights and remedies under the law must be delivered by qualified legal counsel, subject to the authority of the General Counsel of the Military Department concerned or the Judge Advocate General of the Military Department concerned or, at a minimum, the materials to be presented must be reviewed and approved by such qualified legal counsel.

(b) If training is delivered through one-on-one financial counseling, such counseling must be provided in accordance with the requirements in Section 992(b) of Title 10, U.S.C. and DoDI 1342.22, pertaining to counseling on financial services provided to Service members.

(c) Training may be delivered by non-federal entities without branding or attribution to such entity and in accordance with the provisions in DoDI 1344.07.

c. Target Audience. The target audience for each touchpoint is the population that experienced, or anticipates experiencing, the event associated with the touchpoint (e.g., new Service members during initial entry training and arrival at their first duty station, and Service members preparing for or returning from deployment).

d. Standardized Training. The following standardized training curriculum must be included with training delivered by the Military Departments at the identified touchpoints in accordance with the January 27, 2017 Deputy Secretary of Defense Memorandum and DoDI 1332.35. With the exception of training specified in Paragraph 1.d.(4) of this attachment, the Military Departments may tailor training to fit within their training delivery mode, to meet the needs of their audience as long as TLOs from the standardized training and those identified in Table 1 are met. The Military Departments must deliver the following standardized training curriculum:

(1) The “Uniformed Services Blended Retirement System: Your Retirement System” training no later than 365 days after the pay entry base date for all newly accessed Service members;

(2) Training on continuation pay developed by the Military Departments in accordance with the “Blended Retirement System Training for Continuation Pay Provision Training Development Guide;”

(3) The “Blended Retirement System Lump Sum Payment Course” to Service members covered by the Blended Retirement System who are both eligible and intend to elect a lump sum of retired pay in accordance with Section 1415 of Title 10, U.S.C; and,

(4) The “Financial Planning for Transition” training in accordance with DoDI 1332.35 as part of the Transition Assistance Program.

Change 1, 08/12/2020 9 Attachment 3

Introduction to Touchpoint Curriculum 1-14 DTM 19-009, August 13, 2019

e. Training Materials.

(1) Training materials may include, but are not limited to, lesson plans, training guides, presentation slides, infographics, pamphlets, and other materials that will be used to deliver training.

(2) The Military Departments may also use materials that are developed and released internally or by the organizations and entities listed below. However, such materials may not be used as a replacement for the training curricula identified in Paragraph 1.d. of this attachment:

(a) Departments and agencies of the Federal Government.

(b) Non-federal entities, provided such materials are without branding or attribution to such entity, and are approved and presented in accordance with DoDI 1344.07.

Change 1, 08/12/2020 10 Attachment 3

Introduction to Touchpoint Curriculum 1-15 DTM 19-009, August 13, 2019 Table 1. Financial Readiness CMT TLOs Post- ship ship er ation Pay ation nd manent manent nu er Training Training Transition Transition Promotion Promotion P Lead Deployment Initial Entry Initial Entry Pre- a Entitlement to Entitlement Vesting in TSP Vesting Conti Change of Station Change First Duty Station Duty First Major Life Events Life Major Recognize the importance of personal financial management X X and what resources are available. Identify warning signs of Service members at risk for financial X X X problems. Understand the fundamentals of banking services and fees. X X Understand the fundamentals of creating and managing a spending plan, and the importance of updating a spending X X X X X X X plan. Basic Finance Understand the fundamentals and management of debt and X X X X credit. Understand fundamentals of income tax and common tax X X X X X benefits, and potential changes to tax situation. Know military consumer protection law fundamentals X X (SCRA/MLA). Recognize and understand how to protect yourself from X X X misleading consumer practices, and report complaints. Consumer Consumer Protections Recognize and identify steps to resolve identity theft. X X Analyze the implications and identify strategies for financing X X a major purchase. Analyze financial implications and identify strategies for hases X

rc buying a car. Major Major

Pu Understand education financing, to include available benefits, X X obligations, and repayment options.

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Introduction to Touchpoint Curriculum 1-16 DTM 19-009, August 13, 2019 Table 1. Financial Readiness CMT TLOs, Continued Post- ship ship er ation Pay ation nd manent manent nu er Training Training Transition Promotion P Lead Deployment Initial Entry Entry Initial Pre- a Entitlement to Entitlement Vesting in TSP Vesting Conti Change of Station Change First Duty Station Duty First Major Life Events Life Major Comprehend the components of Service member’s military retirement system and the importance of preparing for X X X X X X retirement. Discuss the reasons, needs, types, and options for purchasing

ing for the for ing X X X X

Future insurance. nn Understand purpose and implications of estate planning X X X X Pla (beneficiaries, wills, trusts, power of attorney, etc.) Know the components of basic pay and allowances throughout X

one’s military career.

nd Examine the impact of special pay and entitlements. X X X Discuss TRICARE options and costs. X X X X Discuss survivor and dependent benefits. X X X Entitlements Benefits, a Benefits, Compensation, Compensation, Understand future financial benefits afforded by the X X Department's Career Investment Programs. Understand interest and how the concept of compounding X works.

nd Recognize the importance of and be able to develop savings X X X X X and an emergency fund. Describe the fundamentals of investing. X Investing Investing Saving a Understand and be able to manage a Thrift Savings Plan (TSP) X X X X X account. Notes: Permanent Change of Station applies to Service members in paygrades E-1 to E-4 and O-1 to O-3. Promotion applies to Service members in paygrade E-1 to E-5 and O-1 to O-4. Major Life Events includes, at a minimum, marriage, birth of first child, divorce, and disabling sickness or condition. Transition includes separation, transition between Active and Reserve Components, and retirement.

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Introduction to Touchpoint Curriculum 1-17 DTM 19-009, August 13, 2019

GLOSSARY

PART I. ABBREVIATIONS AND ACRONYMS

ASD(M&RA) Assistant Secretary of Defense for Manpower and Reserve Affairs ASD(R) Assistant Secretary of Defense for Readiness

CMT Common Military Training

DASD(FE&T) Deputy Assistant Secretary of Defense for Force Education and Training DASD(MC&FP) Deputy Assistant Secretary of Defense for Military Community and Family Policy DASD(RI) Deputy Assistant Secretary of Defense for Reserve Integration DoDI DoD instruction DTM Directive-type Memorandum

MLA Military Lending Act

SCRA Servicemembers’ Civil Relief Act

TLOs terminal learning objectives TSP Thrift Savings Plan

U.S.C. United States Code USD(P&R) Under Secretary of Defense for Personnel and Readiness

PART II. DEFINITIONS

These terms and their definitions are for the purpose of this DTM.

Career Investment Programs. Policies, programs, and partnerships that support war-fighting readiness and ensure that Service members are prepared for transition to the civilian workforce following military service, including, but not limited to, voluntary education, tuition assistance, certification, licensure, apprenticeship, and financial readiness. continuation pay. A direct cash payment available to Service members covered under the Blended Retirement System, payable between completion of 8 and 12 years of service with a commitment of a minimum of 3 additional years of service. financial literacy. The ability to use knowledge and skills to manage financial resources. financial readiness. The state in which successful management of personal financial responsibilities supports a Service member’s ability to perform their wartime responsibilities. initial entry training. Training provided to Service members (enlisted, commissioned officers, and warrant officers) before arrival at the first permanent duty station.

CHANGE 1, 08/12/2020 13 Glossary

Introduction to Touchpoint Curriculum 1-18 DTM 19-009, August 13, 2019 lump sum. A cash payment of a portion of retirement pay under the Blended Retirement System made to eligible individuals in accordance with Section 1415 of Title 10, U.S.C. major life event. At a minimum, marriage, birth of first child, divorce, and disabling sickness or condition. pay entry base date. Date that denotes when an individual’s service is calculated for pay purposes. point of delivery. Event designated by the Military Department concerned where training is delivered. structured self-development. Mandatory, planned, and goal-oriented learning that reinforces and expands the depth and breadth of an individual’s knowledge base.

TLOs. The performance required of the student to demonstrate competency in the material being taught. TLOs describe exactly what the student must be capable of performing under the stated conditions to the prescribed standard upon lesson completion. touchpoint. Personal and professional life events when financial literacy training is to be provided to Service members in accordance with Section 992(a) of Title 10, U.S.C. training materials. Materials used by instructors, facilitators, and participants in a training environment. transition. Separation from service, transition between Active and Reserve Components, or retirement. vesting. The process by which an individual accrues non-forfeitable rights over employer- provided incentives or employer contributions made to the individual’s qualified retirement account.

CHANGE 1, 08/12/2020 14 Glossary

Introduction to Touchpoint Curriculum 1-19 Road to FINANCIAL READINESS Think of your financial journey as a road trip. You’ll need a plan to get there, regular fill-ups and maintenance to get where you need to go. And you will have assistance available along the way.

You will receive financial training at each of these touchpoints:

Learn about financial readiness, create Review your budget, maximize savings, minimize Invest this pay wisely, review your budget, and understand a budget, learn how to read debt, understand the impact of your credit score Initial entry maximize savings, minimize debt and your Leave and Earnings Statement, review on your long-term plans and reassess Thrift training understand the impact on taxes. your retirement system and make a plan for Savings Plan contributions. paying off debt. Each promotion Entitlement for continuation pay

Arrival at first Vesting in Thrift duty station At each duty station Savings Plan*

Register for all benefits, complete general financial Plan ahead for PCS expenses, review Invest as much cash as possible, identify long-term training, update your financial plan, focus on changes to your pay, benefits and taxes, financial goals and create steps to reach them, emergency savings, attend workshops on key topics, consider cost-of-living expenses and maximize contributions now for a greater payoff in and save by using your commissary, fitness center update your financial plan. retirement and attend workshops on investing offered and recreation program offerings. by your Family Center.

Update your financial plan and goals, review Register your child in the Defense Enrollment Eligibility insurance policies, reach out to the Exceptional Reporting System, update health, dental and life insurance Family Member Program and revisit your plan policies, review and adjust your budget, and consider for long-term savings. opening a college savings plan.

Disabling condition/death Birth and adoption

Divorce Marriage

Update your DEERS information, Register your spouse in DEERS, update update paperwork and insurance health, dental and life insurance policies, policies, notify creditors, and review identify joint financial goals and adjust your and adjust your budget. budget accordingly.

Leadership Pre- and post-deployment Recurring required Career transition training training training

Understand the value of Update paperwork and insurance Review and adjust your budget with Examine your goals, budget and savings, notify financial readiness and its policies, consider freezing your credit every change you face throughout civilian employers (for Reserve component impact on mission readiness, report and setting up credit alerts, the military lifecycle, always look to members coming off of active duty), meet with identify financial red flags review and adjust your budget, increase increase savings and perform regular your personal financial manager/counselor, in subordinates, get to know savings, understand any changes in pay reviews of your credit report. attend transition workshops and review lump available financial readiness and allowances, meet with a personal sum options for retired pay, if enrolled in the resources, and understand financial manager/counselor and review Blended Retirement System. the impact of debt on job the Savings Deposit Program. performance, such as on clearances, which could impact promotions.

Your personal financial manager/counselor is available through your Family Center for education and training at each stage of your journey. Turn to them to learn more about money management, including saving, investing, retirement planning, and credit and debt management.

For more resources and tips follow the Office of Financial Readiness at https://finred.usalearning.gov and @DoDFINRED on . Visit Military OneSource for a wealth of additional financial information.

*Only applies to those enrolled in the Blended Retirement System. To learn more about the BRS, go to http://militarypay.defense.gov/BlendedRetirement.

Introduction to Touchpoint Curriculum 1-20 EFFECTIVE FINANCIAL EDUCATION Five principles and how to use them

Summary for ﬁnancial educators and practitioners When you interact with people and help them work toward their money goals—and life goals—it’s important to feel conﬁdent in your approach. How to use the five principles

The five principles outlined below can help guide your work. For example, you might use the principles as a checklist to identify how your program supports key factors that drive a person’s financial well-being. You might compare the principles to your program’s focus and decide to incorporate new insights. Or, you might seek out complementary programs to fill gaps you identify. The principles are compiled from research on what drives people to take actions aimed at improving their money situation as well as their financial well-being, and how those drivers can be influenced by financial education. To help make the principles easy to put into practice, we talked to experts in the field and gathered feedback from financial education practitioners.

1. Know the individuals and families to be served Financial education programs can be more effective if they are matched to people’s speciﬁc circumstances, challenges, and goals. Example: Start with an assessment tool, like the CFPB’s Financial Well-Being Scale.

2. Provide actionable, relevant, and timely information People are more likely to absorb information if it is connected to an upcoming decision that matters to them, at the time when they can put it to use, with concrete steps they can follow. Example: Provide ﬁrst-time homebuyers with information they can use to guide them through the home loan process.

3. Improve key financial skills To put financial knowledge to use, consumers also need to build skills. Key skills include knowing when and how to find reliable information to make financial decisions, how to process the information, and how to follow through. Example: Give people simplified worksheets to help them comparison shop.

Consumer Financial Protection Bureau consumerfinance.gov/adult-financial-education 1 of 2

Introduction to Touchpoint Curriculum 1-21 4. Build on motivation Financial education can help people strengthen qualities and attitudes that allow them to stay motivated. You can help people focus on their own values rather than external influences, persevere in the face of obstacles, and build confidence that they can achieve their financial goals. Example: Set up a buddy system to help people stay on track.

5. Make it easy to make good decisions and follow-through The situations people encounter can strongly influence what they actually do. You can help people follow through on their intentions by working with the influences or forces at play within their surroundings. Example: Help people set up automatic transactions that support specific goals.

Effective financial education leads to action The five principles relate to the key drivers of financial well-being. Financial well-being can be defined and measured as a person’s sense of control and freedom, with today’s finances and looking toward the future.

Effective financial education can help people bridge the gap between what they want to achieve and the actions they ultimately take. The model of financial action, illustrated below, shows how knowledge, skills, motivations, and opportunities work together to support a course of action.

The model of financial action

Know-how PRINCIPLES (Knowledge + Skills)    Know the individuals and families to be served.   Provide actionable, relevant, and ACTION timely information.  Improve key ﬁnancial skills.   Improve key ﬁnancial skills.  Motivation Opportunity  Build on motivation.     Make it easy to make good decisions and follow through.

For a thorough discussion of each principle, along with examples and tips, please see the full report, Effective financial education: Five principles and how to use them.

Consumer Financial Protection Bureau consumerfinance.gov/adult-financial-education 2 of 2

Introduction to Touchpoint Curriculum 1-22 How to Access Touchpoint Training on Navy e-Learning

This guide will assist you in accessing and completing the Navy Financial Readiness Touchpoint Training Courses on Navy e-Learning (NeL). Currently, Service members take financial literacy training at personal and professional Touchpoints across the military lifecycle, beginning with recruit and officer accessions training and continuing throughout a Service member's career and transition to civilian life. NeL financial readiness Touchpoint training courses address all of the mandatory financial literacy Touchpoints, minus the "Initial Entry Training" and "Transition"Touchpoints as these two Touchpoints are addressed during the officer/enlisted accession pipelines and the Transition Assistance Program (TAP) class, respectively. These courses are available now for enrollment on NeL. Additionally, the MyNavy Financial Literacy mobile application will host the NeL Touchpoint training courses and should rollout in late-December 2020. Sailors will be able to submit course completion certificates directly to their Electronic Training Jacket or print certificates to prove completion. The courses are in the chart below along with access instructions.

List of Touchpoint Training Courses Number Title OPNAV-FDSFRT-1.0 First Duty Station Financial Readiness Touchpoint OPNAV-PCSFRT-1.0 Permanent Change of Station (PCS) Financial Readiness Touchpoint OPNAV-PFRT-1.0 Promotion Financial Readiness Touchpoint OPNAV-VTSPFRT-1.0 Vesting in TSP Financial Readiness Touchpoint OPNAV-ECPFRT-1.0 Entitlement to Continuation Pay Financial Readiness Touchpoint OPNAV-DSCFRT-1.0 Disabling Sickness or Condition Financial Readiness Touchpoint OPNAV-DFRT-1.0 Divorce Financial Readiness Touchpoint OPNAV-BFCFRT-1.0 Birth of First Child Financial Readiness Touchpoint OPNAV-MFRT-1.0 Marriage Financial Readiness Touchpoint OPNAV-LTFRT-1.0 Leadership Training Financial Readiness Touchpoint OPNAV-PREDFRT-1.0 Pre-Deployment Financial Readiness Touchpoint OPNAV-PDFRT-1.0 Post-Deployment Financial Readiness Touchpoint

Introduction to Touchpoint Curriculum 1-23 2

1. Go to https://learning.nel.navy.mil/ELIAASv2p/ and log into Navy eLearning. If you have issues accessing this site because of your firewall, you may have to attempt it several times. Access can also be started through MyNavy Portal at https://my.navy.mil/ and select Quick Links and Navy eLearning

Introduction to Touchpoint Curriculum 1-24 3

2. Go to Course Catalog and type in Touchpoint

3. Enroll in the Touchpoint you want to complete/Return to main screen to launch the training.

Introduction to Touchpoint Curriculum 1-25 4

4. Return to My Learning and Open My Training History once training is complete in order to retrieve your completion certificate.

Introduction to Touchpoint Curriculum 1-26

Introduction to Touchpoint Curriculum Instructor Guide TC 1 IG I. COURSE ORGANIZATION AND OUTLINE

The Introduction to Touchpoint Curriculum course is organized into six sections:

1. Introduction and Agenda

2. What Is Touchpoint Curriculum? • Policy: DTM 19-009 • 5 Principles for Financial Literacy

3. Road to Financial Readiness

4. Learning Objectives

5. Touchpoint Toolbox • Checklists and Handouts • PowerPoint (PPT) and Instructor Guide (IG) • Videos and Video Discussion Guide (VDG) • Online Learning

6. Touchpoint Start to Finish

7. Summary

TOTAL: 30 minutes

II. LEARNING OBJECTIVES

At the conclusion of this training, the CFS should:

Introduction to Touchpoint Curriculum 1-1 III. CHAPTER PREPARATION

This is an administrative chapter designed to provide an overview of Touchpoint Curriculum. The CFS will not teach this class. The PowerPoint and Instructor Guide are provided in your manual for reference and informational purposes only.

Sections labeled “INSTRUCTOR NOTE:” include additional information for instructor background, as well as activities that provide practical application of key learning points. Instructor notes contain an icon and appear in a shaded text box for easier recognition.

CONTENT ICONS — The following icons are used throughout the guide:

Instructor Note INSTRUCTOR NOTE: (indicates additional information related to the content for the instructor)

Checklist and Handout (indicates a Checklist or Handout is associated with the content)

Learning Activity (indicates a learning activity)

INSTRUCTOR NOTE: Being prepared for training promotes organization, projects a positive image, and reduces stress.

Be prepared to discuss each Checklist and Handout in class. You should familiarize yourself with this content so you can effectively discuss each document during your presentation.

While this guide is written as a script, avoid reading it word-for-word. Familiarize yourself ahead of time so you feel comfortable covering the material in your own words.

Throughout the presentation, the Checklist or Handouts will be identified with an icon on the PowerPoint and an Instructor Note in this Instructor Guide.

Introduction to Touchpoint Curriculum 1-2 IV. CONTENT Welcome to Touchpoint Curriculum Training

Welcome to your Introduction to Touchpoint Curriculum. My name is ______and I’m excited to share with you today how this training will help you, as a CFS, address some of the most common financial challenges, considerations, and decision points that your Service member’s face throughout their personal lives and professional careers. Let’s get started. SLIDE 1 Agenda

Over the next 30 minutes, we’ll discuss Touchpoint Curriculum and how you’ll use it as a CFS. We’ll talk about the policy that mandates the training and the principles it’s built on. We’ll define all 12 Touchpoints, the learning objectives SLIDE 2 of each, the tools you have available and how the military keeps track of this training.

Directive Type Memorandum DTM19-009

INSTRUCTOR NOTE: (OPTIONAL) Why does the DoD care about your financial situation? Service members have primary responsibility for SLIDE 3 maintaining their financial readiness. Financial readiness is a state in which successful management of personal financial responsibilities supports a Service member’s ability to perform his or her wartime responsibilities. Lack of financial readiness can have negative impacts on mission readiness and the Department’s ability to carry out its responsibilities in support of the National Defense Strategy. Financial readiness impacts mission readiness.

Refer learners to TC 1 Student Manual, pages 1-5 through 1-18.

The Directive Type Memorandum (DTM) 19-009 establishes Financial Readiness Common Military Training (CMT) Requirements to provide Service members the knowledge, skills, and behavior standards to manage their personal affairs. Financial readiness impacts mission readiness.

What Are the Touchpoints? Road to Financial Readiness

INSTRUCTOR NOTE: Refer learners to TC 1 Student Manual, page 1-19 for the Road to Financial Readiness. SLIDE 4

Introduction to Touchpoint Curriculum 1-3 As a CFS, it’s important for you to understand each of these Touchpoints so you can deliver the right training at the right time to Service members.

Think of your financial journey as a road trip. Where are you now? Where do you want to be? How will you get from here to there? As with most successful journeys, you’ll need to chart your course and make a plan. You’ll also need regular fill-ups and tuneups along the way. Quite likely, even some course corrections or detours.

Touchpoint Curriculum is like a pit stop on the road to financial readiness that allows Service members to pull off the road to get the help they need when they need it. As a CFS, you lead the pit crew. But your PFMs are always here to help!

There are 13 Touchpoints identified in the DTM and illustrated on this Road to Financial Readiness flyer. Each of these major events come with financial considerations and decisions. Each of these personal or professional milestones come with a lot of financial considerations and decisions.

If you’re a Marine, you’ll recognize these events as Financial Education Action Points. Soldiers refer to them as Milestones.

As a CFS, you’ll use your Touchpoint Toolbox to provide actionable, relevant, and timely information to help people make the decisions need to be made. You’ll help them improve financial skills so they can make good financial decisions and follow through on their financial action plans.

5 Principles for Financial Literacy

The Department of Defense is committed to incorporating appropriate best practices in its financial literacy training to ensure Service members receive quality education. This approach to financial literacy education is consistent SLIDE 5 with best practices commonly identified in research and literature. Training is designed with a specific population in mind and builds on motivation associated with various personal and professional milestones that occur throughout a Service member’s life and career.

5 Principles (Best Practices) for Financial Literacy

1. Know the individuals receiving services • Information is more effective when matched to people’s specific circumstances, challenges, and goals 2. Provide actionable, relevant, and timely information • Service members are more likely to absorb information connected to an upcoming decision that matters to them, at a time when they can apply it using concrete steps to follow.

Introduction to Touchpoint Curriculum 1-4 3. Improve key financial skills • Know when and how to find reliable information to make financial decisions, how to process information, and how to follow through 4. Build on motivation • Help strengthen qualities and attitudes to build confidence and stay motivated 5. Make it easy to make good decisions and follow through • Help see things through to completion

INSTRUCTOR NOTE: This is the study that you may want to familiarize yourself with before class: https://files.consumerfinance.gov/f/ documents/201706_cfpb_SUMMARY_five-principles-financial-well-being.pdf.

Learning Objectives

Like all common military training (CMT), Touchpoint Curriculum has specific Terminal Learning Objectives (TLOs).

SLIDE 6 The TLOs are organized into six major categories:

1. Basic Finance 2. Consumer Protections 3. Major Purchases 4. Planning for the Future 5. Compensation, Benefits and Entitlements 6. Saving and Investing

Each of these categories have specific TLOs that are designed to ensure that Service members gain knowledge, skills, and abilities that are applicable to each Touchpoint.

TLO Matrix, page 11 of DTM

INSTRUCTOR NOTE: Refer learners to the TLO Matrix in their Student Manual on pages 1-15 and 1-16 to follow along.

SLIDE 7 This Matrix establishes standard CMT TLOs required at each training point. Unless otherwise directed, leaders at all levels may use these TLOs to meet financial readiness CMT requirements, may determine how best to achieve these requirements, and will use their individual and collective training assessments to identify subject matter gaps consistent with DoDI 1322.31.

Let me orient you to the Matrix.

Introduction to Touchpoint Curriculum 1-5 Major Topics in first column: First thing I’ll mention are the major topics along the left column. Each learning objective is categorized under these 6 major topics. On this page, you see Basic Finance, Consumer Protection, and Major Purchases.

Top row: Next let’s look at the Touchpoints listed along the top row. There are 10 listed. As a reminder, you won’t deliver Initial Entry Training (IET) or Transition Assistance Training (TAP). Also note that Major Life Events includes Marriage, First Child, Divorce, and Disability since they all have the same TLOs.

Each “X” represents a TLO for that Touchpoint. Let’s do a quick quiz to make sure you know how to follow this Matrix:

1. What’s the first TLO forFirst Duty Station ? “Understand the fundamentals of banking services and fees.”

Why do you think this is important for a young Service member arriving at their First Duty Station?

2. What’s the first TLO for the Major Life Events? “Understand fundamentals of creating and managing a spending plan.”

Why do you think this might be an important thing to talk about when someone gets married or has a baby?

TLO Matrix, page 12 of DTM

On this slide, I’d like to call your attention to the Notes section at the bottom of the Matrix in your DTM:

SLIDE 8 1. Notice that the remaining three categories are listed here: Planning for the Future; Compensation, Benefits, and Entitlements; and Saving and Investing. 2. See the Notes at the bottom of the page: PCS only applies to Service members in paygrades of E1-4 and O1-3. Promotion applies to paygrades E1-5 and O1-4. Major Live Events include Marriage, First Child, Divorce, and Disability. They will be delivered as needed.

Student Manual Orientation

INSTRUCTOR NOTE: Refer learners to their Student Manual, TC 5 Vesting in the TSP.

SLIDE 9 There are 12 Touchpoint Student Manuals. Each has the same six-section outline. Let’s take a look at TC 5 Vesting in the TSP Student Manual.

Introduction to Touchpoint Curriculum 1-6 Section I: INTRODUCTION. For consistency, this short paragraph is similar to the introduction paragraph of the Touchpoint Checklist.

Section II: LEARNING OBJECTIVES. This section lists Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs). The TLOs are from the DTM or pre-decisional DoDI 1322.31. The ELOs are from the DoD Training Standard Sheets (TSS). As you see in the TC 5 Student Manual, there are two TLOs and they each have one ELO. Other Touchpoints will have more.

Section III: REFERENCES. The references listed support the learning objectives and helped create the Touchpoint curriculum. Name one of the references.

Section IV: ACRONYMS. This section lists all the tools and resources available for a CFS to teach the touchpoint, including Checklists and Handouts, classroom training materials, and online options. I will provide more information on how to utilize each of these tools later in this presentation.

Section V: TOUCHPOINT TOOLBOX: MATERIALS AND RESOURCES TO TEACH TOPIC. This is your Toolbox. More discussion on next slides.

Section VI: ADDITIONAL LEARNING AND ACTIVITIES. This section is designed to provide the CFS with ideas for exercises and activities to reinforce learning. This may be useful if a CFS has a short amount of time to conduct a training session for the command on a specific financial consideration at a given Touchpoint. This section provides a list of PFMSC classes that provide additional information relevant to each Touchpoint.

Touchpoint Toolbox

Every job is easier with the right tool. That’s why we’re giving you a toolbox and the flexibility and autonomy to determine which tool is right for your job.

SLIDE 10 There are three different ways you can teach Touchpoint Curriculum. You decide which one best fits the needs of your client, your knowledge and familiarity of topic, or the resources available to you.

Each of these three tools in your toolbox meet TLOs for that specific Touchpoint.

Introduction to Touchpoint Curriculum 1-7 One on One: Touchpoint Checklists and Handouts

INSTRUCTOR NOTE: Refer learners to TC 3 PCS Counselee Checklist. What Handouts are listed? What is the Catalog Identification Number (CIN)? SLIDE 11 Each Touchpoint has a Counselor and Counselee Checklist. Each Checklist provides actionable, relevant, and timely information that Service members can use to make informed financial decisions. Both have the same content so here’s the main difference.

• The Counselor Checklist has notes that help guide your conversation with your counselee. • The Counselee Checklist has signature blocks for both of you to sign and date to indicate when the counseling was completed. Counselee Checklists also include the Catalog Identification Number (CIN) along the bottom banner.

One more note about Checklists: In the top right corner, there is a blue box that lists Handouts applicable to that Touchpoint. Handouts provide more detailed information to reinforce learning objectives.

These Checklists are great tools for everyone. They serve as fundamental learning tools for financially inexperienced Service members or reminders for those who are already on track with their finances. They are comprehensive and proactive tools that help you to handle small tasks before they become big issues. You don’t have to be an expert in every topic. That’s what a Checklist is for.

Classroom Instruction: PowerPoint and Instructor Guide

INSTRUCTOR NOTE: Refer learners to TC 5 Vesting in the TSP.

Each Touchpoint has a PowerPoint presentation and Instructor Guide. You SLIDE 12 may choose this option to deliver Touchpoint Curriculum training if you have a group of Service members that need the same training at the same time.

Even if you decide to teach from a PPT, you will reference Checklists and Handouts throughout the presentation.

Introduction to Touchpoint Curriculum 1-8 Classroom Instruction: Videos and Video Discussion Guide

INSTRUCTOR NOTE: Refer learners to TC 6 Continuation Pay Video Discussion Guide. SLIDE 13 Finally, there are Videos and Video Discussion Guides that may be used to satisfy Touchpoint Curriculum. These are a series of short videos that you can use if you are not familiar teaching a topic. The Video Discussion Guide gives specific talking points and knowledge checks between videos.

This may be a great way to provide training to your command if you aren’t 100% comfortable teaching a class with a PPT presentation. Remember that PFMs can come co-teach with you to help get you comfortable with the material.

With both methods of classroom training, PPT and Videos, you’ll always use the Checklist and Handouts. Remember to sign and date the Counselee Checklist to verify completion of training.

Online Learning

Online learning is another option for completion of Touchpoint training. As of October 2020, Sailors are able to complete their Touchpoint training on Navy e-Learning and their certificate of completion goes straight to FLTMPS. SLIDE 14 Beginning in December 2020, Sailors will be able to complete self service Touchpoint training through MyNavy Financial Literacy mobile application.

Talk to your PFM or PFC to find out what online or self service Touchpoint training options are available for your service.

Where Is My Touchpoint Toolbox?

Your Navy Touchpoint Toolbox is available in many different places to include FINRED’s Navy Resources Page, CNIC website, and PFM milSuite site. Check with your specific service for their websites and locations. SLIDE 15 If this is an in-person class, you will receive a Student Manual that includes hard copy of printed material and a DVD with PPT/IGs and Videos/VDGs.

You can order a DVD with Checklists and Handouts, PowerPoint (PPT) Training Slides and Instructor Guides, Videos and Video Discussion Guides.

Introduction to Touchpoint Curriculum 1-9 Touchpoint Training Start to Finish

How does this all begin? When does a Service member know when they have a Touchpoint requirement?

SLIDE 16 This slide is specific to USN only.

1. NSIPS Message directs Sailor to CFS, PFM, or FFSC for assistance. Remind Sailors to keep their email address updated in NSIPS. This is especially important for those Sailors approaching entitlement to Continuation Pay. It is extremely important for Sailors to keep their email address updated in NSIPS. This is especially important for those Sailors approaching entitlement to Continuation Pay.

2. CFS or PFM delivers Touchpoint Curriculum. Be sure to sign and date the Sailor’s Counselee Checklist. If Sailor opts for self-service online or mobile learning, Navy e-Learning and MyNavy Financial Literacy mobile application will send training completion to FLTMPS.

3. Sailor provides verification of completed training to command for FLTMPS entry.

It is important for you as a CFS to get and stay connected with Career Counselors, administrative LPOs, and training LPOs. These are key partners to help ensure financial literacy Common Military Training (CMT) gets delivered and recorded.

Resources

You have many resources available to you.

Checklists and Handouts are a great resource to help navigate the financial SLIDE 17 decisions you’ll need to make and help others make, so become familiar with them and refer back to them.

You are not alone! You have many layers of support to help you learn more and make good financial decisions.

You can talk to other CFSs at your unit or meet with a PFM and attend a class at your local installation service center. You can call Military OneSource or CG SUPRT for additional assistance. This is a great option for flexibility of scheduling since the call center has extended hours. You may also access the FINRED Sen$e mobile app or the MyNavy Financial Literacy mobile application for assistance with a variety of personal finance issues.

Introduction to Touchpoint Curriculum 1-10 Questions?

As a reminder, Touchpoint Curriculum is a life cycle/career cycle approach to financial literacy training. As a CFS, you play a critical role in its delivery. You are your command’s subject matter expert but you are not alone. Partner with SLIDE 18 your Personal Financial Manager/Counselor whenever you need assistance. We are here for you. Thank you in advance for helping improve mission readiness through financial readiness. Questions?

Touchpoint Toolbox Demos

INSTRUCTOR NOTE: This slide is for use during in-person class only. Virtual adaptation does not include small group presentations.

SLIDE 19

V. FORMS provided in Student Manual:

DTM 19-009 • FINRED Road to Financial Readiness • CFPB Five Principles for Financial Literacy • How to Access Touchpoint Training on Navy e-Learning

Touchpoint Curriculum may be accessed on the following websites:

Office of Financial Readiness (FINRED), Navy Resource Page: https://finred.usalearning.gov/SPL/Training/NavyResource

PFM milSuite site: https://www.milsuite.mil/personal-financial-management-program-wfl/

CNIC website: https://www.cnic.navy.mil/ffr/family_readiness/fleet_and_family_support_program/work-and-family-life/ personal_finances/pfm-touchpoint-checklists.html

milSuite https://www.milsuite.mil/book/groups/cnic-personal-financial-management-program-wfl

CNIC https://www.cnic.navy.mil/ffr/family_readiness/fleet_and_family_support_program/work-and-family-life/ personal_finances/pfm-touchpoint-checklists.html

FINRED Navy Resources Page

Introduction to Touchpoint Curriculum 1-11

Introduction to Touchpoint Curriculum Presentation

Directive Type Memorandum DTM19-009

• Financial Readiness Common Military Training (CMT) Requirements

• Provide Service members the knowledge, skills, and behavior standards to manage their financial affairs

• August 13, 2019

DTM 19-009

What Are the Touchpoints?

• First Duty Station • PCS Moves • Promotion • Vesting in the TSP • Entitlement for Continuation Pay • Disabling Condition • Divorce • Birth and Adoption • Marriage • Leadership Training • Pre- and Post- Deployment

Road to Financial Readiness

4 5 Principles for Financial Literacy

• Know the individuals receiving services • Provide actionable, relevant, and timely information • Improve key financial skills • Build on motivation • Make it easy to make good decisions and follow through

Learning Objectives

• Terminal Learning Objectives (TLOs) are organized into six major categories: ü Basic Finance ü Consumer Protections ü Major Purchases ü Planning for the Future ü Compensation, Benefits and Entitlements ü Saving and Investing

DTM 19-009, pages 10 - 11

6 Terminal Learning Objective (TLO) Matrix - and Postand - Training Training Transition Promotion Permanent Permanent Leadership Leadership Initial Entry Deployment Pre Entitlement to to Entitlement Vesting in TSP in Vesting Continuation Pay Continuation First Duty Station Duty First Events Life Major Change of Station of Change

Recognize the importance of personal financial management and what resources are available X X

Identify warning signs of Service members at risk for financial problems X X X Understand the fundamental of banking services and fees X X

Understand the fundamentals of creating and managing a spending plan, and the importance of updating a spending plan X X X X X X X

Basic Finance Understand the fundamentals and management of debt and credit X X X X

Understand fundamentals of income tax and common tax benefits, and potential changes to tax situation X X X X X

Know military consumer protection law fundamentals (SCRA/MLA) X X

Recognize and understand how to protect yourself from misleading consumer practices, and report complains X X X Consumer Consumer Protections Recognize and identify steps to resolve identity theft. X X

Analyze the implications and identify strategies for financing a major purchase X X Analyze financial implications and identify strategies for buying a car X Major Major

Purchase Understand education financing, to include available benefits, obligations, and repayment options X X

Terminal Learning Objective (TLO) Matrix

Notes: - Permanent Change of Station applies to Service members in paygrades E-1 to E-4 and O-1 to O-3. Promotion applies to Service members in paygrade E-1 to E-5 and O-1 to O-4

Major Life Events includes, at a minimum, marriage, birth of first child, divorce, Postand - Training Training

and disabling sickness or condition. Transition Promotion Permanent Permanent Leadership Leadership Initial Entry Deployment

Transition includes separation, transition between Active and Reserve Pre Entitlement to to Entitlement Vesting in TSP in Vesting Continuation Pay Continuation Components, and retirement. Station Duty First Events Life Major Change of Station of Change

Comprehend the components of Service member’s military retirement system and the importance of preparing for retirement X X X X X X

Discuss the reasons, needs, types, and options for purchasing insurance X X X X

Future Understand purpose and implications of estate planning (beneficiaries, will, trust, power of attorney, etc.) X X X X Planning for the Know the components of basic pay and allowances throughout one’s military career X Examine the impact of special pay and entitlements X X X

Discuss TRICARE options and costs X X X X

Discuss survivor and dependent benefits X X X

and Entitlements Understand future financial benefits afforded by the Department’s Career Investment Programs X X Compensation, Benefits, Benefits, Compensation, Understand interest and how the concept of compounding works X

Recognizer the importance of and be able to develop savings and an emergency fund X X X X X

Describe the fundamentals of investing X Investing Saving and Understand and be able to manage a Thrift Savings Plan (TSP) account X X X X X

8 Student Manual Orientation

• Section I: Introduction to Touchpoint • Section II: Learning Objectives (TLOs and ELOs) • Section III: References • Section IV: Acronyms • Section V: Touchpoint Toolbox • Section VI: Additional Learning and Activities

TC 5 Vesting Student Manual

Touchpoint Toolbox

• One on One ü Checklist and Handouts

• Classroom ü Checklists and Handouts ü PowerPoint (PPT) Training Slides and Instructor Guide (IG) ü Videos and Video Discussion Guides (VDG)

• Online Training ü Navy e-Learning, MyNavy Portal Financial Readiness, or your service-specific e-Learning site

10 One on One: Touchpoint Checklists and Handouts

TC 3 Permanent Change of Station (PCS) Counselee Checklist

Classroom Instruction: PowerPoint and Instructor Guide

12 Classroom Instruction: Video and Video Discussion Guides

TC 6 Continuation Pay Video Discussion Guide

Online: Navy e-Learning or MyNavy Financial Literacy Application

14 Where Is My Touchpoint Toolbox?

Office of Financial Readiness (FINRED), Navy Resource Page: https://finred.usalearning.gov/SPL/Training/NavyResource

PFM milSuite site: https://www.milsuite.mil/personal-financial-management-program-wfl/

CNIC website: https://www.cnic.navy.mil/ffr/family_readiness/fleet_and_family_support_ program/work-and-family-life/personal_finances/pfm-touchpoint- checklists.html

CFS Touchpoint DVD: https://www.personalfinanceformilitarylife.org/product/financial-literacy- touchpoint-videos-and-resources-navy-edition-april-2020/

Training Initiation and Completion for Navy

1. NSIPS Message directs Sailor to CFS, PFM, or FFSC for assistance ü Remind Sailor to keep email updated in NSIPS. This is also how they will receive notification to apply for Continuation Pay. 2. CFS or PFM delivers Touchpoint Curriculum or refers Sailor to online learning. 3. Sailor provides verification of completed training to command for FLTMPS entry.

