Is it ever too late to plan for retirement? No, as long as you're willing to be thrifty and extend your working years and be mindful of your individual and employer-based retirement savings options. Building a successful, comfortable retirement depends on a variety of individual factors, including where you live, how long you plan to work, your health and your other investments and assets.

The IRS recently announced an update for your options, including cost-of-living adjustments that will give many taxpayers the advantage of putting more away during 2015. Here's a summary:

  • Regular contribution limits for 401(k), 403(b), most 457 plans, and the federal employee Thrift Savings Plan. Increased from $17,500 (for tax year 2014) to $18,000 (for tax year 2015). The catch-up contribution limit for employees aged 50 in these plans is increased from $5,500 to $6,000. Contribution deadline: Dec. 31.
  • Annual contribution limits, Individual Retirement Accounts (IRA). For both traditional and Roth IRAs, the annual contribution limit is not subject to a cost-of-living adjustment and remains at $5,500. The over-50 catch-up contribution amount is $1,000. There are particular restrictions ( based on income levels, workplace retirement plan coverage among other issues. Contribution deadline: April 15.
  • Higher 2015 income phase-out levels for traditional IRA contributions. For singles covered by a workplace retirement plan, the 2015 cutoff is now increased to a modified adjusted gross income (AGI) between $61,000 and $71,000. The IRS website details other significant increases and updates in phase-out levels for married couples and singles.
  • Higher 2015 income phase-out levels for Roth IRA contributions. The IRS website also updates higher phase-out levels for married and single taxpayers on its website. For married couples filing jointly, the 2015 level is now $183,000 to $193,000.

Here's what you can do if you're in your 50s and you haven't yet saved much for retirement:

  • Get qualified financial advice. Organizations such as the Association for Financial Counseling Planning and Education (, Certified Financial Planner Board of Standards list qualified financial advisors, and your state CPA society can suggest tax professionals in your area.
  • Budget and downsize. Want to retire? Start living like a retiree while you're still working. Most experts believe late starters (50 and over) need to put away at least 10 percent of gross income to start making headway. Create a realistic budget, trim debt and consider cheaper housing, transportation and lifestyle options.
  • Take advantage of "catch-up" contribution limits. Retirement savers over the age of 50 have the option to put more away not only in traditional and Roth IRAs but also 401(k) plans - not including SIMPLE 401(k)s, 403(b) plans, SARSEP and 457(b) plans (see Annual contribution limits, IRAs above).
  • Keep working...strategically. If you're lucky, you love your work or are in a position to change careers to one with better retirement savings options. If so, consult an expert on ways to keep earning and investing effectively.

Bottom line: The government's cost-of-living adjustments will allow you to save more for retirement in 2015, but don't wait until then to evaluate your goals to set - or reset - your retirement planning going forward.

No matter how far away you are from retirement, it's important to understand your Social Security benefits - and there's a particularly good reason to do it now.

The Social Security Administration (SSA) is bringing back annual paper benefits statements for the first time in three years. It stopped in 2011 to save money on printing and postage, but Congress and consumer advocates complained that workers needed better access to their data. In September, the agency reversed its decision and announced it's resuming the practice of mailing paper statements to workers in two categories:

  • Those who are not receiving benefits and are within three months of turning 25, 30, 35, 40, 45, 50, 55, and 60. (After age 60, workers will receive a statement every year.)
  • Those who still haven't registered for a My Social Security ( online account.

Why is this important? First, if you've paid into the Social Security and Medicare system, you should understand the benefits you've earned. Second, as the SSA has been closing field offices and reducing services to the public, despite the fact that Baby Boomers are starting to flood the system. It's a good time to confirm and correct benefits due to the longer wait times on the agency's toll free telephone line and field offices.

