Tester: Grieving military spouses deserve more time to make financial decisions
(BIG SANDY, Mont.) – Senator Jon Tester is backing legislation to allow grieving military spouses more time to make financial decisions following a service member’s death.
Tester’s bill gives surviving spouses three years to decide whether to invest the compensation they receive from the military following the death of a loved one into a Roth IRA or Coverdell Education Savings Account. Current law allows only one year.
Members of the Army Survivor Outreach Services staff report that approximately one-quarter of grieving Army spouses are not ready to make significant financial decisions during the first year after the loss of a service member.
“We need to give family members who have just suffered a tremendous loss the necessary time to make these life-changing decisions,” Tester said. “This bill gives survivors the flexibility they need to have all the options in front of them to consider their family’s long-term future.”
The military death gratuity and Service members Group Life Insurance payments typically amount to $500,000.
A Roth IRA is a specific type of savings plan designed to encourage individuals to save for their retirement. Account holders are generally penalized if they access their savings before the age of 59.5. Coverdell Education Savings Accounts, created as an incentive to help parents and students save for education expenses, are tax-free as long as they are used for education.
Tester’s bill is available online HERE.