16 Resources

• Checklist and Handouts

• Financial Education and Support ü Command Financial Specialists (CFS) ü Personal Financial Managers (PFM) ü Installation Family Support Center or Health, Safety, Work-Life (HSWL) Regional Practice ü Relief Societies ü Military OneSource or CG SUPRT • Financial Literacy Mobile Apps ü MyNavy Financial Literacy ü Sen$e

Questions?

The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

18 Touchpoint Toolbox Demos: 0830-1000 Small Group Preparation

• Team A: (30 min) TC 6 Entitlement to Continuation Pay – PPT/IG or Video/VDG • Team B: (90 min) TC 3 PCS – PPT/IG with Counselee Checklist • Team C: (30 min) TC 4 Promotion – PPT and IG or Video/VDG • Team D: (30 min) TC 11 Leadership – 1-1 Counseling Role Play (without eFPW) • Team E: (90 min) TC 12A Pre-Deployment Preparation • PPT/IG with Checklists/Handouts • Teams F and G: (60 min each) Present one Major Life Event (TC 7-10). One team uses PPT/IG or Video/VDG. Other team presents via counseling role play.

19 • Student Manual • Counselor (PFM/CFS) Checklist • Counselee Checklist • Instructor Guide • Video Discussion Guide • PowerPoint Slides

TC 2 First Duty Station

First Duty Station Student Manual TC 2 SM I. INTRODUCTION

As a CFS you have the important role of ensuring Service members and family members understand the benefits of the programs and services offered by the Personal Financial Management Program at their military installation. Whether their goal is to complete a 20-year career or separate after a few years, they should take advantage of those resources.

After completing this chapter, you will understand how to assist Service members when they arrive at their first duty station. Considerations at their first duty station include: relocating to a new town, getting a new house, making new friends, and possibly even buying their first vehicle. This new adjustment can be exciting, but at the same time, stressful, and can become a financial burden. In this Student Manual, we will introduce you to the tools that allow you to teach your Service members to understand their pay and entitlements, establish their spending plan, manage debt, build savings, and plan for their future.

First Duty Station 2-1 II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

1. TLO: Understand the fundamentals of banking services and fees. ELOs: Understandthe importance of tracking deposits and expenditures. Know how to balance apersonal banking register against a recent bank statement. Know how to recognize and correctbanking errors. Know ways to avoid banking fees. Understand basic considerations of debitand credit card use and tracking expenditures. Know common apps and programs for budgeting and banking. 2. TLO: Understand the fundamentals of creating and managing a spending plan, and the importance of updating a spending plan. ELOs: Understand why it is important to have a spending plan. Know characteristics of SMART Goals (Specific, Measurable, Achievable, Relevant and Time-bound) and develop financial goals that follow these guidelines. Be able to create a personal spending plan. Know strategies to minimize expenses and keep a spending plan on track. 3. TLO: Understand the fundamentals and management of debt and credit. ELOs: Understand FICO score. Know how to check and resolve errors on a credit report. Understand strategies to raise a credit score. Know strategies for managing credit and debt. 4. TLO: Understandfundamentals of income tax and common tax benefits, and potential changes to tax situation. ELOs: Understand various tax costs and their use. Understand how to make the most of tax deductions. Know how to review tax payments. Know how to research state taxes and the differences associated with residency. Understand the various components and resulting implications of a W-4 form. Be able to collect and prepare documentation for tax filing. Know where to find tax information on the LES. 5. TLO: Know military consumer protection law fundamentals, including the Servicemembers Civil Relief Act (SCRA) and Military Lending Act (MLA). ELOs: Understand why Service members are targets for predatory lending and fraud. Understand the components and protections for Service members under the SCRA. Understand the components and protections for Service members under the MLA. Know basic procedures for handling a consumer complaint or dispute associated with the SCRA or MLA. 6. TLO: Recognizeand understand how to protect yourself from misleading consumer practices, and report complaints. ELOs: Understand the threat of predatory lenders and identify better alternatives like military aid societies. Know how to find information on state-specific consumer protection laws. Recognize fraud and scam tactics and know how to safeguard against them. Be able to access and read a credit report to identify fraudulent activity. Understand credit fraud and the process for placing alerts and freezes on accounts. Know the basic procedures for handling a consumer complaint or dispute. Know which federal agencies support consumer protections and how to find information. 7. TLO: Recognize and identify steps to resolve identity theft. ELOs: Know what type of information is subject to identity theft. Know strategies for protecting one’s identity. Recognize warning signs that identity theft has occurred. Know steps for resolving identity theft activity.

First Duty Station 2-2 8. TLO: Analyze the implications and identify strategies for financing a major purchase. ELOs: Know how to add a major purchase to a spending plan and evaluate for feasibility. Know how to identify predatory lenders. Know how to research product quality for major purchases. Be able to compare and contrast various funding sources for major purchases. Understand and separate emotional spending from major purchases. Understand how using credit for major purchases can impact future credit scores and access to lines of credit. 9. TLO: Analyze financial implication and identify strategies for buying a car. ELOs: Know how much to pay for transportation (recommended percentage of total income transportation expenses). Know how to re-evaluate the financial impact of a vehicle at each duty station. 10. TLO: Understandeducation financing, to include available benefits, obligations, and repayment options. ELOs: Understand options to lower interest rate. Understand income-driven repayment plans and Public Service Loan Forgiveness (PSLF). Understand eligibility to have loans deferred for a certain period of time. 11. TLO: Discuss the reasons, needs, types, and options for purchasing insurance. ELOs: Discuss basic insurance terminology and how insurance works. Identify the various insurance options available (auto, renters, health). Recognize the difference in mandatory and suggested insurance. Determine insurance levels necessary to minimally cover personal assets and liabilities. Understand the implications of various deductible levels. Understand benefits under Servicemembers’ Group Life Insurance (SGLI). Know how to update SGLI. Know how to compare benefit levels for private life insurance including term and permanent life insurance. Know how to review beneficiaries and levels for life insurance. Know the different types of life insurance that are offered to military members and their families. 12. TLO: Examine the impact of special pay and entitlements. ELOs: Understand requirements of common special pay considerations (hardship duty pay, assignment incentive pay, and hazardous duty pay). Know where to find information regarding special pay and entitlements on the LES. Understand the differences between special and incentive pay and basic pay and allowances. Understand the role and compensation for government housing CONUS and OCONUS. 13. TLO: Discuss TRICARE options and costs. ELOs: Know what the Defense Enrollment Eligibility Reporting System (DEERS) is, how to enroll, and make changes. Know how to sign up for eCorrespondence in milConnect. Understand the difference between the various TRICARE options. Recognize differences and benefits of TRICARE versus private insurance options. Know how to locate military treatment facilities for use of TRICARE. Know how to check what medical services are covered under TRICARE. Know how to access TRICARE when traveling or during an emergency. Know what to consider and how to switch between TRICARE plan options. 14. TLO: Understand future financial benefits afforded by the Department’s Career Investment Programs. ELOs: TBD 15. TLO: Understand interest and how the concept of compounding works. ELO: Know the difference between simple and compound interest. 16. TLO: Recognize the importance of and be able to develop savings and an emergency fund. ELOs: Understand importance of building up emergency savings for unexpected events. Identify financial tools that can be used for short-term savings.

First Duty Station 2-3 17. TLO: Describe the fundamentals of investing. ELOs: Know the difference between stocks, bonds and mutual funds. Be able to assess current and long-term saving and investment goals. Understand differing risk levels for investing. Know how to diversify an investment portfolio. Know how to choose between various investment options. 18. TLO: Understand and be able to manage a Thrift Savings Plan (TSP) account. ELOs: Know how to adjust TSP contributions. Understand the investment choices offered in the TSP.

First Duty Station 2-4 III. REFERENCES

• Office of Financial Readiness (FINRED) — https://finred.usalearning.gov • Thrift Savings Plan (TSP) — https://www.tsp.gov • U.S. Securities and Exchange Commission — https://www.investor.gov • Internal Revenue Service (IRS) — https://www.irs.gov https://www.irs.gov/filing/individual/update-my-information • Military Compensation — https://militarypay.defense.gov https://militarypay.defense.gov/Benefits/Thrift-Savings-Plan https://militarypay.defense.gov/Pay/Tax-Information https://militarypay.defense.gov/Benefits/Savings-Deposit-Program • Military Compensation Policy — https://militarypay.defense.gov/Pay https://militarypay.defense.gov/Benefits.aspx • Defense Finance and Accounting Service (DFAS) — https://www.dfas.mil https://www.dfas.mil/militarymembers/payentitlements/sdp.html • myPay — https://mypay.dfas.mil • U.S. General Services Administration (GSA)/ Travel Per Diem rates — https://www.gsa.gov/travel/plan-book/per-diem-rates • Federal Deposit Insurance Corporation (FDIC) — https://www.fdic.gov • National Credit Union Administration (NCUA) — https://www.ncua.gov • Compound Interest Calculator — https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator • USA.gov — https://www.usa.gov/saving-investing • TreasuryDirect — https://www.savingsbonds.gov • Free annual credit report — https://www.annualcreditreport.com • Consumer Financial Protection Bureau (CFPB) — https://www.consumerfinance.gov https://www.consumerfinance.gov/consumer-tools/military-financial-lifecycle https://www.consumerfinance.gov/owning-a-home • Federal Trade Commission (FTC) — https://www.IdentityTheft.gov • Federal Trade Commission (FTC) Consumer Information — https://www.consumer.ftc.gov • FTC Complaint Assist — https://www.ftccomplaintassistant.gov • Department of Justice — https://www.justice.gov/servicemembers/servicemembers-civil-relief-act-scra • U.S. Armed Forces Legal Assistance — https://legalassistance.law.af.mil • U.S. Department of Housing and Urban Development — https://www.hud.gov/ • Federal Emergency Management Agency (FEMA) — https://www.fema.gov/national-flood-insurance-program • Department of Education — https://www.ed.gov • Federal Student Aid — https://studentaid.ed.gov/sa • Servicemembers’ Group Life Insurance (SGLI) — https://www.va.gov/life-insurance/options-eligibility/sgli • Veterans’ Group Life Insurance (VGLI) — https://www.va.gov/life-insurance/options-eligibility/vgli • Department of Veterans Affairs (VA) — https://www.benefits.va.gov • Department of Veterans Affairs (VA) Education and Training benefits — https://www.benefits.va.gov/gibill/tuition_assistance.asp • TRICARE — https://www.tricare.mil

First Duty Station 2-5 • Defense Enrollment Eligibility Reporting System (DEERS) — https://www.tricare.mil/deers • Military Health System — https://health.mil • milConnect — https://milconnect.dmdc.osd.mil/milconnect • Medicaid — https://www.medicaid.gov • Medicare — https://www.medicare.gov • HealthCare.gov — https://www.healthcare.gov/have-job-based-coverage/flexible-spending-accounts • Defense Activity for Non-Traditional Education Support (DANTES) — https://www.dantes.doded.mil/index.html • Department of Defense Tuition Assistance (TA) program — https://www.dantes.doded.mil/FinancialAid/MilitaryTuitionAssistance.html • milSuite — https://www.milsuite.mil/book/groups/cnic-personal-financial-management-program-wfl • CNIC Touchpoint Curriculum — https://www.cnic.navy.mil/ffr/family_readiness/fleet_and_family_support_program/work-and- family-life/personal_finances/pfm-touchpoint-checklists.html

First Duty Station 2-6 IV. ACRONYMS AND ABBREVIATIONS

Acronym/Abbreviation Full Name Definition

BAS Basic Allowance for BAS is an allowance to offset costs Subsistence for a member’s meals.

BAH Basic Allowance for Housing BAH is an allowance to offset the cost of housing when members do not receive government-provided housing.

LES Leave and Earnings This monthly single-page report Statement details members’ eligible pay and allowances, payroll deductions and leave balances.

FICO Fair Isaac Corporation This type of credit score makes up a substantial portion of the credit criteria lenders use to assess an applicant’s credit risk.

PSLF Public Service Loan This program forgives remaining Forgiveness balances on Direct Loans for those who have made 120 qualifying monthly payments under a qualifying repayment plan while working full time for a qualifying employer.

SGLI Servicemembers’ Group Life Servicemembers’ Group Life Insurance Insurance offers low-cost term coverage to eligible Service members.

VGLI Veterans’ Group Life Service members who are eligible for Insurance Veterans’ Group Life Insurance may be able to keep their life insurance coverage after they leave the military for as long as they continue to pay the premiums.

TSP Thrift Savings Plan The Thrift Savings Plan is a retirement savings and investment plan for federal employees and members of the Uniformed Services, including the Ready Reserve.

First Duty Station 2-7

Acronym/Abbreviation Full Name Definition

SCRA Servicemembers Civil Relief The Servicemembers Civil Relief Act Act eases the financial burden when Service members are called to active duty by postponing, suspending or lessening certain debt obligations and actions.

MLA Military Lending Act The Military Lending Act protects Service members and their families by limiting the cost of credit offered to 36% annual percentage rate.

CONUS Continental United States This refers to locations within the continental United States.

OCONUS Outside Continental United This refers to locations outside the States continental United States.

DEERS Defense Enrollment Eligibility Registration in this database is Reporting System required for TRICARE eligibility and enrollment.

VA Department of Veterans This federal agency provides health Affairs and other benefits to eligible veterans and their families.

CZTE Combat Zone Tax Exclusion Earnings received while in the combat zone are excluded from taxable income.

First Duty Station 2-8 V. TOUCHPOINT TOOLBOX: MATERIALS AND RESOURCES TO TEACH TOPIC

All materials are available on PFM milSuite, CNIC and FINRED websites (listed above), and DVD. Links to curriculum may change or vary locally.

1. One-on-One Counseling Checklists and Handouts (Service Specific) • First Duty Station CFS/PFM Checklist • First Duty Station Counselee Checklist

Handouts: • First Duty Station Counselee Checklist • Military Banking Handout • Spending Plan Worksheet Handout • Understanding Credit Handout • Military Consumer Protection Handout • Sources of Help for Military Consumers Handout • Major Purchases Handout • Education Benefits and Savings Handout • TRICARE Overview Handout • Basic Investing Handout • Thrift Savings Plan Handout • Paying off Student Loans Handout

2. Classroom Training Materials (Service Specific) All materials available on disc, or PFM milSuite and CNIC websites. Links to curriculum may change or vary locally. • First Duty Station Touchpoint Checklists and Handouts • First Duty Station PowerPoint (PPT) Training slides and Instructor Guide (IG) • First Duty Station Videos and Video Discussion Guides (VDG)

3. Online Training • First Duty Station course (Navy e-Learning, My Navy Portal or your service-specific e-Learning site)

First Duty Station 2-9 VI. ADDITIONAL LEARNING AND ACTIVITIES

Many new military members have very little financial training. As a CFS, you can help these Service members get started on the right path to financial success. The training materials, Checklists and Handouts will prepare them for the financial considerations that come with a first duty station.

Here are some activities to have with your audience: • Complete the Spending Plan Worksheet. Help Service members understand their pay and entitlements and develop a spending plan that prioritizes their financial goals. • Review the Major Purchases Handout and discuss the fundamentals of buying a car. • Review the Thrift Savings Plan Handout and establish the habit of paying yourself first.

Encourage Service members to attend PFM Standard Curriculum courses at the local installation family service center to learn more about financial considerations for this Touchpoint. • Developing Your Spending Plan • Planning for Your Retirement • Saving and Investing • The Thrift Savings Plan

First Duty Station 2-10 FIRST DUTY STATION

ContinuationCFS/PFM Pay: CHECKLIST Plot Your PathNAVY FINANCIAL to READINESS $uccess

Welcome to your first duty station! HANDOUTS Whether you complete a 20-year career or  Military Banking  Major Purchases separate after a few years, you will want to  Spending Plan Worksheet  Education Benefits and Savings take advantage of the benefits offered and  Understanding Credit  Paying off Student Loans personal financial readiness training  Military Consumer Protection  TRICARE Overview provided to you.  Sources of Help for Military  Thrift Savings Plan Consumers  Basic Investing This checklist, along with the accompanying handouts and the information provided by the Fleet and Family Support Center (FFSC) staff can help you make sound financial decisions.

BASIC FINANCE

 Review the "Military Banking" handout for information on credit unions and banks, typical fees, online banking, and how to manage your bank accounts.

 Understand basics of debit/credit card use and tracking deposits/expenditures.

 Know how to recognize and correct banking errors. Review your transactions periodically and immediately contact your bank if you find errors that need to be corrected.

 Update your personal spending plan using the "Spending Plan Worksheet." A good spending plan helps you manage your money, plan for your financial goals, and prepare for emergencies. Here are four steps financial experts suggest to get started. Counselor: Inform counselees that you can provide a “Spending Plan Worksheet” as well as more detailed templates with features that can help them understand their financial situation and reduce excessive debt.

Step 1: Understand your current situation. In this step, it’s important to understand what’s REALLY going on with your money today. Start tracking all your income and spending for the next 30 days. How you do the tracking is up to you, but what’s important is you do it.

FIRST DUTY STATION - PAGE 1 Step 3: Create a plan. Build a plan for setting aside money and putting limits on how much you’ll spend each month per category. • Prioritize your financial goals. • Establish an emergency fund. Financial experts suggest you should keep at least three to six months of living expenses in reserve. If you do not have that much saved, consider saving a little each paycheck to help get you there. Counselor: Share with counselees the concepts of paying yourself first, automating savings, and keeping their emergency fund in a separate account. Remind counselees they can make saving effortless by setting up an automatic transfer through their bank or an allotment, time permitting.

Step 4: Make adjustments. Update your spending plan as your life changes. Monitor your plan until you have fully adjusted your finances to reflect your new situation.

 Consider setting up automatic bill pay to avoid missed or late payments. Check each of your three major credit reports for free at www.annualcreditreport.com. Sailors can request free credit monitoring services from the nationwide credit reporting agencies: Equifax, Experian, and TransUnion. Review the "Understanding Credit" handout for more information. Counselor: Tell counselees that they may be dealing with many new creditors, which increases their exposure to billing errors and identity theft. Remind counselees that they can get a free copy of credit reports from the personal financial counselor/educator (PFM/E) at the FFSC. The PFM/E can also help them interpret their reports and discuss what they need to do to improve their scores.

 Review your tax situation and change federal and state withholding as needed via mypay.dfas.mil. Counselor: Remind counselees that for additional help, they may wish to consult with a PFM/E at the FFSC or the on-base Volunteer Income Tax Assistance (VITA) office.

 Review the Military Spouse Residency Relief ACT (MSRRA), which protects tax, voting and property rights of military spouses. A military spouse may keep their tax domicile (legal residence) if they move because their military spouse is transferred out of state.

Additional notes: ______

______

CONSUMER PROTECTIONS

 Review the “Military Consumer Protection” handout for additional information on identity theft, the Servicemembers Civil Relief Act (SCRA), and Military Lending Act (MLA). Counselor: Remind counselees the base legal office can assist by reviewing contracts to help keep them from falling prey to predatory lenders and fraudsters.

 Protect yourself from misleading consumer practices and know basic procedures for handling a consumer complaint or dispute. Review the "Sources of Help for Military Consumers" handout.

FIRST DUTY STATION - PAGE 2 MAJOR PURCHASES

 Analyze your housing and transportation needs and be sure to prepare your finances for any major purchases. Review the handouts on "Major Purchases" for more information. Counselor: Remind counselees to speak with financial counselors on their installation to build and review their spending plan before taking on any major purchases.

 Understand that financial counselors are available at the Fleet and Family Support Center to assist with questions about a major purchase. Counselor: Remind counselees to speak with financial counselors on their installation to build and review their spending plan before taking on any major purchases.

 Review the "Education Benefits and Savings" and "Paying off Student Loans" handouts to learn more about financing education, available benefits, obligations, and repayment options.

 Research and take advantage of tuition assistance and the College Level Examination Program (CLEP) to help cover or offset the costs of higher education. Additional notes: ______

______

PLANNING FOR THE FUTURE

 Evaluate your life insurance needs to ensure you have enough coverage, the right type of coverage, and correct beneficiaries. A simple method to calculate your life insurance needs is to use the acronym LIFE. Start by totaling all four categories listed below.

Debt you would like to pay off, like a iabilities L mortgage, auto loan or credit cards(s) $

Multiply targeted annual income amount by ncome to be replaced I the number of years to replace $

The amount you would like to set aside for uneral and final expenses F final expenses $

The amount you want to set aside to fund Education and other goals education and other goals for family, $ friends or charitable organizations Total life insurance needed $$$$

Then compare your life insurance needs with your current amount of coverage plus any assets and benefits available at death. If you find you need additional coverage, then consider supplementing Servicemembers’ Group Life Insurance (SGLI) with a commercial life insurance policy. Review the policy for any restrictions, such as a war clause. Common life insurance policies include: • Term Insurance — provides a stated amount of coverage over specific period of time and is designed to provide a large amount of coverage for the least cost. • Permanent insurance — provides coverage designed to last for your entire life and can build cash value.

FIRST DUTY STATION - PAGE 3 There are several permanent life insurance options offered such as universal life, whole life, variable life and even variable universal life insurance. These policies may have a surrender period and be subject to fees and penalties if canceled during this time. Counselor: Remind counselees to ask questions and fully understand any commercial life insurance policy they are considering purchasing. They should understand the cost, coverage, terms and conditions, as well as how the agent is compensated before making a decision to buy.

 Enroll your dependents in Family Servicemembers’ Group Life Insurance (FSGLI). Counselor: Inform counselees that FSGLI provides up to $100,000 in coverage in $10,000 increments to cover eligible spouses for as little as $0.45/month. (Dependent children are automatically covered at $10,000 as soon as they are registered in DEERS.) Refer counselees to www.benefits.va.gov/insurance/ fsgli.asp for more information.

 Update the beneficiaries of your Servicemembers’ Group Life Insurance (SGLI), if appropriate. Counselor: Inform counselees that the SGLI Online Enrollment System (SOES) allows service members with full-time SGLI coverage to make fast and easy changes to their life insurance coverage and beneficiary information at any time without completing a paper form or making a trip to their personnel office. To access SOES, they must sign into www.dmdc.osd.mil/milconnect and go to the “Benefits” tab, Life Insurance SOES-SGLI Online Enrollment System.

 Review or consider obtaining renters (homeowners) insurance policies to ensure that they are adequate for your circumstances.

 Update your auto insurance policies, and ensure coverage is appropriate for your current needs. Additional notes: ______

______

COMPENSATION, BENEFITS, AND ENTITLEMENTS

 Understand basic pay is normally determined by rank (grade) and years of service. The other pays, often referred to as special and incentive pays, are for specific qualifications or events. To learn more about basic, special and incentives pays visit militarypay.defense.gov.

 Understand allowances are moneys provided for specific needs, such as food or housing. Basic Allowance for Subsistence (BAS) and Basic Allowance for Housing (BAH) are two of the most common allowances, but there are several others including Clothing, Dislocation, Family Separation Allowance (FSA), and Family Subsistence Supplemental Allowance (FSSA). To learn more about allowances, including current rates, visit militarypay.defense.gov.

 Enroll new family member(s) in TRICARE (active duty), TRICARE Reserve Select (Reserve members) or other health insurance plan. Review the handout "TRICARE Overview" for more information. Counselor: Note that TRICARE Prime and TRICARE Select require annual enrollment. Counselees may also want to reassess their own TRICARE plan. Refer active-duty Sailors to www.tricare.mil/Plans/ HealthPlans. Refer Reserve Component Sailors to www.tricare.mil/Plans/HealthPlans/TRS. Remind Reservists that they must ensure continuous, regular payments to stay enrolled in TRICARE Reserve Select. Irregular drill pay can cause Service members and family members to be dropped until the next open enrollment period.

FIRST DUTY STATION - PAGE 4 Remind Sailors with civilian insurance plans to review available policies for features like deductibles, copays, prescription coverage, costs for in-network and out-of-network coverage, and other options that can affect the true cost of health care.

 If your spouse is employed and also has health insurance (OHI or “other health insurance”), arrange coordination of benefits with TRICARE or other insurance carrier. Counselor: Normally, TRICARE becomes secondary insurance for a spouse with OHI. Some civilian insurers will not allow coverage under more than one policy.

 Enroll new family member(s) in the TRICARE Dental Program. Monthly premiums and copays will apply. Visit www.tricare.mil/Dental for more information. Counselor: Refer counselees to 1(844) 653-4061 or to www.tricare.mil/CoveredServices/Dental/TDP to learn more. Reserve members should examine available programs to determine the best insurance available for their situation.

 Invest in your future marketability today. It is never too early to prepare your career for transition from the military to the civilian sector, and improve potential upward mobility and greater earning power with these tips from the DoD Career Ready Portal at https://dodcareerready.usalearning.gov/. • Tip 1: Look into whether your military career offers a registered apprenticeship for your Navy rating or skills you may have. Visit the United Services Military Apprenticeship Program (USMAP) website to identify and register for apprenticeships, track progress, and report completion of apprenticeships. Learn more: https:// dodcareerready.usalearning.gov/service_members/apprenticeships. • Tip 2: Determine if your military experience translates into a civilian credential. Turn your military experience into certifications and licensing by visiting the Department of Navy Credentialing Opportunities Online (COOL): https://www.cool.navy.mil. • Tip 3: Explore eligibility for tuition assistance. Did you know that you could qualify for tuition assistance to pursue your education and potentially increase your earning potential? Learn more about all the opportunities: https://dodcareerready.usalearning.gov/ service_members/ tuition_assistance.

Counselor: For more information on these programs, visit https://dodcareerready.usalearning.gov/ service_members and show the counselees around these programs, discuss future career goals, and how building skills and gaining education can increase their earning power.

SAVING AND INVESTING

 Review the “Thrift Savings Plan” and “Basic Investing” handouts to learn more about investing for retirement, compound earnings and fundamentals of investing.

 Manage your TSP account visit TSP.gov, log in with your account number. If you have misplaced or lost your account number, visit tsp.gov/tsp/forgottenAccount.html to request the account number be mailed to you.  Review and update beneficiaries and contact information for your TSP account, if applicable. Counselor: Refer counselees to the TSP.gov website to complete Form TSP-3 Designation of Beneficiary form to update beneficiaries. Additional notes: ______

______

Catalog ID: OPNAV-FDSFRT-1.0 — (Updated August 2020) FIRST DUTY STATION - PAGE 5 FIRST DUTY STATION

NAVY FINANCIAL READINESS ContinuationMY CHECKLIST Pay: Plot Your Path to $uccess

BASIC FINANCE

 Review the "Military Banking" handout for information on credit unions and banks, typical fees, online banking, and how to manage your bank accounts.

 Understand basics of debit/credit card use and tracking deposits/expenditures.

 Know how to recognize and correct banking errors. Review your transactions periodically and immediately contact your bank if you find errors that need to be corrected.

Step 3: Create a plan. Build a plan for setting aside money and putting limits on how much you’ll spend each month per category.

FIRST DUTY STATION - PAGE 1 • Prioritize your financial goals. • Establish an emergency fund. Financial experts suggest you should keep at least three to six months of living expenses in reserve. If you do not have that much saved, consider saving a little each paycheck to help get you there.

Step 4: Make adjustments. Update your spending plan as your life changes. Monitor your plan until you have fully adjusted your finances to reflect your new situation.  Consider setting up automatic bill pay to avoid missed or late payments.

 Review your tax situation and change federal and state withholding as needed via mypay.dfas.mil.

Additional notes: ______

______

CONSUMER PROTECTIONS

 Review the “Military Consumer Protection” handout for additional information on identity theft, the Servicemembers Civil Relief Act (SCRA), and Military Lending Act (MLA).

 Protect yourself from misleading consumer practices and know basic procedures for handling a consumer complaint or dispute. Review the "Sources of Help for Military Consumers" handout.

MAJOR PURCHASES

 Analyze your housing and transportation needs and be sure to prepare your finances for any major purchases. Review the handouts on "Major Purchases" for more information.

 Understand that financial counselors are available at the Fleet and Family Support Center to assist with questions about a major purchase.

 Review the "Education Benefits and Savings" and "Paying off Student Loans" handouts to learn more about financing education, available benefits, obligations, and repayment options.

 Research and take advantage of tuition assistance and the College Level Examination Program (CLEP) to help cover or offset the costs of higher education. Additional notes: ______

______

FIRST DUTY STATION - PAGE 2 PLANNING FOR THE FUTURE

Debt you would like to pay off, like a iabilities L mortgage, auto loan or credit cards(s) $

Multiply targeted annual income amount by ncome to be replaced I the number of years to replace $

The amount you would like to set aside for uneral and final expenses F final expenses $

The amount you want to set aside to fund Education and other goals education and other goals for family, $ friends or charitable organizations Total life insurance needed $$$$

 Enroll your dependents in Family Servicemembers’ Group Life Insurance (FSGLI).

 Update the beneficiaries of your Servicemembers’ Group Life Insurance (SGLI), if appropriate.

 Review or consider obtaining renters (homeowners) insurance policies to ensure that they are adequate for your circumstances.

 Update your auto insurance policies, and ensure coverage is appropriate for your current needs. Additional notes: ______

______

COMPENSATION, BENEFITS, AND ENTITLEMENTS

FIRST DUTY STATION - PAGE 3  Understand allowances are moneys provided for specific needs, such as food or housing. Basic Allowance for Subsistence (BAS) and Basic Allowance for Housing (BAH) are two of the most common allowances, but there are several others including Clothing, Dislocation, Family Separation Allowance (FSA), and Family Subsistence Supplemental Allowance (FSSA). To learn more about allowances, including current rates, visit militarypay.defense.gov.

 Enroll new family member(s) in TRICARE (active duty), TRICARE Reserve Select (Reserve members) or other health insurance plan. Review the handout "TRICARE Overview" for more information.

 If your spouse is employed and also has health insurance (OHI or “other health insurance”), arrange coordination of benefits with TRICARE or other insurance carrier.

 Enroll new family member(s) in the TRICARE Dental Program. Monthly premiums and copays will apply. Visit www.tricare.mil/Dental for more information.

Additional notes: ______

SAVING AND INVESTING

 Review the “Thrift Savings Plan” and “Basic Investing” handouts to learn more about investing for retirement, compound earnings and fundamentals of investing.

 Review and update beneficiaries and contact information for your TSP account, if applicable.

______

CFS/PFM Printed Name Counselee Printed Name

______Signature Date Signature Date

Catalog ID: OPNAV-FDSFRT-1.0 — (Updated August 2020) FIRST DUTY STATION - PAGE 4

First Duty Station Instructor Guide TC 2 IG I. COURSE ORGANIZATION & AGENDA

The First Duty Station course is organized into 10 parts:

1. Introduction and Agenda • Welcome • Facilitator Introduction • Review of Agenda

2. Compensation and Military Banking • Compensation • Leave and Earning Statement (LES) • Military Banking

3. Basic Finance • Create/Manage a Spending Plan • Manage Debt and Credit • Your Tax Situation

4. Consumer Protection • Why Are Service Members Vulnerable? • Misleading Consumer Practices • Identity Theft • Servicemembers Civil Relief Act (SCRA) • Military Lending Act (MLA) • Make Smart Purchases • Car-Buying Basics

5. Education and Career Planning

6. Insurance • Health Insurance • Property and Auto • Life Insurance • Life Insurance Needs

7. Saving and Investing • Saving vs. Investing • Compound Interest • Types of Investments • Mutual Funds and ETFs • Common Investment Strategies

First Duty Station 2-1 8. Thrift Savings Plan) • Understanding Your TSP: Roth vs. Traditional • TSP Investment Choices: Core Funds • TSP Investment Choices: Lifecycle Funds • Automatic and Matching Contributions • Manage Your TSP

9. Summary

10. Resources and Thank You

TOTAL: 90 minutes

First Duty Station 2-2 II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

1. TLO: Understand the fundamentals of banking services and fees. ELOs: Understand the importance of tracking deposits and expenditures. Know how to balance a personal banking register against a recent bank statement. Know how to recognize and correct banking errors. Know ways to avoid banking fees. Understand basic considerations of debit and credit card use and tracking expenditures. Know common apps and programs for budgeting and banking. 2. TLO: Understand the fundamentals of creating and managing a spending plan, and the importance of updating a spending plan. ELOs: Understand why it is important to have a spending plan. Know characteristics of SMART Goals (Specific, Measurable, Achievable, Relevant and Time-bound) and develop financial goals that follow these guidelines. Be able to create a personal spending plan. Know strategies to minimize expenses and keep a spending plan on track. 3. TLO: Understand the fundamentals and management of debt and credit. ELOs: Understand FICO score. Know how to check and resolve errors on a credit report. Understand strategies to raise a credit score. Know strategies for managing credit and debt. 4. TLO: Understandfundamentals of income tax and common tax benefits, and potential changes to tax situation. ELOs: Understand various tax costs and their use. Understand how to make the most of tax deductions. Know how to review tax payments. Know how to research state taxes and the differences associated with residency. Understand the various components and resulting implications of a W-4 form. Be able to collect and prepare documentation for tax filing. Know where to find tax information on the LES. 5. TLO: Know military consumer protection law fundamentals, including the Servicemembers Civil Relief Act (SCRA) and Military Lending Act (MLA). ELOs: Understand why Service members are targets for predatory lending and fraud. Understand the components and protections for Service members under the SCRA. Understand the components and protections for Service members under the MLA. Know basic procedures for handling a consumer complaint or dispute associated with the SCRA or MLA. 6. TLO: Recognize and understand how to protect yourself from misleading consumer practices, and report complaints. ELOs: Understand the threat of predatory lenders and identify better alternatives like military aid societies. Know how to find information on state-specific consumer protection laws. Recognize fraud and scam tactics and know how to safeguard against them. Be able to access and read a credit report to identify fraudulent activity. Understand credit fraud and the process for placing alerts and freezes on accounts. Know the basic procedures for handling a consumer complaint or dispute. Know which federal agencies support consumer protections and how to find information. 7. TLO: Recognize and identify steps to resolve identity theft. ELOs: Know what type of information is subject to identity theft. Know strategies for protecting one’s identity. Recognize warning signs that identity theft has occurred. Know steps for resolving identity theft activity.

First Duty Station 2-3 8. TLO: Analyze the implications and identify strategies for financing a major purchase. ELOs: Know how to add a major purchase to a spending plan and evaluate for feasibility. Know how to identify predatory lenders. Know how to research product quality for major purchases. Be able to compare and contrast various funding sources for major purchases. Understand and separate emotional spending from major purchases. Understand how using credit for major purchases can impact future credit scores and access to lines of credit. 9. TLO: Analyze financial implication and identify strategies for buying a car. ELOs: Know how much to pay for transportation (recommended percentage of total income transportation expenses). Know how to re-evaluate the financial impact of a vehicle at each duty station. 10. TLO: Understandeducation financing, to include available benefits, obligations, and repayment options. ELOs: Understand options to lower interest rate. Understand income-driven repayment plans and Public Service Loan Forgiveness (PSLF). Understand eligibility to have loans deferred for a certain period of time. 11. TLO: Discuss the reasons, needs, types, and options for purchasing insurance. ELOs: Discuss basic insurance terminology and how insurance works. Identify the various insurance options available (auto, renters, health). Recognize the difference in mandatory and suggested insurance. Determine insurance levels necessary to minimally cover personal assets and liabilities. Understand the implications of various deductible levels. Understand benefits under Servicemembers’ Group Life Insurance (SGLI). Know how to update SGLI. Know how to compare benefit levels for private life insurance including term and permanent life insurance. Know how to review beneficiaries and levels for life insurance. Know the different types of life insurance that are offered to military members and their families. 12. TLO: Examine the impact of special pay and entitlements. ELOs: Understand requirements of common special pay considerations (hardship duty pay, assignment incentive pay, and hazardous duty pay). Know where to find information regarding special pay and entitlements on the LES. Understand the differences between special and incentive pay and basic pay and allowances. Understand the role and compensation for government housing CONUS and OCONUS. 13. TLO: Discuss TRICARE options and costs. ELOs: Know what the Defense Enrollment Eligibility Reporting System (DEERS) is, how to enroll, and make changes. Know how to sign up for eCorrespondence in milConnect. Understand the difference between the various TRICARE options. Recognize differences and benefits of TRICARE versus private insurance options. Know how to locate military treatment facilities for use of TRICARE. Know how to check what medical services are covered under TRICARE. Know how to access TRICARE when traveling or during an emergency. Know what to consider and how to switch between TRICARE plan options. 14. TLO: Understand future financial benefits afforded by the Department’s Career Investment Programs. ELOs: TBD 15. TLO: Understand interest and how the concept of compounding works. ELO: Know the difference between simple and compound interest. 16. TLO: Recognize the importance of and be able to develop savings and an emergency fund. ELOs: Understand importance of building up emergency savings for unexpected events. Identify financial tools that can be used for short-term savings.