Start by waiting for your next paper benefits statement or sign up at My Social Security website to review your current data. Here's a quick overview of what your statement tells you:

  • Introduction and your estimated benefits. This section covers four categories. The first is your retirement benefits, which are based on your age when you start drawing them. The calculations are based on three critical ages as examples: 62 (the earliest age you can draw retirement benefits), 67 (the full retirement age for anyone born after 1960) and age 70 (the oldest anyone can start drawing benefits, generally at the highest level if you can wait). The second is disability, which refers to the amount of your monthly disability benefit if you qualify. Third, your family/survivors benefits if a loved one dies. And lastly, your Medicare eligibility and the particular facts to support that conclusion.
  • Your Earnings Record. This is a summary of your earnings that you need to verify for accuracy. Pull your annual tax returns as far back as you can to confirm this information, and if you work with a tax or financial planning professional, double-check their conclusions if you plan to challenge any errors with the SSA.
  • Some Facts About Social Security. Provides additional definitions and guidelines to better understand your statement and includes key contact information.

Most experts will tell you that when it comes to retirement, time is your biggest ally - it gives you the opportunity to invest, save and adjust your plan strategy. Use your statement to do the following:

  • Spot and correct errors. If you and your tax professional spot disparities in your benefit statement make careful notes, gather your evidence and consult the SSA's contact page ( to start the correction process remotely or in person.
  • Blend Social Security into a broader retirement plan. Most experts agree Social Security alone won't provide a comfortable retirement. It's never too late to plan.

Bottom Line: Even if you're years away from retirement, make sure you understand your Social Security benefits, and that they're accurate and fit into a broader financial plan for your retirement.

If you buy your own health insurance, add this important date to your yearend to-do list: November 15.

That's the date open enrollment is available for individual healthcare plans offered through the site, your respective health insurance marketplace ( or independent agents in your community.

If you're working for a company that provides your health insurance, chances are your open enrollment period has already begun. The SHOP insurance marketplace, open to small businesses and nonprofits with 50 or fewer full-time employees, also begins taking online applications November 15.

If you buy your own personal or family coverage, don't wait until November 15 to start planning your 2015 coverage decisions - do it now.

Here are six things you should know to get started:

1. Timing is tight. Last year's health insurance enrollment process lasted six months. This year, it's only three - November 15 to February 15. You may be able to enroll outside of those dates if you're facing a major life change like a divorce, birth of a child or marriage; otherwise, that's your window.

2. Sticker shock is a possibility. Obamacare didn't guarantee cheap healthcare coverage; it guaranteed available healthcare coverage. Keep in mind that if you bought health coverage last year, your insurer will automatically re-enroll you on December 15 for new coverage effective January 1. However, that's no guarantee that your monthly premium will stay the same. Some experts are predicting only modest increases (, but depending on where you live, your premiums might go up or down. And if your 2013 carrier grandfathered your 2014 coverage, those changes may go well beyond price.

3. Your doctors and hospitals might change. Hospitals and physician practices scrutinize the state of the health insurance market very closely. Their income depends on it. In 2013, some medical practices made news by dropping insurance plans altogether and accepting only cash or credit; others changed the insurance plans they would honor. Something to keep in mind: the best way to confirm that you'll still have access to your favorite doctor and hospital choice is to pick up the phone. Your doctor's website may list the particular insurance plans his or her practice may accept, but don't expect the list to be current. Call your practitioner or their business office to confirm they're sticking with your plan or any you've chosen to use instead. You don't want to be surprised with enormous out-of-network costs later.

4. Planning future health needs is important. If in the next year you're planning to expand your family, undergo elective surgery or other factors that could affect how you'll use the healthcare system, query the plans about specialists, prescriptions and other specific services before you sign up. It could save you thousands in potential out-of-pocket costs.

5. Coverage isn't immediate. Depending on when you enroll during the open enrollment period, your actual coverage may not start until two to six weeks later. Check effective dates of coverage for every plan you're evaluating to make sure the timing addresses your particular needs.

6. You can get help. Personal referrals from friends and fellow professionals to particular plans and agents are always a good way to start your enrollment search. There may also be nonprofit assistance within your community or state to help you evaluate individual plans. On the national level, nonprofit Enroll America runs a nationwide site ( with specific tools and resources for help in your search.

