Technical Exhibit 11 - FP Facilitator Guide (2019-2020).pdf

FINANCIAL

PLANNING FOR

TRANSITION

2019-2020 TAP CURRICULUM

Financial Planning for Transition 2019 -2020 - Page i

TTable of Contents

Facilitator Overview ........................................................................................................ ii

Effective Workshop Facilitation with Adult Learners ..................................................... iii

Explanation of the Facilitator Guide ................................................................................ v

Introduction to Financial Planning

Financial Goals

Income

Expenses

Debt

Assets

Action Plan

Resources

Summary

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FFacilitator Overview The purpose of this course is to provide transitioning Service members with an understanding of how and why transition may impact their finances. This course includes activities, demonstrations, and discussion to increase awareness and encourage learning. It is import these all take place as instructed.

Facilitator Qualifications

Nationally accredited financial educator/counselor who is a government employee or government contractor will deliver this curriculum. (Reference DoDI – 1342.22).

Facilitator Preparation

Research the demographics of the workshop in advance and tailor your activities and examples accordingly.

Check Internet access; be prepared to use the screen shots in the PowerPoint presentation if Internet access is not available.

Check all web links in all modules prior to delivery.

Gather and Check supplies – markers, chart paper, sticky notes, paper, pens, and other supplies.

Secure projection equipment (including projection screen suitable for audience size) and the Financial Planning for Transition PowerPoint presentation.

Review the Service-specific spending plan.

Research sources of local financial assistance for veterans.

If allowed by the installation, Service members may be instructed to bring personal computers or other devices to use during the workshop for research activities.

Facilitator Guides: Follows the slide deck providing details for each slide and page reference for the participant guide

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EEffective Workshop Facilitation with Adult Learners o Adult learners need to know “why.” Make the content relevant to them by providing real-life examples of how they will use the knowledge and why it is important for them. Stories are a powerful teaching tool—keep them brief, relevant, and appropriate.

o Adults learn best through exploration activities. Resist the temptation to save time by skipping the activities in the curriculum and relying on lecture and slide presentations. You will lose your audience’s attention and your credibility, and they will not learn or retain the information.

o Keep it simple to avoid information overload. Present the information in a clear, concise, systematic manner followed by an activity or discussion. Avoid the temptation to add more information than is covered in the curriculum or use terms or acronyms that are not explained in the materials. Stop talking and/or adding more information while they work on an activity. Give regular breaks (10 minutes per hour) to allow participants to move around and informally discuss what they have learned.

o Be respectful. Adults bring myriad skills and experiences into the workshop. Acknowledge their education and training and give opportunities for them to share their ideas and thoughts with the class. Invite them to participate, but never force anyone to read, write on the board, or share personal information.

o Give feedback and get feedback. Adult learners like to be involved in the creation and evaluation of their learning; allow adequate time for questions and answers. At the end of each module, participants are given time to complete the TTransition GPS Participant Assessment. As the facilitator, please encourage all participants to complete the online assessment.

Interactive Demonstrations and Activities

To encourage active participation and to foster learning in the adult audience, this module has incorporated demonstrations and activities. When facilitating a demonstration or activity, use the following information to foster success:

Demonstration: participants observe while you explore helpful websites and tools. An activity may follow which provides time for the participant to Demonstrations require internet connection.

During an activity, participants actively engage in hands-on exercises. Look for visual cues, such as hands raised, heads up, pens down, etc., to gauge when to wrap-up the activity.

Be sure to answer any questions the participants have during activities and demonstrations. You’ll find instructions and additional guidance throughout this Instructor Guide.

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PParking Lot

As you progress through the material, you may get questions from participants that require further research or may be better suited for another part of the discussion. You can create a list—a “parking lot”—to collect these questions. Encourage participants to add any questions they may have during breaks to the parking lot, too.

Check the parking lot at the end of each module to ensure you answered any relevant questions.

Collect contact information for participants whose parking lot questions remain unanswered and follow up to give them an answer later.

Note: All discussions should be general in nature and not specific to any participant’s personal financial situation. If a participant does start to have a discussion on their personal financial situation in the classroom, explain to them that this is not the correct place to be discussing the personal financial information and they need to make an appointment with a financial counselor.

TAP Curriculum Participant Assessment Guidelines (http://www.dmdc.osd.mil/tgpsp//)

At the end of each module, ask participants to complete the TAP Curriculum Participant Assessment.

As the facilitator, please encourage all participants to complete the online assessment. Here are some pertinent details to share with the class:

Participant assessments are completely anonymous; demographic information is not stored and needs to be entered for each assessment.

The assessment information is gathered and analyzed quarterly and is used as Service member feedback during the annual curriculum review.

Participants should select only the course they just completed.

For facilitator information about the participant assessment, visit https://DODTAP.mil; select the “Login to DoD TAP” tab at the top; select “Managers and Counselors,” and sign in using a Common Access Card.