First Duty Station 2-4 17. TLO: Describe the fundamentals of investing. ELOs: Know the difference between stocks, bonds and mutual funds. Be able to assess current and long-term saving and investment goals. Understand differing risk levels for investing. Know how to diversify an investment portfolio. Know how to choose between various investment options. 18. TLO: Understand and be able to manage a Thrift Savings Plan (TSP) account. ELOs: Know how to adjust TSP contributions. Understand the investment choices offered in the TSP.

III. CHAPTER PREPARATION

CONTENT ICONS — The following icons are used throughout the guide:

Instructor Note INSTRUCTOR NOTE: (indicates additional information related to the content for the instructor)

Checklist and Handout (indicates a Checklist or Handout is associated with the content)

Learning Activity (indicates a learning activity)

INSTRUCTOR NOTE: Being prepared for training promotes organization, projects a positive image, and reduces stress.

Be prepared to discuss each Checklist and Handout in class. You should familiarize yourself with this content so you can effectively discuss each document during your presentation.

While this guide is written as a script, avoid reading it word-for-word. Familiarize yourself ahead of time so you feel comfortable covering the material in your own words.

Throughout the presentation, the Checklist or Handouts will be identified with an icon on the PowerPoint and an Instructor Note in this Instructor Guide.

First Duty Station 2-5 Materials and Equipment: • Projector/screen • First Duty Station course PowerPoint slides • Chart paper and easel or whiteboard and markers • Paper, pens, pencils • Course sign-in sheet

Forms and Handouts: • First Duty Station Counselee Checklist • Military Banking Handout • Spending Plan Worksheet Handout • Understanding Credit Handout • Military Consumer Protection Handout • Sources of Help for Military Consumers Handout • Major Purchases Handout • Education Benefits and Savings Handout • TRICARE Overview Handout • Basic Investing Handout • Thrift Savings Plan Handout • Paying off Student Loans Handout

First Duty Station 2-6 IV. CONTENT Introduction

Facilitator Introduction Introduce yourself by providing: Hello, my name is . I am a . (Describe your experience as a facilitator or with personal financial management.) SLIDE 1 The information I’ll provide over the next 90 minutes will help you better understand a variety of personal financial management issues as you begin your military career. So, let’s get started!

Agenda

INSTRUCTOR NOTE: First Duty Station Counselee Checklist

To help you understand the content in this presentation, we will explore: SLIDE 2 • Compensation and Military Banking • Basic Finance • Consumer Protection • Education and Career Planning • Insurance • Saving and Investing • Thrift Savings Plan

I’ll also point you to free resources that can help you take action on what we discuss.

Compensation

INSTRUCTOR NOTE: First Duty Station Counselee Checklist

Let’s start off by using the First Duty Station Checklist and talking about your SLIDE 3 compensation (your paycheck and benefits) and banking.

Basic Pay One of the best parts about your military service is your paycheck, right? It’s important to understand that your basic pay is normally determined by rank (grade) and years of service and is taxable.

Special and Incentive Pay The other pays, often referred to as special and incentive pays, are for specific qualifications or events, which are also taxable. To learn more about basic, special and incentives pays you may visit militarypay.defense.gov.

First Duty Station 2-7 Allowances Allowances are moneys provided for specific needs and are non-taxable, such as food or housing. Basic Allowance for Subsistence (BAS) and Basic Allowance for Housing (BAH) are two of the most common allowances, but there are several others including Clothing, Dislocation, Family Separation Allowance (FSA), and Family Subsistence Supplemental Allowance (FSSA). To learn more about allowances, including current rates, visit militarypay.defense.gov.

Leave and Earning Statement (LES) or Payslip

Anytime you have a major life change, such as a permanent change of station (PCS) move, it’s a good idea to make sure your LES or Payslip is up to date and accurate. SLIDE 4 INSTRUCTOR NOTE: Military OneSource has a great resource for understanding how to read your LES or Payslip. Visit this website for more LES or Payslip information: https://www.militaryonesource.mil/military-lifecycle/new-to-the-military/getting-settled/your-leave-and-earnings-statement. Visit this website to find your specific branch’s LES or Payslip https://www.dfas.mil/militarymembers/.

Pay particular attention to the following sections/boxes:

Entitlements — 10 Are you getting the correct basic pay, BAH, BAS and any other special or incentive pays? BAH will be based on new duty station. PCS may result in overpayments. Look for “advance debt” in this section and in remarks.

Deductions — 11 Are they deducting the correct taxes – federal, state, Social Security and Medicare? Are the other deductions correct such as SGLI, FSGLI, TSP, meal deduction, AFRH and child support paying.

Pay Data (BAH Status) – 50 (BAQ Type), 51 (BAQ DEPN), 52 (VHA ZIP) and 57 (DEPNS) Is the information in these four boxes correct? These boxes impact your BAH status and Variable Housing Allowance (VHA) entitlements. Note: Unless your area is receiving a VHA entitlement, block 57 will be zero. The ZIP code will populate your number of dependents automatically.

First Duty Station 2-8 Remarks – 76 The remarks section records any recent or upcoming changes. If you have been overpaid and the government plans to garnish your wages next pay period, this is where it will show. Read this every month. Read from the bottom right up for specific information pertaining to you. If you see “advance debt,” speak to your personnel or admin to request proration of debts and to verify validity.

Military Banking

INSTRUCTOR NOTE: Military Banking Handout

You may have quickly selected a bank in boot camp but now you can take SLIDE 5 your time to decide what your best option is. Choosing a bank or credit union is a matter of personal preference. Serving in the military puts you in a unique situation that requires making smart choices with your money. Deployments and temporary duty assignments can be disruptive if you don’t plan ahead. Flexibility is key!

Often, your first financial decision is to choose a banking institution. So, it is important to select one that meets your needs and has a good reputation. Let’s discuss the basics of military banking. Please follow along by using the Military Banking Handout provided.

Types of Banking Institutions There are two types of banking institutions: Credit unions and banks.

Credit unions are nonprofit organizations owned by their members. Because of their nonprofit status, interest rates on loans and savings accounts tend to be more favorable to you.

First Duty Station 2-9 Banks are “for-profit” institutions. Generally, interest rates on loans tend to be higher and interest paid on deposit accounts tend to be lower than credit unions.

Things to Consider When searching for a banking institution, keep the following in mind: • Convenience — Are ATMs and branch locations easily accessible? • Fees — What charges are associated with the type of banking you plan to use? Try to keep banking fees to a minimum. • Deposits — What interest rate is paid to you for the deposits? • Balances — Are there minimum balance requirements? • Direct Deposit — Does the bank/credit union offer early direct deposit of active-duty pay, which could allow you to access your pay sooner than regular military paydays? • Special Programs — Do you qualify for any special military savings programs that will help you boost your savings? • Mobile Banking — Can you deposit checks electronically?

Products and Services Offered Select a banking institution that meets your needs by offering a range of products or accounts, including: • Savings • Checking • Money Market • Certificates of Deposit • Loans

Also, select a banking institution with a variety of services, including: • Interest on deposits • ATM • Credit and debit cards • Online and mobile banking • Cashier’s checks • Deposit insurance • Overdraft protection • Automatic and web bill pay • Electronic funds (EFT and wire transfers)

Look for a bank or credit union that has low to no fees and offers special military benefits. These are some common banking fees to watch out for: • ATM withdrawal fees • Overdraft or non-sufficient funds (NSF) fees • Loan interest and origination fees • Monthly service charges • Low or minimum balance fees • Usage fees • Online banking

First Duty Station 2-10 Online and Mobile Banking Conducting financial transactions online and mobile is common and offers a great deal of convenience; however, there is some risk. To limit your risk, be careful not to expose your personal data and account information. Avoid public computers, unsecured Wi-Fi access points, and make sure your device’s software and security settings are up to date. Also, remember that online balances may not include all pending transactions. To know your balance, keep a record of transactions by using an app, notebook or register.

Credit and Debit Cards Credit cards can be a great tool, but they can also get you into trouble if misused. Strive to pay your balance off every month. Interest charges are typically high and are added to your balance, making it difficult to get ahead.

Debit cards are similar to writing a check. The money is withdrawn from your account within three to five days. Because of this, you’ll need to track your account balance to make sure you have enough money in the account to cover your spending transactions. Also, be mindful that some organizations like gas stations and hotels may freeze a larger amount until the transaction clears.

Bank Statements Bank statements provide a lot of information. Review your statement monthly to verify all transactions. If you write checks, remember it may take some time before the money is deducted from your account.

Review, Protect Your Accounts Review your bank, loan and credit card statements frequently for errors or unauthorized/fraudulent activity. I cannot emphasize this enough!

If you need assistance to correct errors or handle fraudulent activity, first contact your bank. If the issue is not corrected, use the following resources:

Office of the Comptroller of the Currency (OCC) www.HelpWithMyBank.gov Phone: (800) 613-6743

Federal Trade Commission (FTC) www.consumer.ftc.gov

National Credit Union Administration (NCUA) www.ncua.gov or www.mycreditunion.gov

First Duty Station 2-11 Create/Manage a Spending Plan

INSTRUCTOR NOTE: Spending Plan Worksheet Handout and First Duty Station Counselee Checklist

SLIDE 6 Now that we’ve reviewed the basics of military banking, let’s turn our attention to the basics of personal finance—the management of your money.

We’ll start by looking at your personal spending plan or budget, which you can update using the Spending Plan Worksheet provided.

Remember, a good spending plan helps you manage your money, plan for your financial goals, and prepare for emergencies. Here are four tips financial experts suggest could help you get started, listed on First Duty Station Checklist.

Step 1 — Understand Your Current Situation In this step, it’s important to understand what’s REALLY going on with your money today. Start tracking your spending and income for the next 30 days using statements. How long you do the tracking is up to you.

Step 2 — Know Where Your Money Should Go Financial experts recommend these general guidelines when budgeting your money: • Save and/or invest 10% — 15% of pretax income. • Strive to keep transportation expenses including car payments, insurance, gas and maintenance to 15% — 20% of pretax pay. • Limit housing expenses, including mortgage or rent payment, taxes, utilities, maintenance, etc. to BAH or 25% of pretax pay.

Step 3 — Create A Plan Build your plan for setting aside money and putting limits on how much you’ll spend each month on expenses.

It’s a good idea to prioritize your financial goals. Make the most of future pay increases to help achieve your financial goals. In other words, pay yourself first! Consider using injections of income to contribute more toward your Thrift Savings Plan (TSP) or other saving/investing goals.

Don’t forget to establish an emergency fund. Financial experts suggest you should keep at least three to six months of living expenses in an account just for emergencies. If you do not have that much saved, consider setting aside a little each paycheck to help get you there. However, if you have high interest debt, try to save at least $1,000 and then focus on paying down the debt first. And don’t forget about periodic expenses that don’t happen on a monthly basis, such as car maintenance and holidays.

First Duty Station 2-12 Step 4 — Make Adjustments Update your budget as life changes, especially after you move to your first duty station and experience the true cost of things like housing, utilities and groceries.

Manage Debt and Credit

INSTRUCTOR NOTE: Understanding Credit Handout

Another important part of personal finance is to know how to manage debt SLIDE 7 and credit. Let’s now take a look at the Understanding Credit Handout.

Credit can be a valuable part of your long-term financial plan. It can be used for large purchases, such as college education, a new vehicle, or a home. It even helps you build a credit reputation (summarized in a credit report).

However, credit can be dangerous if misused. Some individuals make the mistake of viewing credit as a license to spend. Poor spending decisions can leave you deeply in debt and damage your credit reputation for years.

Healthy Credit Habits Understand how credit works and make wise decisions with these tips.

• Create and follow a spending plan, so that you don’t overspend and take on debt. • Pay bills on time. Do not skip payments particularly the Star Card as they will garnish your pay. • Strive to pay off credit cards in full each month. If you have to carry a balance, try to keep it as low as possible. • Do not apply for credit you do not need, unless you are trying to establish a credit history. Start with a savings-secured loan and credit card. • Keep credit card and loan information in a safe, secure place to reduce the risk of identity theft. • Keep your receipts and compare charges when your billing statements arrive. Call your bank, credit card or finance company immediately if there is a discrepancy.

First Duty Station 2-13 Understand and Protect Your Credit Reputation (Score) Your credit report is a record of your payment history with creditors. Lenders, employers, landlords, insurers and other businesses often evaluate this report to determine if you are dependable and to make decisions about your credit worthiness. Your credit report shows the following: • How much credit you are using • How well you pay your debts • Who is inquiring about your credit • Information on bankruptcies or federal income tax liens

To maintain a solid credit score, it’s important to monitor your credit report for any errors. You can obtain a free credit report annually from each of the three major credit bureaus at www.annualcreditreport.com. Effective 31 October 2019, Service members are able to request free credit monitoring services from the nationwide credit reporting agencies, under certain conditions.

INSTRUCTOR NOTE: Be prepared to answer questions about co-signed loans and authorized users on credit cards and how this can affect their credit score.

Know the Factors Determining Your Credit Score Credit scores may range from 300-850 depending on the credit-scoring model. A FICO Score is one credit score model and is considered by lenders to be the industry standard for determining how likely a person is to repay a loan.

Let’s look at the chart on the Understanding Credit Handout. It indicates the five key components of a FICO credit score. • 35% = Payment history • 30% = Amounts owed • 15% = Length of credit history • 10% = Types of credit used • 10% = New credit

Be sure to keep all five credit score components in check to maintain the highest possible score.

First Duty Station 2-14 Your Tax Situation

Review Your Tax Situation and Make Needed Changes Now is a great time to review your tax situation and make any needed changes. The idea is to NOT get a big refund. Instead, strive to break even SLIDE 8 or only receive a small refund or pay a small amount each year. So, claim your correct federal and state withholding to have more money in your paycheck each month to either pay down debt or build up your savings. The IRS has a tax-withholding estimator to assist you at irs.gov.

Have you recently married or had a new child? You may want to adjust your federal and state withholding via mypay.dfas.mil or Direct Access to prevent a big refund.

Review the Military Spouse Residency Relief Act (MSRRA)

INSTRUCTOR NOTE: MSRRA Information is on the Checklist.

If you are married, you may also want to review the Military Spouse Residency Relief Act (MSRRA), which protects tax, voting and property rights of military spouses. A military spouse may keep their tax domicile (legal residence) if they move because their military spouse is transferred out of state.

INSTRUCTOR NOTE: Seek help from Military OneSource for free tax filing software and professional assistance.

Why Are Service Members Vulnerable?

Be on the lookout for people trying to scam you out of your hard-earned money. From aggressive salespeople to criminals, there are many people who would love to take your money off your hands. Unfortunately, the military SLIDE 9 are often targets.

INSTRUCTOR NOTE: Ask, “Why do you think the military are vulnerable targets?” Confirm any of their answers and then discuss the list quickly: young, away from home, deployments, frequent moves, and spouse unemployment.

Military members tend to have increased financial management issues for a number of reasons including age and military lifestyle. We come from different states and countries with possibly different consumer laws.

First Duty Station 2-15 Misleading Consumer Practices

INSTRUCTOR NOTE: Sources of Help for Military Consumers Handout

Recognize Scams SLIDE 10 Avoid offers to join multilevel marketing organizations, and steer away from somebody offering you a way to get rich quick. Remember, if it sounds too good to be true, it probably is.

Protect Yourself Before giving your money to anyone else, even a legitimate business, be sure to protect yourself.

First, understand the difference between needs, wants and wishes. Your family may need a vehicle, you may want a brand-new car, and you may wish for that $100,000 foreign sports car. When spending money – and especially when you’re borrowing it – stick to your needs.

Before spending or investing money, do your research and comparison shop. If you’re unsure, give yourself extra time to sleep on it. Don’t give in to pressure. Be mindful of businesses requiring you to set up allotments on the spot, this is illegal.

Report a Complaint If you feel you’ve been cheated, report it. The Sources of Help for Military Consumers Handout gives you a step-by-step process on how to effectively complain. If you’re not sure where to direct your complaint, contact your installation’s Legal Service Office.

Identity Theft

INSTRUCTOR NOTE: Military Consumer Protection Handout. Let’s review the Military Consumer Protection Handout and discuss how you can manage your personal affairs to defend against identity theft. SLIDE 11 Identity theft occurs when someone steals an individual’s personal information and uses it without his or her permission to open fraudulent accounts and make unauthorized purchases.

First Duty Station 2-16 In the course of your military duty, it’s important to follow the Personally Identifiable Information (PII) regulations. • Safeguard your wallet, debit cards/checkbooks, ID cards, credit cards and your mail. • Sign up for electronic delivery of your banking, credit and other financial statements to avoid mail theft. • Opt-out of prescreened credit offers by visiting optoutprescreen.com. • Opt-out of marketing phone calls by visiting donotcall.gov. • Periodically review your credit report. • Ensure your computer’s security settings are up to date. • Avoid unsecured Wi-Fi networks. • Consider placing active-duty alerts or a credit freeze on your credit report – they are easy to implement and can protect your credit.

You can also put a complete freeze on your credit. That means nobody, even you, can open new credit in your name until you lift the freeze. To freeze your credit, contact all three of the credit bureaus.

You can learn more about protecting yourself from ID theft by visiting identitytheft.gov, consumer.gov and ftc.gov.

You can refer back to the Military Consumer Protection Handout for these websites in the future.

Servicemembers Civil Relief Act (SCRA)

INSTRUCTOR NOTE: Keep following along the Military Consumer Protection Handout.

SLIDE 12 Protecting yourself from scammers and scams isn’t enough. It’s also important to know your rights as a member of the military under the Servicemembers Civil Relief Act (SCRA) and Military Lending Act (MLA).

Under SCRA, active-duty Service members, Reservists, and members of the National Guard (when on active service) are protected under the law. SCRA (for all) begins on the first day of active duty, which means when the person leaves home for basic or occupational training.

First Duty Station 2-17 SCRA provides many legal protections, including:

Contracts • Loan rate capped at 6% — You can request to have the interest rate reduced to 6% for the duration of your military obligation on pre-service debts such as credit cards, loans, mortgages, etc. • Terminate residential or auto lease — You can request termination of any lease (residential or vehicle) when called to active duty or PCS or deployed. It’s best to notify those companies in writing before you execute your orders. Speak with the Legal Service Office to review your situation and see if you qualify. Legal can also review your lease before you move in. • Cancel cellphone service contract — You can make this request without penalty.

Stay civil judgments – SCRA offers certain protections from legal proceedings while you are deployed. Generally, you are protected from: • Eviction and foreclosure • Default judgment • Property repossession or seizure • These issues will not go away entirely, and you will have to deal with them when you return.

Insurance • Life insurance premium payments – Companies cannot cancel your policy or increase your premiums because you are on active duty. • Health insurance reinstatement – Companies must reinstate your health insurance when you leave active duty.

State income tax statutes – Active duty and their spouses can keep their state of residency, which means they can request a tax exemption if not living in that state (if applicable, not all states participate), and they are not required to pay state income tax where they currently live.

For more information about the SCRA visit www.militaryonesource.mil and search the keyword “SCRA.”

First Duty Station 2-18 Military Leading Act

INSTRUCTOR NOTE: Keep following along with the Military Consumer Protection Handout.

SLIDE 13 Under the Military Lending Act (MLA), active-duty Service members (including active Guard and Reserves and covered dependents), cannot be charged an interest rate higher than 36% on most consumer loans, along with other protections. This act does not cover peer-to-peer loans.

Visit www.consumerfinance.gov, for more information about the MLA.

Make Smart Purchases

INSTRUCTOR NOTE: Major Purchases Handout

Making a major purchase doesn’t mean you have to risk your financial future SLIDE 14 in the process, you just need to be smart about it.

Let’s discuss and review together the Major Purchases Handout.

Think First Stop major purchases from becoming major problems by keeping these things in mind: • Logic beats emotion. Be smart. Don’t let fancy marketing suck you in. • Additional costs matter. What else will you have to pay? As an example, cars require maintenance, repairs, gas, taxes/annual registration and insurance. Other big purchases are often similar. • Things change. Your life can be completely different in a year or two. Will today’s purchase still make sense then or could you regret it? • Shopping around is smart. It forces you to slow down the purchase decision and be more levelheaded about what you are purchasing. • Cash or credit? Paying cash is often smarter than financing. Just don’t use all of your cash. Keep some for emergencies.

Avoid Trouble Ask yourself, “want or need?” Is the purchase you’re considering absolutely necessary? Be honest. For example, you may legitimately need a car, but you probably don’t need the nicest one available. You should be just as excited about making a smart purchase as you are about what you want to buy. If not, you could be headed for trouble.

First Duty Station 2-19 Wait. One of the best ways to bypass an emotional buying decision is to implement a cooling-off period before you pull the trigger. Sleep on it — maybe for a couple of days — and see if it still seems like a good move.

Ask someone else. Ask a parent, family member or friend to be a sounding board on major purchases. Just be sure to find a helper and not an enabler.

Car-Buying Basics

INSTRUCTOR NOTE: Be sure to review this section of the Major Purchases Handout in detail. Service members often get in over their head when they buy a car. Catch them now before it’s too late! Encourage SLIDE 15 learners to attend a car-buying class at the local Fleet and Family Service Center or Installation Family Service Center.

Buying a vehicle is a major financial move that will factor significantly into your financial planning and your monthly budget. It is important that you assess your needs, identify your priorities, and understand the available financing options before you decide on the most appropriate vehicle for you. It’s easy to rationalize that you need more in a vehicle than you really do, but resist that urge.

Prior to buying a vehicle, you’ll want to be sure to understand the basics of vehicle financing, such as: • When you finance a car, the financial institution or dealership that loaned you the money to buy that car also has an interest, and they are considered the lienholder. In most states, the lienholder will keep the vehicle’s title until you pay the loan in full. If you default or fail to pay the loan, the lienholder can repossess it. • Borrowing money costs you money! Your lender will typically charge you an Annual Percentage Rate or APR, which includes interest and fees. The lower the APR, the less total interest you’ll pay! • You should try to limit your total transportation expenses to 15% – 20% of your gross pay. Be sure to include the cost of gas, insurance, maintenance and repairs. • Consider your personal situation. Will you deploy anytime soon? Will your household income be decreasing for any reason? A lot can change over a few years, so it is important to think about your purchase not only in terms of whether you can afford the vehicle today, but also whether you will be able to afford it in the future. Most vehicles decline in value rather quickly; making it easy to owe more than the vehicle is worth, so watch out! Remember that some lenders will not allow you to take your financed vehicle out of the country. So be mindful if you are looking to PCS overseas.

First Duty Station 2-20 Finally, understand there are three separate deals that happen when you purchase a vehicle. The first is the purchase price; the second is financing, so be sure to get pre-approved before you go shopping; and finally a trade-in, if you have a vehicle you plan to trade. Each of these should be thought of as separate negotiations to add up to the best deal.

Education and Career Planning

INSTRUCTOR NOTE: Education Benefits and Savings and Paying off Student Loans Handouts

SLIDE 16 Education can be expensive. Fortunately, in the military, there are several opportunities to invest in yourself, and maybe even save some money on your education and professional development while you’re at it. Taking the time to learn more can help you earn more over the long term.

According to recent studies, the average college graduate earns over $1 million more dollars over their lifetime than a high school graduate.

Tuition Assistance Consider taking advantage of The Tuition Assistance program to earn an associate, bachelor’s, or even graduate degree while you are serving. For more information, visit Navy: https://www.navycollege.navy.mil/.

Paying Back Student Loans The military may help you save money when paying back student loans. The Paying off Student Loans Handout has information about options and programs. Take advantage of the Servicemembers Civil Relief Act to lower the interest rate to 6% on student loans you incurred before joining the service.

Also keep in mind most federal student loans are eligible for at least one income-driven repayment plan. If your income is low enough, your payment could be dramatically reduced.

Finally, the Public Service Loan Forgiveness Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full time for a qualifying employer. Visit studentaid.gov for additional information.

First Duty Station 2-21 United States Military Apprenticeship Program

INSTRUCTOR NOTE: First Duty Station Checklist

The First Duty Station Checklist has additional options to help you invest in your future marketability. Let’s review them.

Take your career into your own hands and consider registering for an apprenticeship related to your rate.

You can even earn a U.S. Department of Labor “Certificate of Completion” for programs you complete.

These certificates are nationally recognized and can be an advantage in getting a better job in the future.

Visit the United Services Military Apprenticeship Program website to identify and register for apprenticeships, track progress, and report completion. https://dodcareerready.usalearning.gov/service_members/apprenticeships

Credentialing Opportunities On-Line Program (COOL) The Credentialing Opportunities On-Line Program or COOL for short, can help determine if your military experience translates into a civilian credential.

Think about all the training, education, and experience you will receive throughout your military career.

The COOL program has mapped over 1,700 civilian licenses and certificates to military skills, and that number increases all the time.

To learn more about this helpful program visit the website https://www.cool.navy.mil/.

First Duty Station 2-22 Health Insurance

Whenever you move to a new duty station and state, especially to your first duty station, it’s a good idea to review and update all your insurance policies — this includes property, auto, life and health insurance — to make sure SLIDE 17 you’re protected. Let’s start by discussing health insurance.

INSTRUCTOR NOTE: TRICARE Overview Handout

TRICARE If you are married or have dependents enrolled in TRICARE, review your coverage and become familiar with your benefits before moving to your first duty station. Once you arrive at your new duty station, you may need to find a new primary care manager (PCM) or health care provider.

Reserve members are generally eligible for TRICARE Prime when activated for 30 days or more. Eligibility begins on the date your orders are issued or 180 days before you report to active duty, whichever is later. If you are a member of the Reserve, it’s important to review any civilian coverage you want.

If you’re a member of the Selected Reserve and have enrolled in TRICARE Reserve Select, you’ll need to convert your coverage as you enter active duty and then convert it back later.

To be eligible for TRICARE, you must first be registered in the Defense Enrollment Eligibility Reporting System (DEERS). So, if you plan to marry or expect a child, be sure to enroll them in DEERS. When you separate from active duty or demobilize, the Transitional Assistance Management Program (TAMP) can provide TRICARE benefits for another 180 days.

If your spouse is employed and has other health insurance, be sure to coordinate other health insurance benefits with TRICARE.

Visit www.tricare.mil for more information.

TRICARE Dental Once you move to your first duty station, you’ll also want to enroll family member(s) in the TRICARE Dental Program. Monthly premiums and copays will apply. Visit www.tricare.mil/Dental for more information. Reserve members should examine available programs to determine the best insurance available for their situation.

First Duty Station 2-23 Property and Auto

Renters Insurance Review or consider obtaining renters (homeowners) insurance policies to ensure that they are adequate for your circumstances. Even if you live in the SLIDE 18 barracks you need renter’s insurance to protect your personal property.

Auto Insurance Once you’ve moved to your first duty station, review your auto policies to be sure you have adequate coverage for the state you are now living in. A key page to look for is the policy specifications page, which shows types and amounts of coverage. Also, make sure your insurance meets your loan requirements as well.

Life Insurance

SGLI You’re automatically insured for $400,000 of Servicemembers’ Group Life Insurance (SGLI) unless you decline coverage or choose a smaller amount. SLIDE 19 TSGLI (also known as Servicemembers’ Group Life Insurance Traumatic Injury Protection) provides short-term financial support to help you recover from a severe injury. For eligibility requirements or more information visit va.gov and search “TSGLI.”

Be sure to review your SGLI beneficiaries often. You can now manage your Servicemembers’ Group Life Insurance (SGLI) coverage using the SGLI Online Enrollment System (SOES). SOES allows you to change to your life insurance coverage and beneficiary information at any time. To access SOES, sign into www.dmdc.osd.mil/milconnect and go to the Benefits Tab, Life Insurance SOES (SGLI Online Enrollment System).

FSGLI If you are married, enroll your family members in the Family SGLI program, which provides coverage up to $100,000 for a spouse for a low-cost premium and $10,000 for each child at no cost.

Private Life Insurance Considerations If you’re looking for additional life insurance, there are two main types of private life insurance — term and permanent insurance.

First Duty Station 2-24 Think of term insurance as temporary coverage that lasts for a certain period of years. Permanent insurance is designed to last your entire life.

Permanent insurance costs more, but also builds cash value. Term gives you the most coverage for your dollar right now.

Watch out for policy exclusions or restrictions. These are situations when you may not be covered, like combat. Also, make sure that the life insurance company you work with has a solid reputation.

LIFE Insurance Needs

Evaluate your life insurance needs to ensure you have enough coverage, the right type of coverage, and correct beneficiaries. A simple method to calculate your life insurance needs is to use the acronym LIFE. SLIDE 20 • “L” stands for liabilities, which are debts you would like to pay off, such as a mortgage, student loans, car loans, or credit cards. Keep in mind, some federally funded student loans may be forgiven at death.

• “ I” represents the income you would like to replace. Multiply that by the number of years your survivor(s) will need the income. So, if you want to replace $20,000 of income for 20 years, that’s $400,000. Note, this does not account for inflation.

• “ F”of course, is for funeral and other final expenses. The National Funeral Directors Association estimates funeral costs range between $6,000 and $10,000. This can vary by location and should be added to any other expenses, like the administration of your estate.

• “ E” represents education and other things you would like to provide for your survivor(s).

After you’ve added it all up, subtract SGLI and additional death benefit coverage you already have, plus assets available at your death. If you need more coverage, consider supplementing your SGLI and speak with a financial counselor at ACS to develop a plan. Remember, you’re looking for life insurance, which generally covers any cause of death (other than a suicide that happens in the first two years of the policy).

First Duty Station 2-25 Saving vs. Investing

INSTRUCTOR NOTE: Basic Investing Handout

Now let’s turn out attention to some opportunities to save and invest for your SLIDE 21 future and the Basic Investing Handout.

Saving involves setting money aside in safe, relatively low interest paying accounts so it’s there when you need it. Usually you are saving for a specific purchase such as your emergency fund or to buy a low-cost item like a TV or game system.

In simple terms, investing is using money to try to make a profit or produce income. Investing money is different from saving money. Investing is about taking calculated risks with your money to try to earn more with it. Most people invest to achieve a goal, whether it be a long-term goal like retirement or short-term goal like saving for a down payment on a house.

Compound Interest

INSTRUCTOR NOTE: Reference Basic Investing Handout.

In simple terms, compound interest is the cycle of earning interest on interest! SLIDE 22 Here is an example to help illustrate the power of compound interest and why it’s important to start early.

Pressy, Mandi and Steve all want to save for retirement. • Pressy starts at age 20 saving $200 per month. • Mandi starts at age 25 saving the same $200 per month. • Steve waits until age 35 and also saves $200 per month.

Assuming the same 8% rate of return for each of them, see the chart below for their results. Even though Pressy only saves $12,000 ($2,400 for 5 years) more than Mandi, she ends up with over $350,000 more by age 65. Steve, by age 65 has significantly less than both, so the moral of the story is to start saving early for your retirement.

Read through the Question and Answers Why Should I Invest? on the Handout.

First Duty Station 2-26 Types of Investments

INSTRUCTOR NOTE: Thrift Savings Plan Handout

Cash and cash equivalents such as savings accounts, money markets, and SLIDE 23 certificates of deposit (CDs) are intended to be relatively safe and accessible.

They tend to offer relatively low yields and returns because there’s not as much risk associated with these products, like with stocks or bonds. This typically makes cash and cash equivalent products a poor choice for long-term goals because many of them won’t even keep up with inflation.

A bond is an investment representing a loan made by an investor to a borrower — typically a business or government entity. The borrower promises the debt will be paid back with interest at a specific time. Bonds are typically issued by companies, municipalities, states, and sovereign governments to finance projects and operations.

A stock — also known as a share or equity — is a type of investment representing ownership in a company. Companies sell stock to raise money to fund their business. You become a shareholder and own part of the company when you buy stock. As a shareholder you share in the company’s profits if it chooses to distribute periodic payments called dividends. If the company is successful, then the stock may become more valuable and can be sold for a profit. On the other hand, if the company has problems, then the shares in the company might become less valuable or become completely worthless, and an investor can lose money from the original investment.

Mutual Funds and Exchange-Traded Funds (ETFs)

A mutual fund is a type of investment made up of a pool of money collected from many investors to invest in securities like cash, bonds, stocks and other assets. Mutual funds are operated by professionals, who allocate the SLIDE 24 fund’s assets and attempt to produce capital gains or income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in its prospectus.

An ETF, or exchange-traded fund, is an investment that tracks a particular set of equities, similar to an index. It’s similar to a mutual fund but trades just as a normal stock would on an exchange, and its price adjusts throughout the day rather than at market close. ETFs can track stocks in a single industry, such as energy, or an entire index of equities like the S&P 500.

First Duty Station 2-27 Investing — Things to Consider

INSTRUCTOR NOTE: Basic Investing Handout

Let’s briefly review some common strategies to invest listed on the SLIDE 25 Basic Investing Handout: • Invest regularly • Invest for the long term • Keep emotions out of your actions • Avoid high-risk investments • Avoid chasing performance • Diversify • Evaluate your investment plan at least annually.

Understanding Your TSP

INSTRUCTOR NOTE: Thrift Savings Plan Handout

The Thrift Savings Plan (TSP) is a type of retirement saving plan open to SLIDE 26 federal employees and members of the Uniformed Services. Similar to a civilian 401(k), the TSP offers the opportunity for Service members to save and invest for retirement.

Let’s now take out the Thrift Savings Plan Handout and explore more about the TSP, which is also a tax-advantaged account.

Traditional vs. Roth Contributions So, what does “tax-advantaged” mean? When you put money into the TSP, this is known as making a contribution, and you get to pick the type of tax bucket you want your money to go into: Traditional or Roth. You can even do both if you want.

When you make Traditional contributions, your taxable income is reduced now, but withdrawals from these accounts are taxable later.

When you make Roth contributions, your taxable income is not reduced now, but withdrawals from these accounts can be tax-free later, as long as a few rules are followed.

These are treated differently in a tax-free zone. Traditional contributions go in tax-free but all of the growth will be taxed. Roth contributions go in tax-free and the growth will never be taxed.

First Duty Station 2-28 But what about contributions made by your branch of service?

These contributions won’t impact your tax bill today. However, since they all go into your Traditional account, the contributions and the earnings will be taxable later when they are withdrawn.

The IRS does set annual limits for all retirement accounts including TSP. Visit tsp.gov to learn the current annual limit and special limit or “additional” limit for combat zones.

INSTRUCTOR NOTE: Recommend you look up the current annual and additional limit amounts before class.

TSP Investment Choices: Core Funds

Now let’s look at the many TSP investment choices available to you.

• Let’s start with the G Fund, which invests in government bonds SLIDE 27 and is considered very low risk because it’s guaranteed to never go down in value. • Next up the on the risk and potential reward scale is the F Fund, which offers low to moderate volatility via government, corporate, and mortgage-backed bonds, Barclays US Aggregate Index. The F Fund is not guaranteed and can lose value. • This is also the case for all the remaining funds we’re about to cover. • Next up are three stock-based funds. • The C Fund is managed to replicate the S&P 500 Index. • The S Fund invests in small to mid-sized company stocks, Dow Jones Index. • And the I Fund invests in international company stocks across more than 20 developed countries.

TSP Investment Choices: Lifecycle Funds

INSTRUCTOR NOTE: Thrift Savings Plan Handout

If you don’t feel comfortable deciding how to mix these investments to create SLIDE 28 a portfolio that’s right for you, there’s a remaining group of funds called the Lifecycle Funds that may be right for you.

Each of these funds invests in a professionally developed mix of the funds we just covered, starting out with a riskier blend but then getting more conservative over time.

First Duty Station 2-29 An age-appropriate Lifecycle Fund is where your automatic contributions will go, unless you change it.

To learn more about the investment funds covered today, visit tsp.gov. There you can find the key features, rates of return, and top 10 investment holdings for each of the funds offered.

Blended Retirement System: Automatic and Matching Contributions

Under BRS, you receive an automatic 1% contribution into your TSP after serving 60 days. After two years of service you are considered “vested” in SLIDE 29 the TSP meaning that you have met the service requirements that entitle you to keep the automatic 1% contribution and you gain eligibility for service matching contributions. Let’s take a look at the chart to see how your contributions will be matched after two years of service.