Start now to build a good toolbox full of online and personal resources to help you with your 2015 health insurance search.

Many people finally get around to writing a will in order to safeguard their assets for their heirs. But what if you've got the opposite problem: Your nest egg was decimated by the recession, bad investments or simply living longer than expected and now you've got a mountain of bills you can't pay off.

Will your kids inherit your debts after you die?

The short answer is, not in most cases. But there are situations where someone could be legally responsible for paying off your bills after death. Plus, aggressive creditors have been known to coerce heirs into paying off debts for which they're not responsible, just to be left alone.

If you're afraid that your financial legacy will be a heap of unpaid bills, here's what you need to know and prepare for:

In general, children aren't responsible for paying off their parents' unsecured debts - things like credit cards, personal loans and medical bills, which aren't collateralized by physical property. If there's not enough money in the estate to pay off those bills, creditors will have to write them off.

There are several exceptions, however:

  • If your child, spouse or other acquaintance is a cosigner on a credit card or loan (e.g., mortgage, car, personal loan), they share equal responsibility for paying it off. This is why you should always think twice before cosigning anyone's loan.
  • If someone is a joint account holder - that is, their income and credit history were used to help obtain the loan or credit card - they're generally responsible to pay off the balance.
  • Widows and widowers are responsible for their deceased spouse's debts if they live in a community property state.

Note that authorized users on your credit cards aren't liable for repayment since they didn't originally apply for the credit. Chances are they were simply "piggybacking" on your credit record to help build their own. However, to protect authorized users from being bothered by creditors after your death, you may want to remove them from your accounts.

If you have outstanding secured debts upon death, such as a mortgage or car loan, your estate must pay them off or the creditor can seize the underlying asset. For example, if you were planning to leave your house to your kids, they'll need to either pay off or continue making payments on any outstanding mortgage, property taxes and insurance, or risk foreclosure.

Depending on your state's laws, there are a few types of assets, like life insurance proceeds and retirement benefits, which you can pass along to beneficiaries that generally won't be subject to probate or taxation and thus may be safe from creditors.

Just be aware that if you name your estate as beneficiary for an insurance policy or retirement account, creditors can come after the money to pay off your debts. Thus, it's usually wise to name specific individuals as beneficiaries - and back-up beneficiaries, in case they die first. Also, if your beneficiary is a cosigner on any of your debts, creditors can pursue him or her for any balances owed.

Check with a probate attorney or legal clinic familiar with your state's inheritance and tax laws. Free or low-cost legal assistance is often available for lower-income people.

Bottom line: If you expect to leave unpaid debts after you die, alert your family now, so that together you can plan a course of action. You don't want to blindside your loved ones in the midst of their grief.

If you always stop to read the fine print before signing anything, congratulations - your parents trained you well. If you don't, beware: Your signature could commit you to a long-term gym membership you don't really want, an apartment you can't afford or worst of all, paying off someone else's loan you cosigned.

Broadly defined, contracts are mutually binding agreements between two or more parties to do - or not do - something. It could be as simple as buying coffee (you pay $3 and the restaurant agrees to serve you a drinkable beverage), or as complex as signing a 30-year mortgage.

Once a contract is in force it generally cannot be altered unless all parties agree. And, with very few exceptions (e.g., if deception or fraud took place), contracts cannot easily be broken.

Before you enter a contractual agreement, try to anticipate everything that might possibly go wrong. For example:

  • After you've leased an apartment you decide you can't afford the rent or don't like the neighborhood.
  • Your roommate moves out, leaving you responsible for the rest of the lease.
  • You finance a car you can't afford, but when you try to sell, it's worth less than your outstanding loan balance.
  • You buy a car and only later notice that the sales agreement includes an extended warranty or other features you didn't verbally authorize.
  • You sign a payday loan without fully understanding the terms and end up owing many times the original loan amount.
  • You buy something on sale and don't notice the store's "No returns on sale items" policy.
  • You click "I agree" to a website's privacy policy and later realize you've given permission to share your personal information.
  • You buy a two-year cellphone plan, but after the grace period ends, discover that you have spotty reception and it will costs hundreds of dollars to buy your way out.

