9 things every National Guard and Reserve service member should 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."

But there are major differences between active duty and National Guard or Reserve. While this list is not exhaustive, here are nine important things every National Guard and Reserve member must know.

1. Use TRICARE Reserve Select to your advantage.

In the United States, unpaid medical bills are the leading cause of bankruptcy Opens in a New Window.‍ ‍ ^{See note 1} That means it's important to budget for health care expenses — and to keep them as low as possible.

This is a benefit of TRICARE Reserve Select.

As a retired U.S. Air Force Reserve lieutenant colonel and CFP®, I understand and have experience with TRICARE Reserve Select Opens in a New Window.‍ ‍ ^{See note 1} But I’m also familiar with insurance provided by civilian employers and privately purchased insurance, so I can appreciate the benefits TRICARE Reserve Select provides.

In many cases, TRICARE Reserve Select premiums and cost shares will be more affordable for eligible Reservist or National Guard members than their civilian employer-provided plan. TRICARE Reserve Select's costs are reasonable, but you should 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.

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.

Military life can be 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 your family's financial future.

If you joined the National Guard or Reserve following active duty, you’re in luck: SGLI is still available to you. SGLI is a great way to supplement your private life insurance, as well as any employer-offered group life insurance. To make sure you’re getting the best policy for your needs, ask yourself these 10 questions when buying life insurance.

Keep in mind that one day, you’ll leave National Guard or Reserve service behind and SGLI will go away. That’s why it’s important to consider another life insurance policy that you own. It can provide peace of mind for you and protection for your family.

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 or National Guard budget" and a "Reserve or National Guard fund" to help reduce financial stress during those times when income is lowered due to military service.

A Reserve or National Guard budget helps ensure that you don't outspend your new income. If you earn more during times of military service, this budget can help you use the surplus to improve your financial situation. It’s important to understand how National Guard or Reserve duty can impact your budget.

A Reserve or National Guard fund is money you’ve saved 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 this backup fund, but if you do, have a plan to replenish it before you need it again.

Since no-notice or short-notice orders still exist, store this fund in an easily accessible place like a savings account.

5. Maintain a work-life balance.

Think of your life in the Reserve as a three-legged stool. The legs represent 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 those for 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 and what does it take to retire from the Reserve or National Guard?
  
• If I take a full-time, three-year period of service, how will that impact my retirement paycheck?
  

7. Understand your Reserve Component Survivor Benefit Plan decision.

Your RCSBP decision is important because it can affect the financial security of your family if something happens to you. It’s one of the biggest military retirement decisions you’ll make, and you need to make sure you make the right one for you and your beneficiaries.

8. Understand the Servicemembers Civil Relief Act.

Before you're called to active duty, it’s a good idea to understand how the 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. or deploy overseas 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 Opens in a New Window.‍ ‍ ^{See note 1}

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 then eight in the Air Force Reserve, and during my time on active duty, I worked alongside National Guard or Reserve members at each installation who were doing the same job I was doing.

Even though you may be part-time, your service is vital to our nation's security and our freedom for generations to come. And no matter what stage of your military journey you are in, USAA is here to help you every step of the way.