The DoD will match dollar for dollar the first 3%, after that they will match $.50 for each additional percent up to 5% — this is the maximum they will match. So if you contribute 5% the DoD will contribute the 1% automatic and a 4% match. All automatic and matching funds will be deposited into the traditional TSP. Remember you start getting the match after two years of service. Also, automatic and matching contributions continue through the end of the pay period during which you reach 26 years of service.

Manage Your TSP

There are two main websites you will use to access and manage your TSP: tsp.gov, myPay and Direct Access.

SLIDE 30 myPay and Direct Access. To start, stop, or change contributions to your TSP, log in to myPay at mypay.das.mil/mypay or Direct Access. This pertains to the percentage you are contributing and the type (Traditional or Roth). Also, verify and update your address. This is the address TSP uses to send your account information.

TSP.gov. To access and manage your TSP account, you’ll need to visit TSP. gov and log in with your account number*. Here you can view your portfolio, manage your investments, and change your future allocations.

First Duty Station 2-30 You can also review and update beneficiaries in your TSP account, if applicable. Access the form TSP-3 Designation of Beneficiary. This can be completed electronically and then printed; however, it must be manually signed, witnessed, and faxed.

INSTRUCTOR NOTE: If you have misplaced or lost your account number, visit www.tsp.gov/tsp/forgottenAccount.html to request the account number be mailed to you. Be sure to verify and update your address in myPay and Direct Access first.

Summary

Congratulations on your First Duty Station assignment!

Let’s recap what you learned about: SLIDE 31 • Compensation and Military Banking • Basic Finance • Consumer Protection • Education and Career Planning • Insurance • Saving and Investing • Thrift Savings Plan

Resources

Please read through your Checklist and Handouts and refer back to them. They are a great resource to help navigate the financial decisions you’ll need to make. SLIDE 32 You are not alone! You have many layers of support to help you learn more and make good financial decisions.

You can talk to your CFS at your unit or meet with a PFM and attend a class at your local installation service center. You can call Military OneSource or CG SUPRT for additional assistance. This is a great option for flexibility of scheduling since the call center has extended hours. You may also access the FINRED Sen$e mobile app or the MyNavy Financial Literacy mobile app for assistance with a variety of personal finance issues.

First Duty Station 2-31 Thank You!

Thank you for participating! I wish you the best of luck as you prepare to move to your first duty station. Please let me know if you have any questions or if you would like to schedule an in-person appointment to review your SLIDE 33 personal finances.

First Duty Station 2-32 FIRST DUTY STATION

PART 1: Managing Finances TTOUCHPOINTC CURRICULUM

CFS Preparation: Distribute and discuss the First Duty Station checklist and accompanying handouts to support this video-based training course. Checklists and handouts can be found online at https:// finred.usalearning.gov/SPL/Training/NavyResource/TouchpointCurriculum.

CFS Intro: Welcome to training. Today our conversation is about managing your finances at your first duty station and beyond. The goal is to improve your understanding of personal finance as you settle into your new location. Together we will watch videos to aid in the sharing of information and discuss some of the financial aspects of arriving at your first duty station.

Play Video 1

CFS Preface: Arriving at your first duty station is an exciting time filled with new routines and new information. (CFS can share story of their first duty station.) Gaining a solid understanding of your finances now will set you up for success in the short term and long 1. Course term. As we go through the videos and different topics are presented, take note of what you Overview can directly apply to your personal finance journey.

Play Video 2

Discussion Questions

1. How often are you looking at your Leave and Earnings Statement? CFS Talking Points: Use this opportunity to have students view their personal LES. Encourage participants to get in the habit of checking their LES every month. Explain that 2. Compensation, by checking the LES, potential pay problems such as underpayment or overpayment can Taxes and Banking be addressed in a timely manner. If time permits, review and show/point out to students common pay and allowances such as Base Pay, BAH, and BAS.

2. How did you choose the bank/credit union you are currently working with? CFS Talking Points: Facilitate discussion on how and why students choose their current financial institution. Ask if the institution(s) was (were) chosen based upon the factors listed in the video: convenience, variety of products and services, fees, lifestyle. Discuss how to research financial institutions and choose the best fit for the individual. Remind them of fees and the importance of access to funds wherever they are in the world.

Knowledge Check

Question: You can update your federal and state tax withholding at what site?

Answer: mypay.dfas.mil

First Duty Station, Pg. 1 PART 2: Personal Finance Principles

CFS Intro: The next video will cover foundational personal finance principles that are essential to grasp and maintain throughout your life. Starting now at your first duty station puts time on your side and sets you up for a prosperous financial future.

Play Video 3

Discussion Questions

1. What unique expenses will you include when building your personal spending plan? CFS Talking Points: Give participants time to respond. Explain that a personal spending plan is an individual plan or family plan (if appropriate) that will not be an exact copy of 3. Spending Plans someone else’s. Remind students that the important takeaway is to have a spending plan, to track expenses, and update or change as necessary.

2. Is your current spending in line with the financial goals you want to accomplish? CFS Talking Points: Encourage students if they don’t currently have specific financial goals to take time to think through and establish what they would like to accomplish short term and then move to long term. Ask students if the way they currently spend money reflects what they want their finances to look like. If not, remind them they are in control and offer ideas for change.

Knowledge Check

Question: It is recommended that transportation expenses not exceed what percentage of your income?

Answer: 15% – 20% of pretax pay, however lower is better

PART 3: Debt and Credit

CFS Intro: The goal of the next video is to provide information on making informed decisions when it comes to credit and debt. Having this area of your life under control allows you to focus on your future and not be bound to paying for your past.

Play Video 4

Discussion Question Taking on too much debt can have what effect on your life? CFS Talking Points: Give participants time to answer. Financial implications: interest going to the bank instead of working for you, which delays financial goals. Having to work longer,

4. Debt and more hours, miss out on life events that cost money — vacation, entertainment, etc. Credit Other Considerations: Physical/psychological implications: stress, anxiety, depression, sleep disruption, relationship problems, not focused

First Duty Station, Pg. 2 Knowledge Check

Question: What are the three major credit reporting agencies?You can update your federal and state tax withholding at what site? Answer: Equifax, TransUnion, Experian

Question: Which site lets you access your credit reports from the three major credit reporting agencies at no cost, once per year? Answer: www.annualcreditreport.com

Question: What credit score is most commonly used in lending? Answer: FICO; scores range on average 300 – 850

PART 4: Consumer Protection and Identity Theft

CFS Intro: Protecting your personal information is vital for financial security. This video will address some of your protections to combat fraud.

Play Video 5

Discussion Questions

1. What can you do to better protect your personal and financial information? CFS Talking Points: More secure passwords, being aware when using public Wi-Fi, 5. Protection from keeping wallet secure, updated software, properly dispose of personal documents, make Misleading sure creditors have current address, check credit reports Consumer Practices

Knowledge Check

Question: What two laws provide financial protections to Service members and their families?

Answer: Servicemembers Civil Relief Act (SCRA) and Military Lending Act (MLA)

PART 5: Major Purchases

CFS Intro: Protecting your personal information is vital for financial security. This video will address some of your protections to combat fraud.

First Duty Station, Pg. 3 Play Videos 6 & 7

Discussion Question

Buying a vehicle is a big decision. Research and take your time. If you decide to finance this purchase, what factors were mentioned in the video that should be considered? 6. Financial Planning Topics CFS Talking Points: Understand the basics (financing, APR). Know how much you can afford (experts recommend transportation costs no more than 15% – 20% of pretax income including loan payment, maintenance, insurance, and gasoline). Get pre-approved (compare rates). Be prepared (research vehicle costs, where to buy, be willing to walk away).

7. Financing a Major Purchase

PART 6: Education and Insurance

CFS Intro: Next up are valuable benefits you have access to while serving in the military. Take advantage of these opportunities while in the military to protect you and your family as well as furthering your education and career through programs specifically designed for you.

Play Videos 8 & 9

Discussion Questions

1. Have you considered any of the programs mentioned for further education while you are serving? How can using these programs benefit you? CFS Talking Points: Give participants time to answer. Examples include: Tuition 8. Education and Assistance Program, Servicemembers Civil Relief Act, Student Loan Repayment Plans, Career Investment Programs Public Service Loan Forgiveness, Apprentice Program. Furthering education while on Active-Duty can assist in a smooth transition to the civilian sector and can also enhance your knowledge for your current job.

2. Remember your named beneficiary on your life insurance supersedes what your will states. What life events might make you consider changing your beneficiaries? 9. Life and Health Insurance CFS Talking Points: Marriage, divorce, birth of child, relationship change, the death of a beneficiary

Knowledge Check

Question: Explain a key feature of the difference between term and whole life insurance. Answer: • Term: specific amount for specific period of time; fixed cost, lower cost, not complex • Whole: coverage for your entire life; flexible premiums; cash value

Question: Where can you go to review your health insurance options? Answer: www.tricare.mil

First Duty Station, Pg. 4 PART 7: Investment Strategies

CFS Intro: At this point we have discussed having a proper spending plan, emergency savings, education benefits, health and life insurance. Next, we move onto ways to put your money in a position so it works for you.

Play Videos 10, 11, 12 & 13

Discussion Questions

1. Why is it important to start investing now versus waiting until later? 10. Compound Interest CFS Talking Points: Compound interest is powerful, but it takes time to experience the full benefits. Encourage students to focus on what they can save each paycheck and not how difficult it is to save. It’s not how much you make, but what you keep that is important.

2. Are you currently using any of the three primary investment categories? 11. Basic Investing CFS Talking Points: Encourage students to discuss cash, bonds and stocks. Ask how they can use these investment tools to reach their financial goals. Remind students of risk and timeframe and how they can impact the choices they make when deciding what investment tool(s) to use. Discuss using mutual funds as an option for diversification.

3. How can you play a more active role in funding your future financial goals to include 12. Understanding retirement? the TSP CFS Talking Points: Pay attention, get organized, have account information, check accounts on a regular basis, work with a Command Financial Specialist and/or Financial Counselor for additional education

13. Managing Your TSP

Knowledge Check

Question: What are 3 major inputs that will determine the outcome of your investments? Answer: The amount of money you invest, the rate of return of the investments, and time

Question: investment tool can provide stability to your portfolio and may be a good option for shorter-term financial goals? Answer: Term: bonds

Question: What is the purpose of the Thrift Savings Plan? Answer: Allows participants a tax-advantaged account to save for retirement

First Duty Station, Pg. 5 PART 8: First Duty Station Conclusion

CFS Intro: Now that we have discussed financial considerations of your first duty station, remember that you can speak with a Financial Counselor on base if you have questions or concerns. This installation has the resources to assist you as you navigate your financial life in the military as well as prepare you for life after service.

Play Video 14

CFS Follow UP

The CFS will need to provide the contact information for Financial Counselor and other 14. First Duty relevant resources specific to Service member's installation. Station Conclusion

Catalog ID: OPNAV-FDSFRT-1.0 — (Updated December 2020) First Duty Station, Pg. 6

First Duty Station Presentation TC 2

First Duty Station

Agenda

• Compensation and Military Banking • Basic Finance • Consumer Protection

• Education and Career Planning

• Insurance

• Saving and Investing

• Thrift Savings Plan

• Resources

First Duty Station Checklist Available

2 Compensation

Basic Pay • Special and Incentive Pays • Allowances

www.militarypay.defense.gov

First Duty Station Checklist Available

Leave and Earnings Statement (LES)

• Entitlements (10)

• Deductions (11)

• Pay Data (BAH & VHA) 50 – 51 – 52 – 57

• Remarks (76)

4 Military Banking

• Types of Banking Institutions • Things to Consider • Products and Services Offered

• Online and Mobile Banking

• Credit and Debit Cards

• Bank Statements

• Review, Protect Your Accounts

Military Banking Handout Available

Create / Manage a Spending Plan

STEP 1: Understand your current situation • Set goals STEP 1: • Track inflows and outflows Understand your current STEP 2: Know where your money should go situation • Save and/or invest 10% – 15%* • Transportation less than 15% – 20%* STEP 2: • Limit BAH to 25% or less* STEP 4: Make 4-STEP Know where your money Step 3: Create a plan adjustments BUDGETING should go • Pay yourself first PROCESS • Automate saving and bill paying • Strive to save 3 – 6 months of expenses for emergencies STEP 3: STEP 4: Make adjustments Create a plan • Make family budgeting a team sport • Replenish emergency funds as needed • Review frequently

Spending Plan Worksheet Handout and Checklist Available * Pretax income

6 Manage Debt and Credit

• Tips to Create Healthy Credit Habits ü Create and follow a spending plan ü Pay bills on time Types of ü Strive to pay credit cards Credit New 10% in full each month Credit 10% ü Keep credit card and loan information safe Length of Payment ü Keep your receipts and Credit History History compare charges with 15% 35% billing statements Amounts • Understand and Protect Owed Your Credit Reputation (Score) 30%

• Know the Factors that Determine Your Credit Score

Understanding Credit Handout Available

Your Tax Situation

• Review your tax situation ü Make changes in myPay.dfas.mil or USCG Direct Access

ü Military Spouse Residency Relief Act (MSRRA)

ü Seek help from Military OneSource for free software and professional assistance

8 Why Are Service Members Vulnerable?

• Young • Away from home • Deployments

• Frequent moves • Spouse unemployment

Misleading Consumer Practices

• Recognize scams ü Multilevel marketing / pyramid scheme ü Get rich quick ü Too good to be true

• Protect yourself ü Needs, wants, wishes ü Research ü Comparison shop ü Sleep on it

• Report a complaint

Sources of Help for Military Consumers Handout Available

10 Identity Theft

• Secure your information ü Follow PII regulations and procedures ü Safeguard your wallet ü Sign up for electronic statements ü Opt out and do not call ü Periodically review credit report ü Update computer security settings ü Avoid unsecure Wi-Fi networks ü Active-duty alert or credit freeze

• Report a complaint ü www.identitytheft.gov ü www.consumer.gov

Military Consumer Protection Handout Available

Servicemembers Civil Relief Act (SCRA)

• Contracts ü Loan rate capped at 6% ü Terminate residential or auto lease ü Cancel cellphone service contract • Stay civil judgments ü Eviction and foreclosure ü Default judgment ü Property repossession or seizure • Insurance ü Life insurance premium payments ü Health insurance reinstatement • State income tax statutes

Military Consumer Protection Handout Available

12 Military Lending Act (MLA)

• Protects active-duty, active guard / reserves, dependents • Protection from Predatory Lending

• Interest rate capped at 36%

Military Consumer Protection Handout Available

Make Smart Purchases

• Think First ü Logic beats emotion ü Additional costs matter ü Shopping around is smart ü Cash or credit

• Avoid Trouble ü Want or need ü Wait and save ü Ask someone else

Major Purchases Handout Available

14 Car-Buying Basics

Three Deals of Car Buying 1. Purchase Price 2. Financing 3. Trade

Interest Rate Length Payments Loan Amount Total Interest Paid

$ 3 $456 x 36 $15,000 $1,428 16,428 Years + % 6 4 $352 x 48 $15,000 $1,909 $16,909 Years + APR

5 $290 x 60 $15,000 + $2,400 $17,400 Years

Interest Rate Length Payments Loan Amount Total Interest Paid

$ 3 $484 x 36 $15,000 $2,424 17,424 Years + % 10 4 $380 x 48 $15,000 + $3,261 $18,261 Years APR 5 $ $ $ $ 319 x 60 15,000 + 4,122 19,122 Years

Major Purchases Handout Available

Education and Career Planning

• Tuition Assistance

• Paying Back Student Loans

• United States Military Apprenticeship Program

• Credentialing Opportunities On-Line Program (COOL)

Education Savings and Benefits and Paying off Student Loans Handouts Available

16 Health Insurance

• TRICARE ü Become familiar with benefits ü Defense Enrollment Eligibility Reporting System (DEERS) ü Coordinator – other health insurance benefits ü Visit www.tricare.mil

• TRICARE Dental ü Enroll family members ü Visit www.tricare.mil/Dental

TRICARE Overview Handout Available

Property and Auto

• Renters Insurance ü Protection for your belongings ü Inexpensive

• Auto Insurance ü State requirements ü Loan requirements

18 Life Insurance

• Servicemembers’ Group Life Insurance (SGLI) ü Coverage ü Beneficiaries • Family Servicemembers’ Group Life Insurance (FSGLI) • Private Life Insurance ü Term and permanent coverage ü War clause and other restrictions ü Beneficiaries ü Premium payments

LIFE Insurance Needs

Liabilities (debts and obligations)

Income (amount X number of years needed) +

Final expenses +

Education and other goals +

– Subtract current coverage and assets

Your Total Need

20 Saving vs. Investing

• Saving ü Safe, low-risk (return of your money) ü Low interest ü Short-term goals (emergency funds, vacation, etc.)

• Investing ü Takes risk (return on your money) ü Potential for higher returns ü Long-term goals (major purchase, retirement, etc.)

Basic Investing Handout Available

Compound Interest

$ 1M $1,054,907.88 Time Is Money! Start Saving Early

$ 800k for Your Retirement

$698,201.57 $ 600k

$ 400k

$298,072.00 $ 200k Pressy saves Mandi saves Steve saves $200/mo. $200/mo. $200/mo. Starting at age 20 Starting at age 35 $ 0k Starting at age 25 Retirement Age

20 25 35 65 PRESSY MANDI STEVE

Total Amount Saved with 8% Rate of Return

Basic Investing Handout Available

22 Types of Investments

LOWER RISK HIGHER RISK LOWER RETURN POTENTIALLY HIGHER RETURN SHORTER TIMEFRAME LONGER TIMEFRAME

CASH BONDS STOCKS Security Lending Ownership Examples: Examples: Examples: Certificates of Deposit U.S. Government Small / Med / Large Co. Stocks Money Market Account U.S. Corporate U.S. / Foreign Stocks Savings Account Municipal Oil / Gold Foreign Government / Corporations REITs

This is simply an illustration of the general relationship between various asset classes. Some investments will not align with this model.

Basic Investing Handout Available

Mutual Funds and Exchange-Traded Funds (ETFs)

MUTUAL FUNDS ETFs

Bought and sold Pool together Actively traded once per day money from throughout the day, many investors like stocks

Basket-like investments Priced only once that can hold hundreds or per day, after Prices may fluctuate thousands of securities throughout the day market close (Stocks, bonds, commodities, currencies, etc)

Can be either stock-based, Typically actively Typically fixed-income, or passively managed managed balanced funds

Promote Often have higher diversification tax implications due Often have lower expenses to capital gains Charge fees

24 Investing – Things to Consider

• Invest regularly • Invest for the long term • Keep emotions out of your actions • Avoid high-risk investments • Avoid chasing performance • Diversify • Evaluate your investment plan at least annually

Basic Investing Handout Available

Understanding Your TSP

Traditional Roth

Thrift Savings Plan Handout Available

26 TSP Investment Choices: Core Funds

G FUND F FUND C FUND S FUND I FUND Government Securities Fixed Income Index Common Stock Index Small Capitalization Stock International Stock Index Investment Fund Investment Fund Investment Fund Index Investment Fund Investment Fund

What It Is: Government What It Is: Government, What It Is: Stocks of What It Is: Stock of small to What It Is: International securities that are specially corporate, and asset-backed large and medium-sized medium-sized U.S. companies stocks from more than 20 issued to the TSP bonds U.S. companies developed countries Pros: Potential for high Pros: Does not lose money; Pros: May earn returns that Pros: Potential for high investment returns over the Pros: Potential for high has a consistent but are higher than money market investment returns over long term investment returns over the relatively low investment funds over the long term with the long term long term return relatively low risk Risks: Can be volatile Risks: Can be volatile depending on stock market Risks: Can be volatile Risks: Your money may Risks: Bond prices fall when depending on stock performance depending on stock market not grow to meet your interest rates rise. Bonds may market performance performance retirement needs or outpace be repaid early, reducing your Benchmark Index: Dow Jones inflation. returns. Benchmark Index: U.S. Completion TSM Index Benchmark Index: Standard & Poor’s MSCI EAFE Stock Index Benchmark Index: 500 Stock Index Bloomberg Barclays U.S. Aggregate Bond Index

For more comprehensive information, visit tsp.gov and select “Learn about fund options” from the menu

TSP Investment Choices: Lifecycle Funds

Each L Funds is a mix of individual funds based on when you’ll need your money

L 2065 L 2060 L 2055 L 2050 L 2045

Consider if you were Consider if you were Consider if you were Consider if you were Consider if you were born after 1999 or plan born between born between born between born between to withdraw from your 1995-1999 or plan to 1990-1994 or plan to 1985-1989 or plan to 1980-1984 or plan to account after 2062. withdraw from your withdraw from your withdraw from your withdraw from your account between account between account between account between 2058-2062. 2053-2057. 2048-2052. 2043-2047.

For the For the For the For the For the long-term investor long-term investor long-term investor long-term investor long-term investor

L 2040 L 2035 L 2030 L 2025 L INCOME

Consider if you were Consider if you were Consider if you were Consider if you were Consider if you were born between born between born between born between born between 1975-1979 or plan to 1970-1974 or plan to 1965-1969 or plan to 1958-1964 or plan to 1958 or already withdraw from your withdraw from your withdraw from your withdraw from your withdrawing from your account between account between account between account between account. 2038-2042. 2033-2037. 2028-2032. next year and 2027.

For the For the For the For the For those long-term investor medium-term investor medium-term investor short-term investor already withdrawing

With the exception of L Income, the investment mix of each L Fund becomes more conservative over time. To change your investments, log in to My Account on tsp.gov and choose “Contribution Allocation” or “Interfund transfers” from the the menu.

Thrift Savings Plan Handout Available

28 Blended Retirement System: Automatic and Matching Contributions

Defined Contribution Thrift Savings Plan (TSP)

You DoD Automatic DoD Matching Total Contribute Contribution Contribution (Traditional) (Traditional)

0% 1% 0% 1% 1% 1% 1% 3% 2% 1% 2% 5% 3% 1% 3% 7% 4% 1% 3.5% 8.5% 5% 1% 4% 10%

Service members who joined on or after January 1, 2018: • 1% DoD Automatic Contribution begins 60 days after entering service. • 4% DoD Matching Contributions begin after completing 2 years of service. • Both automatic and matching contributions are vested after serving two years.

Manage Your TSP

• mypay.dfas.mil or Direct Access ü Start – stop – change o Percentage o Type (Traditional / Roth) ü Update address

• TSP.gov ü View portfolio ü Manage investments ü Change allocations ü Review and update beneficiaries

30 Summary

Congratulations on your First Duty Station assignment! Let’s recap what you learned about: ü Compensation and Military Banking ü Basic Finance ü Consumer Protection ü Education and Career Planning ü Insurance ü Saving and Investing ü Thrift Savings Plan

Resources

• Checklist and Handouts

32 Thank You!

The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

33 • Student Manual • Counselor (PFM/CFS) Checklist • Counselee Checklist • Instructor Guide • Video Discussion Guide • PowerPoint Slides

TC 3 Permanent Change of Station (PCS) Permanent Change of Station (PCS) Student Manual TC 3 SM I. INTRODUCTION

After completing this chapter, you will understand how to assist Service members with financial considerations of a PCS Move. Whether this is their first PCS or their fifth, the process can be exciting, stressful, and financially concerning. As a CFS, you can help your Service members gather information, plan ahead, and know what resources are available for their departure from or arrival to a new duty station. In this Student Manual, we’ll introduce you to the PCS tools that allow you to teach your Service members what they need to know to make knowledgeable decisions before, during, and after their move. Use these resources as a solutions-focused tool to help your counselee set goals, establish priorities, and develop a family action plan.

II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

1. TLO: Understand the fundamentals of creating and managing a spending plan, and the importance of updating a spending plan. ELOs: Beable to calculate the differences in pay and benefits from previous duty station to current dutystation. Be able to identify changes in expenses from previous duty station to current duty station. Update personal spending plan. 2. TLO: Understand the fundamentals and management of debt and credit. ELOs : Know how to check and resolve errors on a credit report. Understand strategies to raise a credit score. Know strategies for managing credit and debt. Know several resources for funding major life events that reduce the need for additional credit. 3. TLO: Examinethe impact of special pay and entitlements. ELO: Understand typical costs and entitlements associated with a change in duty station. 4. TLO: Know military consumer protection law fundamentals, including the Servicemembers Civil Relief Act (SCRA) and the Military Lending Act (MLA). ELOs: Understand the components and protections for Service members under the SCRA and MLA. Know basic procedures for handling a consumer complaint or dispute associated with the SCRA or MLA. Understand how the basic protections afforded under the SCRA can protect finances.

Permanent Change of Station (PCS) 3-1 III. REFERENCES

• Office of Financial Readiness (FINRED) — https://finred.usalearning.gov • Cost of Living Calculator — https://www.bankrate.com/calculators/savings/moving-cost-of-living-calculator.aspx • Military Compensation Policy — https://militarypay.defense.gov/Pay https://militarypay.defense.gov/Benefits.aspx • Defense Finance and Accounting Service (DFAS) — https://www.dfas.mil • Internal Revenue Service (IRS) — https://www.irs.gov • myPay — https://mypay.dfas.mil • U.S. General Services Administration (GSA)/Travel Per Diem rates — https://www.gsa.gov/travel/plan-book/per-diem-rates • Defense Travel Management Office —https://www.defensetravel.dod.mil/site/allowances.cfm • milConnect — https://milconnect.dmdc.osd.mil/milconnect • Free annual credit report — https://www.annualcreditreport.com • milSuite for PFM — https://www.milsuite.mil/book/groups/cnic-personal-financial-management-program-wfl • Money and Mobility publication — https://www.saveandinvest.org/sites/saveandinvest/files/Money-Mobility.pdf • CNIC Touchpoint Curriculum — https://www.cnic.navy.mil/ffr/family_readiness/fleet_and_family_support_program/work-and-family- life/personal_finances/pfm-touchpoint-checklists.html

Permanent Change of Station (PCS) 3-2 IV. ACRONYMS AND ABBREVIATIONS

Acronym/Abbreviation Full Name Definition

BAS Basic Allowance for BAS is an allowance to offset costs for Subsistence a member’s meals.

BAH Basic Allowance for Housing BAH is an allowance to offset the cost of housing when members do not receive government-provided housing.

COLA Cost of Living Allowance COLA is a supplement designed to equalize purchasing power between high and low-cost areas.

CONUS Continental United States This refers to locations within the continental United States.

FSA Family Separation Allowance FSA is payable when a military member is forced to be away from his/her dependents for longer than 30 days due to military orders.

LES Leave and Earnings Statement This monthly single-page report details members’ eligible pay and allowances, payroll deductions and leave balances.

MIHA Move-in Housing Allowance MIHA is a lump-sum allowance provided to Service members assigned to overseas locations to help meet expenses for major appliances, other improvements, or to pay non- refundable rent-related taxes or fees – MIHA does not require repayment.

OCONUS Outside Continental This refers to locations outside the United States continental United States.

OHA Overseas Housing Allowance OHA is paid to Service members who live in private housing at their overseas duty station – OHA replaces BAH.

PER DIEM Per Diem Per Diem is the daily allotted pay the DoD gives Service members while they are traveling on official duty orders.

Permanent Change of Station (PCS) 3-3 V. TOUCHPOINT TOOLBOX: MATERIALS AND RESOURCES TO TEACH TOPIC

All materials are available on PFM MilSuite, CNIC and FINRED websites (listed in references), and DVD. Links to curriculum may change or vary locally.

1. One-on-One Counseling Checklists and Handouts (Service Specific) • PCS Counselor Checklist • PCS Counselee Checklist

Handouts: • Spending Plan Worksheet • Understanding Credit • Military Consumer Protection • Sources of Help for Military Consumers • Major Purchases • 5 Rules of Buying a House • Estimated Travel Costs for a PCS

2. Classroom Training Materials (Service Specific) All materials available on disc, or PFM milSuite and CNIC websites. Links to curriculum may change or vary locally. • PCS Touchpoint Checklists and Handouts • PCS PPT Training Slides and Instructor Guide (IG) • PCS Videos and Video Discussion Guides

3. Online Training • PCS Course (Navy e-Learning, MyNavy Portal or your service-specific e-Learning site)

Permanent Change of Station (PCS) 3-4 VI. ADDITIONAL LEARNING AND ACTIVITIES

Moving often means adjusting to change and starting new routines. This is especially true for finances and cash flow. Use this opportunity to work through some of the tools to help your Service members plan and prepare. PCS moves mean adjusting your spending plan. A spending plan will help your Service members manage their money, plan for their financial goals, and prepare for emergencies.

Here are some activities to have with your audience: • Complete the Spending Plan Worksheet Handout • Bank rate cost of living calculator to help estimate expenses for the new duty station • Complete the PCS Expense Worksheet Handout • Military OneSource Demo: “Plan My Move” Before, During, After Checklists

Encourage Service members to attend PFM Standard Curriculum courses at the local Installation Family Service Center to learn more about financial considerations for this Touchpoint. • Money and The Move • Developing Your Spending Plan • Thrift Savings Plan • Renting or Home Buying • Car-Buying Strategies

Permanent Change of Station (PCS) 3-5 PERMANENT CHANGE OF STATION (PCS)

NAVY FINANCIAL READINESS ContinuationCFS/PFM Pay: CHECKLIST Plot Your Path to $uccess HANDOUTS Moving often means adjusting to change and starting new  Spending Plan Worksheet routines. This is especially true for your finances and cash flow.  Understanding Credit  Military Consumer Protection This checklist, supplemented with information and referrals from  Sources of Help for Military Consumers the Fleet and Family Support Center (FFSC) staff, can help you  Major Purchases to prepare for the main financial considerations of a PCS and  5 Rules of Buying a House Estimated Travel Costs for a PCS make sound financial decisions. 

BASIC FINANCE

 Update your personal spending plan using the "Spending Plan Worksheet." A good spending plan helps you manage your money, plan for your financial goals, and prepare for emergencies. Here are four steps financial experts suggest to get started. Counselor: Inform counselees that you can provide a “Spending Plan Worksheet” as well as more detailed templates with features that can help them understand their financial situation and reduce excessive debt.

PCS - PAGE 1 • Prioritize your financial goals. • Establish an emergency fund. Financial experts suggest you should keep at least three to six months of living expenses in reserve. If you do not have that much saved, consider setting aside a little each paycheck to help get you there. Counselor: Share with counselees the concepts of paying yourself first, automating savings, and keeping their emergency fund in a separate account. Suggest they make it effortless by setting up an automatic transfer through their bank or an allotment, time permitting.

Step 4: Make adjustments. Update your spending plan as your life changes. Monitor your plan until you have fully adjusted your finances to reflect your new situation.

 Identify changes in pay, expenses and taxes from your current duty station to your next duty station. • Budgeting to live on one income is a great way to reduce financial-related stress during a PCS. The second income, once re-established, can be used to save for goals and quality-of-life improvements. Using this strategy can reduce a long-term debt and reduce stress if there is a pay issue during the move. • Potential changes to income could include an increase or decrease in pay, to include: Cost of Living Allowance (COLA), Basic Allowance for Housing (BAH), Special and Incentive Pay, and spousal income. Visit www.defensetravel.dod.mil/site/allcalc.cfm to calculate expected changes to your pay. • Potential changes to your expenses at your next duty station may include an increase or decrease in: housing, transportation, insurance, child care, food, fuel and utilities. It’s important to establish a spending plan so you can identify and adjust to these changes. • Note: Your tax liability could change depending on where you are relocated. Speak to a tax professional to discuss your specific situation.

 Notify your financial institutions and creditors of your upcoming move. Consider setting up automatic bill pay to avoid missed or late payments. Confirm all transactions have cleared your bank or credit union account, if you plan to switch financial institutions at your next duty station.

 Check each of your three major credit reports for free at www.annualcreditreport.com. Sailors can request free credit monitoring services from the nationwide credit reporting agencies: Equifax, Experian, and TransUnion. Review the "Understanding Credit" handout for more information. Counselor: Remind counselees that a Personal Financial Manager/Educator (PFM/E), can provide a free copy of their credit report, help them interpret their reports and discuss what they need to do to improve their scores.

 Develop a plan for managing and paying off your debt. Help is available at your Fleet and Family Support Center (FFSC) or at www.powerpay.org.

 Consider the pros and cons of changing state residency. The Military Spouses Residency Relief Act (MSRRA) gives the spouse of an active-duty Service member the option not to change state residency when relocating to a new state due to a PCS. Changing may not be the best option for a spouse because it may impact state income tax, personal property taxes, car registration, and voter registration.

 Under MSRRA, if your spouse plans to work in the new location and not change residency, they should file their IRS Form W4 with their employer. Additional notes: ______

______

PCS - PAGE 2 CONSUMER PROTECTIONS

 Review the “Military Consumer Protection” handout for additional information on identity theft, the Servicemembers Civil Relief Act (SCRA), and Military Lending Act (MLA). Counselor: Remind counselees the base legal office can assist by reviewing contracts to help counselees from falling prey to predatory lenders and fraudsters.

 Protect yourself from misleading consumer practices and know basic procedures for handling a consumer complaint or dispute. Review the "Sources of Help for Military Consumers" handout.

MAJOR PURCHASES

 Analyze your housing and transportation needs and be sure to prepare your finances for any major purchases related to your PCS. Review the "Major Purchases" and "5 Rules of Buying a House" handouts for more information. Additional notes: ______

______

PLANNING FOR THE FUTURE

Debt you would like to pay off, like a iabilities L mortgage, auto loan or credit cards(s) $

Multiply targeted annual income amount by ncome to be replaced I the number of years to replace $

The amount you would like to set aside for uneral and final expenses F final expenses $

The amount you want to set aside to fund Education and other goals education and other goals for family, $ friends or charitable organizations Total life insurance needed $$$$

Then compare your life insurance needs with your current amount of coverage plus any assets and benefits available at death. If you find you need additional coverage, consider supplementing Servicemembers’ Group Life Insurance (SGLI) with a commercial life insurance policy. Review the policy for any restrictions, such as a war clause. Common life insurance policies include: • Term insurance — provides a stated amount of coverage over a specific period of time and is designed to provide a large amount of coverage for the least cost. • Permanent insurance — provides coverage designed to last for your entire life and can build cash value.

PCS - PAGE 3 There are several permanent life insurance options offered such as universal life, whole life, variable life and even variable universal life insurance. These policies may have a surrender period and be subject to fees and penalties if canceled during this time. Counselor: Remind counselees to ask questions and fully understand any commercial life insurance policy they are considering purchasing. They should understand the cost, coverage, terms and conditions, as well as how the agent is compensated before making a decision to buy. Additional notes: ______

______

COMPENSATION, BENEFITS, AND ENTITLEMENTS

 Speak with your installation’s Finance Office and Travel Management Office for the most up-to- date information on travel pay and allowances specific to your situation.

 Typical Travel Pay and Allowances:

Allowance Purpose

Mileage reimbursement Offset driving costs

Per diem Cover hotel and meals

Dislocation allowance Cover expenses not otherwise reimbursed

 Other Allowances (Location Specific)

OHA Overseas Housing Allowance

MIHA Move-In Housing Allowance

TLA Temporary Lodging Allowance

 You may use your Government Travel Charge Card (GTCC) during your PCS to cover expenses that will be reimbursed by the government. Remember, your GTCC if for official travel-related expenses ONLY and misuse can subject you to administrative or disciplinary action. You will be responsible to pay any overages on the GTCC that are not covered by reimbursement, so it is important to develop an estimated cost of what is reimbursable.

 Advance pay is intended to enable a member to have sufficient money in hand to execute a PCS. With sufficient justification, you may request up to 3 months of Basic Pay. In some cases, allowances may also be paid. Counselor: Since this is an advance, it MUST BE REPAID over the next 12 months unless your commanding officer authorizes a longer repayment term (up to 24 months).

 Consider weight limitations, since you must cover the cost of shipping items that exceed the DoD weight limits. Visit www.move.mil or your Travel Management Office for more information.

PCS - PAGE 4 Counselor: The counselees may want to consider a yard sale or online marketplace to sell non-essential household items. This provides two benefits – making extra money AND lowering the shipping weight. Another option is to donate the items to charity.

 Prepare for the potential costs associated with transporting and/or storing your vehicles. The government only pays for the shipment of ONE vehicle to overseas duty assignments and usually only pays what it would cost to drive one personally owned vehicle from station to station in the U.S. There may be exceptions, so check with your command and your Travel Management Office regarding your specific situation. Additional notes: ______

______

PCS CONSIDERATIONS (Before Your PCS)

 Log into MyNavy Portal (MNP) at https://my.navy.mil, using your CAC and CAC-enabled machine. Visit the MyPCS section for additional information, download a copy of the PCS Checklist and the MyPCS Mobile app to your mobile device.

 Visit usps.com to update your address and consider using Hold Mail and forwarding services. It’s recommended that you do this 30 days in advance. Prepare for possible housing-related expenses such as cleaning, maintenance, long-term storage, insurance, and house hunting at your next duty station.

 Prepare for potential costs associated with taking pets to your next duty station. These costs may include immunizations required for overseas travel (quarantine, airline crates, etc.).

 Obtain passports and visas, if appropriate. There will be costs associated with passports and visas when transferring overseas, which may be reimbursed with command approval. More information on passport fees and processing times (normally four to six weeks after application) is available on the State Department website https://travel.state.gov/content/travel/en/passports.html. Counselor: Note that passport rates vary based on whether the passport is new or being renewed. Passport applications for children under 16 require the presence of both parents, even if they are estranged. Additional notes: ______

______

PCS CONSIDERATIONS (During Your PCS)

 Estimate travel costs for your PCS move using the "Estimated Travel Costs for a PCS" provided. Remember to keep all receipts so you can complete your travel claim immediately upon arrival. Also, any unreimbursed moving expenses may be eligible for a tax deduction. Be sure to consult with a tax professional. Counselor: Remind counselees to budget an average of $25 per 100 miles of driving for gas and maintenance. The government authorizes 350 miles of travel per day, so they will want to plan their number of overnight stays based on this distance. Multiply planned number of overnight stays by $120 per night or more depending on the unique characteristics of their family. Estimate $50 per person per day for meals.