Cosigning a loan can be particularly risky. If the other person stops making payments, you're responsible for the full amount, including late fees or collection costs. Not only will your credit rating suffer, but the creditor can use the same collection methods against you as against the primary borrower, including suing you or garnishing your wages.

Still, there may be times you want to cosign a loan to help out a relative or friend. The Federal Trade Commission's handy guide, "Co-signing a Loan," shows precautions to take before entering such agreements (

A few additional reminders:

  • Ensure that everything you were promised verbally appears in writing.
  • Make sure all blank spaces are filled in or crossed out before signing any documents -including the tip line on restaurant and hotel bills.
  • Don't be afraid to ask to take a contract home for more careful analysis or to get a second opinion. A lawyer or financial advisor can help.
  • Don't be pressured into signing anything. If salespeople try that tactic, walk away. (Be particularly wary at timeshare rental meetings.)
  • Keep copies of every document you sign. This will be especially important for contested rental deposits, damaged merchandise, insurance claims, extended warranties, etc.
  • Take along a "wingman" if you're making an important decision like renting an apartment or buying a car to help ask questions and protect your interests.
  • Be wary of "free trial" offers. Read all terms and conditions and pay particular attention to pre-checked boxes in online offers.

Bottom line: Contracts protect both parties. Just make sure you fully understand all details before signing on the dotted line.

Each year when Father's Day rolls around, I'm reminded that I wouldn't trade the experience of raising my two kids for the world. But when I think back to how naïve my wife and I once were about the costs of raising children, I can't help wishing we'd been better prepared.

If you're a new dad, or about to become one, you'd better sit down. According to the U.S. Department of Agriculture, a typical middle-income family can expect to spend over $241,000 to raise a newborn child until age 18 - and that doesn't even include prenatal care or college costs.

Right now, you're probably more worried about getting enough sleep than funding your retirement. But at some point, you'll need to plot out a financial roadmap to ensure your family's future financial security. As one dad to another, here are a few strategies I've learned that can help:

Start saving ASAP. It's hard to save for the future when your present expenses are so daunting, but it's important to start making regular contributions to several savings vehicles, even if only a few dollars at a time:

  • Establish an emergency fund with enough cash to cover at least six months of living expenses. Start small by having $25 or $50 a month deducted from your paycheck and automatically deposited into a separate savings account.
  • Even if retirement is decades away, the sooner you start saving and compounding your interest, the faster your savings will grow. If your employer offers 401(k) matching contributions, contribute at least enough to take full advantage of the match.
  • Once those two accounts are well established, open a 529 Qualified State Tuition Plan to start saving for your children's education.

If funding these accounts seems impossible, look for a few luxuries you could cut from your budget for six months - lattes, eating out, premium cable, etc. After six months, evaluate whether they were actual "needs" or simply "wants" you can live without.

Get insured. If your family depends on your income, you must be prepared for life's unexpected events, whether an accident, illness, unemployment or death. Get adequate coverage for:

  • Health insurance. Everyone needs medical insurance, no matter how young or healthy.
  • Homeowner/renter's insurance. Don't let theft, fire or another catastrophe leave your family without a home or possessions. To reduce premiums, consider choosing a higher deductible.
  • Life insurance. You'll probably want coverage worth at least five to 10 times your annual pay - more, if you want to cover college costs. And don't forget to insure your spouse's life so you'll be protected as well.
  • Disability insurance. Millions of Americans suffer disabilities serious enough to miss work for months or years, yet many forego disability insurance, potentially leaving them without an income after a serious accident or illness. Ask about your employer's sick leave and short-term disability benefits and if long-term disability is offered, consider buying it.
  • Car insurance. Almost every state requires insurance if you own or drive a car, and for good reason: It protects you financially should you cause an accident or be hit by an uninsured driver. Make sure you have sufficient liability coverage to protect your net worth and income - it only takes one serious accident to wipe out your savings.

