Support Network

This Veterans Day is a bittersweet celebration -- a mix of admiration and appreciation on behalf of all of those who serve in the U.S. military and lingering pain and disbelief about the tragic shooting that left 13 dead and 29 wounded at Fort Hood last week.

As the nation mourns the military members and civilians killed and injured on Nov. 5, the government is stepping forward to support their families. Survivors of the service members who died in the attack are entitled to benefits from the Defense, Labor and Veterans Affairs departments and the Social Security Administration. These include dependency and indemnity compensation, educational assistance, guaranteed home loans and a death gratuity. Defense's Casualty Assistance Program also provides support.

The families of civilian employees killed in the attack are eligible for survivor benefits including continued health care coverage; life insurance; and a survivor annuity, depending on the coverage of the deceased. Civilian victims or their families also may qualify for workers compensation.

If you would like to help, there are ways to contribute directly to support efforts. United Service Organizations has set up a special fund to assist the Fort Hood community, and donations can be made here. USO contributions made through the Combined Federal Campaign will go toward the organization's general mission of assisting U.S. service members and their families and will not be set aside for this specific fund.

Roth Recommendation

If the Military Officers Association of America has its way, one Veterans Day gift that service members eventually could enjoy is enhanced benefits with their Thrift Savings Plan.

In testimony during a congressional hearing last week, Michael Hayden, a retired Air Force colonel and deputy director of government relations for the association, proposed allowing military and civilian TSP enrollees to move existing savings into the Roth accounts that will soon become a feature of the plan.

Hayden noted that the Roth offering -- mandated by the Family Smoking Prevention and Tobacco Control Act passed in June, is likely to be popular with military service members. Roth accounts allow participants to pay taxes before they make investments, rather than when they withdraw the money upon retirement. The accounts are especially beneficial for younger employees who expect their income to rise during their careers, putting them in a higher tax bracket when they retire.

"Providing a conversion option is a win-win for both the participant and the federal government," Hayden said during his testimony, noting that the taxes paid on the Roth accounts would go directly into the federal coffers.

The idea seemed to pique the interest of Rep. Stephen Lynch, D-Mass., chairman of the House Oversight and Government Reform Committee's federal workforce subcommittee. Don't count on this benefit just yet, however.

As TSP Executive Director Gregory Long noted, this option normally is reserved for individual retirement accounts, which are different from the 401(k) plans the TSP is modeled after. IRAs typically are established by the employee, whereas 401(k) plans are created and partially funded by the employer. Current Internal Revenue Service rules don't allow workers to roll funds from a 401(k) plan to a Roth 401(k), and the complicated bookkeeping required in the conversions could make them a tough sell.

Hayden also recommended giving service members the flexibility to contribute a set dollar amount -- rather than a percentage of their incomes -- to their TSP accounts. Civilian employees have both options but military members are limited to the percentage, which Hayden said restricts their ability to maximize their benefits.

Housing Help

Congress also has bolstered some emergency benefits for service members stationed overseas by ensuring that they will have an extra year to qualify for homebuyers tax credits.

Last week, lawmakers extended an $8,000 first-time homebuyer credit through April 2010. The 2009 Worker, Homeowner and Business Assistance Act (H.R. 3404) included language by Sen. Claire McCaskill, D-Mo., and Charles Grassley, R-Iowa, giving military personnel serving abroad in 2009 or 2010 an extra year to qualify for the credit. The law also eliminates a repayment requirement for personnel who are forced to sell their homes as a result of their official service, and ensures military members are not taxed on payments to make up for declining home values in areas where there are base closures.