PCS - PAGE 5 PCS CONSIDERATIONS (After You Arrive)

 Prepare for possible expenses once you arrive such as security deposits, lodging, child care, and vehicle registration costs.

 Child care can be a big expense, so seek out potential resources to help reduce costs: • Military OneSource: https://installations.militaryonesource.mil/ • Command sponsors in your new location • MilitaryChildCare.com, www.militarychildcare.com: A DoD-sponsored organization matching military families with providers that includes both child development centers on base and certified care homes. Visit Military OneSource and the Military Spouse Employment partnership website for spouses needing help seeking new employment: https://msepjobs.militaryonesource.mil/msep/.

Additional notes: ______

______

Catalog ID: OPNAV-PCSFRT-1.0 — (Updated August 2020) PCS - PAGE 6 PERMANENT CHANGE OF STATION (PCS)

NAVY FINANCIAL READINESS ContinuationMY Pay: CHECKLIST Plot Your Path to $uccess HANDOUTS Moving often means adjusting to change and starting new  Spending Plan Worksheet routines. This is especially true for your finances and cash flow.  Understanding Credit  Military Consumer Protection This checklist, supplemented with information and referrals from  Sources of Help for Military Consumers the Fleet and Family Support Center (FFSC) staff, can help you  Major Purchases to prepare for the main financial considerations of a PCS and  5 Rules of Buying a House Estimated Travel Costs for a PCS make sound financial decisions. 

BASIC FINANCE

 Update your personal spending plan using the "Spending Plan Worksheet." A good spending plan helps you manage your money, plan for your financial goals, and prepare for emergencies. Here are four steps financial experts suggest to get started. Step 1: Understand your current situation. In this step, it’s important to understand what’s REALLY going on with your money today. Start tracking all your income and spending for the next 30 days. How you do the tracking is up to you, but what’s important is you do it. Step 2: Know where your money should go. Financial experts offer these general guidelines when budgeting your money: • Try to save and/or invest 10% – 15% of pretax pay. • Strive to keep transportation expenses including car payments, insurance, gas and maintenance to 15% – 20% of pretax pay. • Limit housing expenses, including mortgage or rent payment, taxes, utilities, and maintenance to your Basic Allowance for Housing or 25% of pretax pay.

Step 3: Create a plan. Build a plan for setting aside money and putting limits on how much you’ll spend each month per category. • Prioritize your financial goals. • Establish an emergency fund. Financial experts suggest you should keep at least three to six months of living expenses in reserve. If you do not have that much saved, consider setting aside a little each paycheck to help get you there.

PCS - PAGE 1 Step 4: Make adjustments. Update your spending plan as your life changes. Monitor your plan until you have fully adjusted your finances to reflect your new situation.

 Check each of your three major credit reports for free at www.annualcreditreport.com. Sailors can request free credit monitoring services from the nationwide credit reporting agencies: Equifax, Experian, and TransUnion. Review the "Understanding Credit" handout for more information.  Develop a plan for managing and paying off your debt. Help is available at your Fleet and Family Support Center (FFSC) or at www.powerpay.org.

 Under MSRRA, if your spouse plans to work in the new location and not change residency, they should file their IRS Form W4 with their employer. Additional notes: ______

______

CONSUMER PROTECTIONS

 Review the “Military Consumer Protection” handout for additional information on identity theft, the Servicemembers Civil Relief Act (SCRA), and Military Lending Act (MLA).

 Protect yourself from misleading consumer practices and know basic procedures for handling a consumer complaint or dispute. Review the "Sources of Help for Military Consumers" handout.

PCS - PAGE 2 MAJOR PURCHASES

PLANNING FOR THE FUTURE

Debt you would like to pay off, like a iabilities L mortgage, auto loan or credit cards(s) $

Multiply targeted annual income amount by ncome to be replaced I the number of years to replace $

The amount you would like to set aside for uneral and final expenses F final expenses $

The amount you want to set aside to fund Education and other goals education and other goals for family, $ friends or charitable organizations Total life insurance needed $$$$

Additional notes: ______

______

COMPENSATION, BENEFITS, AND ENTITLEMENTS

 Speak with your installation’s Finance Office and Travel Management Office for the most up-to-date information on travel pay and allowances specific to your situation.

PCS - PAGE 3  Typical Travel Pay and Allowances:

Allowance Purpose

Mileage reimbursement Offset driving costs

Per diem Cover hotel and meals

Dislocation allowance Cover expenses not otherwise reimbursed

 Other Allowances (Location Specific)

OHA Overseas Housing Allowance

MIHA Move-In Housing Allowance

TLA Temporary Lodging Allowance

 Consider weight limitations, since you must cover the cost of shipping items that exceed the DoD weight limits. Visit www.move.mil or your Travel Management Office for more information.

Additional notes: ______

______

PCS CONSIDERATIONS (Before Your PCS)

PCS - PAGE 4  Prepare for potential costs associated with taking pets to your next duty station. These costs may include immunizations required for overseas travel (quarantine, airline crates, etc.).

Additional notes: ______

______

PCS CONSIDERATIONS (During Your PCS)

PCS CONSIDERATIONS (After You Arrive)

 Prepare for possible expenses once you arrive such as security deposits, lodging, child care, and vehicle registration costs.

Additional notes: ______

______

CFS/PFM Printed Name Counselee Printed Name

______Signature Date Signature Date

Catalog ID: OPNAV-PCSFRT-1.0 — (Updated August 2020) PCS - PAGE 5 Permanent Change of Station (PCS) Instructor Guide TC 3 IG I. COURSE ORGANIZATION AND OUTLINE

The Permanent Change of Station (PCS) course is organized into five parts:

1. Introduction and Agenda • Welcome • Facilitator Introduction • Review of Agenda

2. Financial Planning • Spending Plan • Estimate Changes to Income • Estimate Changes to Expenses • Protect Your Credit • Manage Debt

3. PCS Considerations • Before Your Move Housing Weight Limitations SCRA Vehicles Pets and Passports • During Your Move Estimate Travel Costs Tax Deductions • After You Arrive Expenses Once You Arrive State Residency Child Care Spouse Employment

4. Allowances and Entitlements • Travel Pay and Allowances • PCS Resources

5. Summary and Resources

TOTAL: 60 minutes

Permanent Change of Station (PCS) 3-1 II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

1. TLO: Understand the fundamentals of creating and managing a spending plan, and the importance of updating a spending plan. ELOs: Beable to calculate the differences in pay and benefits from previous duty station to current duty station. Be able to identify changes in expenses from previous duty station to current duty station. Update personal spending plan. 2. TLO: Understand the fundamentals and management of debt and credit. ELOs: Know how to check and resolve errors on a credit report. Understand strategies to raise a credit score. Know strategies for managing credit and debt. Know several resources for funding major life events that reduce the need for additional credit. 3. TLO: Examine the impact of special pay and entitlements. ELO: Understand typical costs and entitlements associated with a change in duty station. 4. TLO: Know military consumer protection law fundamentals, including the Servicemembers Civil Relief Act (SCRA) and the Military Lending Act (MLA). ELOs: Understand the components and protections for Service members under the SCRA and MLA. Know basic procedures for handling a consumer complaint or dispute associated with the SCRA or MLA. Understand how the basic protections afforded under the SCRA can protect finances.

Permanent Change of Station (PCS) 3-2 III. CHAPTER PREPARATION

CONTENT ICONS — The following icons are used throughout the guide:

Instructor Note INSTRUCTOR NOTE: (indicates additional information related to the content for the instructor)

Checklist and Handout (indicates a Checklist or Handout is associated with the content)

Learning Activity (indicates a learning activity)

INSTRUCTOR NOTE: Being prepared for training promotes organization, projects a positive image, and reduces stress.

Be prepared to discuss each Checklist and Handout in class. You should familiarize yourself with this content so you can effectively discuss each document during your presentation.

While this guide is written as a script, avoid reading it word-for-word. Familiarize yourself ahead of time so you feel comfortable covering the material in your own words.

Throughout the presentation, the Checklist or Handouts will be identified with an icon on the PowerPoint and an Instructor Note in this Instructor Guide.

Permanent Change of Station (PCS) 3-3 Materials and Equipment: • Projector/screen • Permanent Change of Station (PCS) course PowerPoint slides • Chart paper and easel or whiteboard and markers • Paper, pens, pencils • Course sign-in sheet • Course evaluations

Forms and Handouts: • Permanent Change of Station (PCS) Checklist • Spending Plan Worksheet Handout • Understanding Credit Handout • Military Consumer Protection Handout • Sources of Help for Military Consumers Handout • Major Purchases Handout • 5 Rules of Buying a House Handout • Estimated Travel Costs for a PCS Handout

Permanent Change of Station (PCS) 3-4 V. CONTENT Introduction

Facilitator Introduction Introduce yourself by providing: Hello, my name is . I am a . SLIDE 1 (Describe your experience as a facilitator or with personal financial management.)

The information I’ll provide over the next 60 minutes will help you better understand and prepare for a Permanent Change of Station (PCS) move.

Agenda

INSTRUCTOR NOTE: Permanent Change of Station (PCS) Counselee Checklist

Moving often means adjusting to change and starting new routines. This is SLIDE 2 especially true for your finances. This course will help you to optimize your resources and strategize ways to complete your upcoming move without breaking your budget.

Today we will discuss several topics to prepare you for this Permanent Change of Station or PCS: • Financial Planning • PCS Considerations Before your move In transit After you arrive • Allowances and Entitlements

I’ll also point you to free resources that can help you take action on what we discuss.

We have a lot to cover today, so let’s get started.

Permanent Change of Station (PCS) 3-5 Financial Planning

ACTIVITY: Engage with the class participants to learn more about their previous moving experiences. Poll the class with the questions provided. Consider making a game out of this activity by uncovering who traveled the SLIDE 3 farthest or took the longest to reach their destination.

I want everyone to think back to the last time you moved, either as a civilian or as a Service member.

• How far did you move? • How long did it take you? • How much did moving cost you out of pocket? • Thinking about your next move, how many of you have financial changes taking place? Things like a spouse changing jobs, needing to find a new day care, or you are thinking of buying a house?

Moving can be full of surprises, so let’s talk about trying to plan for the unexpected.

Spending Plan

INSTRUCTOR NOTE: Spending Plan Worksheet Handout

A good place to start preparing for your PCS is by reviewing your spending SLIDE 4 plan or budget. It doesn’t matter how you track your money, whether it’s an app, spreadsheet, or an old-fashioned journal. What’s important is that you do it. For those who haven’t looked at your spending plan recently, I’ve included a Spending Plan Worksheet in your course Handouts to complete tonight. If you are married, this would be a great activity to complete with your spouse.

A good spending plan helps you manage your money, plan for financial goals, and prepare for emergencies. Let’s do a quick overview of the spending plan process and then we will focus on specific changes that may apply to your move.

Permanent Change of Station (PCS) 3-6 Here are four tips financial experts suggest to build your plan:

Step 1: Understand Your Current Situation In this step, it’s important to understand what’s really going on with your money today. Start tracking all of your current cash inflows and outflows for the next 30 days to analyze where you are spending. Or calculate your past 30 days using credit card and bank account statements.

Take note of what expenses you will be leaving behind and try to estimate new expenses at your next duty station. We will dive into more details on how to estimate these changes in a few minutes.

Step 2: Know Where Your Money Should Go Financial experts offer these general guidelines when budgeting your money: • Save and/or invest 10 — 15% of pretax pay. • Strive to keep transportation expenses including car payments, insurance, gas, and maintenance to 15 — 20% of pretax pay. • Limit housing expenses, including mortgage or rent payment, taxes, utilities, maintenance, etc., to the Basic Allowance for Housing (BAH) or 25% of pretax pay.

For those of you who plan to live off base, pay close attention to this guidance and try not to overspend on your next home.

Step 3: Create a Plan Build a plan for setting aside money and putting limits on how much you’ll spend each month on various things. Although it seems obvious, you should spend less than you earn. Try to prioritize your financial goals, whether they be saving and investing or paying down debt.

If you do not have an emergency fund, consider saving toward this goal. An emergency fund is money that’s kept in a low-risk account, such as a savings account that you can access easily and without any penalties in case you have an emergency.

Most experts agree 3 – 6 months of expenses is a good target amount.

Paying bills while you’re moving can be challenging. Consider putting recurring bills on automatic payment during this time. That way you won’t miss a payment and potentially hurt your credit.

Step 4: Make Adjustments Make sure to go back and update your spending plan as life changes. It’s a good idea to monitor and make adjustments every month until you have fully adjusted your finances for your new location.

Permanent Change of Station (PCS) 3-7 Estimate Changes to Income

Now let’s take a closer look at some potential changes to income. For those who are single or have dependents, it’s a good idea to live below your means during a PCS to help offset and adjust to income changes associated with SLIDE 5 your move.

Potential changes that could impact your monthly income could be: • Basic Allowance for Housing (BAH) • Overseas Housing Allowance (OHA) • Cost of Living Allowance (COLA) • Family Separation Allowance (FSA) • Family Subsistence Supplemental Allowance (FSSA) • Special and Incentive Pays • Spousal Income

For those who are married, it’s a good idea to plan to live on one income to reduce financial related stress during a PCS. The second income, once re-established, can be used to save for goals and improve your quality of life. Using this strategy can also reduce long-term debt obligations when additional income is interrupted during a move.

A great way to calculate changes to your pay is by visiting www.defensetravel.dod.mil/site/allcalc.cfm.

INSTRUCTOR NOTE: If time allows, bring up the website https://www.defensetravel.dod.mil/site/allcalc.cfm and demonstrate the estimator.

Estimate Changes to Expenses

Now let’s take a few minutes to review some potential changes to your expenses. A few of the expenses mentioned on this list include housing, taxes, child care and insurance. It’s best to research these changes now, SLIDE 6 so you won’t be in for a surprise at your next duty station. Certain expenses like auto insurance and fuel prices at your new location can be fairly easy to research. Others like utilities, car registration fees, and grocery prices can be more difficult.

Here are two great resources that can help you determine the average cost of living in certain areas: • Living Wage Resource — https://livingwage.mit.edu/ • Cost of Living Calculator — https://www.bankrate.com/calculators/ savings/moving-cost-of-living-calculator.aspx

Permanent Change of Station (PCS) 3-8 INSTRUCTOR NOTE: If internet access is available, consider pulling up the Cost of Living Calculator and compare a couple of PCS locations to demonstrate the difference in costs.

Before we move on, let’s briefly talk about taxes. Everyone’s situation is different. Some of you may see very little impact on your federal income taxes since your taxable pay may not differ much from your current location. Others may see changes primarily due to changes in spousal income.

For help with your personal tax situation, contact the Voluntary Income Tax Assistance (VITA) program for free assistance.

Protect Your Credit

INSTRUCTOR NOTE: Understanding Credit and Sources of Help for Military Consumers Handouts are available to cover credit reports, credit scores and tips on improving your credit. SLIDE 7 Up next, let’s talk about protecting your credit during a PCS.

Notify Financial Institutions Notify your financial institutions and creditors of your upcoming move and provide them with your new mailing address if you know it.

Confirm all transactions have cleared your bank or credit union account if you plan to switch financial institutions at your next duty station.

Set Up Automatic Payments Consider setting up automatic bill pay to avoid missed or late payments.

Check Your Credit Check your three major credit reports for free at https://annualcreditreport.com. This is especially important if you plan to make a major purchase at your next duty station.

Update Your Address Submit an address change through the United States Postal Service at usps.com as soon as you know the new address or a temporary one; you can also place your mail on hold until you have one. Be sure to inform all your creditors, financial institutions and utility companies of the new address directly. This can help avoid the most common credit issues caused by PCS… lost or missing mail.

Permanent Change of Station (PCS) 3-9 Enroll in Free Credit Monitoring Another benefit available for eligible Service members is free credit monitoring services from the nationwide credit reporting agencies, shown on the screen.

• Equifax: www.equifax.com/personal/credit-report-services • Experian: www.experian.com/help • TransUnion: www.transunion.com/credit-help

Manage Debt

INSTRUCTOR NOTE: Major Purchases and 5 Rules for Buying a Home Handouts

SLIDE 8 Now let’s move on to debt. Whether you have a lot of debt, a little debt, or no debt at all, how you manage debt can have a profound impact on your finances and well-being.

So, if you are struggling with paying back loans or credit cards, a PCS can often compound the problem. Managing debt smartly boils down to two things: being careful with how much debt you take on in the first place, and then taking a deliberate approach to how you pay it off.

Debt Destroyer Strategies If debt reduction is a goal for you, there are a few strategies that can help you do it efficiently. • The Debt Snowball, is a debt repayment strategy that focuses on paying down your lowest balance, while making minimum payments on all other debt. Once you’ve paid off your lowest balance debt, concentrate additional resources to pay down the next lowest balance debt, until you become completely debt free. • The DebtAvalanche works in a similar fashion, but instead of paying off the lowest balance debt, you concentrate on paying off the highest interest rate debt first, while making minimum payments on the rest. After the highest rate debt is paid off, turn your attention to the next highest rate debt.

Help with either strategy is available through the Personal Financial Managers at your Fleet and Family Support Center (FFSC), installation Family Support Center, or at www.powerpay.org.

Permanent Change of Station (PCS) 3-10 Major Purchases

INSTRUCTOR NOTE: Review the Major Purchases Handout in class and call attention to the section about car buying and vehicle load debt multiplier graph. Remind students that a Car-Buying Strategies class is available for more information.

For those of you who are not focused on paying off debt, but instead are considering taking on new debt, here are some tips. If you are thinking about purchasing a new house or vehicle at your next duty station make sure the payment fits into your new budget.

You may want to consider attending a home-buying seminar or meet with a Personal Financial Manager. With Financial Planning out of the way, let’s turn to PCS Considerations before you move.

PCS Considerations

ACTIVITY: If time permits and is appropriate, poll the class participants about where they are moving for their next assignment. If you are familiar SLIDE 9 with any of the locations, share a story about your experience.

When relocating, it’s common for travel expenses to begin well before you depart. Let’s discuss a few of these obligations.

Before Your Move

INSTRUCTOR NOTE: Refer students to PCS Counselee Checklist.

Let’s begin with housing. SLIDE 10 Housing • House Hunting — You may receive house-hunting leave, but the Department of Defense (DoD) does not pay for the travel and lodging costs associated with that leave. • Moving out — Move-out expenses may include selling costs, dismantling major appliances or play equipment, lawn maintenance, cleaning services, etc.

Permanent Change of Station (PCS) 3-11 Weight Limitations The DoD outlines household goods weight limitations. To check limits specific to your situation, visit https://www.move.mil/. You must pay for items shipped in excess of the DoD weight limitations, so it might be a good time for a garage sale or to sell unused items online. This can help you make a little extra money and lower your shipping weight. Another option is to donate the items to a charity.

Servicemembers Civil Relief Act Review the Servicemembers Civil Relief Act (SCRA) to see if your PCS orders qualify you to break your lease contract on your home, vehicle, or cell phone.

INSTRUCTOR NOTE: Military Consumer Protection Handout

See your base legal office with specific questions unique to your situation.

Vehicles Now let’s talk vehicles. The government only pays for the shipment of ONE vehicle to overseas duty assignments and usually only pays what it would cost to drive one personally owned vehicle from station to station in the U.S. So, if you plan to transport multiple vehicles be prepared for those additional expenses.

For those storing their primary vehicle rather than moving it overseas, the government will pay storage fees up front. There may be exceptions, so learners should check with their command. Note that stored vehicles must remain stored for the duration of the orders authorizing storage.

For those with leased vehicles or if there is a loan, the leasing company or financial institution may not allow movement of the vehicle overseas. You should check with the leasing agent or financial institution before moving the vehicle. The base legal office can advise you about their rights under the Servicemembers Civil Relief Act (SCRA) we mentioned earlier.

Pets Pet owners, you may incur some costs with taking pets to your next duty station. These costs may include immunizations required for overseas travel (quarantine, airline crates, etc.) as appropriate.

Passports Finally, for those moving overseas, be sure to obtain passports and visas when appropriate. There will be costs associated with passports and visas when transferring overseas. The cost for these may be reimbursed with command approval. More information on passport fees and processing times (normally four to six weeks after application) is available on the State Department website https://travel.state.gov/content/travel/en/passports.html.

Permanent Change of Station (PCS) 3-12 Parents who have primary custody of a child who will be relocating overseas with the child may need to obtain consent of the other parent or the approval of the family court. Petitioning for such court approval can be a long process. Refer to your legal office for advice on how to ensure appropriate procedures have been followed.

One additional note on passports: passport applications for children under 16 require the presence of both parents, even if they are estranged.

In Transit

INSTRUCTOR NOTE: Distribute the Estimated Travel Costs for a PCS Move Handout. While most of these normal expenses may be reimbursed or may be covered by the GTCC, it’s important that Service members keep SLIDE 11 all of their receipts. The Handout can be covered in class as an activity if time allows.

Estimated Travel Costs Worksheet The Handout will help you plan and estimate costs associated with traveling to your next duty station. Driving costs, overnight accommodations and food are covered up to certain limitations.

Tax Considerations It’s important to keep all of your receipts related to your move. You may be eligible to deduct some of your unreimbursed PCS moving expenses from your federal income tax return. Most moving costs are covered by military allowances, but you’ll want to save your receipts and log your expenses to calculate any possible deduction at the end of the tax year. Check out IRS Publication 521, Moving Expenses for examples and more details.

After You Arrive

Finally, let’s review a few items to consider once you arrive at your new location.

Initial Expenses SLIDE 12 The first is temporary lodging and food. You will need a place to stay until you find a place to live. It’s a good idea to find a place with cooking appliances and a refrigerator to save money on food expenses while house hunting.

Also be aware of vehicle registration costs and procedures. With a few exceptions, states expect new residents to register their vehicles in that state. Double check the state’s motor vehicle department to find out what the rules are at your new duty station and to find out about military-specific guidelines.

Permanent Change of Station (PCS) 3-13 State Residency The Military Spouses Residency Relief Act (MSRRA) gives the spouse of an active-duty Sailor the option not to change state residency when relocating to a new state due to a PCS. It is important to weigh pros and cons of changing state residency. Changing may not be the best option for a particular person or family because it may impact state income tax, personal property taxes, car registration, and voter registration.

Child Care Child care resources can vary greatly by location. Research your options and plan for changes to your spending plan and child care routines.

Military OneSource’s interactive Military Installations website and MilitaryChildCare.com are both good places to start your research.

Spouse Employment Visit Military OneSource and the Military Spouse Employment partnership website for spouses needing help seeking new employment. The Fleet and Family Support Center’s (FFSC) Family Employment Readiness Program (FERP) can also assist spouses with their employment search from job hunting to resume writing.

Allowances and Entitlements

ACTIVITY: Consider inviting a representative from the Finance Office to discuss the specifics of travel pay and allowances. SLIDE 13 Next we will go over some of the basics on common allowances and entitlements. It’s important to speak with your installation’s Finance Office for the most up-to-date information on travel pay and allowances specific to your situation.

Travel Pay and Allowances

You may receive a number of travel pays and allowances as part of your PCS orders. These may include mileage reimbursement, per diem (to cover hotel and meals), and a dislocation allowance (monies to cover expenses SLIDE 14 not otherwise reimbursed). Other pays and allowances are specific to certain geographic areas, like Overseas Housing Allowance (OHA), Cost-of-Living Adjustment (COLA), and Move-In Housing Allowance (MIHA).

Permanent Change of Station (PCS) 3-14 Based on geographic location, you may also be eligible for Temporary Lodging Expense (TLE) or Temporary Lodging Allowance (TLA). The installation Finance Office, and Move.mil will provide additional information and estimates for reimbursement.

PCS Resources

Government Travel Card You may use your Government Travel Charge Card (GTCC) to cover expenses that will be reimbursed by the government. However, it is important SLIDE 15 to anticipate costs and develop an estimated cost for expenses. You are responsible to pay any overages on the GTCC that are not covered by reimbursement. Remember government travel cards are issued only for official travel-related expenses. Cardholders who misuse their DoD travel cards are subject to administrative or disciplinary action.

Advance Pay Upon receipt of your orders, you may request an advance on pay and Basic Allowance for Housing (BAH), to help cover the extra expenses of relocation due to your PCS move. However, it is important to note that since this is an advance, it MUST BE REPAID over the next 12 months unless your unit commander authorizes a longer repayment term.

Helpful Websites: Move.mil, www.defensetravel.dod.mil, www.saveandinvest.org – search for Money and Mobility, MyNavy Portal, and MyPCS mobile. These are all terrific resources to help plan for a successful PCS.

INSTRUCTOR NOTE: The full website for the Money and Mobility document is https://www.saveandinvest.org/sites/saveandinvest/files/Money-Mobility.pdf.

Permanent Change of Station (PCS) 3-15 Summary and Resources

Let’s take the last couple of minutes we have together to review what we covered today.

SLIDE 16 Summary

We discussed the following topics. Do you have any questions on any of them? • Financial Planning • PCS Considerations: Before, during and after your move SLIDE 17 • Allowances and Entitlements

Resources

Please read through your Checklist and Handouts and refer back to them. They are a great resource to help navigate the financial decisions you’ll need to make. SLIDE 18 You are not alone! You have many layers of support to help you learn more and make good financial decisions.

Thank You

Thank you for participating, and I wish you the best at your next duty station.

SLIDE 19

Permanent Change of Station (PCS) 3-16 PCS VIDEO DISCUSSION GUIDE

PART 1 TTOUCHPOINTC CURRICULUM

CFS Preparation: Distribute and discuss the PCS checklist and accompanying handouts to support this video-based training course. Checklists and handouts can be found online at https:// finred.usalearning.gov/SPL/Training/NavyResource/TouchpointCurriculum.

CFS Intro: Welcome to training. Today’s conversation is on PCS, Permanent Change of Station. Whether it is your first PCS or your fifth, the process can be exciting, stressful, and financially concerning. The goal of today’s discussion is to make sure you take the necessary steps to plan and prepare your finances for your move. The upcoming videos will provide insight on the financial planning aspects of a PCS.

Play Videos 1 & 2

Discussion Questions

1. In the last video you heard firsthand accounts of PCS moves to and from various locations. What are some key takeaways that you plan on implementing before, during, and after your next PCS? CFS Talking Points: Begin budgeting and saving for expected expenses as well as the unexpected ones long before your actual move date. Automate bill payments so there 1. PCS Overview are no worries about missed payments. Keep proper documentation and file your travel claim paperwork as soon as possible. Remember relocation can be stressful on you and your family members. Keep calm and maintain a positive perspective, such as the “adventure” example described in the last video. These gestures can go a long way in ensuring your family makes proper adjustments to the changes in location, culture and schedule.

2. Planning for 2. What are ways you can stay organized and in control of your finances as you prepare a PCS and execute your move? When it comes to saving and budgeting for your move, what are likely expenses that you will incur? CFS Talking Points: Create a PCS binder so all things associated with your move can be stored in one location. Communicate with your spouse and family members to make sure expectations are set and you are all on the same page going forward. Think about expenses in three separate categories: A. Before you move: When you are checking out of your current location — move out fees to include cleaning or damage, partial rent payments, mortgage payments until your home is sold or rented, last payments on utilities if renting (keep receipts when closing out accounts), continued utilities if you own your home, canceling cable, cellphones (will SCRA apply?), security system, additional dining out if your cookware is all packed, bucket list items of things you want to do prior to leaving your current location, veterinary expenses especially if moving overseas, additional vehicle gas if the check-out process is extensive, vehicle maintenance/repairs in preparation for the drive, additional lodging costs if staying in temporary lodging for an extended period of time, replacement of gear prior to checking out.

PCS Discussion Guide, Pg. 1 B. During the move: Gasoline for car(s), food, additional lodging, excess baggage fees, (are you and your family traveling separately?), pet travel fees C. After your move: Rental deposits, utility deposits, replacing household items, restocking the pantry, additional food costs until your household shipment arrives, appropriate clothing for the weather at your new location (island life to frozen tundra), auto insurance changes for new state, rental insurance updates, startup tuition for child care/private school, school supplies and fees, pet quarantine (overseas) CFS Note: Have audience write out a personal list and ask for participation as these expenses can be unique to the individual as examples listed above are not all-inclusive.

Knowledge Check

Question: Who should you talk to for moving entitlement clarification? Answer: Installation Finance Office You can also visit your installation’s Family Center to discuss relocation expectations with a PFM or Relocation Specialist.

PART 2: Before PCS

CFS Intro: As we have discussed, there are a lot of different ways that you can plan for your move so that your PCS does not disrupt your financial plans and the progress you have made. Let’s see a further breakdown of possible scenarios and expenses. Be sure to take note of specific costs you anticipate you or your family incurring, and use resources like the “Plan My Move” checklist from Military OneSource.

Play Videos 3, 4, 5 & 6

Discussion Questions

1. Were any housing-specific costs mentioned and explained in the videos that surprised you? CFS Note: As presented in the video, go through the 5 major housing expenses and encourage conversation. Create a list of answers on white-board/chart paper.

3. Financial CFS Talking Points: Planning A. Cleaning, maintenance, and disassembling B. Breaking a rental contract or lease C. Excess shipping or storing costs D. Insurance E. House hunting

4. Housing 2. Let’s review the common vehicle expenses associated with PCS. What specific Expenses expenses are you going to have prior, during, or after your PCS?

PCS Discussion Guide, Pg. 2 CFS Talking Points: A. Number of vehicles — Do you have a second vehicle that the costs of transporting will not be funded or reimbursed? B. Insurance — Now is a good time to contact your insurance company. C. Maintenance — Whether you plan on driving, shipping, or storing your vehicle, make sure your regularly scheduled maintenance is taken care of. 5. Vehicle Expenses D. Vehicles stay behind? Will you have transportation? How will it be paid? Where will your vehicles stay? Will you be leaving your car with family or friends? What implications can this have? How will you insure your car is taken care of? E. Leases — Are you able to break the lease with SCRA?

OCONUS considerations: • 6. Miscellaneous Purchasing maintenance-related parts Expenses • Storage • Lease/financed vehicle • Rental insurance may need to be obtained before leaving US address

3. As we all know, miscellaneous expenses, both large and small add up. It’s important to be prepared so that you are not caught off guard. Having been through a PCS before, I want to discuss and get your feedback on estimates of a few costs that you may incur: CFS Note: Be prepared to discuss current costs; share resources from www.bestplaces.net or www.bankrate.com for Cost of Living in different locations.

CFS Talking Points: Who here has a favorite local restaurant? Are you planning to eat there for a week straight before you leave? What about pets? Do your pets need a visit to your neighborhood vet before you depart? For those going overseas — do you and all your family members have a valid passport? Do the kids need another round of shots before moving? It may take some time to get settled and checked in and assigned a PCM at your new duty location so in order to avoid stress and additional costs make sure you and your family have enough prescription medication to cover the potential gap.

Knowledge Check

Question: Whom should you contact if you have questions about shipping allowance or entitlements for storage?

Answer: Travel Management Office

PCS Discussion Guide, Pg. 3 PART 3: During PCS

Play Videos 7, 8 & 9

Discussion Question

How will you keep track of your PCS receipts? How will you tally the total cost? 7. Recap: Expenses Before CFS Talking Points: a PCS Move • Use your PCS binder as the one location to keep all documents. Separate your receipts for gas and maintenance, lodging, food and miscellaneous expenses in different envelopes to make them easier to locate when you do your travel claim. Take pictures of your receipts. • For further documentation of costs, have a notebook to jot down all expenses; use 8. During PCS: Food & Misc. the notes section of your phone to tally costs especially if you are using your debit Expenses or credit card to pay these costs up front. • Notify your bank that you are traveling to avoid having your accounts put on hold for suspicious activity. Continually check your accounts while traveling to verify purchases.

9. Recap: Expenses During PCS

PCS Discussion Guide, Pg. 4 PART 4: After PCS

CFS Intro: You’ve made it! You have arrived! Now it’s time to get settled at your new location. The next video will discuss costs that may occur after you arrive.

Play Video 10

Discussion Questions

1. In addition to your security deposit and possibly first month’s rent, what expenses do you think you will have when moving into your new home? CFS Talking Points: Pantry and grocery items, curtains to fit windows if they are a different size than your last home, cleaning supplies (mop, broom, scrub brush), toilet 10. After PCS: paper, paper towels, laundry items, candles, air fresheners, home decor (front door Housing mat, rugs, couch pillows, bed pillows, etc.)

2. What ways can you save on utility deposits? CFS Talking Points: Call ahead as utility companies may waive fees for Service members, or accept letters of reference from the previous provider. Check with your bank or credit union to see if they participate in a utility deposit program.

3. You may be surprised that moving to a new location may require you to update your vehicle registration and insurance. What ways can you prepare to make sure you have the appropriate documents and have funds set aside to cover these expenses? CFS Talking Points: Visit state's DMV site; call ahead to the local DMW if required to update registration; contact your insurance provider for information and quote; if not satisfied with current insurance or premium contact other insurance companies for quotes — be sure your new policy is in place before canceling your old one.

Knowledge Check

Question: What Act may allow you to terminate your cellphone plan based on your orders?

Answer: SCRA — Servicemember Credit Relief Act

PCS Discussion Guide, Pg. 5 PART 5

CFS Intro: We will now go over some best practices, resources, and then recap.

Play Videos 11, 12 & 13

Discussion Questions

CFS Talking Points: These tips are helpful to consider. Act on those that are appropriate 11. PCS Best for your situation. Are there any best practices that you had not considerd prior to today’s Practices training? CFS Note: Encourage conversation drawing on experiences and curiosity of students.

12. Money Tips Knowledge Check

Question: If choosing to take a Pay Advance, what is the standard repayment time?

13. PCS Answer: 12 months Resources

Play Video 14

Discussion Questions

We have completed today’s training and want to hear feedback. How has this better 14. Recap prepared you for your upcoming PCS? Resources CFS Talking Points: Based on the information provided, what will you do differently in your preparation for this PCS? Will you allocate more money to savings to aid in your transfer? Remember to break the process down into three separate sections: before PCS, during PCS, and after PCS. This will help you stay organized, focused and on track with your spending.

CFS Notes: Allow time for questions.

Catalog ID: OPNAV-PCSFRT-1.0 — (Updated December 2020) PCS Discussion Guide, Pg. 6 Permanent Change of Station (PCS) Presentation TC 3

Permanent Change of Station (PCS)

Agenda

• Financial Planning • PCS Considerations ü Before Your Move ü In Transit ü After You Arrive • Allowances and Entitlements • Resources

Permanent Change of Station (PCS) Counselee Checklist Available

2 Financial Planning

Create / Manage a Spending Plan

Spending Plan Worksheet Handout Available * Pretax income

4 Estimate Changes to Income

• Basic Allowance for Housing (BAH) • Overseas Housing Allowance (OHA) • Cost of Living Allowance (COLA) • Family Separation Allowance (FSA) • Family Subsistence Supplemental Allowance (FSSA) • Special and Incentive Pays • Spousal Income

www.defensetravel.dod.mil/site/allcalc.cfm

Estimate Changes to Expenses

• Housing • Child care • Transportation costs • Groceries • Utilities • Additional household items • Home and auto insurance • Income taxes

6 Protect Your Credit

• Notify financial institutions • Set up automatic payments • Check your credit • Update your address • Enroll in free credit monitoring

Understanding Credit Handout Available

Manage Debt

• Debt Destroyer strategies ü Snowball ü Avalanche

• Major purchases ü Housing ü Vehicles

Major Purchases and 5 Rules for Buying a Home Handouts Available

8 PCS Considerations

Before Your Move

• Housing ü House hunting ü Moving out • Weight limitations • Servicemembers Civil Relief Act (SCRA) • Vehicles • Pets • Passports

PCS Counselee Checklist and Military Consumer Protection Handout Available

10 In Transit

• Estimated Travel Costs for a PCS Move Worksheet

• Tax considerations

Estimated Travel Costs for a PCS Move Handout Available

After You Arrive

• Initial expenses • State residency • Child care • Spouse employment

12 Allowances and Entitlements

Travel Pay and Allowances

Allowance Purpose Mileage reimbursement Offset driving costs Per diem Cover hotel and meals Dislocation allowance Cover expenses not otherwise reimbursed

Other Pay and Allowances (Location Specific)

OHA Overseas Housing Allowance MIHA Move-in Housing Allowance TLA Temporary Lodging Allowance

14 PCS Resources

• Government Travel Charge Card (GTCC)

• Advance pay

• Websites and mobile app ü Move.mil ü MyNavy Portal (mynavy.mil) ü MyPCS Mobile

Summary and Resources

16 Summary

Congratulations on your upcoming move to your next duty station! Along with new adventure opportunities, a Permanent Change of Station can add many additional expenses. Preparation and planning can help alleviate the stress of spending more than you can afford. Let’s wrap all the topics we talked about today: ü Financial Planning ü PCS Considerations o Before Your Move o In Transit o After You Arrive ü Allowances and Entitlements ü PCS Resources

Resources

• Checklist and Handouts

18 Thank You!

The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

19 • Student Manual • Counselor (PFM/CFS) Checklist • Counselee Checklist • Instructor Guide • Video Discussion Guide • PowerPoint Slides

TC 4 Promotion Promotion Student Manual TC 4 SM I. INTRODUCTION

After completing this chapter, you will have the resources and tools to assist Service members with making financial decisions when getting a promotion. As their career takes off, it is a great time to help them review their finances and set a path toward a successful and prosperous future.