TAP Curriculum Participant Assessment Screenshots TAP Curriculum Participant Assessment Facilitator Information Sheet

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EExplanation of the Facilitator Guide

Section Title

Slide Title

Slide Image

Slide Number

KEY POINTS:

o Main topics to be presented

Participant Guide

Corresponding page number in the Participant Guide

Facilitator Notes

Notes to aid in the facilitation of the section, additional topic related information and/or information from Participant Guide

Graphic indicates there is an activity. Instructions to conduct the activity will be included in this section.

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IIntroduction to Financial Planning Welcome

Slide 1 o Have displayed before class begins

Participant

Module Time: 3-4 hours Times suggested for activities are approximate. Assess your audience and make adjustments as needed..

Emphasize the purpose of this module:

Understand the changes and impact transitioning may have on their financial situation.

CRS: Create a post-transition budget

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Welcome

Slide 2 o Disclaimer from DoD o Do not read, paraphrase the content

Page 1: Disclaimer

The information provided herein does not constitute a formal endorsement of any company, its products, or services by the Department of Defense. Specifically, the appearance of external hyperlinks does not constitute endorsement by the U.S.

Department of Defense of the linked websites, or the information, products, or services contained therein. The U.S. Department of Defense does not exercise any editorial control over the information you may find at these locations. This module provides informational resource material to assist military personnel and their families in identifying or exploring valuable resources and options.

Explain that the DOD cannot endorse any product or website external to department of defense.

The websites used during this class have been found to contain valuable information; there are many website which offer similar information

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Quote

Slide 3 o Slide used for Ice

Breaker Activity o Do not read slide

Guide Page 1

Facilitator Notes

Personal finance is personal and there are many theories on the best ways to be financial secure;

Provide different personal financial theories (cash envelope, tracking every penny, general knowledge, etc.)

This class is to provide the participant with the knowledge to become or maintain financial stability as they transition, using whatever theory or way works for them.

AACTIVITY: Polling for Knowledge TIME: 2 minutes INSTRUCTIONS: Ask the following questions of the class in a hand poll – ask them to raise their hands for the following statements:

o How many have a current spend plan?

o Understand what income you need to maintain your current lifestyle o How taxes will be changing?

o Basics of healthcare?

o Possible options for TSP?

o Anything else financial related that would be good to know prior to transition? (wait for responses, if none, move on)

INNTENT: to provide the Service members topics to be covered in this class

DEBRIEF: This class will provide you with the knowledge you need to prepare financially for transition.

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Agenda

Slide 4 o Agenda o Acknowledge each service has their own service-specific spend plan o Class is a broad overview

Guide Page 1

Class will provide a broad overview of financial topics, for specific situation information – make an appointment with the counselor Each Service will provide a Service-specific spending plan to use during the workshop. Because spending plans may vary between Services, the Participant Guide has non-specific instructions when referring to the spending plan.

You should familiarize yourself before the workshop with the spending plan being used and be prepared to answer any specific questions.

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FFinancial Goals

Financial Goals

Slide 5 o What are financial goals?

o Define short, medium, and long term goals o Provide examples of financial goals

Participant Guide Page 2-4

Facilitator Notes

Explain a ffinancial goal is a goal with financial aims and what makes a good goal SPECIFIC: State the goal in terms that are clear MEASURABLE: Clear definition of success ATTAINABLE: Needs to be attainable in current financial situation REALISTIC: Is the goal realistic based on your situation TIME-BASED: Need to have a specific time limit

Use the time frames listed on the slide/guide and provide examples or have the SM provide examples of a goals from each timeframe.

Examples of financial goal statements:

Create examples specific to the class; two provide below, one for Separatees and one for Retirees.

SEP – Save 10% into a separate savings specifically for a family vacation next summer.

RET – Add $500 per month into a 529 plan for college beginning in August 2024.

AACTIVITY: Write Financial Goals:

TIME: 3-5 minutes INSTRUCTIONS: Direct the participants to the correct page in the on the spending plan, the page within this guide (page 4) or to the spending plan located at the end of this guide (page 87), to write the 3 goals, one short, one medium and one long.

DEBRIEF: Ask if anyone is willing to share their goal

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FFinancial Goals

Why a Spending Plan?

Slide 6 o Stress the changes that occur during transition, especially the financial changes o Important to know where the SM are at financially before transition to make adjustments now

Guide Page 4-5

Participants may be less engaged, feeling this class is not necessary or questioning why they need to update/create a spending plan.

ASK: WWhy should you update/create a spending plan prior to transition?

Solicit responses – examples of answers below and may vary

Expenses may change, i.e. increase in housing costs, purchase a vehicle, insurance payments, loss of commissary and Exchange privileges, etc.

I might need to work while in school or starting my business.

Good to understand your financial situation before a major life event or transition.

To know how much income I need to maintain my current lifestyle Understand where I can save decrease expenses to save money or pay down debts.

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IIncome

Learning Objectives

Slide 7 o Do not read, paraphrase the content o Explain purpose of this module

Guide Page 6

Learning Objectives: slide should be quick; do not read

Purpose: of this section is to evaluate current income and determine how much income is needed after transition

Ask: how many know how much money they need to keep their current lifestyle?