And finally, spend responsibly. If you buy things you don't really need or can't afford, you'll just end up having to work longer hours to pay for them - time you could have spent watching your kids growing up.

Last year the IRS doled out over 110 million income tax refunds averaging $2,803. Another way to look at it is that collectively, Americans overpaid their taxes by nearly $310 billion in 2012.

Part of that is understandable: If you don't have enough tax withheld throughout the year through payroll deductions or quarterly estimated tax payments, you'll be hit with an underpayment penalty come April 15. But the flip side is that by over-withholding, you're essentially giving the government an interest-free loan throughout the year.

If you ordinarily receive large tax refunds, consider withholding less and instead putting the money to work for you, by either saving or investing a comparable amount throughout the year, or using it to pay down debt. Your goal should be to receive little or no refund.

Ask your employer for a new W-4 form and recalculate your withholding allowance using the IRS' Withholding Calculator (at This is also a good idea whenever your pay or family situation changes significantly (e.g., pay increase, marriage, divorce, new child, etc.) IRS Publication 919 can guide you through the decision-making process.

Meanwhile, if you do get a hefty refund this year, before blowing it all on something you really don't need, consider these options:

Pay down debt. Beefing up credit card and loan payments can significantly lower your long-term interest payments. Suppose you currently pay $120 a month toward a $3,000 credit card balance at 18 percent interest. At that pace it'll take 32 months and $788 in interest to pay it off, assuming no new purchases. By doubling your payment to $240 you'll shave off 18 months and $441 in interest.

Note: If you carry balances on multiple cards, always make at least the minimum payments to avoid penalties.

The same strategy will work when paying down loans (mortgage, auto, personal, etc.) Ask the lender to apply your extra payment to the loan principal amount, which will shorten the payoff time and reduce the amount of overall interest paid. Just make sure to ask whether there's a prepayment penalty before trying this strategy.

Boost your emergency fund. As protection against a job loss, medical emergency or other financial crisis, try to set aside enough cash to cover six to nine months of living expenses. Seed the account with part of your refund and then set up monthly automatic deductions from your paycheck or checking account going forward.

Increase retirement savings. If your debt and emergency savings are under control, add to your IRA or 401(k) accounts, especially if your employer matches contributions; remember, a 50 percent match corresponds to a 50 percent rate of return - something you're not likely to find anywhere else.

Finance education. Enroll in college courses or vocational training to gain additional skills in case you lose your job or want to change careers. And ask whether your employer will help pay for job-related education.

You can also set money aside for your children's or grandchildren's education by contributing to a 529 Qualified State Tuition Plan. As an incentive, the government allows your contributions to grow tax-free until they're withdrawn.

And finally, to check on the status of your refund, go to the IRS's Where's My Refund site. You can usually get information about your refund 24 hours after the IRS acknowledges receipt of your e-filed return or about four weeks after filing a paper return.

I have yet to meet anyone who thinks they're saving too much money for retirement. On the contrary, most people admit they're probably setting aside too little. Retirement accounts must compete with daily expenses, saving up for a home, college and unexpected emergencies for every precious dollar.

If taking money out of your IRA, 401(k) or other tax-sheltered plan is your best or only option, you should be aware of the possible impacts on your taxes and long-term savings objectives before raiding your nest egg:

401(k) loans. Many 401(k) plans allow participants to borrow from their account to buy a home, pay for education, medical expenses or other special circumstances. Generally, you may be allowed to borrow up to half your vested balance up to a maximum of $50,000 - or a reduced amount if you have other outstanding plan loans.

Loans usually must be repaid within five years, although you may have longer if you're using the loan to purchase your primary residence.