You will have the unique opportunity as the Command Financial Specialist to guide your Service members to plan ahead and make knowledgeable financial decisions. Use the resources provided in this student manual as a solutions-focused tool to help your counselee manage their money, explore how their military experience will translate into civilian credentials, establish priorities, plan their financial future, and develop a career action plan.

II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

1. TLO: Understand the fundamentals of creating and managing a spending plan, and the importance of updating a spending plan. ELOs: Update personal spending plan. Understand changes in income related to promotion. Identify options for increased income, to include paying off debt and managing credit. 2. TLO: Understand future financial benefits afforded by the Department’s Career Investment Programs. ELO: Know the education and training benefits that are available to help you advance in your career such as Apprenticeships, Certifications and Tuition Assistance. 3. TLO: Recognize the importance of and be able to develop savings and an emergency fund. ELO: Re-evaluate savings goals and status. 4. TLO: Understand and be able to manage a Thrift Savings Plan (TSP) account. ELO: Understand how an increase in pay affects TSP contributions.

Promotion 4-1 III. REFERENCES

• Office of Financial Readiness (FINRED) — https://finred.usalearning.gov • Military Compensation — https://militarypay.defense.gov/Pay/Tax-Information/CZTE https://militarypay.defense.gov/Benefits/Thrift-Savings-Plan https://militarypay.defense.gov/Pay/Tax-Information https://militarypay.defense.gov/Benefits/Savings-Deposit-Program • Free annual credit report — https://www.annualcreditreport.com • Department of Veterans Affairs (VA) — https://www.benefits.va.gov • Department of Veterans Affairs (VA) Education and Training benefits — https://www.benefits.va.gov/gibill/tuition_assistance.asp • Defense Activity for Non-Traditional Education Support (DANTES) — https://www.dantes.doded.mil/index.html • Department of Defense Tuition Assistance (TA) program — https://www.dantes.doded.mil/FinancialAid/MilitaryTuitionAssistance.html • Thrift Savings Plan (TSP) — https://www.tsp.gov • USA.gov — https://www.usa.gov/saving-investing • U.S. Securities and Exchange Commission (SEC) — https://www.investor.gov • Internal Revenue Service (IRS) — https://www.irs.gov, https://www.irs.gov/newsroom/combat-zones) • Consumer Financial Protection Bureau (CFPB) — https://www.consumerfinance.gov • Federal Trade Commission (FTC) Consumer Information — https://www.consumer.ftc.gov • Defense Finance and Accounting Service (DFAS) — https://www.dfas.mil/militarymembers/payentitlements/sdp.html • Federal Deposit Insurance Corporation (FDIC) — https://www.fdic.gov • National Credit Union Administration (NCUA) — https://www.ncua.gov • Treasury Direct — https://www.savingsbonds.gov • USA.gov — https://www.usa.gov/saving-investing • Compound Interest Calculator — https://www.investor.gov/additional-resources/free-financial- planning-tools/compound-interest-calculator • milSuite — https://www.milsuite.mil/book/groups/cnic-personal-financial-management-program-wfl • CNIC Touchpoint Curriculum — https://www.cnic.navy.mil/ffr/family_readiness/fleet_and_family_support_program/work-and- family-life/personal_finances/pfm-touchpoint-checklists.html

Promotion 4-2 IV. ACRONYMS AND ABBREVIATIONS

Acronym/Abbreviation Full Name Definition

LES Leave and Earnings This monthly single-page report Statement details members’ eligible pay and allowances, payroll deductions and leave balances.

TSP Thrift Savings Plan The Thrift Savings Plan is a retirement savings and investment plan for federal employees and members of the Uniformed Services, including the Ready Reserve.

Promotion 4-3 V. TOUCHPOINT TOOLBOX: MATERIALS AND RESOURCES TO TEACH TOPIC

All materials are available on PFM milSuite, CNIC and FINRED websites (listed above), and DVD. Links to curriculum may change or vary locally.

1. One-on-One Counseling Checklists and Handouts (Service Specific) • Promotion CFS/PFM Checklist • Promotion Counselee Checklist

Handouts: • Spending Plan Worksheet Handout • Understanding Credit Handout • Thrift Savings Plan Handout

2. Classroom Training Materials (Service Specific) All materials available on disc, or PFM milSuite and CNIC websites. Links to curriculum may change or vary locally. • Promotion Touchpoint Checklists and Handouts • Promotion PowerPoint (PPT) Training slides and Instructor Guide (IG) • Promotion Videos and Video Discussion Guides (VDG)

3. Online Training • Promotion course (Navy e-Learning, My Navy Portal or your service-specific e-Learning site)

Promotion 4-4 VI. ADDITIONAL LEARNING AND ACTIVITIES

Getting a promotion is an important and exciting moment for every Service member. They should take advantage of this opportunity to take a look at their finances and cash flow and establish short- and long-term financial goals. They should use the resources available to them to develop themselves and plan their financial and professional future.

Here are some activities to have with your audience: • Complete the Spending Plan Worksheet Handout • Encourage them to seek assistance from a Personal Financial Manager at their (service-specific) Family Support Center. • Review funds available in TSP through exploration of tsp.gov under “Fund Options”

Encourage Service members to attend PFM Standard Curriculum courses at the local installation family service center to learn more about financial considerations for this Touchpoint. • Developing Your Spending Plan • Thrift Savings Plan • Saving and Investing • Car-Buying Strategies

Promotion 4-5 PROMOTION

ContinuationCFS/PFM Pay: CHECKLIST Plot Your Path toNAVY FINANCIAL $uccess READINESS

Congratulations on your promotion! As your career takes off, HANDOUTS it's a great time to review your finances and set a course toward a more prosperous future. This checklist, supplemented with  Spending Plan Worksheet information and referrals made by the Fleet and Family Support  Understanding Credit Center staff, can help you organize and efficiently work through  Thrift Savings Plan many of the financial questions you might have about your situation.

Counselor: Use this checklist and the listed handouts as a solution-focused tool to help Sailors, in a classroom setting or counseling session, set goals, establish priorities, and develop a plan of action. Space is provided to add local resources and reminders about additional topics. If you need additional information and referrals, contact your local Fleet and Family Support Center (FFSC) staff.

BASIC FINANCE

 Update your personal spending plan using the "Spending Plan Worksheet." A good spending plan helps you manage your money, plan for your financial goals, and prepare for emergencies. Here are four steps financial experts suggest to get started. Counselor: Inform counselees that you can provide a “Spending Plan Worksheet” as well as more detailed templates with features that can help them understand their financial situation and reduce excessive debt.

Step 2: Know where your money should go. Financial experts offer these general guidelines when budgeting your money: • Save and/or invest 10% – 15% of pretax pay. • Strive to keep transportation expenses including car payments, insurance, gas and maintenance to 15% – 20% of pretax pay. • Limit housing expenses, including mortgage or rent payment, taxes, utilities, and maintenance to your Basic Allowance for Housing or 25% of pretax pay.

Step 3: Create a plan. Build a plan for setting aside money and putting limits on how much you’ll spend each month per category. • Prioritize your financial goals. • Establish an emergency fund. Financial experts suggest you should keep at least three to six months of living expenses in reserve. If you do not have that much saved, consider using some of your pay raise to help get you there.

PROMOTION - PAGE 1 Counselor: Share with counselees the concepts of paying yourself first, automating savings, and keeping their emergency fund in a separate account. Remind counselees they can make saving effortless by setting up an automatic transfer through their bank or an allotment, time permitting.

Step 4: Make adjustments. Update your spending plan as your life changes. Monitor your plan until you have fully adjusted your finances to reflect your new situation.

______

COMPENSATION, BENEFITS, AND ENTITLEMENTS

Tip 1: Look into whether your military career offers a registered apprenticeship for your Navy rating or skills you may have. Visit the United Services Military Apprenticeship Program (USMAP) website to identify and register for apprenticeships, track progress, and report completion of apprenticeships. Learn more: https:// dodcareerready.usalearning.gov/service_members/apprenticeships.

Tip 2: Determine if your military experience translates into a civilian credential. Turn your military experience into certifications and licensing by visiting the Department of Navy Credentialing Opportunities Online (COOL) website: https://www.cool.navy.mil/.

Tip 3: Explore eligibility for tuition assistance. Did you know that you could qualify for tuition assistance to pursue your education and potentially increase your earning potential? Learn more about all the opportunities at the Department of Defense Career Ready Portal: https://dodcareerready.usalearning.gov/ service_members/tuition_assistance. Counselor: For more information on these programs, visit https://dodcareerready.usalearning.gov/ service_members and discuss the programs, future career goals, and how building skills and gaining education can increase their earning power. Refer Sailors to the Transition Assistance and Employment Readiness programs, as needed. Additional notes: ______

______

PROMOTION - PAGE 2 SAVING AND INVESTING

 Establish an emergency fund. Financial experts suggest you should keep at least three to six months of living expenses in reserve. If you do not have that much saved, consider setting aside a little each paycheck to help get you there.  Evaluate your retirement goals and review Thrift Savings Plan (TSP) annual contribution limits. The pay increase that comes with a promotion is a great opportunity to boost your retirement savings. • Review the "Thrift Savings Plan" handout that accompanies this checklist. • Consider increasing your contributions toward retirement. • Visit tsp.gov to learn more about investment choices and annual contribution limits. • Understand the benefits of automatic and matching contributions under the Blended Retirement System (BRS). Sailors covered by the BRS should consider contributing at least 5% of basic pay to their TSP to take full advantage of service matching contributions.

 Log on to myPay at mypaydfas.mil to start, stop, or change the contribution amounts and tax treatment (Roth or Traditional) to your TSP. Keep your mailing address and contact information up to date.

 Log on to your TSP account at TSP.gov to manage current and future investment choices. Note: You will need your account number to log on to the website. If you have misplaced or lost your account number, visit tsp.gov/tsp/forgottenAccount.html to request the account number be mailed to you. Verify your address in myPay first and pay attention to the effective date.

 Review and update beneficiaries for your TSP account, if applicable. Counselor: Refer counselees to the TSP.gov website to complete Form TSP-3 Designation of Beneficiary form to update beneficiaries.

 Update contact information for your TSP account, if applicable. Additional notes: ______

______

Updated August 2020 / Course ID: OPNAV-PFRT-1.0 PROMOTION - PAGE 3 PROMOTION

NAVY FINANCIAL READINESS ContinuationMY Pay:CHECKLIST Plot Your Path to $uccess

Congratulations on your promotion! As your career takes off, HANDOUTS it's a great time to review your finances and set a course toward a more prosperous future. This checklist, supplemented with information  Spending Plan Worksheet and referrals made by the Fleet and Family Support Center staff, can  Understanding Credit help you organize and efficiently work through many of the financial  Thrift Savings Plan questions you might have about your situation.

BASIC FINANCE

 Update your personal spending plan using the "Spending Plan Worksheet." A good spending plan helps you manage your money, plan for your financial goals, and prepare for emergencies. Here are four steps financial experts suggest to get started. Step 1: Understand your current situation. In this step, it’s important to understand what’s REALLY going on with your money today. Start tracking all your income and spending for the next 30 days. How you do the tracking is up to you, but what’s important is you do it. Step 2: Know where your money should go. Financial experts offer these general guidelines when budgeting your money: • Save and/or invest 10% – 15% of pretax pay. • Strive to keep transportation expenses including car payments, insurance, gas and maintenance to 15% – 20% of pretax pay. • Limit housing expenses, including mortgage or rent payment, taxes, utilities, and maintenance to your Basic Allowance for Housing or 25% of pretax pay.

Step 3: Create a plan. Build a plan for setting aside money and putting limits on how much you’ll spend each month per category. • Prioritize your financial goals. • Establish an emergency fund. Financial experts suggest you should keep at least three to six months of living expenses in reserve. If you do not have that much saved, consider using some of your pay raise to help get you there.

Step 4: Make adjustments. Update your spending plan as your life changes. Monitor your plan until you have fully adjusted your finances to reflect your new situation.

PROMOTION - PAGE 1 COMPENSATION, BENEFITS, AND ENTITLEMENTS

 Invest in your future marketability. There’s no time like the present — while you have a reliable job and paycheck — to explore how you can develop yourself professionally. Prepare your career for transition from the military to the civilian sector, and improve potential upward mobility and greater earning power with these tips from the DoD Career Ready Portal at https://dodcareerready.usalearning.gov/. Tip 1: Look into whether your military career offers a registered apprenticeship for your Navy rating or skills you may have. Visit the United Services Military Apprenticeship Program (USMAP) website to identify and register for apprenticeships, track progress, and report completion of apprenticeships. Learn more: https:// dodcareerready.usalearning.gov/service_members/apprenticeships. Tip 2: Determine if your military experience translates into a civilian credential. Turn your military experience into certifications and licensing by visiting the Department of Navy Credentialing Opportunities Online (COOL) website: https://www.cool.navy.mil/. Tip 3: Explore eligibility for tuition assistance. Did you know that you could qualify for tuition assistance to pursue your education and potentially increase your earning potential? Learn more about all the opportunities at the Department of Defense Career Ready Portal: https://dodcareerready.usalearning.gov/ service_members/tuition_assistance.

SAVING AND INVESTING

 Evaluate your retirement goals and review Thrift Savings Plan (TSP) annual contribution limits. The pay increase that comes with a promotion is a great opportunity to boost your retirement savings. • Review the "Thrift Savings Plan" handout that accompanies this checklist. • Consider increasing your contributions toward retirement. • Visit tsp.gov to learn more about investment choices and annual contribution limits. • Understand the benefits of automatic and matching contributions under the Blended Retirement System (BRS). Sailors covered by the BRS should consider contributing at least 5% of basic pay to their TSP to take full advantage of service matching contributions.

PROMOTION - PAGE 2  Log on to myPay at mypaydfas.mil to start, stop, or change the contribution amounts and tax treatment (Roth or Traditional) to your TSP. Keep your mailing address and contact information up to date.

 Review and update beneficiaries for your TSP account, if applicable.

 Update contact information for your TSP account, if applicable.

Additional notes: ______

______

CFS/PFM Printed Name Counselee Printed Name

______Signature Date Signature Date

Updated August 2020 / Course ID: OPNAV-PFRT-1.0 PROMOTION - PAGE 3 Promotion Instructor Guide TC 4 IG I. COURSE ORGANIZATION AND OUTLINE

The Promotion course is organized into five parts:

1. Introduction and Agenda • Welcome • Facilitator Introduction • Review of Agenda

2. Financial Planning • Setting SMART Goals • Spending Plan • Your Credit Reputation

3. Saving for Retirement • Who Wants to Be a Millionaire? Thrift Savings Plan (TSP) Managing Your TSP

4. Career Investment Programs • United Services Military Apprenticeship Program (USMAP) • Credentialing Opportunities On-Line (COOL) • Tuition Assistance

5. Summary and Resources

TOTAL: 60 minutes

Promotion 4-1 II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

Promotion 4-2 III. CHAPTER PREPARATION

CONTENT ICONS — The following icons are used throughout the guide:

Instructor Note INSTRUCTOR NOTE: (indicates additional information related to the content for the instructor)

Checklist and Handout (indicates a Checklist or Handout is associated with the content)

Learning Activity (indicates a learning activity)

INSTRUCTOR NOTE: Being prepared for training promotes organization, projects a positive image, and reduces stress.

Be prepared to discuss each Checklist and Handout in class. You should familiarize yourself with this content so you can effectively discuss each document during your presentation.

While this guide is written as a script, avoid reading it word-for-word. Familiarize yourself ahead of time so you feel comfortable covering the material in your own words.

Throughout the presentation, the Checklist or Handouts will be identified with an icon on the PowerPoint and an Instructor Note in this Instructor Guide.

Promotion 4-3 Materials and Equipment: • Projector/screen • Promotion course PowerPoint slides • Chart paper and easel or whiteboard and markers • Paper, pens, pencils • Course sign-in sheet • Course evaluations

Forms and Handouts: • Promotion Checklist • Spending Plan Worksheet Handout • Understanding Credit Handout • Thrift Savings Plan Handout

Promotion 4-4 IV. CONTENT Introduction

Facilitator Introduction Introduce yourself by providing: Hello, my name is . I am a . (Describe your experience as a facilitator or with personal financial SLIDE 1 management.)

The information I’ll provide over the next 60 minutes will help you organize your finances and make the most of your recent promotion.

Agenda

Congratulations to everyone here today on your recent promotion! As your career advances, it’s a great time to hit the pause button and review your finances to set yourself up for a more successful, prosperous future. SLIDE 2 In this training, we will cover four main topics, they are: • Financial Planning • Saving for Retirement • Career Investment Programs • Resources

Financial Planning

ACTIVITY: How many of you already know how you will be spending your pay increase? (Take note of the types of responses and use them as examples throughout the course.) SLIDE 3

Promotion 4-5 Planning for Success

Some of you already have big plans for your pay raise, but let’s take a step back and look at the big picture. For those planning to save, invest, or make a major purchase, have you really analyzed how you will accomplish these SLIDE 4 goals? A good way to set yourself up for success is to use SMART Goals. SMART stands for Specific, Measurable, Achievable, Relevant and Time-bound. Use this method to define your goals.

INSTRUCTOR NOTE: Demonstrate how to create a SMART Goal using a goal from one of the attendees, or use the example provided.

Let me give you an example.

What if I say, “I want to build up my emergency savings?” Is that a SMART Goal?

No. It is not specific or measurable and there is no deadline.

A SMART Goal is more like: “Six months from today, I want to have $1,800 in my emergency savings account. I will save $75 per week by taking my lunch to work and making my own coffee in the morning.”

Here are a few example goals; remember to make them SMART. • If you have a lot of debt, or any debt with a high interest rate, it may be a good idea to make eliminating or reducing that debt your top priority. • You may also want to save more for retirement or for a near-term goal like a down payment on a house. • Each of us should have an emergency fund. That’s money you keep available in a liquid, interest-paying account so you can handle unexpected expenses like repairs or insurance deductibles.

Once you’ve determined how much you need to save monthly to achieve your goals, consider automating your savings to make it easier.

ACTIVITY: Challenge attendees to write down as many of their financial goals as they can in 60 seconds. Some examples may include: pay down debt, build an emergency fund, save for retirement.

Promotion 4-6 Spending Plans

A spending plan is a great way to map out all your current income and expenses, including everything from bills and debt payments to retirement plan contributions. SLIDE 5 In addition to giving you a clear picture of where you stand, a spending plan also lets you set goals for how you use your money each month. For example, you can plan to decrease spending on some items, and use the extra money to pursue goals such as paying down debt or saving for the future.

INSTRUCTOR NOTE: Distribute Spending Plan Worksheet Handout and Promotion Checklist.

Step 1: Know Your Current Situation Knowing where your money is going now can help you determine whether these expenses need to remain as is or adjustments are needed. Track all of your cash inflows(including your pay increase) and outflows for the next 30 days or look back at the previous 30 days. You can record it any way you want — by pen and paper, on a spreadsheet on the computer or on your phone. The important thing here is to do it for the full 30 days.

Step 2: Know Where Your Money Should Go Once you know where your money is going, you then need to understand where it should go. There are general rules/guidelines that experts suggest: • Save and/or invest 10% – 15% of pretax pay. • Keep transportation expenses, including car payments, insurance, gas and maintenance, to 15% – 20% of pretax pay. • Housing expenses, including mortgage or rent payment, taxes, utilities, maintenance, etc. should be limited to your Basic Allowance for Housing (BAH) or to 25% of pretax pay.

Step 3: Create a Plan Now that you know how much you are spending, where it’s going and where it should be going, it’s time to create your plan.

It’s a good idea to prioritize your financial goals as we discussed earlier. Next, you need to get into the habit of paying yourself first. If you are not already allocating a portion of your income toward savings or investments, this may be a good time. Automate savings and keep funds in a separate account to help you stick with your plan and avoid temptations to spend.

Promotion 4-7 If you haven’t already done so, strongly consider building an emergency fund. This “just-in-case” account is designed for your peace of mind during emergencies and keeps you from going into debt and/or depleting money you have set aside for other goals. Experts suggest, a minimum of $1,000 with a goal of 3–6 months of living expenses. If you need to tap into your emergency fund, try to replenish it quickly.

ACTIVITY: Ask attendees to think of some examples of unexpected expenses that an emergency fund could help cover. Answers may include: vehicle repairs, home repairs, insurance deductibles, appliance replacements, travel on short notice, spouse loses job.

Step 4: Make Adjustments As your life circumstances change, your spending plan needs to adjust as well. Major life events like marriage, birth of a new child, divorce or promotion could affect your spending plan, so review it regularly.

Your Credit Reputation

Up next, let’s talk about your credit reputation. Why does it matter? Your credit reputation impacts your security clearance. It also impacts your ability to get approved for a loan and how much interest you’ll pay. If your promotion plans SLIDE 6 include making a major purchase or to pay back debt, then it makes sense to review your credit.

Check your three major credit reports for free at www.annualcreditreport.com. Make sure all the information is correct and dispute errors if needed.

Another benefit available for eligible Service members is free credit monitoring services from the nationwide credit reporting agencies shown on the screen. • Equifax: www.equifax.com/personal/credit-report-services • Experian: www.experian.com/help • TransUnion: www.transunion.com/credit-help

INSTRUCTOR NOTE: Understanding Credit Handout

Finally, review the Understanding Credit Handout for more information about credit reports, credit scores and tips on improving your credit.

Promotion 4-8 Saving for Retirement

Retirement is one of the most important goals any of us will save for. It’s also one of the most expensive. And unlike other goals, we typically don’t get a second chance to get this one right. SLIDE 7 ACTIVITY: This slide can be turned into a learning activity “Who Wants to Be a Millionaire?” Ask the class to estimate the amounts required to invest at each age to reach $1 million. The closest guess without going over is the winner.

Start Saving Early: How to Be a Millionaire

Compounding (which you might hear called “compound interest” or “compound earnings”) is when the dollars you save or invest accumulate earnings of their own. SLIDE 8 Let’s think about one goal worth consideration: your retirement. How much you need to save for retirement depends on a variety of factors, but it’s best to start saving as soon as possible so time is on your side. For example, how much would you have to save to have a million dollars at retirement?

Assuming “retirement” is age 65 and interest is 8%, it would take the following to have a million dollars:

• $190/month for 45 years (starting at age 20) Cumulative invested: $102,600 Cumulative compound interest: $899,563 Total: $1,002,163

• $290/month for 40 years (starting at age 25) Cumulative invested: $139,200 Cumulative compound interest: $873,192 Total: $1,012,392

• $675/month for 30 years (starting at age 35) Cumulative invested: $243,000 Cumulative compound interest: $762,993 Total: $1,005,993

• $1,700/month for 20 years (starting at age 45) Cumulative invested: $408,000 Cumulative compound interest: $593,335 Total: $1,001,335

Although both savings and investments accumulate compound interest or earnings, the return rate for investments is usually much higher than a savings account. But with the higher returns comes higher risk.

Promotion 4-9 Thrift Savings Plan

INSTRUCTOR NOTE: Thrift Savings Plan Handout

To plan appropriately, you should be aware and understand the resources SLIDE 9 available to help save for retirement. One important resource is the Thrift Savings Plan.

• The TSP is a Defined Contribution Plan. This means Service members who participate in the TSP contribute a fixed amount or a percentage of their paychecks to an account that is intended to fund their retirements. For those covered under BRS, you will also receive automatic and matching contributions as soon as you are eligible. All uniformed Service members have the opportunity to participate in the Thrift Savings Plan. The TSP is a long-term, government-sponsored retirement savings plan, which is similar to 401(k) plans offered to private sector employees. • The TSP is Professionally Managed. The Federal Retirement Investment Board, who contracts with BlackRock Institutional Trust Company (N.A.) (BlackRock) to manage many of the fund’s assets, professionally manages the Thrift Savings Plan. • There are many benefits to participating in the TSP: Minimal administrative fees – .043% per $1,000 managed, roughly $.43/$1,000 – an average 401(k) charges up to 1% Automatic deductions – it comes right out of the paycheck before you even see it Automatic and matching contributions for those covered under the Blended Retirement System (BRS) Traditional and Roth Options – There are options to contribute pretax (Traditional) or post-tax (Roth) contributions (use the Thrift Savings Plan Handout to explain the differences) Many investment funds – There are numerous investment choices and these are outlined on the Thrift Savings Plan Handout and at www.tsp.gov.

Promotion 4-10 TSP Contributions

• Contribution Limits Elective Deferral Limit — It doesn’t matter whether you’re covered under the Blended Retirement System (BRS) or SLIDE 10 Legacy “High-3” Retirement System, you can save up to $19,500* for 2020 into your TSP. This is called the elective deferral limit. Under certain situations, this limit may be higher, so see tsp.gov for more information. The elective deferral limit of $19,500* (2020) applies to the combined total of Traditional and Roth contributions. Combat Zone Tax Exclusion = $57,000 for 2020 — The annual addition limit is $57,000 (2020). This limit is per service and includes Service member contributions (tax-deferred, after-tax, and tax-exempt), automatic 1% contributions, and matching contributions. Catch-up = $6,500 for 2020 — The catch-up contribution limit is $6,500.

• Traditional vs. Roth So, how do you decide between contributing to the Traditional or Roth option in your TSP account?

If you want to lower current taxes and defer them until retirement, select Traditional contributions. Alternatively, select Roth contributions if you’d prefer to pay taxes on your contributions now and avoid taxes on qualified withdrawals in the future.

• Matching Contributions For those covered under the BRS, it’s important to contribute at least 5% of your basic pay to your TSP to take full advantage of the match available from your service. If you contribute less than 5%, you are essentially giving away free money, because you are not taking full advantage of matching contributions.

Promotion 4-11 Managing Your TSP

Now let’s focus on how to manage your TSP account. There are two locations to manage different aspects of your Thrift Savings Plan. • Start at myPay or Direct Access SLIDE 11 Here is where you will identify your contribution amounts and from which pay source you want your contribution to be withdrawn (base pay, special pays, etc.) You’ll also identify if you want your contributions to be fully Roth, Traditional or a combination of both Maintain your address here to ensure receipt of statements and other important communications from TSP.

• You’ll want to log into tsp.gov to continue management of your TSP account. You will need your account number. If you have misplaced or lost your TSP account number, visit www.tsp.gov/tsp/forgottenaccount.html to request that the account number be mailed to you. Verify your address in myPay first. Once inside your account, review your beneficiary designations and update them as needed. You should also update your contact information, especially if you have moved recently. • In additional to these housekeeping items, take some time to review your investment choices and your future allocation. Make sure your investments align to your retirement goals and risk tolerance.

The TSP has investment options at all different levels of risk. You can review these options at tsp.gov as well as the Thrift Savings Plan Handout.

Career Investment Programs

Your promotion is a great time to start thinking about your next promotion. Prepare both personally and professionally by taking advantage of the education and training benefits the military provides. SLIDE 12

Promotion 4-12 Career Investment Programs

• Invest in Your Future Marketability Whether you plan on retiring from the military or transitioning after a few years to the civilian sector, developing yourself professionally will SLIDE 13 help you advance in your career and increase your earning potential.

Take your career into your own hands and visit the DoD Career Ready Portal online to review all the available programs.

• Apprenticeships Start by looking into the United States Military Apprenticeship to register for apprenticeships related to your grade (MOS). These programs help to expand your career options and build on your military experience. Certificates of Completion are given by the Department of Labor and they are nationally recognized and can be an advantage in getting a better job in the future.

• Certifications Next, check to see if your military experience will translate into a civilian credential. Being a Service member, you’ve been trained with special skills and your knowledge, education and experience are very valuable in the civilian world.

The Credentialing Opportunities On-Line (COOL) program has mapped over 1,700 civilian licenses and certificates to military skills, and that number increases all the time.

• Tuition Assistance Lastly, take advantage of the military’s Tuition Assistance program. If one of the reasons you joined the military was to get an education, this program is a great solution. It pays up to 100% of tuition expenses for semester hours costing $250 or less.

Promotion 4-13 Summary and Resources

Now let’s take a couple of minutes to discuss key takeaways and resources to help you going forward.

SLIDE 14 Summary

We discussed the following topics. Do you have questions on any of them? • Financial Planning • Saving for Retirement • Career Investment Programs SLIDE 15 INSTRUCTOR NOTE: If time allows, ask a few of the participants to provide one key takeaway they learned from today’s class.

Resources

Please read through your Checklist and Handouts and refer back to them. They are a great resource to help navigate the financial decisions you’ll need to make. SLIDE 16 You are not alone! You have many layers of support to help you learn more and make good financial decisions.

Thank You!

Thank you for participating, and once again, congratulations on your recent promotion! SLIDE 17

Promotion 4-14 PROMOTION VIDEO DISCUSSION GUIDE PART 1 TTOUCHPOINTC CURRICULUM

CFS Preparation: Distribute and discuss the Promotion checklist and accompanying handouts to support this video-based training course. Checklists and handouts can be found online at https:// finred.usalearning.gov/SPL/Training/NavyResource/TouchpointCurriculum.

CFS Intro: Welcome to the Promotion course! The goal of today’s discussion is to improve your understanding of personal finance, so you can make the most of your new situation. It is important to review your finances as you set a path for a successful and more prosperous future.

Play Videos 1 & 2

Discussion Questions

1. Why is a spending plan important? CFS Talking Points: A. A good spending plan helps you manage your money. B. A good spending plan helps with achieving financial goals. 1. Promotion Course Overview C. A good spending plan helps you prepare for emergencies. 2. What four tips do financial experts suggest for developing a spending plan? CFS Talking Points: A. Understand your current situation: Track your income and expenses for the next 30 days or look back 30 days using bank and credit card statements. B. Know where your money should go: Save or invest 10%-15% of pretax pay. Limit 2. Financial Planning housing expenses to your BAH or 25% of pretax pay. Limit transportation expenses to 15%-20% of pretax pay. C. Create a plan: Put limits on how much you will spend each month on the various expense categories. D. Make adjustments: As life changes, make the adjustment and update your budget.

Knowledge Check

Question: How much money should be set aside to establish an emergency fund?

Answer: Enough to cover 3 to 6 months of living expenses.

Promotion Discussion Guide, Pg. 1 PART 2: Saving for Retirement

CFS Intro: In the next video, we will discuss how the pay increase from a promotion is a great opportunity to review your retirement savings goals and TSP account.

Play Video 3

Discussion Questions

1. Do you know how much you can save toward your retirement?

CFS Talking Points: A. Whether you are in the Blended Retirement System (BRS) or Legacy “High 3” 3. Saving for Retirement system, you can save up to $19,500 in 2020 into your TSP. Limits may Retirement be higher in certain situations (combat zone) and change year to year. B. For those covered under BRS, it is important to contribute at least 5% of your basic pay to take full advantage of the matching available from your Service.

2. How do you manage your TSP account?

CFS Talking Points: A. Log into your TSP account, using your account number and password. B. Review your entire financial situation, your contribution levels, and the funds that you have selected. C. Determine how much risk your household is willing to take. TSP offers investment options at all different levels. D. Ensure that your investments line up with your risk tolerance. If you are not comfortable with that, then there are lifecycle funds options. You simply pick a target retirement date and the fund does the work. E. Review and update contact information and beneficiaries.

Knowledge Check

Question: What should you do if you misplace or lose your TSP account number?

Answer: Go to https://www.tsp.gov/tsp/login.html. Select "Forgot your account number or password,” and follow the prompts. You can also call the ThriftLine at 1-877-968-3778 and press option 3 to speak to a Participant Service Representative.

Promotion Discussion Guide, Pg. 2 PART 3: Career Goals

CFS Intro: In the conclusion of this training, we will discuss career investment programs and additional resources to help your specific situation.

Play Videos 4 & 5

Discussion Question

How can you invest in your future marketability?

CFS Talking Points: A. Look into whether your military career offers a registered apprenticeship for your MOS or skills you may have. Visit the United Services Military Apprenticeship 4. Career Program (USMAP) website to identify and register for apprenticeships, track Investment Programs progress, and report completion of apprenticeships. Learn more: https:// dodcareerready.usalearning.gov/service_members/apprenticeships. B. Determine if your military experience translates into a civilian credential. Turn your military experience into certifications and licensing by visiting Army, Navy, Marine Corps and Air Force Credentialing Opportunities Online (COOL): https:// dodcareerready.usalearning.gov/service_members/credentials. For Coast Guard, 5. Final visit The Coast Guard Credentialing Opportunities Online, or CG COOL. Thoughts C. Explore eligibility for tuition assistance. Did you know that you could qualify for tuition assistance to pursue your education and potentially increase your earning potential? Learn more about all the opportunities: https://dodcareerready.usalearning.gov/ service_members/tuition_assistance. For Coast Guard, refer to the local USCG ESO or https://www.forcecom.uscg.mil/Our-Organization/FORCECOM-UNITS/ETQC/ Voluntary-Education/Education-Service-Officers/.

Knowledge Check

Question: What additional resources are available?

Answer: Call Military OneSource at 1 (800) 342-9647 for phone or video financial counseling with a professional financial counselor. Click www.MilitaryOneSource.mil for financial education resources at your fingertips. For Coast Guard: contact CGSUPRT. • Army: ACS • Navy: Fleet and Family Support Center • Marine Corps: MCCS • Coast Guard: Health, Safety, and Work-Life Regional Practice

Catalog ID: OPNAV-PFRT-1.0 — (Updated December 2020) Promotion Discussion Guide, Pg. 3 Promotion Presentation TC 4

Promotion

Agenda

• Financial Planning

• Saving for Retirement

• Career Investment Programs

• Resources

2 Financial Planning

Planning for Success

S M A R T

Specific Measurable Achievable Relevant Time-bound

Determine State what Understand how much Make sure it’s Set a deadline you’ll do why it’s it will cost and possible to to get it done accomplish important set milestones to you

The second challenge 4 Spending Plans

STEP 1: Know your current situation ü Track inflows and outflows STEP 1: ü Review past financial statements Know your current STEP 2: Know where your money should go situation ü Save and/or invest 10% – 15%* ü Transportation less than 15% – 20%* STEP 2: ü Limit BAH to 25% or less* STEP 4: Make 4-STEP Know where your money Step 3: Create a plan adjustments BUDGETING should go ü Set SMART Goals PROCESS ü Pay yourself first ü Automate saving ü Build an Emergency Fund STEP 3: STEP 4: Make adjustments Create a plan ü Update with life changes ü Review frequently

Promotion Checklist and Spending Plan Worksheet Handout Available * Pre-tax income

Your Credit Reputation

• Check your credit at www.annualcreditreport.com

• Free credit monitoring for Service members ü Equifax: equifax.com/personal/credit-report-services ü Experian: experian.com/help ü TransUnion: transunion.com/credit-help

Understanding Credit , Major Purchases, and 5 Rules of Buying a House Handouts Available

6 Saving for Retirement

How to Be a Millionaire

$ 1M

$ 800k

$ 600k

$ 400k $408,000

$ 200k $243,000 $139,200 $102,600 $ 0k

Start at age 20 Start at age 25 Start at age 35 Start at age 45 $190/month $290/month $675/month $1,700/month Your investment: for 45 years for 40 years for 30 years for 20 years

Cumulative compound Cumulative compound Cumulative compound Cumulative compound Assumes 8% return compounded interest: $899,563 interest: $873,192 interest: $762,993 interest: $593,335 annually to age 65 Total: $1,002,163 Total: $1,012,392 Total: $1,005,993 Total: $1,001,335

8 Thrift Savings Plan

• Defined contribution plan ü Open to all military members and federal employees ü Similar to a civilian 401(k)

• Professionally managed

• Benefits ü Minimal administrative fees ü Automatic deduction ü Automatic and matching contributions (BRS) ü Traditional and Roth options ü Many investment funds

Thrift Savings Plan Handout Available

TSP Contributions

• Contribution Limits ü Elective Deferral: $19,500 for 2020 ü Combat Zone: $57,000 for 2020 ü Catch-up (50+ years) = $6,500 • Traditional vs. Roth contributions • Matching contributions (BRS) ü Contribute 5% for full-matching benefit

Traditional Roth

10 Managing Your TSP

• mypay.dfas.mil and Direct Access ü Make your elections to include how much money you want to contribute and from which pay source (base, special, etc.) ü Roth vs. Traditional ü Maintain updated address

• Visit TSP.gov and log in with your account number ü Misplaced account number ü Review and update beneficiaries ü Update contact information

• Review investment choices and future allocations

Career Investment Programs

12 Career Investment Programs

• Invest in your future marketability • Apprenticeships • Certifications

• Tuition assistance

Summary and Resources

14 Summary

Congratulations on reaching this important milestone! Let’s recap what you’ve learned to help you organize your finances and make the most of your recent promotion. ü Financial Planning ü Saving for Retirement ü Career Investment Programs ü Resources

Resources

• Checklist and Handouts

16 Thank You!

The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

17 • Student Manual • Counselor (PFM/CFS) Checklist • Counselee Checklist • Instructor Guide • Video Discussion Guide • PowerPoint Slides

TC 5 Vesting in the Thrift Savings Plan (TSP) Vesting in the Thrift Savings Plan (TSP) Student Manual TC 5 SM I. INTRODUCTION

The Blended Retirement System (BRS) is a modernized retirement plan that went into effect for all Service members on January 1, 2018. Components of the BRS include a defined contribution (consisting of government automatic and matching contributions to a Service member’s TSP contribution), a mid-career incentive called Continuation Pay, a defined benefit (also known as a pension) after at least 20 years of service, and a lump-sum option at retirement.