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Income Definitions

Slide 8 o NET and GROSS income

Guide Page 6

Net and Gross Income It is important to review common terms used when dealing with income to ensure everyone understand the difference between Gross and Net income; see slide for definitions Use monetary examples:

Gross is $2000, take away taxes $350, retirement $200, insurance $150 – the NET is now $1300.

Create your own that is relevant to your class, i.e. a retiree will take home more than $2000 a pay period so increase to $6000, changing the other numbers as needed.

Consider asking the class what the numbers should be for taxes, retirement, and insurance.

NG/R Note: National Guard and Reservists pay grade may not reflect an accurate picture of gross income due to having other sources of income. Company may still be providing financial support.

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LES

Statement

Slide 9 o Entitlements is the income o Reference for current income o Other sources of income

Guide Page 7

DoD LES This should be review for all SM Focus on entitlements; guide has a box around entitlements as to the amount for

ASK: what types of entitlements are included?

Answers will vary: BAS, BAH, COLA, Dive, Language, Hazard Duty

IF no Coast Guard are in the class, skip to slide 11

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USCG

PaySlip

Slide 10 o ONLY use if CG members are in class o Income is under the

Earnings box

Participant

If there are no Coast Guard members in the class; skip this slide go directly to slide 11.

Coast Guard PaySlip

Coast Guard uses PaySlip as the equivalent to an LES.

Income is located under the Earnings which is about mid-way down the page; will include the same type of entitlements as the DoD members, BAS, BAH, Basic Pay, Dive, etc.

Guide has a box around the Earning on page 8

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Update Spending Plan -

Slide 11 o Additional source of income o Update SP Activity

Participant Guide Page 9

Facilitator Guide

ASK: wwhat are additional sources of income?

Answers may vary: spouse, second job, annuity, investment, rental house, child support/alimony, medical payments, parental support

Acknowledge these additional sources of income should be included on the spending plan.

ACTIVITY: Update Spending Plan TTIME: 3 minutes INSTRUCTIONS: Have Service members review or include all income into the correct location on the spending plan provided, or to the spending plan located at the end of this guide (page 87-88). Use the LES, PaySlip, and additional sources of income.

INNTENT: Have a knowledge of current income amount; which becomes relevant in next activity

DEBRIEF: Knowing what your current net income will better allow the participant to determine a civilian equivalent salary to maintain current lifestyle.

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Civilian Equivalent Salary

Slide 12 o Civilian Equivalent:

Scenario 1– Hardy o Understand civilian equivalent salary (CES) o How to determine CES using RMC calculator o Instructions for

Website Demonstration

Guide Page 9-10

Throughout this guide there are two scenarios used at three ttopics: CCivilian Equivalent, Cost of Living and Taxes:

Scenario 1: Hardy - E-5, single, living in Washington, D.C., with 4 years Scenario 2: Smith - 0-5, married, living in San Antonio, TX, retiring after 20 years

Next two slides, 12-13, cover the CES for each scenario—use the slide that best reflects the demographics of your class.

RMC Calculator:

Three ways to facilitate this topic:

o Using the slide to explain how to use the website and interpret the results o As a web demonstration (if internet or computers are not available to participants) o Have participants follow along during the web demonstration on their own computers using their information, with follow on time to research their own information (Preferred method).

Explain the how to use the RMC Calculator by adding Grade, Years of Service, Tax Filing, Family Size, Living situation, Zip code of current/desired location.

Scroll down to see the results; including current salary, BAH, BAS, taxes, etc.

RMC calculation is at the bottom of the webpage, below the chart.

Civilian Salary Equivalent: Scenario 1 - Hardy Use the RMC Calculator to determine the civilian equivalent:

http://militarypay.defense.gov/Calculators/RMC-Calculator/

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AACITIVTY: Web Demonstration/Web Research Using RMC Calculator TTIME: 5 minutes IINSTRUCTIONS: Go to the RMC website (http://militarypay.defense.gov/Calculators/RMC-Calculator/), ask for a volunteer to provide their information, use one of the provided scenarios (the one most relevant to the class), or create a new scenario; complete the required fields. Click Calculate.

Explain the information on the website.

IINTENT: Understand how to use the calculator, interpret the results to provide information on salary that is equivalent in the civilian sector to maintain current lifestyle.

DDEBRIEF: Any questions on the use of the RMC Calculator? Explain since this does not use personal information it does not include special pays in the income or taxes amount. There will be a difference between the two due to what is taxable.

Entitlements may or may not be taxable, i.e. housing allowance is not taxable, but when included as income, it is

Encourage participants to write down the CES in their service spending plan, within this guide (page 13) or to the spending plan located at the end of this guide (page 87), under “Projected Income”.