Potential drawbacks to 401(k) loans include :

  • If you leave your job, even involuntarily, you must pay off the loan immediately (usually within 30 to 90 days) or you'll owe income tax on the remainder - as well as a 10 percent early distribution penalty if you're under age 59 ½.
  • Loans cannot be rolled over into a new account.
  • Some plans don't allow new contributions until outstanding loans are repaid.
  • Many people, faced with a monthly loan payment, reduce their 401(k) contributions, thereby significantly reducing their potential long-term account balance and earnings.
  • Your account value will be lower while repaying your loan, which means you'll miss out on market upswings.

401(k) and IRA withdrawals. Many 401(k) plans allow hardship withdrawals to pay for certain medical or higher education expenses, funerals, buying or repairing your home or to prevent eviction or foreclosure. You'll owe income tax on the withdrawal - plus an additional 10 percent penalty if you're younger than 59 ½, in most cases.

Traditional IRAs allow withdrawals at any time for any reason. However, you'll pay income tax on the withdrawal - plus the 10 percent penalty as well, with certain exceptions. With Roth IRAs, you can withdraw contributions at any time, since they've already been taxed. However, to withdraw earnings without penalty you must be at least 59 ½ and the funds must have been in the account for at least five years.

To learn more about how the IRS treats 401(k) and IRA loans and withdrawals, visit

Further financial implications. With 401(k) and traditional IRA withdrawals, the money is added to your taxable income, which could bump you into a higher tax bracket or even jeopardize certain tax credits, deductions and exemptions that are tied to your adjusted gross income. All told, you could end up paying half or more of your withdrawal in taxes, penalties and lost or reduced tax benefits.

Losing compound earnings. Finally, if you borrow or withdraw your retirement savings, you'll sacrifice the power of compounding, where interest earned on your savings is reinvested and in turn generates more earnings. You'll forfeit any gains those funds would have earned for you, which over a couple of decades could add up to tens or hundreds of thousands of dollars in lost income.

Bottom line: Carefully consider the potential downsides before tapping your retirement savings for anything other than retirement itself. If that's your only recourse, consult a financial professional about the tax implications.

Good news for people shopping for a mortgage - and for current homeowners facing foreclosure because they can no longer afford their home loan: New mortgage regulations drafted by the Consumer Financial Protection Bureau recently took effect and they provide a slew of new rights and protections for consumers.

One of the cornerstones of the new mortgage rules is that lenders now are required to evaluate whether borrowers can afford to repay a mortgage over the long term - that is, after the initial teaser rate has expired. Otherwise, the loan won't be considered what's now referred to as a "qualified mortgage."

Qualified mortgages are designed to help protect consumers from the kinds of risky loans that brought the housing market to its knees back in 2008. But obtaining that designation is also important to lenders because it will help protect them from lawsuits by borrowers who later prove unable to pay off their loans.

Under the new ability-to-pay rules, lenders now must assess - and document - multiple components of the borrower's financial state before offering a mortgage, including the borrower's income, savings and other assets, debt, employment status and credit history, as well as other anticipated mortgage-related costs.

Qualified mortgages must meet the following guidelines:

  • The term can't be longer than 30 years.
  • Interest-only, negative amortization and balloon-payment loans aren't allowed.
  • Loans over $100,000 can't have upfront points and fees that exceed 3 percent of the total loan amount.
  • If the loan has an adjustable interest rate, the lender must ensure that the borrower qualifies at the fully indexed rate (the highest rate to which it might climb), versus the initial teaser rate.
  • Generally, borrowers must have a total monthly debt-to-income ratio of 43 percent or less.
  • Loans that are eligible to be bought, guaranteed or insured by government agencies like Fannie Mae, Freddie Mac and the Federal Housing Administration are considered qualified mortgages until at least 2021, even if they don't meet all QM requirements.

Lenders may still issue mortgages that aren't qualified, provided they reasonably believe borrowers can repay - and have documentation to back up that assessment.

