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PHASE ONE: “You’re in the Guard Now.”

For National Guard Service Members, your financial journey begins the moment you take your oath. You have entered into a military career, which introduces new benefits and experiences that may significantly impact your finances.

1) Your Pay and Benefits

As a National Guard member, you earn one day of active duty pay and allowances for each day of active duty you serve. Here’s how earning pay and benefits works:

  • On active duty: You are eligible for all active duty entitlements and benefits which may be more than what the state offers (Check with your unit or Military Pay section for more details)
  • On drill status: Earn one day’s pay for every four hours of inactive duty, not to exceed two drill periods a day
  • On inactive duty: You may be eligible for other entitlements and benefits, such as
    • Flight pay
    • Parachute pay
    • Other proficiency pays - paid at the rate of 1/30th of the monthly rate multiplied times the number of periods of inactive duty
    • Coverage by your Servicemembers' Group Life Insurance (SGLI) and state workmen’s compensation laws

2) Allotments and Deductions

While serving in the National Guard, you have the opportunity to enter into allotments of your pay – dedicated amounts which are automatically deducted from your earned pay and accounted for on your Leave & Earnings Statement. Some allotments you can enter into include:

  • Paying off loans
  • Paying insurance premiums
  • Purchasing savings bonds
  • Paying off debt

During periods of inactive duty, members are authorized to make one allotment from their pay for the payment of premiums under a group life insurance program sponsored by the state military department in which such member holds a National Guard membership or by the state associations of the National Guard. For those serving on active duty, there are two types of allotments: discretionary and non-discretionary. You can have up to six discretionary allotments per month, and any number of non-discretionary allotments, as long as the total allotments per month amount to 15 or less.

3) Thrift Savings Plan & Risk Tolerance

The Uniformed Services Thrift Savings Plan (TSP) is the same plan Federal civil service employees enjoy, but without the matching contribution from the government. TSP is a retirement benefit that allows Federal employees and members of the uniformed services to increase their retirement income by contributing to a long-term savings and investment plan with tax-exempt income.

If you are nearing retirement, you should think twice before taking a lot of risk in hopes of earning bigger returns. If you've just started your career, you have quite a few years before you'll need the money in your TSP account. You can let time work in your favor and accept more risk in choosing a fund later in your military career.

There are 5 funds in which you may invest:

  1. G Funds: Government securities specially issued to TSP with no risk of losing principal money
  2. F Funds: Government, corporate, and mortgage-backed bonds with the objective of matching performance of the Barclays Capital U.S. Aggregate Bond Index
  3. C Funds: Stocks of large and medium-sized U.S. companies with the objective to match the performance of the Standard & Poor’s 500 (S&P 500) Index
  4. S Funds: Stocks of small to medium-sized U.S. companies not included in the C Fund with the objective to match the performance of the Dow Jones U.S. Completion TSM Index
  5. I Funds: International stocks of 21 developed countries with the objective to match the performance of the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) Index

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