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Equivalent Salary

Slide 13 o Civilian Equivalent:

Scenario 2– Smith o Same directions for demonstration is on previous slide

Participant Guide Page 11-12

Facilitator Guide

Civilian Salary Equivalent:: Scenario 2 - Smith Use the RMC Calculator to determine the civilian equivalent:

http://militarypay.defense.gov/Calculators/RMC-Calculator/

ACITIVTY: Web Demonstration/Web Research Using RMC Calculator TTIME: 5 minutes INSTRUCTIONS: Go to the RMC website (http://militarypay.defense.gov/Calculators/RMC-Calculator/), ask for a volunteer to provide their information, use one of the provided scenarios (the one most relevant to the class), or create a new scenario; complete the required fields. Click Calculate.

Explain the information on the website.

INTENT: Understand how to use the calculator, interpret the results to provide information on salary that is equivalent in the civilian sector to maintain current lifestyle.

DEBRIEF: Any questions on the use of the RMC Calculator? Explain since this does not use personal information it does not include special pays in the income or taxes amount. There will be a difference between the two due to what is taxable.

Entitlements may or may not be taxable, i.e. housing allowance is not taxable, but when included as income, it is

Encourage participants to write down the CES in their service spending plan, within this guide (page 13) or to the spending plan located at the end of this guide (page 87), under “Projected Income”.

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EExpenses

- Expenses

Slide 14 o Learning Objectives o Do not read verbatim, paraphrase the content

Guide Page 14

Expenses section covers changes in expenses that may occur during transition, to include differences in location, taxes, healthcare, and insurance.

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Living Expenses

Slide 15 o CURRENT expenses within each category

Guide Page 14

Use the slide to discuss the types of expenses the participants currently have.

Encourage the participants to consider and think about what their current expenses as they are completing the section on expenses for spending plan.

ACTIVITY: Types of Expenses TTIME: 5-10 minutes INSTRUCTIONS: Show the slide and discuss what types of expenses could be associated with each circle.

1. HHousehold – rent, cleaning supplies, repairs, lawn care. Mortgage is not included in this category as it is considered debt instead of an expense. This is a change from what is taught during the military life cycle finance courses. The change is necessary because commercial lenders consider rent/mortgage as debt when calculating the debt-to- income ratio for lending purposes. If it is mentioned, let SM know it will be discussed during the debt section.

2. UUtility – electric, gas, water, trash, cable/satellite, internet, phone

3. TTransportation – car lease, registration, insurance, gas, maintenance (car loan payments are debt, not expense)

4. FFood – groceries, dining out, vending machine, purchased beverages,

5. CClothing/Personal – clothes, hair-cuts, manicures, makeup/toiletries, purses, jewelry, gifts

6. IInsurance – car, house, renters, life, pet, personal

7. LLeisure – movies, dining out, travel, sporting events, cultural activities, going to the range

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OOPTION: Round Robin Question -- Start with Household as the topic, pick a person at random asking them to provide a household expense, ask the person sitting next to them if they have an expense, keep going until no one can add any more expenses, then go on to the next topic; do the same with each topic ending with leisure.. --This option will often engage those who would not otherwise offer suggestions.

INTENT: To have the participants to consider where and how they spend their money; if there are reoccurring expenses (streaming services, gaming services, tattoos, haircuts (both men and women), or expenses that are paid automatically to a credit card/bank account which may have been forgotten.

DEBRIEF: Notice that some of these expenses overlap or could be in a few different categories; is there a right or wrong place for each expense? No, the important thing is to have it included.

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Track

Slide 16 o Fixed/Variable expenses o Disposable Income o Tracking spending to understand spending habits o Ways to track spending

Guide Page 15

Explain fixed and variable expenses EX: Rent verse the electric bill

Disposable income Income that is not slated for any particular bill or savings which is considered disposable income went spent carelessly, can quickly derail a spending plan and leave no money at the end of the month.

Provide an example:

o Budgeting $175 on dining out, but really spending $500 o Or use another example that would be relevant to the class

Why tracking spending Ask how many go to Starbuck daily or the vending machine daily? How much do they send each day? Figure the amount for the pay period or month o $5 latte x 5 days per week = $100 per month o $10 lunch x 5 days per week = $100 per period/$200 per month o Trips to the vending machine $3 coke, 2 per day, = $6/day or $60/pay period Ways to track spending

ASK for suggestions; Use way that works best for the SM o Use a free app to track spending; many can be found in the app store on your mobile device or tablet o Keep a small notebook with you to record every purchase (cash/credit/ debit) o Keep receipts from every purchase and total them up at the end of the week o Create your own log using computer software such as Excel or Word

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Plan Update -

Slide 17 o Update spending plan with current expenses

Guide Page 16

Spending Plan Update -- EExpenses Have participants review/update their current list of expenses. This can be done in the Service-specific spending plan, or in the spending plan located at the end of this guide (page 89-91).

Encourage them to include:

Rent or mortgage Estimate utilities, cell phone, cable Estimate grocery expenses and dining out Car payment, gas, insurance Online subscriptions Personal habits/grooming

ACTIVITY: Update Spending Plan - Expenses

INSTRUCTIONS: Direct the participants to the correct page in the on the spending plan, or to the spending plan located at the end of this guide (page 89-91) to complete or updates the EXPENSES section.