As a CFS, if you are talking to a Service member about vesting in the TSP, it means they have completed or are nearing two years of service. This anniversary marks an important milestone in their career. This is your opportunity to make sure they understand the Blended Retirement System and the Thrift Savings Plan so they can take advantage of matching contributions. These financial decisions will make a big difference in their retirement nest egg. This is how you make millionaires!

II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

1. TLO: Comprehend the components of Service member’s military retirement system and the importance of preparing for retirement. ELOs: Understand the components of Blended Retirement System. Understand the Thrift Savings Plan. Understand what vesting means. 2. TLO: Understand and be able to manage a Thrift Savings Plan (TSP) account. ELOs: Know how to manage and update TSP account. Be able to update beneficiaries for TSP. Be able to review TSP contributions and weigh against additional financial considerations.

III. REFERENCES

• Office of Financial Readiness (FINRED) — https://finred.usalearning.gov • Thrift Savings Plan (TSP) — https://www.tsp.gov • Blended Retirement System (BRS) — https://militarypay.defense.gov/blendedretirement • U.S. Securities and Exchange Commission (SEC) — https://www.investor.gov • Defense Finance and Accounting Service (DFAS) — https://www.dfas.mil • Internal Revenue Service (IRS) — https://www.irs.gov • myPay — https://mypay.dfas.mil • milConnect — https://milconnect.dmdc.osd.mil/milconnect • CNIC Touchpoint Curriculum — https://www.cnic.navy.mil/ffr/family_readiness/fleet_and_family_support_program/work-and- family-life/personal_finances/pfm-touchpoint-checklists.html

Vesting in the Thrift Savings Plan 5-1 IV. ACRONYMS AND ABBREVIATIONS

Acronym/Abbreviation Full Name Definition

LES Leave and Earnings This monthly single-page report Statement details members’ eligible pay and allowances, payroll deductions and leave balances.

BRS Blended Retirement System The Blended Retirement System is a modernized retirement plan for the Uniformed Services.

TSP Thrift Savings Plan The Thrift Savings Plan is a retirement savings and investment plan for federal employees and members of the Uniformed Services, including the Ready Reserve.

Vesting in the Thrift Savings Plan 5-2 V. TOUCHPOINT TOOLBOX: MATERIALS AND RESOURCES TO TEACH TOPIC

All materials are available on PFM milSuite, CNIC and FINRED websites (listed above), and DVD. Links to curriculum may change or vary locally.

1. One-on-One Counseling Checklists and Handouts (Service Specific) • Vesting in the Thrift Savings Plan CFS/PFM Checklist • Vesting in the Thrift Savings Plan Counselee Checklist

Handouts: • Military Retirement Handout • Thrift Savings Plan Handout • Basic Investing Handout • Optional Discussion not included in PowerPoint: Spending Plan Worksheet Handout

2. Classroom Training Materials (Service Specific) All materials available on disc, or PFM milSuite and CNIC websites. Links to curriculum may change or vary locally. • Vesting in the Thrift Savings Plan Touchpoint Checklists and Handouts • Vesting in the Thrift Savings Plan PowerPoint (PPT) Training slides and Instructor Guide (IG) • Vesting in the Thrift Savings Plan Videos and Video Discussion Guides (VDG)

3. Online Training • Vesting in the Thrift Savings Plan course (Navy e-Learning, My Navy Portal or your service-specific e-Learning site)

Vesting in the Thrift Savings Plan 5-3 VI. ADDITIONAL LEARNING AND ACTIVITIES

Here are some additional ideas for conversations and activities to have with your audience: • Complete the Spending Plan Worksheet Handout. Show students how small adjustments in living expenses can allow them to build adequate savings and invest for their future. • Show students how to change their contribution allocations in TSP and how to adjust their contribution elections • Show the power of compounding interest with a FINRED or TSP financial calculator • Use the Military Retirement Handout or calculators listed in resources to demonstrate what a Service member can expect if he/she retires

Vesting in the Thrift Savings Plan 5-4 VESTING IN THE THRIFT SAVINGS PLAN

NAVY FINANCIAL READINESS CFS/PFM CHECKLIST HANDOUTS Congratulations on completing two years of service in the  Basic Investing Navy! This anniversary marks an important milestone in your military  Military Retirement career and Thrift Savings Plan (TSP). Under the Blended  Thrift Savings Plan Retirement System (BRS), eligible Sailors who complete two years  Spending Plan Worksheet of service become vested in the TSP. Counselor: Use this checklist and accompanying handouts as a solution-focused tool to help Sailors in a classroom setting or counseling session to set goals, establish priorities, and develop a plan of action. Space is provided to add local resources and reminders about additional topics. If you need additional information and referrals, contact your local Fleet and Family Support Center (FFSC) staff.

VESTING AND THE BLENDED RETIREMENT SYSTEM (BRS)

Counselor: Help counselees comprehend components of the Blended Retirement System and the importance of preparing for retirement.

 Understand what vesting means. • Vesting in the Thrift Savings Plan (TSP) means you have met the service requirement that entitles you to keep automatic and matching contributions. When you separate or retire from the Navy, you can keep the money the military has added or "matched" to your TSP account. It's important to note, you are always vested in your own contributions and earnings. • There are two different scenarios when vesting begins based on when you joined the military: 1) If you were serving as of December 31, 2017, and opted into the BRS, then you became eligible for an automatic contribution of 1% and matching contributions up to 4% of basic pay in your TSP. You are already vested in service matching contributions but are required to complete two years of service to vest in the automatic 1% contributions. 2) If you joined the service on or after January 1, 2018, then you are automatically enrolled in BRS. You will begin receiving an automatic 1% government contribution 60 days after entering service and will begin receiving matching contributions up to 4% of basic pay after completing two years of service. You will become vested in both automatic and matching contributions after completing two years of service. Counselor: Inform counselees that under the Blended Retirement System, they are always vested in their own contributions and the earnings. Upon separation or retirement from service, the TSP account is portable. They can either leave it with the TSP or move it to another qualifying government (civilian TSP) or private-sector retirement account, like a 401(k). Also, civilian service does not count toward vesting in the uniformed service TSP account.  Understand the importance of preparing for retirement. Review the "Basic Investing" handout. Counselor: Remind counselees that although retirement may seem to be a long way off, choices they make now, such as contributing to their TSP accounts, can give them a significant advantage when they do retire.

 Understand the components of the Blended Retirement System. Review the "Military Retirement" handout. • The Blended Retirement System (BRS) is a modernized retirement plan that went into effect for all new Service members on January 1, 2018. • Components of the BRS include a defined contribution (consisting of government automatic and matching contributions to a Service member’s TSP), a defined benefit (also known as a pension) after at least 20 years of service, a midcareer incentive called Continuation Pay, and a lump-sum option at retirement.

UNDERSTANDING THE TSP

 Understand the Thrift Savings Plan. Review the "Thrift Savings Plan" handout. • The Thrift Savings Plan (TSP) is a retirement saving plan open to federal employees and members of the uniformed services. Similar to a civilian 401(k), the TSP offers the opportunity for Sailors to save and invest for retirement. • Under the BRS, you may receive up to 4% in Service Matching Contributions, on top of the Service Automatic 1% Contribution into your defined contribution plan or TSP account. Note: The automatic and matching contributions are deposited into the traditional TSP. • Automatic and matching contributions continue through the end of the pay period until you reach 26 years of service.  Evaluate your retirement goals and visit TSP.gov to learn about annual contribution limits* and investment choices. *The elective deferral limit is $19,500 in 2020 for those under the age of 50. Limits may be higher in certain situations. Counselor: Inform the counselees the elective deferral limit of $19,500* (2020) applies to the combined total of Traditional and Roth contributions. The annual addition limit is $57,000 (2020). This limit is per employer and includes employee contributions (tax deferred, after tax, and tax exempt), agency/service

VESTING IN TSP - PAGE 2 automatic 1% contributions, and matching contributions. The catch-up contribution limit is $6,500 (2020) for participants age 50 and older. Encourage counselees to contribute at least 5% to take advantage of the full government match.

 Use the "Spending Plan Worksheet" to analyze your spending plan. When creating your spending plan, consider budgeting at least 5% of basic pay to contribute to your TSP. By contributing 5% out of your pocket, you take full advantage of government matching contributions to boost your retirement savings to 10% of your basic pay. Counselor: Remind the counselees to pay themselves first when developing their spending plan. When appropriate, explain the benefits of contributing more to their TSP accounts, such as compound earnings and possible tax benefits.

 Decide between Traditional or Roth contributions in your TSP account. Counselor: Inform the counselees they can select pretax (Traditional) contributions if they want to lower current taxes and defer them until retirement. Alternatively, they can elect after-tax (Roth) contributions if they prefer to pay taxes on their voluntary contributions now and avoid taxes on the qualified withdrawals in the future. They can change what type of investments to elect for their future contributions by logging into their myPay accounts. For more information, they can talk to a Personal Financial Counselor and Educator (PFC/E) at their installation.

 Review the investment fund options listed on the "Thrift Savings Plan" handout to determine which fund(s) work for your objectives, risk tolerance and time horizon. Counselor: Inform counselees the TSP has several funds they can choose to invest in. By default, TSP contributions are invested in a Lifecycle (L) fund, which lines up with the Service member’s age. See TSP.gov for more information.

MANAGING YOUR TSP

 Visit myPay at mypaydfas.mil to start, stop or change the contribution amounts to your TSP. Verify and update your address in myPay as well, if applicable. Counselor: TSP uses the address in myPay to send account information, so it is important this address is current and updated periodically.

 Log onto your TSP account at TSP.gov to manage your current and future investment choices. Note: You will need your account number to log onto the website. If you have misplaced or lost your account number, visit tsp.gov/tsp/forgottenAccount.html to request the account number be mailed to you. Verify your address in myPay first and pay attention to the effective date.

 Review and update beneficiaries for your TSP account, if applicable. Counselor: Refer counselees to the TSP.gov website to complete Form TSP-3 Designation of Beneficiary to update beneficiaries.  Update contact information for your TSP account, if applicable.

Notes: ______

______

Catalog ID: OPNAV-VTSPFRT-1.0 — (Updated August 2020) VESTING IN TSP - PAGE 3 VESTING IN THE THRIFT SAVINGS PLAN

NAVY FINANCIAL READINESS MY CHECKLIST HANDOUTS Congratulations on completing two years of service in the  Basic Investing Navy! This anniversary marks an important milestone in your military  Military Retirement career and Thrift Savings Plan (TSP). Under the Blended  Thrift Savings Plan Retirement System (BRS), eligible Sailors who complete two years  Spending Plan Worksheet of service become vested in the TSP.

VESTING AND THE BLENDED RETIREMENT SYSTEM (BRS)

• There are two different scenarios when vesting begins based on when you joined the military: 1) If you were serving as of December 31, 2017, and opted into the BRS, then you became eligible for an automatic contribution of 1% and matching contributions up to 4% of basic pay in your TSP. You are already vested in service matching contributions but are required to complete two years of service to vest in the automatic 1% contributions. 2) If you joined the service on or after January 1, 2018, then you are automatically enrolled in BRS. You will begin receiving an automatic 1% government contribution 60 days after entering service and will begin receiving matching contributions up to 4% of basic pay after completing two years of service. You will become vested in both automatic and matching contributions after completing two years of service.

 Understand the importance of preparing for retirement. Review the "Basic Investing" handout.

 Decide between Traditional or Roth contributions in your TSP account.

 Review the investment fund options listed on the "Thrift Savings Plan" handout to determine which fund(s) work for your objectives, risk tolerance and time horizon. Additional notes: ______

______

MANAGING YOUR TSP

 Visit myPay at mypaydfas.mil to start, stop or change the contribution amounts to your TSP. Verify and update your address in myPay as well, if applicable.

VESTING IN TSP - PAGE 2  Log onto your TSP account at TSP.gov to manage your current and future investment choices. Note: You will need your account number to log onto the website. If you have misplaced or lost your account number, visit tsp.gov/tsp/forgottenAccount.html to request the account number be mailed to you. Verify your address in myPay first and pay attention to the effective date.

 Review and update beneficiaries for your TSP account, if applicable.

 Update contact information for your TSP account, if applicable.

Additional notes: ______

______

CFS/PFM Printed Name Counselee Printed Name

______Signature Date Signature Date

Catalog ID: OPNAV-VTSPFRT-1.0 — (Updated August 2020) VESTING IN TSP - PAGE 3 Vesting in the Thrift Savings Plan (TSP) Instructor Guide TC 5 IG I. COURSE ORGANIZATION AND OUTLINE

The Vesting in the Thrift Savings Plan course is organized into six parts:

1. Introduction and Agenda • Welcome • Facilitator Introduction • Review of Agenda

2. Vesting in the TSP • What Does Vesting Mean? • When Am I Vested?

3. Why Save for Retirement? • Reasons to Save • Time = Money (Saving for Retirement Example)

4. Blended Retirement System Overview • The Four Components of BRS Defined contribution (TSP) Continuation Pay Defined benefit (Pension) Lump Sum Option

5. Understanding the TSP • What is the Thrift Savings Plan? (TSP) • TSP Benefits and Contribution Limits • TSP Investment Funds • Evaluate Your Retirement Goals • Differences Between Roth and Traditional • Access and Manage TSP

6. Summary and Resources

TOTAL: 60 minutes Be sure to cover the Checklists and Handouts as indicated by the icons throughout the presentation.

Vesting in the Thrift Savings Plan 5-1 II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

III. CHAPTER PREPARATION

CONTENT ICONS — The following icons are used throughout the guide:

Instructor Note INSTRUCTOR NOTE: (indicates additional information related to the content for the instructor)

Checklist and Handout (indicates a Checklist or Handout is associated with the content)

Learning Activity (indicates a learning activity)

INSTRUCTOR NOTE: Being prepared for training promotes organization, projects a positive image, and reduces stress.

Be prepared to discuss each Checklist and Handout in class. You should familiarize yourself with this content so you can effectively discuss each document during your presentation.

While this guide is written as a script, avoid reading it word-for-word. Familiarize yourself ahead of time so you feel comfortable covering the material in your own words.

Throughout the presentation, the Checklist or Handouts will be identified with an icon on the PowerPoint and an Instructor Note in this Instructor Guide.

Vesting in the Thrift Savings Plan 5-2 Materials and Equipment: • Projector/screen • Vesting in the Thrift Savings Plan (TSP) course PowerPoint slides • Chart paper and easel or whiteboard and markers • Paper, pens, pencils • Course sign-in sheet • Course evaluations

Forms and Handouts: • Vesting in the TSP Checklist • Military Retirement Handout • Thrift Savings Plan Handout • Basic Investing Handout • Spending Plan Worksheet Handout

Vesting in the Thrift Savings Plan 5-3 IV. CONTENT Introduction

Facilitator Introduction Introduce yourself by providing: Hello, my name is . I am a . (Describe your experience as a facilitator or with personal financial management.) SLIDE 1 The information I’ll provide over the next 60 minutes will help you better understand Vesting in the Thrift Savings Plan (TSP), so let’s get started!

Agenda

INSTRUCTOR NOTE: Vesting in the Thrift Savings Plan Counselee Checklist SLIDE 2 To help you understand the content in this presentation, we will use the Vesting in the Thrift Savings Plan Counselee Checklist to explore:

• Vesting in the TSP • Why save for retirement? • Blended Retirement System (BRS) overview • Understanding the TSP

I’ll also point you to free resources that can help you take action on what we discuss.

What Does Vesting Mean?

ACTIVITY: Ask the class What does the term “vesting” mean? Confirm their answers and move to the next slide where you will explain vesting in detail. SLIDE 3

Vesting in the Thrift Savings Plan 5-4 What Does Vesting Mean?

Timeframe of When You Keep Employer Contributions Vesting in the TSP means that you have met the “timeframe” or service requirements that entitle you to keep the automatic 1% contribution. SLIDE 4 The term vesting is used by the TSP and by civilian employer retirement plans like a 401(k).

Makes It Portable When you are vested, this means you can take all the employer contributions with you after you separate or retire and can transfer it to another retirement account if you choose to.

Your Contributions Are Always Yours to Keep It’s worth noting that all of your contributions are always yours to keep. Vesting applies to the automatic and service matching contributions from your employer.

When Am I Vested?

Let’s look at when you are vested in the TSP. There are two different scenarios when vesting begins based on when you joined the military:

SLIDE 5 Service members who were serving as of December 31, 2017, and “opted” into the Blended Retirement System (BRS), will receive Service Automatic Contributions of 1% of their basic pay, immediately. These contributions and their earnings are vested once they have completed two years of service based on your pay entry base date (PEBD).

After serving two years, they will also receive Service Matching Contributions up to 4%, based on their own contributions of basic pay. These contributions and earnings are vested since they have already completed two years of service.

Service members who joined on or after January 1, 2018, are automatically enrolled in the BRS and begin receiving the 1% Service Automatic Contribution 60 days after entering service. Once they have served two years, they will receive Service Matching Contributions up to 4% of their basic pay contribution. They will be vested after serving two years in both the 1% automatic and the Service Matching Contributions.

Your contributions are always yours to keep.

Vesting in the Thrift Savings Plan 5-5 Why Save for Retirement?

ACTIVITY: Ask the class Why should you save for retirement? Confirm their answers and move to the next slide where you will provide several good reasons. SLIDE 6

Reasons to Save

Retirement may seem distant for you, but it’ll be here before you know it. Start planning now to obtain financial security during your retirement years. Here are several reasons to save for retirement now. SLIDE 7 Retirement Can Be Expensive The main reason you want to save for retirement now is retirement can be expensive depending on your desired lifestyle. A pension may not be an option. Outside of the military there are very few civilian employers offering a pension anymore. Your social security may not be enough to fund the lifestyle you want in retirement. You also have to consider your health and longevity (how long will you live). Financial experts suggest to plan for up to 100 years of age. You also have to factor in inflation. The average rate of inflation is 3% — 4%. Are you saving in a product that will beat this rate on average?

Investing Can Be Easy The solution to this potentially expensive retirement problem is investing. Investing now for retirement offers three essential tools for accumulating the most money possible: 1. Time 2. TSP matching contributions (or a greater amount) 3. Potentially a greater rate of return compared to savings

Compound Interest is the cycle of earning interest on interest! It’s the money your money makes, making more money.

When you are in the Blended Retirement System (BRS), the military matches up to 4% of your basic pay contribution and automatically contributes 1% into your TSP. Which means if you contribute 5% the military contributes 5%. You have already doubled your investment.

Vesting in the Thrift Savings Plan 5-6 Time = Money (Saving for Retirement Example)

INSTRUCTOR NOTE: Basic Investing Handout

Let’s now take a look at the Basic Investing Handout and the example of SLIDE 8 Pressy, Mandi and Steve to help illustrate the power of compound interest and why it’s important to start early.

Pressy, Mandi and Steve all want to save for retirement. Pressy starts at age 20 saving $200 per month. Mandi starts at age 25 saving the same $200 per month. Steve waits until age 35 to save $200 per month. Assuming the same 8% rate of return for each of them, see the chart in the presentation (and Handout) for their results: • Pressy invests $108,00 over 40 years and has $1,054,908 at age 65 • Mandi invests $96,000 over 35 years and has $698,202 at age 65 • Steve invests $72,000 over 30 years and has $298,072 at age 65

Even though Pressy only saves $12,000 more than Mandi, she retires with $350,00 more than Mandi. Time is Money!

This example clearly illustrates how saving for retirement early pays off. Time builds wealth, so don’t delay in saving as much as you can in your TSP.

If time permits, refer learners to the Basic Investing Handout to discuss three good reasons to invest: 1. Potential for higher returns 2. Achieving long-term goals 3. Inflation

Blended Retirement System Overview

The BRS is a modernized retirement plan that went into effect for all new Service members on January 1, 2018. Service members who had less than 12 years of service at that time had 1 year to opt into the BRS. SLIDE 9

The Four Components of BRS

INSTRUCTOR NOTE: Military Retirement Handout

As you look at the Military Retirement Handout, you see that there are SLIDE 10 two military retirement systems, the Legacy or “High-3” and the Blended Retirement System (BRS). If you’re vesting the in TSP, that means you’re in the BRS.

Vesting in the Thrift Savings Plan 5-7 Let’s discuss the four components of BRS:

1. Defined Contribution, which consists of automatic (1%) and matching contributions (up to 4%) to a Service member’s TSP. In order to take full advantage of the matching contributions, you need to contribute at least 5% to your TSP.

INSTRUCTOR NOTE: As of 1 October 2020, automatic BRS participation rate will be increased from 3% to 5%. If a BRS member was automatically enrolled before 10/1/2020, and is still contributing at the automatic enrollment rate on 10/1/2020, then the member remains auto-enrolled at 3%. If a BRS member was automatically enrolled but stops contributions during the year and is automatically re-enrolled on 1/1/2021, then the member is auto re-enrolled at 5%.

2. Continuation Pay, a mid-career incentive paid as a lump sum between 8-12 years of service with a service commitment of not less than 3 years.

3. Defined Benefit, also known as a pension. At 20 years, your retirement will be 40% of your base pay plus an incremental 2% per year (over 20) until year 30. BRS match stops at year 26.

4. Lump Sum Retirement option lets you take a lump sum payout in exchange for reducing monthly pension.

Understanding the TSP

Next, let’s have a more detailed discussion on the TSP.

SLIDE 11 What Is the Thrift Savings Plan?

INSTRUCTOR NOTE: Thrift Savings Plan Handout

SLIDE 12 You enrolled into it in boot camp, but do you understand the TSP? This next section is designed to help you understand it and how to manage it.

Let’s start off with explaining what the TSP is by using the Checklist and the Thrift Savings Plan Handout.

Vesting in the Thrift Savings Plan 5-8 Defined-contribution Plan The TSP is a type of retirement saving plan (aka defined contribution) open to all military members and federal employees and members of the uniformed services. Similar to a civilian 401(k), the TSP offers the opportunity for Service members to save and invest for retirement.

Matching Contributions Under the BRS, you may receive up to 4% in service matching contributions, on top of the automatic 1% contribution into your TSP, which are deposited into the Traditional TSP. Automatic and matching contributions continue through the end of the pay period during which you reach 26 years of service.

Professionally Managed The Federal Retirement Investment Board, who contracts with BlackRock Institutional Trust Company (N.A.) (BlackRock) to manage many of the fund’s assets, professionally manages the Thrift Savings Plan.

TSP Benefits and Contribution Limits

There are many benefits to participating in the TSP:

• Minimal administrative fees — .043% per $1000 managed, roughly $.42/$1000. Average 401(k) charges up to 1%. SLIDE 13 • Minimal investment expenses—the cost of owning the respective funds is low. L Funds may have an additional cost associated with them, too. F – 0.004% G – 0.000% C – 0.001% S – .018% I – .007%

• Automatic deductions — it comes right out of the paycheck before you even see it

• Automatic and matching contributions — as we have mentioned already there is a 1% automatic and up to 4% matching contribution

• Traditional and Roth Options — there are options to contribute pretax (Traditional) or post tax (Roth) contributions (use the Thrift Savings Plan Handout to explain the differences)

• Many investment funds — which we will briefly discuss in a moment

Vesting in the Thrift Savings Plan 5-9 Contribution Limits. Even though you can contribute up to 100% of your pay to TSP, every year the IRS sets annual contribution limits.

Elective Deferral = $19,500 for 2020 – This is the amount YOU can contribute to TSP. This is called the elective deferral limit and applies to the total of your Traditional and Roth contributions and other qualified retirement plans, like a 401(k) if you participated in one.

INSTRUCTOR NOTE: Point this out if there are Reservists or National Guard members.

Annual Additions Limit = $57,000 for 2020 – This is the total amount that can be contributed to a qualified retirement plan, which includes your contributions and any from your employer. Under certain situations, this limit may be higher, so see tsp.gov for more information.

INSTRUCTOR NOTE: Point this out if there are Reservists or National Guard members.

Catch-up = $6,500 for 2020 – The catch-up contribution limit is $6,500 (2020) for participants age 50 and older. If you reach age 50 this year (2020), your elective deferral limit is $26,000 and annual addition limit is $63,500.

Service in a Combat Zone – If you serve in a combat zone, you may be able to exceed the elective deferral limits. Your Roth contribution is limited to the elective deferral amount, but your Traditional contributions may not be. Regardless, your contributions (Traditional and Roth) plus the Automatic and Matching Contribution from your service, are limited to the annual additions limit.

Vesting in the Thrift Savings Plan 5-10 Five Core TSP Funds

INSTRUCTOR NOTE: Refer students to the Thrift Savings Plan Handout and briefly review and discuss the below information. Before class, look up SLIDE 14 the current fund rates of return on tsp.gov. Encourage students to attend a TSP class at the local installation family service center to learn more. Encourage them to meet with you (CFS) or your local PFM or PFC to discuss their personal spending plan and financial goals.

Let’s now review the investment fund options available to you in the TSP to determine which fund(s) work for your objectives, risk tolerance and time horizon. The TSP offers several “Lifecycle” and five individual or core investment funds to choose from.

Beginning January 1, 2018, by default, TSP contributions were invested in a Lifecycle (L) Fund, which lines up with your retirement age.

G Fund — Assets are managed internally by the Federal Retirement Thrift Investment Board and are comprised of nonmarketable U.S. Treasury securities guaranteed by the U.S. government. This means that the G fund will not lose money. However, it also may not be the best investment when trying to achieve long-term goals (it does not capitalize well on the benefits of compounding interest).

F Fund — The Fixed Income Index Investment (F) Fund is invested to track the Bloomberg Barclays U.S. Aggregate Bond Index. The (F) Fund portfolio includes only investment-grade fixed income securities.

C Fund — The Common Stock Index Investment (C) Fund tracks the Standard & Poor’s 500 (S&P 500) Index. This is a market index made up of the stocks of 500 large to medium-sized U.S. companies.

S Fund — The Small Capitalization Stock Index (S) Fund is invested to track the Dow Jones U.S. Completion Total Stock Market (TSM) Index. This is a market index of small and medium-sized U.S. companies that are not included in the S&P 500 Index or “small-cap” funds.

I Fund — The International Stock Index (I) Fund is invested in a stock index that tracks the Morgan Stanley Capital International Europe, Australasia and Far East (MSCI EAFE) Index and is a broad international market index comprised of large companies from 20 countries “International” funds.

To learn more about the Thrift Savings Plan be sure to visit tsp.gov.

Vesting in the Thrift Savings Plan 5-11 TSP’s Lifecycle Funds

Lifecycle Funds are designed to automatically adjust to reflect risk based on the targeted timeframe a member plans to retire. They are designed for participants who may not have the time or experience to manage their SLIDE 15 TSP portfolio.

Notice that as someone moves closer to retirement (target date), the exposure to equity decreases and the exposure to stable or fixed income increases. This is designed to provide a smooth glide path to retirement.

Evaluate Your Retirement Goals

INSTRUCTOR NOTE: Encourage students to learn more about retirement planning by attending the class “Planning for Your Retirement” at a local SLIDE 16 installation family service center.

Automatic Enrollment, Contributions. If you’re a Service member who joined on or after Jan. 1, 2018, your service automatically enrolled you in the TSP and 3% of your basic pay is being contributed to your TSP unless you change it. Beginning in October 2020, that automatic contribution will increase to 5%. To increase (or make changes) to your TSP contributions, visit www.mypay.dfas.mil or Direct Access for USCG.

Evaluate Annually. Every year you should evaluate your retirement goals. Do you need to increase your TSP contributions or change funds to meet your goals?

Analyze your spending plan. To help you evaluate and reach your retirement goals, you need to analyze your spending plan to determine how much you can afford to contribute toward your retirement goals. Remember to contribute at least 5% to take advantage of the full government match.

Review Funds: Are the funds you are contributing to working for your objectives, risk tolerance and time horizon? If not, do you need make a change? To make elections for future contributions, log into your account on tsp.gov. For more information, speak to a financial counselor at your installation.

Vesting in the Thrift Savings Plan 5-12 Tax Treatment Options

Traditional vs. Roth. So, how do you decide between contributing to the Traditional or Roth option in your TSP account?

SLIDE 17 If you want to lower current income taxes and defer them until retirement, select Traditional contributions.

Alternatively, select Roth contributions if you’d prefer to pay income taxes on your contributions now and avoid taxes on qualified withdrawals in the future.

How to Access and Manage TSP

Now that you know about the TSP, let’s briefly go over how to manage it.

SLIDE 18 How to Access and Manage TSP

There are two main websites you will use to access and manage your TSP: myPay or Direct Access and tsp.gov.

myPay — To start, stop, or change contributions to your TSP, login to myPay SLIDE 19 at mypay.dfas.mil/mypay. Here, you can change how much of a type of pay (basic or special and incentive) you want to invest and which account you want it invested in. Also, verify and update your address.

While you are active, going to the TSP section of myPay is the quickest and easiest way to update your TSP mailing address. You should know that the “Correspondence Address” section of myPay will NOT update your information with the TSP. You MUST go to the TSP section of myPay to change your TSP address.

On the other hand, if you are separated from service, you can view and change your address by logging into the “My Account” section of the TSP website or complete and print a Form TSP-9, Change in Address for Separated Participant, to submit by mail or fax. USCG personnel will enroll in TSP via Direct Access.

TSP.gov — To access and manage your TSP account, you’ll need to visit tsp.gov and log in with your account number*. Here you can view your portfolio, manage your investments, and change your future allocations.

Vesting in the Thrift Savings Plan 5-13 INSTRUCTOR NOTE: *If you have misplaced or lost your account number, visit www.tsp.gov/tsp/forgottenAccount.html to request the account number be mailed to you. Be sure to verify and update your address in myPay or direct access first.

Summary and Resources

Now let’s take our last couple of minutes together to review what we’ve covered.

SLIDE 20 Summary

We discussed the following topics, do you have any questions on any of them: • Vesting in the TSP • Why save for retirement? • Blended Retirement System (BRS) overview SLIDE 21 • Understanding the TSP • How to access and manage your TSP • tsp.gov and IRS Publication 3 — Armed Forces’ Tax Guide

Resources

Please read through your Checklist and Handouts and refer back to them. They are a great resource to help navigate the financial decisions you’ll need to make.

SLIDE 22 You are not alone! You have many layers of support to help you learn more and make good financial decisions.

Thank You!

SLIDE 23 Vesting in the Thrift Savings Plan 5-14 VESTING IN THE THRIFT SAVINGS PLAN VIDEO DISCUSSION GUIDE

PART 1 TTOUCHPOINTC CURRICULUM

CFS Preparation: Distribute and discuss the Vesting in the Thrift Savings Plan checklist and accompanying handouts to support this video-based training course. Checklists and handouts can be found online at https://finred.usalearning.gov/SPL/Training/NavyResource/TouchpointCurriculum.

CFS Intro: Welcome to this training course on Vesting in the Thrift Savings Plan (TSP) and congratulations on reaching this important milestone in your career. The goal of today's class is for you to learn about retirement planning, how the TSP works, and the investment choices available for your TSP account. Together we will watch a series of videos and pause for a group discussion on some of the important topics. We have a lot to cover so let's get started! Play Videos 1 & 2

Discussion Questions

1. Speaking of retirement, how do you feel about saving and investing early in your military career? Does seeing the numbers and potential growth of your accounts encourage you?

1. Vesting in the CFS Talking Points: Understand that not everyone has retirement savings on their to- TSP Overview do list or even as a priority in their life. However, knowing how interest can work for us, how time can assist in accumulating and compounding our earnings, and the destruction that inflation can have, it is best to start as soon as possible. I encourage you to talk with your leadership or your older family members and ask them what they wish they had done differently regarding retirement savings. Remember that even a 2. Why Save for small investment towards retirement can have a big impact while you are young. If you Retirement? decide to wait 10, 20, 30 years, a much larger portion of your income will need to go toward retirement savings to prepare for the day that you are no longer working.

2. When thinking about an enjoyable retirement, how can TSP play a part? CFS Talking Points: TSP can supplement the more common ways to pay for retirement like Social Security and pensions. If you don’t plan on a pension then it is a good idea to target your personal investing goals at a higher level to fill the gap.

Knowledge Check

Question: At what age do most people qualify for Social Security? Answer: 62. Remind students that if they wait until age 70, the monthly benefit will be much larger. Go to ssa.gov to estimate benefits based on your specific information.

TSP Discussion Guide, Pg. 1 PART 2: Retirement Planning

CFS Intro: In the next section, we will review the components of the Blended Retirement System. By gaining a better understanding of the military's retirement plan, you can fully take advantage of the benefits to help build your own retirement.

Play Video 3

Discussion Question

What are the four components of the Blended Retirement System that can help you save for retirement?

CFS Talking Points: The features of the Blended Retirement System include the Thrift 3. Military Savings Plan (TSP), the military pension, the lump sum option and Continuation Pay. Retirement Overview You can contribute $19,500 in your TSP in 2020. Under the BRS you will automatically receive 1% in automatic contributions from your branch of service. By contributing 5% of your base pay you can take advantage of 4% service matching contributions. Put this all together and contributing 5% of your base pay to the TSP will result in receiving 5% in total service contributions for a total of 10%. Whether you are part of the BRS or not, you may be eligible for a pension after serving 20 years. BRS participants have the option to take a lump sum payment in exchange for a reduced monthly pension amount and can choose to receive continuation pay if offered by their branch of service. Knowledge Check

Question: What percentage of your pay must you contribute in your TSP to receive the maximum match from the government? Answer: 5%

Question: Roughly, how much will your pension be if you retire with 20 years of service? Answer: 40% of your retirement base pay

PART 3: Thrift Savings Plan

CFS Intro: Our next round of videos will dive into TSP with information on how the plan works and how to utilize this benefit to assist in meeting your retirement funding goals.

TSP Discussion Guide, Pg. 2 Play Videos 4, 5, 6 & 7

Discussion Questions

4. Vesting in 1. Question: What does the term vesting mean, and what is vesting for those under the TSP the Military’s Blended Retirement System (BRS)? Answer: Vesting refers to the time when all government provided contributions in your retirement account are yours to keep. Service members under the BRS will be fully vested after completing two years of military service.

5. Understanding the TSP 2. Your TSP account is yours which means you are in charge of managing it. What steps can you take now to ensure you are handling your retirement plan properly? CFS Talking Points: Check to make sure your account in myPay is accurate. Check your tax treatment on contribution and update the percentage of contribution of pay. 6. How to Manage Order your account number and password through www.tsp.gov. Login at Your TSP www.tsp.gov to view your allocation of current balance and future contributions; update if needed; review and update your beneficiaries.

7. TSP Max - Take It to the Limit

Knowledge Check

Question: TSP matching under BRS is based on what pay contribution? Answer: Basic Pay

Question: When are BRS participants vested in contributions provided by the government? Answer: 1. Opt-in — Matching vested immediately, 1% auto contribution vested after 2 years total service. 2. New accessions — Matching begins after two years and is immediately vested. The 1% auto contribution is vested after two years.

Play Video 8

CFS Talking Points: Now that we have completed this training, please remember that you have support through your Installation Personal Financial Manager, Military OneSource, and TSP.gov for your TSP and BRS questions. CFS Note: Provide contact information for Installation Personal Finance Manager, Military 8. Final One Source www.militaryonesource.mil or 1-800-342-9647, TSP — www.tsp.gov or Thoughts ThriftLine 1-877-968-3778.

Catalog ID: OPNAV-VTSPFRT-1.0 — (Updated December 2020) TSP Discussion Guide, Pg. 3 Vesting in the Thrift Savings Plan (TSP) Presentation TC 5

Vesting in the Thrift Savings Plan (TSP)

Agenda

• Vesting in the Thrift Savings Plan (TSP)

• Why Save for Retirement?

• Blended Retirement System Overview

• Understanding the TSP

• How to Access and Manage the TSP

Vesting in the Thrift Savings Plan Counselee Checklist Available

2 What Does Vesting Mean?

What Does Vesting Mean?

• Vesting = Ownership

• Timeframe of when you keep employer contributions ü Thrift Savings Plan (TSP) ü Civilian employer’s 401(k)

• Makes employer contributions portable – yours to keep after separating

4 When Am I Vested?

• Serving before December 31, 2017 ü Opted into BRS ü 1% and matching immediately ü Matching vested immediately

• Serving after January 1, 2018 ü Automatically enrolled in BRS ü 1% after 60 days ü Matching starts at 2 years and you are already vested ü Vested after serving 2 years

• Your contributions are always yours to keep

Why Save for Retirement?

6 Reasons to Save

• Retirement can be expensive ü Pension may not be an option or not enough ü Social Security may not be enough ü Health and longevity ü Inflation

• Investing can be easy ü Time builds wealth ü TSP matching ü Potentially greater returns than saving ü Benefits of compounding interest

Time = Money

Start early and continue

Basic Start Monthly Total Total Investing Age Investment Invested Earned*

Pressy 20 200 108,000 $1,054,908

Mandi 25 200 96,000 $698,202

Steve 35 200 72,000 $298,072

*Assuming an 8% Rate of Return to age 65

Basic Investing Handout Available

8 Blended Retirement System Overview

The Four Components of BRS

• Defined Contribution – TSP Contribution and Match • Continuation Pay – Mid-career Incentive (bonus) • Defined Benefit – Pension • Lump-sum Option – Advance Military Pension

DoDDoD Member’s TSP DoD matching Continuation Monthly TSP Automatic 1% Contributions TSP up to 4% Pay Retired Pay Earnings 1%into into TSP TSP Includes Lump-sum option

After 60 days After 60 days After 2 years At 8-12 years After 20 years Retirement Age

Military Retirement Handout Available

10 Understanding the TSP

What Is the Thrift Savings Plan?

