9 things every National Guard and Reserve service member must know

It's not unusual for a civilian to see someone in uniform and have no idea whether that service member is active duty, or part of the National Guard or Reserve. To the untrained eye, they're all just "in the military."

Service members understand that from the lessons they learned on active duty. But they also understand there are major differences among these Reserve components. To understand the differences and clear up some common misconceptions, check out this podcast that discusses active duty versus Guard versus Reserves.

1. Use TRICARE Reserve Select to your advantage.

In the United States, unpaid medical bills are the leading cause of bankruptcy.^{See note1} Therefore, it's important to budget for health care expenses — and keep them as low as possible.

This is a benefit of TRICARE Reserve Select.

As a retired U.S. Air Force Reserves lieutenant colonel and CFP®, I understand and have experienced, in comparison to many civilian employers' or privately purchased insurance, the competitiveness of TRICARE Reserve Select.^{See note1}

In many cases, TRICARE Reserve Select premium and cost shares will be less expensive for eligible Reservist or National Guard members over their civilian employer-provided plan. While TRICARE Reserve Select's costs are reasonable, analyze your choices and make the decision that makes the most sense for you and your family.

2. Don't forget about the Thrift Savings Plan, or TSP.

Even if you're a National Guard or Reserve service member, the TSP is another way to save for your retirement. If you're under the Blended Retirement System, you have a match available to you that can help your account grow faster.

"Over the years, I've worked with a number of National Guard and Reserve service members who are maxing out their civilian 401(k) and also contributing to their TSP account," says JJ Montanaro, USAA Relationship Director, Military Advocacy Group. "Unraveling this was a major headache."

If you're also contributing to a civilian 401(k), keep these points in mind:

• Synchronize your TSP and civilian retirement plan contributions to avoid overcontributing.
• If you contribute above the legally permitted limit, you'll face taxes on the excess amount each year.
• Since your contributions are managed in different locations, it can be easy to overcontribute if you don't track them carefully.

3. Don't forget about Servicemembers' Group Life Insurance, or SGLI.

The military lifestyle is full of danger, and unfortunately some loved ones, friends and colleagues don't come home. It's essential that you and your family discuss life insurance that will help protect you and your finances.

If you joined the National Guard or Reserve following active duty, the good news is SGLI is still available to you. SGLI is a great way to supplement any private life insurance you own as well as any employer-offered group life insurance. Consider these ten questions to ask when buying life insurance.

4. Use drill pay to improve your finances.

It's tempting to view drill pay as an opportunity to splurge on things like an expensive vacation or a new TV. But spend some time reflecting on your financial goals and how your drill pay can help you accomplish them.

"While I was serving in the Army Reserve, we tried to treat the drill and annual training pay like 'found money'," says Montanaro. "We used it to pay down debt and save, most of the time."

For many National Guard and Reserve service members, military pay doesn't replace the civilian pay they lose while serving — just another reason serving their country is a sacrifice. It's important to have a reserve budget and a reserve fund to help reduce financial stress during those times when income is lowered due to military service.

A Reserve or National Guard budget will help ensure that you don't outspend your income. If you earn more during times of military service, this budget can help you use the surplus to improve your financial situation.

A Reserve or National Guard fund is a savings account that can help supplement your military income during the times you're sacrificing your civilian income. It can help cover part of a mortgage or unreimbursed travel expenses. Try not to use your reserve fund, but if you do, have a plan to replenish it before you need it again.

5. Maintain a work-life balance.

Your life in the Reserve component can be viewed as a three-legged stool with each leg representing your civilian career, your family life and your military career. If the three legs aren't balanced, the stool will fall over and take you with it.

When I was trying to balance my time in the Reserves, I made it a priority to focus on each leg of my stool at its proper time. When I was working for USAA, I did my best not to answer when a military call came in. And when I was working for the military, I did my best not to focus on USAA work. It wasn't perfect, but it helped me maintain some boundaries.

6. Understand Reserve component pay and benefits.

Here's one of the biggest understatements of all time: Reserve component pay and benefits are different from active duty.

Knowing how you get paid and when certain benefits apply helps maximize your financial security. Begin the learning process by asking yourself these questions:

• When am I covered by the military, and when am I covered by my civilian benefits? Is there any overlap?
• How are my retirement points calculated?
• If I take a full-time, three-year period of service, how will that impact my retirement paycheck?
• What will it take for me to get an active-duty retirement out of the Reserves or National Guard?

7. Understand your Reserve Component Survivor Benefit Plan, or RCSBP, decision.

Your RCSBP decision is important because it can affect the financial security of your family if something happens to you. To help you better understand your decision, read Understand your reserve component survivor benefit plan options.

8. Understand the Servicemembers Civil Relief Act, or SCRA.

Before you're called to active duty, understand how the financial benefits of SCRA can help you and your family.

While you don't have to use these benefits, you have access to them. However, in most cases, you must request access — you're not enrolled automatically.

SCRA protection begins on the date you're called to active duty and generally ends when your military service does. There are some exceptions to that rule, so verify what you qualify for and your qualifying time period.

Here are just a few examples of SCRA benefits and protections:

• For debts incurred prior to active duty, you can qualify for an interest rate cap of 6% for the rest of your active-duty service.
• Your landlord can't evict you without a court order unless your rent is higher than a certain amount, which is set each year.
• You can't be foreclosed on without a court order.
• The owners of a self-storage facility can't sell your items for overdue rent without a court order.
• You're allowed to end a vehicle lease you signed before joining if you're mobilized outside the continental U.S., also known as OCONUS, or deploy OCONUS for at least 180 days.

To learn more about SCRA benefits and protections, check with your unit's servicing Judge Advocate or the U.S. Department of Justice's resources for Servicemembers and Veterans Initiative.^{See note1}

9. Recognize how important you are to our country.

Part-time service often equates to full-time stress. I spent 12 years on active duty and the last eight in the Air Force Reserves.

While I was active duty in Afghanistan, I worked alongside National Guard or Reserve members at each installation doing the same job I was doing. We couldn't have taught pilot training without our Reserve pilots.

Even though you may be part-time, your service is vital to our nation's security and our freedom for generations to come.