INTENT: Have a knowledge of current expenses

DEBRIEF: Knowing what your current expenses can provide

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Expenses

– New

Slide 18 o Expenses associated with transition o Expenses which may occur due to transition

Participant Guide Page 17

Facilitator Guide

Expenses may change during/after transition.

Discuss the changes to expenses that may happen due to transition.

Will expenses decrease, increase, stay the same?

Will there be new expenses?

If relocating, cost of living at new location may be higher/lower than current.

ACTIVITY: Discussion on Changes/Additions to Expenses

INSTRUCTIONS: This is the same slide from previously. Go through each expense type asking what may change, increase/decrease or stay the same with transition. Example answers provided:

1. Household – no BAH, may need to rent apt and/or purchase furniture

2. Utilities – living off base may result in utility expense, rates will change depending on location

3. Transportation – cost of insurance, gas, maintenance, vehicle registration

4. Food – cost may be higher or lower depending on location, may not have access to commissary

5. Clothing – no clothing allowance, may need to buy clothing for new a position or civilian life

6. Insurance –change to insurance costs – renters, car, homeowners; life insurance is no longer provided

7. Leisure – may no longer be able to use base facilities, e.g. gym, MWR, pool INTENT: identify which expenses may change or new expense to be considered DEBRIEF: Are some of the costs dependent upon location? How can change in location change expenses?

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Cost of

Changes

Slide 19 o Expense of relocation o Cost of Living Changes

Guide Page 17-20

Expense of Relocation Transition allows one more move by the military Refer SM to a relocation counselor or the office that provides relocation assistance for specific information on last military moves; this is not the class for this discussion; if relocation assistance will be briefing provide the details

Changes to Cost of Living Relocation may affect expenses, such as:

Salary, housing, utilities, taxes (including tax benefits for Veterans), food, childcare, commuting costs, clothing, entertainment, school costs, climate, health insurance

To check how relocation may affect the cost of living, use a COL comparison calculator.

Use your preferred website for demonstrating the Cost of Living comparison; the guide uses BANKRATE.com.

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Cost of Living Demonstration

Slide 20 o Cost of living

(COL) comparison o Determine COL using a COL calculator

Guide Page 17-20

Three ways to facilitate this topic:

Using the slide to explain how to use the website and interpret the results As a web demonstration (if internet or computers are not available to participants) Have participants follow along during the web demonstration on their own computers using their information, with follow on time to research their own information (Preferred method). Instructions in box below.

Using the slide: Note the differences in the cost of living at two different locations.

Scenario 1: Cost of living Comparison – page 18

Moving from Washington DC to Raleigh Raleigh COL is lower by 38% than DC Most expenses would go down as would salary requirements

Scenario 2: Cost of living Comparison – page 19

Moving from San Antonio TX, to Boston MA COL in Boston is 65% higher than in San Antonio Overall expect to pay more for housing, utilities and all expenses; salary will be aligned with this COL

(NOTE: the cost of living in Boston is calculated for living in the city, cost of living in the outer areas would be less expensive.)

DEBRIEF: Explain that different COL calculators will differ in their results;

recommend using a few different ones to have a clear picture of COL of a new area before determining if a particular location will fit your personal and financial needs after transition.

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AACTIVITY: Web Demonstration/Research Using COL Calculator

IINSTRUCTIONS:: Using the BankRate.com website (http://www.bankrate.com/calculators/savings/moving-cost-of-living-calculator.aspx) or a different cost-of-living calculator, to find the location based salary equivalent.

Using the website, complete an example, either with information provided in the scenario or ask for participants to provide. This will include where they are planning to go, along with civilian salary equivalent. Provide an interpretation of the results, COL based on the new location.

Have participants write the amount in the boxes provided in the guide (page 21).

Allow time to determine a secondary location and repeat the calculations.

Remind participants to include the location/zip code in their notes.

INTENT: for participants to gain an understanding potential differences in cost of living in possible areas after transition

DEBRIEF: AAsk the participants if they looked at the average cost of housing for the new area. Is it higher, lower or about equal to where they currently are?

Explain that different COL calculators will differ in their results; recommend using a few different ones to have a clear picture of COL of a new area before determining if a particular location will fit your personal and financial needs after transition.

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Living Wage

Slide 21 o Living wage concept o Demonstration of website Living Wage website

Guide Page 21

Be aware this topic can be difficult to understand and the results from the website confusing.

Three ways to facilitate this topic:

Using the slide to explain how to use the website and interpret the results.

As a web demonstration (if internet or computers are not available to participants).

Have participants follow along during the web demonstration on their own information (Preferred method). Instructions in box below.

Living Wage

Living Wage is the wage an individual must earn to support their family.

Understanding what a living wage is for a given area can assist in determining if the salary compares favorably with the living wage.

Explain a poverty wage is the wage that is equal to the poverty line; minimum wage is the current lowest wage an individual can be paid by an employer.

The family situations on the top row indicate the number in the family and how many in the family are working; if two are working, the amounts indicate what each working adult must earn.