• Defined-contributions plan (TSP) ü Open to all military members and federal employees ü Similar to a civilian 401(k)

• Matching contributions ü Up to 4% match ü Deposited into Traditional TSP ü After completion of 2 years ü Until you reach 26 years of service

• Professionally managed ü Federal Retirement Investment Board

Thrift Savings Plan Handout Available

12 TSP Benefits and Contribution Limits

• Benefits ü Minimal administrative fees ü Automatic deduction ü Automatic and matching contributions ü Traditional and Roth options ü Many investment funds ü Tax advantages

• Contribution Limits ü Elective Deferral = $19,500 for 2020 ü Combat Zone = $57,000 for 2020 ü Catch-up (50+ years) = $6,500 for 2020

Five Core TSP Funds

We offer 5 individual funds that you can customize based on your comfort level G FUND F FUND C FUND S FUND I FUND Government Securities Fixed Income Index Common Stock Index Small Capitalization Stock International Stock Index Investment Fund Investment Fund Investment Fund Index Investment Fund Investment Fund

For more comprehensive information, visit tsp.gov and select “Learn about fund options” from the menu.

14 TSP’s Lifecycle Funds

Each L Fund is a mix of individual funds based on when you’ll need your money

L 2065 L 2060 L 2055 L 2050 L 2045

For the For the For the For the For the long-term investor long-term investor long-term investor long-term investor long-term investor

L 2040 L 2035 L 2030 L 2025 L INCOME

For the For the For the For the For those long-term investor medium-term investor medium-term investor short-term investor already withdrawing

Evaluate Your Retirement Goals

• Annually evaluate ü Increase your TSP contributions ü Goals, risk tolerance and fund selection

• Analyze your spending plan ü How much can you afford? ü At least 5% ü Maximize benefits

• Review funds ü Meet objectives / risk tolerance / time horizon

16 Tax Treatment Options

Traditional Roth

How to Access and Manage the TSP

18 How to Access and Manage TSP

• mypay.dfas.mil and Direct Access ü Start – stop – change o Percentage of pay o Type (Traditional / Roth) ü Update address

• TSP.gov ü View portfolio ü Manage investments ü Change allocations ü Review and update beneficiaries

Summary and Resources

20 Summary

Congratulations on reaching this important milestone! This anniversary marks an important achievement in your military career and in the Thrift Savings Plan. Let’s recap what you learned about: ü Vesting in the Thrift Savings Plan (TSP) ü Why Save for Retirement? ü Blended Retirement System Overview ü Understanding the TSP ü How to Access and Manage TSP

Resources

• Checklist and Handouts

22 Thank You!

The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

23 • Student Manual • Counselor (PFM/CFS) Checklist • Counselee Checklist • Instructor Guide • Video Discussion Guide • PowerPoint Slides

TC 6 Entitlement to Continuation Pay (CP)

Entitlement to Continuation Pay Student Manual TC 6 SM I. INTRODUCTION

As a Command Financial Specialist, you will be able to use the appropriate Checklists and accompanying Handouts as solution-focused tools to help Service members, in one-on-one conversations/sessions to understand and make informed decisions about Continuation Pay. As you go through each part of the checklist with the Service member, you’ll check their understanding by asking relevant questions regarding the topic covered and provide examples as needed.

II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

1. TLO: Understand the fundamentals of creating and managing a spending plan, and the importance of updating a spending plan. ELOs: Update personal spending plan. Know how to protect Continuation Pay assets from scams and frauds. 2. TLO: Understand fundamentals of income tax and common tax benefits, and potential changes to tax situation. ELOs: Understand tax implications of Continuation Pay. Be able to calculate tax bracket and Continuation Pay effects. Know the importance of setting aside funds to cover increased taxes. 3. TLO: Recognize and understand how to protect yourself from misleading consumer practices and report complaints. ELO: Know how to protect Continuation Pay assets from scams and frauds. 4. TLO: Comprehend the components of Service member’s military retirement system and the importance of preparing for retirement. ELOs: Understand Continuation Pay under BRS. Calculate how much pay will be received as Continuation Pay under BRS. Understand how BRS Continuation Pay can be used. Understand how Continuation Pay is factored into contributions to TSP. Understand whether Continuation and Special Pay can be received concurrently.

Entitlement to Continuation Pay 6-1 III. REFERENCES

• Office of Financial Readiness (FINRED) — https://finred.usalearning.gov • Thrift Savings Plan (TSP) — https://www.tsp.gov https://www.tsp.gov/planning-for-life-events/ • Blended Retirement System (BRS) — https://militarypay.defense.gov/blendedretirement • U.S. Securities and Exchange Commission (SEC) — https://www.investor.gov • Internal Revenue Service (IRS) — https://www.irs.gov, https://www.irs.gov/filing/individual/update-my-information • Military Compensation — https://militarypay.defense.gov/Benefits/Thrift-Savings-Plan https://militarypay.defense.gov/Pay/Tax-Information • Free annual credit report — https://www.annualcreditreport.com • USA.gov — https://www.usa.gov/saving-investing • Department of Veterans Affairs (VA) — https://www.benefits.va.gov • Consumer Financial Protection Bureau (CFPB) — https://www.consumerfinance.gov/consumer-tools/military-financial-lifecycle • milSuite for PFM — https://www.milsuite.mil/book/groups/cnic-personal-financial-management-program-wfl • CNIC Touchpoint Curriculum — https://www.cnic.navy.mil/ffr/family_readiness/fleet_and_family_support_program/work-and-family- life/personal_finances/pfm-touchpoint-checklists.html

IV. ACRONYMS AND ABBREVIATIONS

Acronym/Abbreviation Full Name Definition

BRS Blended Retirement System The Blended Retirement System is a modernized retirement plan for the Uniformed Services.

TSP Thrift Savings Plan The Thrift Savings Plan is a retirement savings and investment plan for federal employees and members of the Uniformed Services, including the Ready Reserve.

Entitlement to Continuation Pay 6-2 V. TOUCHPOINT TOOLBOX: MATERIALS AND RESOURCES TO TEACH TOPIC

All materials are available on PFM milSuite, CNIC and FINRED websites (listed above), and DVD. Links to curriculum may change or vary locally.

1. One-on-One Counseling Checklists and Handouts (Service Specific) • Entitlement to Continuation Pay CFS/PFM Counselor Checklist • Entitlement to Continuation Pay Counselee Checklist

Handouts: • Continuation Pay Handout • Military Retirement Handout • Spending Plan Worksheet Handout • Sources of Help for Military Consumers Handout • Basic Investing Handout • Military Consumer Protection Handout

2. Classroom Training Materials (Service Specific) • Entitlement to Continuation Pay Checklists and Handouts • Entitlement to Continuation Pay PowerPoint (PPT) Training Slides and Instructor Guide (IG) • Entitlement to Continuation Pay Videos and Video Discussion Guide (VDG)

3. Online Training • Entitlement to Continuation Pay course (Navy e-Learning, My Navy Portal or your service-specific e-Learning site)

Entitlement to Continuation Pay 6-3 VI. ADDITIONAL LEARNING AND ACTIVITIES

It is critical for CFS to understand Continuation Pay so they can educate Service members about how and when to request Continuation Pay as well as how to effectively apply this money in support of their financial goals.

Here are some additional ideas for conversations and activities to have with your clients or audience: • Complete the Entitlement to Continuation Pay Worksheet • Assist Service member with Spending Plan Worksheet or eFPW • Review the Military Retirement Handout

Encourage Service members to attend PFM Standard Curriculum Courses at the local installation Family Support Center to learn more about financial considerations for this Touchpoint. • Developing Your Spending Plan • The Thrift Savings Plan • Saving and Investing • Planning for Retirement • Credit Management

Entitlement to Continuation Pay 6-4 ENTITLEMENT TO CONTINUATION PAY (CP)

NAVY FINANCIAL READINESS Continuation CFS/PFM Pay: CHECKLIST Plot Your Path to $uccess

Congratulations on reaching this important milestone in your Navy career — the point where you are approaching eligibility for HANDOUTS Continuation Pay (CP). Use this checklist and accompanying handouts to help reassess your career goals and make important personal  Spending Plan Worksheet financial decisions as they pertain to CP.  Military Consumer Protection  Sources of Help for Military Counselor: Use this checklist and the listed handouts as a solution- Consumers focused tool to help Sailors, in a classroom setting or counseling  Military Retirement session, set goals, establish priorities, and develop a plan of action.  Continuation Pay Space is provided to add local resources and reminders about  Basic Investing additional topics. If you need additional information and referrals, contact your local Fleet and Family Support Center (FFSC) staff.

BASIC FINANCE

 Update your personal spending plan using the "Spending Plan Worksheet." A good spending plan helps you manage your money, plan for your financial goals, and prepare for emergencies. Here are four steps financial experts suggest to get started. Counselor: Inform counselees that you can provide a “Spending Plan Worksheet” as well as more detailed templates with features that can help them understand their financial situation and reduce excessive debt.

Step 2: Know where your money should go. Financial experts offer these general guidelines when budgeting your money: • Try to save and/or invest 10% – 15% of pretax pay. • Strive to keep transportation expenses including car payments, insurance, gas and maintenance to 15% – 20% of pretax pay. • Limit housing expenses, including mortgage or rent payment, taxes, utilities, and maintenance to your Basic Allowance for Housing or 25% of pretax pay. Step 3: Create a plan. Build a plan for setting aside money and putting limits on how much you’ll spend each month per category. • Prioritize your financial goals. • Establish an emergency fund. Financial experts suggest you should keep at least three to six months of living expenses in reserve. If you do not have that much saved, consider setting aside a little each paycheck to help get you there.

Counselor: Share with counselees the concepts of paying yourself first, automating savings, and keeping their emergency fund in a separate account. Suggest they make it effortless by setting up an automatic transfer through their bank or an allotment, time permitting.

Step 4: Make adjustments. Update your spending plan as your life changes. Monitor your plan until you have fully adjusted your finances to reflect your new situation.

 Prepare for possible tax implications of CP. The IRS views CP as earned income, therefore taxable. Payment can be split into installments distributed annually to potentially reduce the tax liability incurred by receiving CP as a lump sum. The installments can be spread out up to four years. Each Sailor's situation is unique, so consider speaking with a tax professional. Counselor: Inform counselees that the installments can be spread out up to four years. This may or may not be beneficial based on their personal tax situation, so encourage them to speak with a tax professional to make an informed decision. Additional notes: ______

______

CONSUMER PROTECTIONS

 Review the handout “Military Consumer Protection” for additional information on identity theft, the Servicemembers Civil Relief Act (SCRA), and Military Lending Act (MLA). Counselor: Remind counselees the base legal office can assist by reviewing contracts to help counselees from falling prey to predatory lenders and fraudsters.

 Protect yourself from misleading consumer practices and know basic procedures for handling a consumer complaint or dispute. Review the "Sources of Help for Military Consumers" handout. Additional notes: ______

______

PLANNING FOR THE FUTURE

 Understand the basics of the Blended Retirement System by reviewing the "Military Retirement" handout.

CONTINUATION PAY - PAGE 2 • In 2016, the National Defense Authorization Act created a new military retirement system, called the Blended Retirement System, or BRS, that blends the traditional legacy retirement pension (defined benefit) with contributions to a Sailor's Thrift Savings Plan account (defined contribution). • The TSP is similar to the retirement plans offered by many private employers as it offers similar types of savings and tax benefits. It is also the same defined contribution plan thousands of Department of Defense (DoD) and federal government civilians take advantage of for their retirement savings. • CP is a one-time, midcareer incentive payment offered to eligible Sailors who are covered under the BRS in exchange for additional service. CP is in addition to any other career field-specific incentives or retention bonuses.

 Know more about CP. Review the "Continuation Pay" handout for more information. • You must elect to receive CP before starting your 12th year of service (calculated from a Sailor's Pay Entry Base Date). • CP is targeted at the midcareer mark. • Most Sailors in BRS who reach the 12-year mark will be eligible to request CP. However, each Service determines the timing and the amount. • Please note, any unearned portion of the CP will be subject to repayment if you do not complete your continued service obligation.  Calculate how much CP you will receive. Refer to the "Continuation Pay" handout provided and use the pay rates at https://militarypay.defense.gov/BlendedRetirement to help you determine the amount of money you will potentially receive. • Active duty Sailors, including Full-Time Support (FTS) personnel, may be eligible for a CP multiplier of 2.5. • Members of the Reserves in drilling status may be eligible to receive a CP multiplier of 0.5. • Each Service will determine and publish its own guidance on CP every calendar year. Pay rate multipliers may be based on Service-specific retention needs, specialty skills and hard-to-fill positions, similar to career field incentives and re-enlistment bonuses.  Put CP to good use. Review the "Continuation Pay" handout for more information. Additional notes: ______

______

SAVING AND INVESTING

 Evaluate your retirement goals and review TSP annual contribution limits.

Important note: You should keep the IRS annual contribution limit in mind when deciding how much you will contribute to your TSP account from your CP. Exceeding the IRS limit early could result in your monthly auto payments into your TSP account to stop before December, causing you to lose out on government matching contributions. Review the Military Retirement handout for more information on TSP matching contributions. Counselor: Inform counselees that they only receive government matching contributions on the first 5% of their basic pay that is contributed each pay period. So, if they reach their annual limit earlier in the year and their own contributions stop, the government matching contributions will also stop.

CONTINUATION PAY - PAGE 3  Review the “Basic Investing” handout to learn more about investing for retirement, compound earnings and fundamentals of investing. Additional notes: ______

______

RESOURCES

 Ask for help. You don’t have to navigate financial decisions regarding CP alone. Help is just a visit, call, click or download away. • Visit a personal financial counselor/educator at your local Fleet and Family Support Center who can help you find answers to questions about money management, debt, saving and investing. • Call Military OneSource at 1 (800) 342-9647 for phone or video financial counseling with a professional financial counselor. • Click www.MilitaryOneSource.mil for financial education resources at your fingertips. • Download the MyNavy Financial Literacy App to stay connected and find the latest news on CP rates. Counselor: After you have completed this checklist with the counselees, encourage them to ask questions, especially about topics that the checklist did not address. Are there any additional resources for which you should make a referral? Now is a great opportunity to see what other services the Service member might benefit from.

Additional notes: ______

______

Catalog ID: OPNAV-ECPFRT-1.0 — (Updated August 2020) CONTINUATION PAY - PAGE 4 ENTITLEMENT TO CONTINUATION PAY (CP) ContinuationMY Pay:CHECKLIST Plot Your PathNAVY to FINANCIAL $uccess READINESS

Congratulations on reaching this important milestone in your Navy career — HANDOUTS the point where you are approaching Spending Plan Worksheet Military Retirement eligibility for Continuation Pay (CP). Use this   Military Consumer Protection Continuation Pay checklist and accompanying handouts to    Sources of Help for Military  Basic Investing help you reassess your career goals and Consumers make important personal financial decisions as they pertain to CP.

BASIC FINANCE

Step 4: Make adjustments. Update your spending plan as your life changes. Monitor your plan until you have fully adjusted your finances to reflect your new situation.

CONTINUATION PAY - PAGE 1  Prepare for possible tax implications of CP. The IRS views CP as earned income, therefore taxable. Payment can be split into installments distributed annually to potentially reduce the tax liability incurred by receiving CP as a lump sum. The installments can be spread out up to four years. Each Sailor's situation is unique, so consider speaking with a tax professional. Additional notes: ______

______

CONSUMER PROTECTIONS

 Review the handout “Military Consumer Protection” for additional information on identity theft, the Servicemembers Civil Relief Act (SCRA), and Military Lending Act (MLA).  Protect yourself from misleading consumer practices and know basic procedures for handling a consumer complaint or dispute. Review the "Sources of Help for Military Consumers" handout. Additional notes: ______

______

PLANNING FOR THE FUTURE

 Understand the basics of the Blended Retirement System by reviewing the "Military Retirement" handout. • In 2016, the National Defense Authorization Act created a new military retirement system, called the Blended Retirement System, or BRS, that blends the traditional legacy retirement pension (defined benefit) with contributions to a Sailor's Thrift Savings Plan account (defined contribution). • The TSP is similar to the retirement plans offered by many private employers as it offers similar types of savings and tax benefits. It is also the same defined contribution plan thousands of Department of Defense (DoD) and federal government civilians take advantage of for their retirement savings. • CP is a one-time, midcareer incentive payment offered to eligible Sailors who are covered under the BRS in exchange for additional service. CP is in addition to any other career field-specific incentives or retention bonuses.  Know more about CP. Review the "Continuation Pay" handout for more information. • You must elect to receive CP before starting your 12th year of service (calculated from a Sailor's Pay Entry Base Date). • CP is targeted at the midcareer mark. • Most Sailors in BRS who reach the 12-year mark will be eligible to request CP. However, each Service determines the timing and the amount. • Please note, any unearned portion of the CP will be subject to repayment if you do not complete your continued service obligation.  Calculate how much CP you will receive. Refer to the "Continuation Pay" handout provided and use the pay rates at https://militarypay.defense.gov/BlendedRetirement to help you determine the amount of money you will potentially receive.

CONTINUATION PAY - PAGE 2 • Active duty Sailors, including Full-Time Support (FTS) personnel, may be eligible for a CP multiplier of 2.5. • Members of the Reserves in drilling status may be eligible to receive a CP multiplier of 0.5. • Each Service will determine and publish its own guidance on CP every calendar year. Pay rate multipliers may be based on Service-specific retention needs, specialty skills and hard-to-fill positions, similar to career field incentives and re-enlistment bonuses.  Put CP to good use. Review the "Continuation Pay" handout for more information. Additional notes: ______

______

SAVING AND INVESTING

 Evaluate your retirement goals and review TSP annual contribution limits. Important note: You should keep the IRS annual contribution limit in mind when deciding how much you will contribute to your TSP account from your CP. Exceeding the IRS limit early could result in your monthly auto payments into your TSP account to stop before December, causing you to lose out on government matching contributions. Review the Military Retirement handout for more information on TSP matching contributions.  Review the “Basic Investing” handout to learn more about investing for retirement, compound earnings and fundamentals of investing. Additional notes: ______

______

RESOURCES

______

CFS/PFM Printed Name Counselee Printed Name

______Signature Date Signature Date

Catalog ID: OPNAV-ECPFRT-1.0 — (Updated August 2020) CONTINUATION PAY - PAGE 3

Entitlement to Continuation Pay Instructor Guide TC 6 IG I. COURSE ORGANIZATION AND OUTLINE

The Entitlement to Continuation Pay course is organized into five parts:

1. Introduction and Agenda • Welcome • Facilitator introduction • Agenda

2. Continuation Pay Basics • What is Continuation Pay? • Who is eligible to receive it? • When can you receive it? • Why is it being offered? • How is it calculated and disbursed?

3. Application Process • How to apply for Continuation Pay

4. Financial Implications • What are the tax considerations? • What are the conditions/limitations of investing CP into the TSP? • What can you do with your CP? • What if you don’t meet your service obligations?

5. Summary and Resources

TOTAL: 60 minutes

Entitlement to Continuation Pay 6-1 II. LEARNING OBJECTIVES

Terminal Learning Objectives (TLOs) and Enabling Learning Objectives (ELOs)

Entitlement to Continuation Pay 6-2 III. CHAPTER PREPARATION

CONTENT ICONS — The following icons are used throughout the guide:

Instructor Note INSTRUCTOR NOTE: (indicates additional information related to the content for the instructor)

Checklist and Handout (indicates a Checklist or Handout is associated with the content)

Learning Activity (indicates a learning activity)

INSTRUCTOR NOTE: Being prepared for training promotes organization, projects a positive image, and reduces stress.

Be prepared to discuss each Checklist and Handout in class. You should familiarize yourself with this content so you can effectively discuss each document during your presentation.

While this guide is written as a script, avoid reading it word-for-word. Familiarize yourself ahead of time so you feel comfortable covering the material in your own words.

Throughout the presentation, the Checklist or Handouts will be identified with an icon on the PowerPoint and an Instructor Note in this Instructor Guide.

Entitlement to Continuation Pay 6-3 Materials and Equipment: • Projector/screen • Entitlement to Continuation Pay course PowerPoint slides • Chart paper and easel or whiteboard and markers • Paper, pens, pencils • Course sign-in sheet • Course evaluations

Forms and Handouts: • Entitlement to Continuation Pay Counselee Checklist • Continuation Pay Handout • Military Retirement Handout • Spending Plan Worksheet Handout • Sources of Help for Military Consumers Handout • Basic Investing Handout • Military Consumer Protection Handout

Entitlement to Continuation Pay 6-4 IV. CONTENT Introduction

Welcome to the Entitlement to Continuation Pay course. This is an opportunity to understand what Continuation Pay is, how to apply for it, and how best to use it.

SLIDE 1 Facilitator Introduction Introduce yourself by providing: Hello, my name is . I am a . (Describe your experience as a facilitator or with personal financial management.)

Course Purpose and Rationale The information we will cover over the next 60 minutes will help you plan for your Continuation Pay. Having an effective financial plan will help you remain focused on the mission and make the most of your Continuation Pay.

Agenda

You are entering into the second half of your military career, so it’s a great time to refocus on your finances. Today we will discuss the following four topics: Continuation Pay Basics, Application Process, Financial Implications SLIDE 2 and Resources.

Continuation Pay Basics

We will answer the following questions about Continuation Pay:

What is Continuation Pay? SLIDE 3 Who is eligible to receive it? When can you receive it? Why is it being offered? How is it calculated and disbursed?

There is a lot to cover today, so let’s get started.

Entitlement to Continuation Pay 6-5 What Is Continuation Pay?

INSTRUCTOR NOTE: Military Retirement and Continuation Pay Handouts. Be prepared to discuss each Handout with class.

SLIDE 4 What is Continuation Pay? It’s a one-time, mid-career bonus payable at 12 years of service paid in exchange for 4 additional years of service.

This one-time bonus payment is in addition to any other career field-specific incentives or retention bonuses you may receive or otherwise be eligible to receive. It is essentially a retention tool.

Continuation Pay is one of four key components of the Blended Retirement System. Let’s briefly go over the BRS using the Military Retirement Handout I’ve provided.

Who Is Eligible to Receive It?

This one-time payout is available at the mid-career mark to Active-duty and active Reserve Service members enrolled in the BRS. It is payable between completion of 8 years of service, but before completion of 12 years of service. SLIDE 5 Service members receive Continuation Pay in return for 4 additional years of obligated service.

When Can a Member Receive It?

Currently, all services award Continuation Pay at 12 years of service from PEBD (pay entry basic date). You can request Continuation Pay at 11 years and 6 months of service. SLIDE 6 Please pay close attention to the second bullet on this slide. You must elect it before your 12th year of service. This is an irrevocable election so if you miss this window of opportunity, it cannot be undone.

And finally, the money is actually paid on the first pay period following your 12th anniversary.

Entitlement to Continuation Pay 6-6 How Is It Calculated?

The calculations are different for active duty and Reserves. Currently the active-duty multiplier is 2.5 times basic pay and the Reserve multiplier is 0.5 times basic pay. SLIDE 7 INSTRUCTOR NOTE: Review the current BRS Continuation Pay guidelines as published on https://militarypay.defense.gov/BlendedRetirement/.

X = - = Monthly Basic Pay1 0.52 or 2.53 Gross CP Tax Witholding4 Net CP5

1Amount over 12 years; 2RC. Service members in man-day orders or Voluntary Limited Period of Duty (VLPAD) receive the RC amount; 3AC or AGR. Active Guard/Reserve (AGR) Service members receive the Active Component (AC) amount for CP; 4CP is eligible for Combat Zone Tax Exclusion (CZTE); 5What you take home.

Multipliers: Active-duty range is 2.5 to 13 times monthly basic pay and Reserves range is 0.5 to 6 times monthly basic pay (as if serving on active duty). Other branches of service may use a different multiplier. The Navy reviews its multiplier every fiscal year.

Pay-rate multipliers may be based on service-specific retention needs, specialty skills and hard-to-fill positions, which are similar to career-field incentives and re-enlistment bonuses.

Why don’t you take a minute to calculate your potential Continuation Pay?

How Is It Disbursed?

There are various options available for payout of Continuation Pay: 1. One Installment – Paid the first pay period after you start your 12th year of service. SLIDE 8 2. Two Equal Installments – You’ll receive the first installment the first pay period after you start your 12th year of service and the next installment will be paid the following year. 3. Four Equal Installments – You’ll receive the first installment in the first pay period after you start your 12th year of service and the remainder in three equal annual installments. 4. Continutation Pay is subject to tax withholding – Review the IRS Tax Withholding Estimator to make sure the right amount of tax will be withheld from your paycheck.

Entitlement to Continuation Pay 6-7 Why Is It Being Offered?

As we talked about earlier, CP is part of the BRS benefit package and is essentially a retention tool. It acts as an incentive to retain experienced personnel. SLIDE 9

Two Ways to Apply for Continuation Pay

INSTRUCTOR NOTE: Each uniformed service must document how a Service member applies for Continuation Pay and how the application is processed by their service. SLIDE 10 Each branch of service has its own specific process to apply for Continuation Pay. Currently the Navy has two ways to apply:

1. Complete NAVPERS 1070/613 (Page 13) with your command career counselor 2. Elect through NSIPS (Navy Standard Integrated Personnel System)

Applying Through NSIPS

Here are the five steps to apply for Continuation Pay on NSIPS.

INSTRUCTOR NOTE: Remind Service members that electing CP is SLIDE 11 an irrevocable decision and it requires additional service obligation.

Financial Implications

There are certain financial implications to Continuation Pay that we will now discuss. Those include:

SLIDE 12 • The tax considerations • The conditions or limitations of investing CP into the TSP • Options for your CP • Inability to meet your service obligations

Entitlement to Continuation Pay 6-8 What Are the Tax Considerations?

Continuation Pay is considered earned income and will be taxed accordingly for federal, state, and local taxes.

SLIDE 13 If taken in one installment, depending on your situation, it may move you into a higher tax bracket. If so, you might want to consider requesting 2 or 4 installments to lessen the tax burden in the year you receive it.

ASK: What happens in a combat zone?

If you elect to receive your Continuation Pay in a tax-free combat zone, it will also be tax-free.

Eligible Service members who serve in a combat zone can have income excluded from taxation by the IRS. CZTE is fully explained IRS Publication 3, “The Armed Forces Tax Guide,” which is the authoritative source for all military-specific tax matters.

What Are the Conditions / Limitations of Investing CP into the TSP?

Remember, Continuation Pay is considered a special pay. It can be invested into the TSP; however, these funds are not matched. SLIDE 14 Annual limits still apply for contributions ($19,500 for 2020). You need to keep in mind how this affects your future contributions. Will Continuation Pay max you out for the year? If so, you will lose the match on future contributions until January 1 of the next year.

Keep in mind, if you are serving in a combat zone you are allowed an additional contribution amount ($57,000 for 2020). However, the Roth contribution cannot exceed the annual limit ($19,500 for 2020).

Entitlement to Continuation Pay 6-9 What Can You Do With Your CP?

INSTRUCTOR NOTE: Review the Basic Investing, Spending Plan Worksheet, Sources of Help for Military Consumers, and Military Consumer Protection Handouts. Encourage students to attend Developing Your SLIDE 15 Spending Plan and/or Saving and Investing classes at the local installation Family Support Center.

The choice is yours and should be based on your current financial situation. Take a thoughtful approach and make the most of this money. One great place to start is by reviewing your spending plan to get a sense of where your money is currently going.

Here are some options for your Continuation Pay (Refer to Continuation Pay Handout): • Pay down debt • Save for emergencies • Invest for the future • Make a major purchase • Gift it

INSTRUCTOR NOTE: Go over the Military Consumer Protection Handout.

Unfortunately, scammers and dishonest businesses prey upon consumers, especially Service members with large sums of money to invest. So, it’s important to be mindful of this and protect your hard-earned money.

What if You Don’t Meet Your Service Obligations?

If you are unable to complete your service obligations, you MUST repay all or part of your Continuation Pay.

SLIDE 16 Taking the installment option may help alleviate this financial burden since you only have to pay back the portion you received instead of the full amount. It will be prorated for the number of years served.

But I’m sure none of you are going to take the Continuation Pay and not serve the full 4, right?

Entitlement to Continuation Pay 6-10 Summary

Finally, let’s take our last couple of minutes together to review some of the important information we covered today.

SLIDE 17 We’ve discussed Continuation Pay Details, the Application Process and Financial Implications of how you choose to receive this benefit. Let’s review the Resources available to assist you in making this important decision.

What questions do you have?

Resources

Please read through your Checklist and Handouts and refer back to them. They are a great resource to help navigate the financial decisions you’ll need to make. SLIDE 18 Remember you are not alone! You have many layers of support to help you learn more and make good financial decisions.

You can talk to your CFS at your unit or meet with a PFM and attend a class at your local installation Family Support Center. You can call Military OneSource or CG SUPRT for additional assistance. This is a great option for flexibility of scheduling since the call center has extended hours. You may also access the FINRED Sen$e mobile app or the MyNavy Financial Literacy mobile app for assistance with a variety of personal finance issues.

Thank You!

Once again, congratulations on reaching this important career milestone. As you embark on the second half of your military career, make it a priority to improve your financial readiness. There are plenty of resources we touched on today that are available to assist you. SLIDE 19 Certificates of completion are available if you need them, and can be collected before you leave the classroom but AFTER you finish filling out the assessment. Thanks everyone for participating.

Entitlement to Continuation Pay 6-11 CONTINUATION PAY (CP) VIDEO DISCUSSION GUIDE PART 1 TTOUCHPOINTC CURRICULUM

CFS Preparation: Distribute and discuss the Continuation Pay checklist and accompanying handouts to support this video-based training course. Checklists and handouts can be found online at https:// finred.usalearning.gov/SPL/Training/NavyResource/TouchpointCurriculum.

CFS Intro: Welcome to training. You are here today because you have a decision to make regarding your incentive pay titled Continuation Pay. The goal of today’s discussion is to understand how Continuation Pay works and some important factors to consider as you make your decision.

Play Videos 1, 2 & 3

Discussion Questions

1. The Blended Retirement System consists of four parts. Were you aware of each component? Which parts of the BRS do you believe will benefit you? CFS Talking Points: 1. Introduction • TSP Contributions — Your branch of service will contribute to your TSP account through automatic and matching contributions. • BRS Pension — At 20 years of service, pension is 40% of base pay plus an incremental 2.0% per year (over 20) until year 30. BRS match stops at year 26. • Lump Sum Retirement — Can receive lump sum payout in exchange for reducing 2. BRS monthly pension Overview • Continuation Pay — Lump sum payout made between 8-12 years of service with a service commitment of no less than 3 years

2. What major commitment should you consider when making your decision to accept or decline Continuation Pay?

3. Calculating CFS Talking Points: Will you meet the service obligation? Should you receive How Much CP annual installments instead of a lump sum if you are unsure of your ability to meet the You May Receive obligation? You may have to repay any unearned portion if you do not complete the service requirement.

Knowledge Check

Question: How much Continuation Pay will you receive?

Answer: • Active duty = 2.5 to 13 times base pay • Reservists = .5 to 6 times active duty base pay

CP Discussion Guide, Pg. 1 PART 2

CFS Intro: Do you have any plans for continuation pay should you be eligible and choose to receive it? Let's look at some things to consider.

Play Videos 4 & 5

Discussion Question

What plans do you have for your Continuation Pay if you choose to accept it? CFS Talking Points: What financial goals do you have? Your spending plan as a part of 4. Other CP your overall financial plan can guide you in making appropriate decisions with this income. Considerations Are you working on establishing an emergency fund or paying down debt? Are you looking to maximize your TSP — keeping in mind that maxing out too early can cause loss of matching? What are your thoughts on spending this incentive pay? Gifting these funds — as mentioned in the video — is another option that comes with tax benefits.

5. Your Goals, Spending Plan & CP

Play Video 6

CFS Talking Points: Now that we have completed today’s training on Continuation Pay, keep in mind this is an important choice that requires your attention and consideration. Be sure to contact the Installation Personal Financial Manager with questions and concerns so that you can feel confident in your decision. 6. How to Best Use Your CP CFS Note: Have Installation Personal Financial Manager’s contact information to provide to participants.

Catalog ID: OPNAV-ECPFRT-1.0 — (Updated December 2020) CP Discussion Guide, Pg. 2

Entitlement to Continuation Pay Presentation TC 6

Entitlement to Continuation Pay

Agenda

• Continuation Pay Basics

• Application Process

• Financial Implications

• Resources

Entitlement to Continuation Pay Counselee Checklist Available

2 Continuation Pay Basics

• What is Continuation Pay? • Who is eligible to receive it?

• When can you receive it? • Why is it being offered?

• How is it calculated and disbursed?

What Is Continuation Pay?

• Part of the Blended Retirement System (BRS)

• One-time, mid-career bonus at 12-year mark • Paid in exchange for 4 years of additional service • In addition to other career incentives and bonuses

• A retention tool

Military Retirement and Continuation Pay Handouts Available

4 Who Is Eligible to Receive It?

• Active Duty or Active Reserve • BRS participant • Complete between 8 and 12 years of service, based on Pay Entry Base Date (PEBD) • Agree to 4 years of additional service

When Can a Member Receive It?

• Can request at 11 years and 6 months

• Must elect before your 12th year and is an irrevocable election

• Paid on the 12th anniversary of Pay Entry Base Date (PEBD)

6 How Is It Calculated?

• Active-duty multiplier is 2.5 times basic pay • Reserve multiplier is 0.5 times basic pay • Pay-rate multipliers may be based on: üService-specific retention needs üSpecialty skills and hard-to-fill positions üSimilar to career field incentives and re-enlistment bonuses

X = - =

Monthly Basic Pay1 0.52 or 2.53 Gross CP Tax W itholding 4 Net CP5

How Is It Disbursed?

You can choose to receive a one-time payment or spread your payments to potentially save on taxes

One Installment Pick your Must elect before your 12th year and is an irrevocable election installment plan Paid the first pay period after you start your 12th year of service Remember, CP is subject to tax Two Equal Installments withholding! First installment is paid the first pay period after you start your 12th year of service and the next installment is paid the following year Your payment choice may affect taxes owed. Four Equal Installments Review the IRS Tax First installment is paid the first pay period after you start your 12th Withholding Estimator. year of service and remainder in three equal annual installments

8 Why Is It Being Offered?

• Part of BRS benefit package • Retention tool

Military Retirement Handout Available

Two Ways to Apply for Continuation Pay

Complete NAVPERS 1070/613 with your command career Elect it through NSIPS counselor

10 Applying Through NSIPS

1• Verify Continuation Pay eligibility in NSIPS (Continuation Pay Tab) ü First day to elect is 11 years 6 months after PEBD ü Election must be made prior to entering the first day of the 12th year of service

2• View / Print Continuation Pay Notification Letter

3 Indicate CP Election (Yes or No)

4• If elected, select payment option ü Single Lump-sum Payment ü Two Annual Payments (50%) ü Four Annual Payments (25%)

5• Save

Note: If a Sailor is unsure of the amount of Continuation Pay they will be paid at 12 YOS, it is recommended they contact their Command Career Counselor or Command Financial Specialist.

Financial Implications

• What are the tax considerations?

• What are the conditions / limitations of investing CP into the TSP?

• What can you do with your CP?

• What if you don’t meet your service obligations?

12 What Are the Tax Considerations?

• CP is EARNED income and will be taxed accordingly ü Federal ü State ü Local • More income may push you into a higher tax bracket ü If so, consider 2 or 4 installments ü Set aside funds to cover increased taxes • Combat Zone Tax Exclusion • Review IRS Publication 3, The Armed Forces Tax Guide

What Are the Conditions / Limitations of Investing CP into the TSP?

• Considered a special pay (bonus)

• Can be invested into TSP ü There are no matching funds

• Annual limits still apply ($19,500 for 2020) ü Maxing out early loses match on future contributions ü Matching contributions stop until January 1

• Combat Zone Tax Exclusion allows up to $57,000 for 2020

14 What Can You Do With Your CP?

• Take a thoughtful approach ü Update your spending plan ü Revisit your financial goals o Pay down debt o Make a major purchase o Save for emergencies o Gift it o Invest for the future

• Beware of misleading consumer practices ü Review Sources of Help for Military Consumers ü Protect yourself against identity theft, scams and frauds

Basic Investing, Spending Plan Worksheet, Sources of Help for Military Consumers, and Military Consumer Protection Handouts Available

What if You Don’t Meet Your Service Obligations?

• You must repay all or part of your Continuation Pay

• Installment options can help alleviate this financial burden

16 Summary

Congratulations on reaching this important milestone! Let’s recap what you learned to help in decision making as you approach eligibility for Continuation Pay: ü Continuation Pay Basics ü Application Process ü Financial Implications

Resources

• Checklist and Handouts • Financial Education and Support ü Command Financial Specialists (CFS) ü Personal Financial Managers (PFM) ü Installation Family Support Center or Health, Safety, Work-Life (HSWL) Regional Practice ü Relief Societies ü Military OneSource or CG SUPRT • Financial Literacy Mobile Apps ü MyNavy Financial Literacy ü Sen$e

18 Thank You!

The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.