New, tougher regulations also apply to mortgage servicers - the companies responsible for collecting payments and managing customer service for the loan owners. For example, they now must:

  • Send borrowers clear monthly statements that show how payments are being credited, including a breakdown of payments by principal, interest, fees and escrow.
  • Fix mistakes and respond to borrower inquiries promptly.
  • Credit payments on the date received.
  • Provide early notice to borrowers with adjustable-rate mortgages when their rate is about to change.
  • Contact most borrowers by the time they are 36 days late with their payment.
  • Inform borrowers who fall behind on mortgage payments of all available alternatives to foreclosure (e.g., payment deferment or loan modification).

With limited exceptions, mortgage servicers now cannot: initiate foreclosures until borrowers are more than 120 days delinquent (allowing time to apply for a loan modification or other alternative); start foreclosure proceedings while also working with a homeowner who has already submitted a complete application for help; or hold a foreclosure sale until all other alternatives have been considered.

For more details on the new mortgage rules, visit

Bottom line: You should never enter into a mortgage (or other loan) you can't understand or afford. But it's nice to know that stronger regulations are now in place to help prevent another housing meltdown.

Jason Alderman directs Visa's financial education programs. To participate in a free, online Financial Literacy and Education Summit on April 2, 2014, go to

As Veteran's Day approaches, this is a good time to remind our active duty service members and veterans and their families of the many educational assistance benefits available to them, both during and after service. In this Practical Money Matters piece, Mr. Alderman discusses several of the more popular government-provided education benefits for military families.

By Jason Alderman

As Veteran's Day approaches, this is a good time to remind our active duty service members and veterans about the many education assistance benefits available to them through the G.I. Bill and other government programs.

Here's a rundown of a few of the more commonly used programs:

The Post 9/11 GI Bill is more flexible and generally offers more generous benefits than earlier GI Bills. It provides up to 36 months of support for education and housing to individuals with at least 90 days of active duty after September 11, 2001, or those with a service-connected disability after 30 days. An honorable discharge is required.

Approved training includes undergraduate and graduate degrees, and vocational/technical/on-the-job training, among others. You will be eligible for benefits for 15 years from your last period of active duty of at least 90 consecutive days.

This program covers 100 percent of tuition and fees for in-state students at public institutions, paid directly to the school. For those attending private or foreign schools, it will pay up to $19,198.31 per academic year (sometimes more in certain states).

If you attend a costlier private school - or a public school as a non-resident - you also may be eligible for the Yellow Ribbon Program, where schools voluntarily fund tuition expenses exceeding the highest public in-state undergraduate rate. The institution can contribute up to 50 percent of those expenses and the Veteran's Administration will match the amount.

The 9/11 GI Bill also will pay a books and supplies stipend of up to $1,000 per year, and a monthly housing allowance generally comparable to the military Basic Allowance for Housing for a military pay grade E-5 with dependents, based on the ZIP code for your school.

Another advantage of this newer GI Bill: Armed Forces members with at least six years' service can transfer some or all of their benefits to their spouse and/or children. Here are the basic rules:

  • You must agree to four additional years of service. (Special rules apply if standard policy precludes you from serving four more years or you're eligible for retirement).
  • Because the clock starts ticking from the date you elect to participate - and you can't enroll additional beneficiaries after leaving the military - it's best to sign up all family members right away. You can always go back and change allocation percentages or remove beneficiaries at any time until the benefits are used.
  • Spouses may begin using transferred benefits right away; however children must wait until you've served the full 10 years.
  • You and your spouse must use the benefits within 15 years of your leaving the military; children must use them by age 26.

Montgomery GI Bill. This older version of the GI Bill may still be available if you didn't already opt for the Post 9/11 GI Bill. You're eligible if you started active duty for the first time after June 30, 1985, served continuously for three years, are honorably discharged and had your pay reduced by $100 a month for the first 12 months. (There's a separate plan for reservists.)

For most people, this program is less generous than the Post 9/11 GI Bill. Benefits typically expire 10 years after military separation and are not transferrable to family members; plus, you pay tuition and fees upfront and are later reimbursed. The VA website has a tool to compare benefits under the two GI Bills.

To learn more about the GI Bill, visit Other VA-sponsored educational financial aid programs can be found at