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AACTIVITY: Web Demonstration/Research for LIVING WAGE in a new location after transition TTIME: 5 minutes IINSTRUCTIONS: Go to the Living Wage Calculator (http://livingwage.mit.edu) or a different living wage calculator, to locate the hourly living wage for you new location. Ask a participants for an area, use one of the scenarios, or choose one at random. Provide a clear explanation of the different situations, that scrolling may be required if more than one adult is working.

Encourage participants to write the information down, location and living wage on page 21 in the guide and to repeat with the secondary location.

IINTENT: for participants to understand how to determine living wage for a given area; especially as this relates to finding a position/job and how the wage/salary compares in the ability to maintain current lifestyle with the living wage of the area.

DDEBRIEF: AAsk: was anyone was surprised by the living wage amounts? Where they higher or lower than expected?

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Taxable vs Non-Taxable

Slide 22 o Taxable income o Non-taxable entitlements

Guide Page 22

Facilitator Notes

Taxable/Non--Taxable Income Quickly remind about entitlements being a non-taxable and what is taxable.

Generally, items labeled “pay” are taxable, but there are some exceptions to that rule.

Ask a participant to read the list on the slide; are there any that are not on this list?

Allow participants time to create their list of non-taxable entitlements and estimate how much of their income is not taxed.

ACTIVITY: List of non-taxable entitlements TTIME: 2 Minutes INSTRUCTIONS: Allow the participants’ time to write a list of their non-taxable entitlements they receive and estimate the total amount that is not taxed. Space is available on page 21 in the participant guide.

INTENT: Understand how much of participant’s income is currently non-taxable.

DEBRIEF: Explain that this amount that is not currently taxed will now be taxed by federal, state, and any other taxing agency. This can decrease your income if allowances are not made when determining the salary needed to maintain currently lifestyle.

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Taxes

Slide 23 o Changes to taxes due to transition o How taxes affect

Guide Page 23

Understanding How Taxes Affect Your Income Explain each of the following and how it can affect income after transition:

Paying State Income Tax: May not have been paying state income based on home of record. As a civilian, may be taxable by the state – but may vary depending on your location, disability and veteran status.

All Income is Taxable: While not all military compensation is taxable, ALL civilian salary will be taxed at both the federal and state levels. In some areas, county and city taxes may also be assessed on your income.

No Automatic Extensions: Civilians do not receive automatic extensions on tax filing deadlines, it must be requested.

Property Taxes: Exemptions from certain property taxes or received a discounted rate for vehicle registration may no longer apply. Some states do have tax incentives for Veterans, but it varies by state.

Explain the next step is to use a website to estimate taxes based on location.

Smart Asset : https://smartasset.com/taxes/income-taxes

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Determine Your Taxes

Slide 24 o Estimate taxes based on location o IRS Withholding

Guide Page 24-28

Estimating Taxes This is one of the most important sections in the course; do not skip the time for research—It is very relevant and important to the participants.

Estimating taxes has two scenarios; Hardy will be separating and will not be receiving retirement pay; Smith is retiring and will be receiving a retirement check. This creates two separate activities, one for separtees and one for retirees. Directions are provided in the guide as well as on the slide.

Explain that neither scenario includes a disability and this should be not factored in as income, especially if disability has yet to be determined.

Three ways to facilitate this topic:

Using the slide to explain how to use the website and interpret the results (Slides 68 for Separtees and slide 69 for Retirees – ONLY recommended if internet is unavailable for facilitator or participants) As a web demonstration (if internet or computers are not available to participants) Have participants follow along during the web demonstration on their own information (Preferred method).

Discuss AFTER completing the estimating taxes activity:

IRS Withholding

Will need to be evaluated after transition Can use https://www.irs.gov/individuals-witholding-calculator.

Using this website is not included in the class, but can be demonstrated at the discretion of the facilitator. The amount of taxes withheld throughout the year

Financial Planning for Transition 2019 -2020 - Page 29 is another aspect of taxes which will need to be reevaluated after transition and before you start a new job.

SSpecific instructions are provided for participants on page 25 of the guide.

SScenario 1: Taxes when Separating (scenario information is included in parenthesis and italics)

ACTIVITY: Estimating taxes after transition TIME: 5 minutes INSTRUCTIONS: Go to https://smartasset.com/taxes/income-taxes Using information from participants, the scenario provided, or random information, enter the following:

1. Use the Civilian Salary Equivalent determined earlier in the Household Income ($67,000)

2. Enter a location (Raleigh NC)

3. Choose a filing status ( Single)

Specific instructions are provided ffor participants on page 27.

Taxes for those retiring are more complicated; the first step is to determine the retirement account. This is done with militarypay.defense.gov.

After determining the retirement pay, a retiree now will determine the GGAP, the difference between the retirement pay and civilian equivalent. These two numbers are used for estimating taxes due in retirement; taxes in retirement are also more complicated due to different state tax laws governing retirement pay.

SScenario 2: Estimating Taxes when Retiring.

