Dear Quentin,
My brother is a combat veteran who struggles with complex post-traumatic stress disorder (C-PTSD). He has a 100% permanent disability rating, and receives a monthly payment from the government. He also received a modest amount of back pay, but spent most of it getting caught up on rent and bills.
At this point there are only a few thousand dollars left. The monthly stipend is enough to live on, but just barely, and is unlikely to keep pace with the cost of living in our expensive city. Leaving is not an option, as there is a nearby VA hospital as well as our large (and wonderfully helpful) family.
“‘He shares a home with a relative, but this is not sustainable long-term so he has asked me to help him invest what remains from his back pay.’”
He shares a home with a relative, but this is not sustainable long-term so he has asked me to help him invest what remains from his back pay. I have done reasonably well investing for myself so I agreed to help him, but I am concerned that my experience is too limited. He needs both income and appreciation, but also low risk.
To that end, I selected a variety of dividend kings with as much of a ladder as I could manage so there would be something paying out nearly every month, and also selected a closed-end fund (CLM) that pays a high dividend and pays it out monthly.
The total is well below the lowest tier to make it worthwhile for most advisers to manage, and the CFP he spoke to some time ago just recommended index funds. Index funds didn’t provide much income. What resources would you recommend?
Nervous Investor
Dear Nervous,
Establish how much income your brother needs to live on, explore housing-assistance programs for combat veterans, and decide the purpose of your investments — to create capital (a nest egg for your brother) or to increase his income in order to help him have a more stable financial life, and give him more peace of mind. In other words, put together a long-term financial plan that takes into account all of these moving parts.
Don’t be put off by the relatively modest amounts you have to invest. LetsMakeAPlan.org, a consumer education website launched by the CFPB Board more than a decade ago, is a useful search engine for certified financial planners, and there is a section dedicated to helping veterans, citing special financial benefits include health-care services, no or low down-payment mortgages, GI Bill educational benefits, special legal protections, low-cost investing opportunities, extra savings plans and cheaper life insurance.
Last month, President Biden signed into law the Veterans Compensation Cost-of-Living Adjustment (COLA) Act. This directed the Department of Veterans Affairs to provide a cost-of-living adjustment for veterans benefits in 2024 equal to the cost-of-living increase applied to Social Security benefits, as outlined by the Social Security Administration. It’s an annual measure that passed with bi-partisan support from both Houses of Congress.
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