In this scenario, retirement pay is estimated at $55,000 - leaving a GGAP of $95,000 between the retirement pay and the civilian salary equivalent of $150K

GO TO: http://militarypay.defense.gov/Calculators/High-3-Calculator/ and https://smartasset.com/retirement/retirement-taxes

Retirement Tax Calculations (scenario information is included in parenthesis and italics)

ACTIVITY: Estimating taxes with retirement pay TIME: 10 minutes INSTRUCTIONS: Using information from participants, the scenario provided, or random information, complete the following steps for retirees:

Financial Planning for Transition 2019 -2020 - Page 30

1. Estimate ppre--ttax retirement pay using http://militarypay.defense.gov/Calculators/High-3-Calculator/

2. Follow the directions on the website

a. Active or Reserve

b. Personal Information (must first add year to Pay Entry before month)

c. Retirement Information

d. Career Progression

e. Roll over the first full High-3 Pension bar to see the yearly amount

3. GO TO: https://smartasset.com/retirement/retirement-taxes

4. Choose the state where you wish to retire (Massachusetts)

5. Complete the following information:

a. SS = $0 (if not drawing Social Security)

b. Annual Retirement = military retirement ($55,000)

c. Annual wages = amount needed to close the gap between retirement pay and civilian salary equivalent ($95,000)

d. Location = zip code

e. Year of birth

f. Filing Status

FFOR BOTH SEPARATING/RETIRING TAX ACTIVITY:

IINTENT: to provide knowledge on the extent of the taxes may increase due to ALL income being taxable.

DDEBRIEF: Encourage participants to detail their findings in the spending plan, on page 28 in the guide or to the spending plan located at the end of this guide (page 87).

Ask: Was anyone was shocked by the amount the taxes that would be taken from a civilian paycheck?

After completing this Segway into IRS Withholding.

Will need to be evaluated after transition Can use https://www.irs.gov/individuals-witholding-calculator.

Using this website is not included in the class, but can be demonstrated at the discretion of the facilitator.

Encourage participants to make an appointment with a PFM if there are questions about correct IRS Withholding.

Financial Planning for Transition 2019 -2020 - Page 31

Health Care Choice after Transition

Slide 25 o Healthcare options available after transition

Guide Page 29-30

Health Care Ask: how many use Tricare Prime while in the military? How many used Tricare Select or a different health insurance company?

This will provide you with an understanding of the base knowledge of the class as it pertains to insurance. If the majority have only used Tricare Prime, much of the healthcare discussion will be new and possibly confusing; while others may have used outside insurance and have a basic understanding.

This will allow you to tailor your discussion and utilize the knowledge/experiences of the participants.

Health insurance is still required; however, that may change so keep aware of any new developments in this area to be able to inform the class correctly.

Immediately after Transition Retiring:

Tricare for Retirees o Cannot enroll until a retirement date is in DEERS; this may happen days or months after the retirement; to account for this discrepancy, the enrollment period for retirees into Tricare for Retirees is 12 months.

o https://www.tricare.mil/CoveredServices/BenefitUpdates/Archives/4_23_ 19_Continuing_TRICARE_Health_Coverage_after_Retirement o If planning to use MTF, not all MTF accept Retirees and families.

Employer or other insurance o If using insurance from an employer or other source, the time is generally 60-90 days from retirement date.

Separating Transition Assistance Management Program (TAMP) o Provided to those with certain type of separation

Financial Planning for Transition 2019 -2020 - Page 32 o If eligible, it offers the same coverage available under TRICARE, OONLY for180 days after date of separation.

Continued Health Care Benefit Program (CHCBP) o Provides coverage for up to 18 months upon separation from service.

o There is a quarterly premium, co-pay, and deductible associated with

CHCBP.

For further questions refer to the Tricare Website: www.tricare.mil.

National Guard and Reserve have different the eligibility requirements. Encourage those members to visit www.tricare.mil for more detailed eligibility information.

BBefore switching to next slide (Individual/Group Heallth Insurance), explain now the discussion will focus on the basics of insurance using an insurance company that is from the private sector.

Individual vs. Group Insurance Basic healthcare terminology Plan and networks types – HMO, PPO, POS, EPO Estimating healthcare costs

Financial Planning for Transition 2019 -2020 - Page 33

Health Insurance

Slide 26 o Differences between individual or group health insurance

Guide Page 30

Explain that the main difference between individual and group is how and with whom the insurance is negotiated.

A group in negotiation may receive a better price than an individual, due to the group having both those who will use their insurance more often, as well as those who won’t; both will still pay the premium.

Individual/Single Family

Between insured and insurance company May be more expensive, requires a health exam and the possibility of being denied More choices in plans

Group Insurance Generally the option used by employers to provide health insurance for the employee.

Premium could be split between the employer and employee, varies by company on how insurance is generally less expensive.

Due to negotiation, no individual can be denied when part of the group.

This negotiation may also limit the choice of plans and/or doctors.

Some employers now provide a healthcare stipend. The employee will find their own insurance with the stipend being used to pay the premium.

Financial Planning for Transition 2019 -2020 - Page 34

Healthcare Terms

Slide 27 o Common terms and definitions within Healthcare

Guide Page 31

Use the knowledge of the class; AAsk for volunteers to explain each term; if an answer is incomplete or needs further explanation, provide the information Use monetary examples when relevant; some provide or solicit the class for their own examples.

Premium: amount you pay for health insurance every month Deductible: amount you are responsible for paying before your insurance starts cost sharing EX: if you have a $1500 deductible, you pay all costs up to the $1,500

Co-Insurance: the percentage of medical costs that you are mandated to pay after reaching your minimum deductible EX: if a visit to the doctor is $100 and your co-insurance is 20%, you owe $20

Co-Payment: a flat fee service providers charge based on the health plan EX: a $20-$40 co-pay every time you visit your primary care physician

In-Network Cost: cost to see a doctor who is in your particular network and has an agreement with the insurance company

Out-of-Network Cost: cost to see a doctor who is not in your healthcare plan; cost is usually greater and can be up to the full cost of the service

Out-of-Pocket Cost: deductibles, co-payments, and co-insurance not covered by the insurance provider; does not include premiums

Out of Pocket Maximum/Limit: most you will pay for covered services in one year; after this amount is reached, insurance covers 100%; does not include premiums

Flexible Spending Account (FSA): special account paid into by premium holder which can be used to pay for certain out-of-pocket health care costs

Health Savings Account (HSA): a pre-tax savings account for those with high deductible plans to pay for deductibles, copayments, coinsurance, and some other expenses

Financial Planning for Transition 2019 -2020 - Page 35

Types of Plans

Slide 28 o Different insurance plans available o Considerations when choosing a plan

Guide Page 32-33

This is slide covers two topics: TTypes of Plans and CChoosing the Right Plan for you.

As before, AAsk participants if they know about any of the plans listed; if any of the plans are not discussed or people don’t know, provide the information.

Types of Plans

Preferred Provider Organizations (PPO): use providers in plan, outside of plan costs more.

Health Maintenance Organization (HMO): Limited coverage to providers in plan;

providers outside of plan generally not covered.

Exclusive Provider Organization (EPO): A managed care plan, similar to an HMO, where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency).

Point of Service (POS): Pay for use; pay less for providers that belong to the plan’s network. Referral from your PC doctor required to see a specialist.

Catastrophic Plan: Age requirement for eligibility – 30 y/o, lower premiums, very high deductible, very flexible in choice of provider.

Choosing the right healthcare option for you & your family

Estimate your yearly medical needs Decide which plan type best meets your needs Size up the cost Don’t get lured by freebies Check the quality of the plan Consider a healthcare savings account Check out the prescription coverage Ask about dental and eye coverage

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Estimating Health

Slide 29 o Demonstrate/

Research to estimate cost health insurance

Guide Page 34-36

Facilitator Guide

Estimating Healthcare Costs Encourage participants to assume they will be paying the entire premium.

There are many different websites available to assist in comparing plans and estimating the cost of healthcare insurance.

This activity uses the Healthcare Marketplace. This website can be used to estimate the out-of-pocket expense of different plans with varying levels of coverage.

Explain this will not provide the exact cost, it will provide a good estimation of the cost of individual health insurance.

Recommend participants visit a few different sites, companies, or organizations to estimate the cost of healthcare.

Three ways to facilitate this topic:

Using the slide 29 to explain how to use the website and interpret the results.

As a web demonstration (if internet or computers are not available to participants).

Have participants follow along during the web demonstration on their own information (Preferred method).

ACTIVITY: Web Demonstration/Research to ESTIMATE COST OF HEALTH INSURANCE TIME: 5 minutes INSTRUCTIONS: GO TO: https://www.healthcare.gov/see-plans/ .

Ask participants for the information, use one of the provided scenarios (the one most relevant to the class), or create a new scenario to complete the required fields.

Financial Planning for Transition 2019 -2020 - Page 37

1. Type in a zip code; follow directions to add your specific information or use the skip feature which requires no additional information

2. Review Plans – Explain there is no obligation to purchase/enroll

IINTENT: Provide participants the ability to understand what insurance may cost

DDEBRIEF:

Ask: is anyone is shocked at the cost of healthcare?

Remind them this is the cost of individual/family and not part of a larger negotiated group.

For healthcare information specific to veterans in transition and healthcare options, go to www.healthcare.gov/Veterans.

Transition is considered a “Special Enrollment Period” due to transition being a change in job/career. Those who transition from the military do not need to wait for the open enrollment period to obtain health insurance.

Financial Planning for Transition 2019 -2020 - Page 38

Life

Slide 30 o Life insurance needs o Replaces loss of income, to pay debts o Depends on current life situation

Guide Page 36-37

Life Insurance Purpose of life insurance is to replace the loss of income and pay debts, funeral expenses, education costs, etc.

Amount needed depends on your current life situation. A family with young children will have different life insurance needs than a couple nearing retirement.

Life insurance amount should be calculated by first determining your long-term financial obligations and then subtracting your assets.

There are many online calculators that can help you determine your insurance needs.

This module does not include a demonstration of a life insurance calculator. Many require personal information that goes beyond the scope of this course.