Veterans’ Disability Planning: Help Maximize Your Benefits and Protect Your Financial Future

Living with a disability can affect virtually every aspect of your day-to-day life, as simple tasks become hurdles that demand extra effort and greater support. If you have a disability, you may also be coping with frustration, changes in your sense of identity or mental health struggles.

And these difficulties can be magnified if the disability stems from military service, where your sacrifice has led to injuries – physical or psychological – that can disrupt not only your daily life but also your family life, career path and financial outlook.

By taking a proactive approach to veterans' disability planning, you can help protect your finances, care for your loved ones and reduce the stress of navigating the government resources you’re entitled to.

WHAT IS VETERANS’ DISABILITY PLANNING?

Veterans’ disability planning involves understanding how various federal and state programs work together and how to maximize the benefits you’ve earned.

Often, disabled veterans focus only on immediate compensation, but a veteran’s financial advisor should account for how these benefits interact with other financial elements like housing, health care and retirement savings. They should also anticipate your evolving needs over time, particularly if a disability becomes more pronounced or if you require specialized medical support.

A well-structured plan can help ensure that you maintain eligibility for essential programs, protect critical assets and guard against potential financial gaps.

KEY VA BENEFITS FOR DISABLED VETERANS

Veterans' disability planning typically begins with an in-depth look at various benefits offered by the United States Department of Veterans Affairs.

VA DISABILITY COMPENSATION

VA Disability Compensation is a monthly, tax-free benefit for veterans with service-connected disabilities. The disability may be:

• An illness or injury incurred during active service
• A preexisting condition made worse by military service
• A specific kind of disability presumed to have been caused by military service

Disability compensation is intended to help offset the costs that often accompany limitations in physical or mental functioning. Payments vary based on disability rating, which reflects the percentage that the disability has reduced your overall health and ability.

Here are the 2025 payments based on rating:

Veterans may also receive additional amounts if they have qualifying dependents (and are more than 20% disabled) or more severe conditions.

Note that if your disability becomes worse over time, you can request an updated rating that could increase your payment significantly.

VA DISABILITY HOUSING GRANTS

The VA also offers several housing grants for certain disabled veterans to help them live more independently by providing financial assistance for home modifications. They include the Specially Adapted Housing Grant and the Special Housing Adaptation Grant, which assist in adapting or purchasing a home to accommodate a disability; and the Temporary Residence Adaptation Grant, which aids veterans temporarily residing in a family member's home.

VA HEALTH CARE & LONG-TERM SERVICES

VA health care and associated long-term service programs offer comprehensive medical coverage for veterans, and veterans with service-connected disabilities are assigned to the highest priority groups. Services can include preventive, inpatient and emergency medical care, mental health support, rehabilitative therapies, and even in-home or nursing home care. The level of coverage depends on your disability rating, income, and military service history.

VA PENSION

The VA pension is a financial needs-based program for wartime veterans who meet certain age or disability criteria. Unlike disability compensation, it is not limited to veterans with service-connected conditions. If you receive a VA pension, and you need help with daily activities or are housebound, you may also qualify for VA Aid and Attendance or Housebound benefits.

SURVIVORS’ BENEFITS

The VA Dependency and Indemnity Compensation program is available to spouses, children and parents of veterans who passed away due to a service-connected condition (or in some cases, who were receiving or entitled to receive certain VA benefits at the time of death). Knowing if your loved ones are eligible can help you plan for their financial future.

FINANCIAL PLANNING STRATEGIES FOR DISABLED VETERANS

A knowledgeable financial advisor can help you identify benefits you may qualify for and help protect your eligibility. Below are several strategic areas that highlight why professional help can be so useful.

INCOME AND BENEFIT COORDINATION

Carefully blending disability compensation with other income (like Social Security, savings or part-time work) can help you avoid exceeding critical thresholds that might affect your benefits. An advisor can help structure your financial picture to fit within income guidelines, including using trusts or making strategic withdrawals from retirement accounts at the right times.

A financial advisor can also help you identify programs and benefits you might not even realize you’re eligible for.

MILITARY RETIREMENT PLANNING

Retirement planning can go beyond veterans’ pension planning. Even if you’re receiving a VA pension, you may also qualify to receive retirement pay from the military. If you have a disability rating of 30% or more, you could qualify for the disability retirement plan. An advisor can help you understand how to make the most of your financial benefits and secure your retirement.

An advisor can also help you understand other military retirement benefits, like TRICARE health insurance coverage and other options that can help with long-term care for veterans.

TAX PLANNING FOR VETERANS

Many states offer tax benefits for disabled veterans, sometimes based on disability rating and income level. They can include property tax reductions, sales tax refunds and income tax exemptions.  An advisor can help you identify these benefits and others that apply in your state.

They can also guide you on the use of ABLE accounts to potentially reduce your income taxes while preserving your benefits – more on those below.

ESTATE PLANNING

In addition to the DIC, your beneficiaries may also qualify for a Survivor’s Pension (which is based on financial need) – but they can’t receive both DIC and a Survivor’s Pension, so whichever one is higher will be the benefit that’s paid out. By connecting with a financial advisor now, you can help your beneficiaries understand the programs and build a relationship with someone who will be there to help later.

As a disabled veteran, you may be eligible to participate in the Survivor Benefit Plan. It allows you to make pretax premium contributions in exchange for inflation-adjusted lifetime payments to your spouse or children after your death, similar to life insurance. An advisor can help you understand your eligibility and decide if it makes sense for you.

TOOLS FOR VETERANS' DISABILITY FINANCIAL PLANNING

ABLE ACCOUNTS FOR VETERANS

If your disability occurred before age 26 (or age 46 beginning in 2026), you may qualify for an ABLE (Achieving a Better Life Experience) account. It’s a special, tax-free savings account designed to supplement public benefits without jeopardizing your eligibility. Funds from an ABLE account can cover food, housing, assistive technology and more.

Unlike regular savings, assets held in an ABLE account don’t generally count toward means-tested benefit limits for Supplemental Security Income, Medicaid or the VA pension. This means that you (or your loved ones that want to help) can save for your future needs without putting other benefits at risk.

SPECIAL NEEDS TRUSTS

Special needs trusts are designed to manage assets for individuals with disabilities. They can be helpful for disabled veterans because they preserve eligibility for government programs – for example, parents and friends can make gifts or leave an inheritance for the benefit of the disabled veteran, and it won’t be counted as an asset and potentially jeopardize benefits.

EDUCATION & CAREER TRANSITION BENEFITS

Those with service-related disabilities can take advantage of the VA Readiness and Employment program, which offers assistance with job training, job searches and even starting a business. If you’re unable to work because of your disability, VR&E can also offer help living independently.

And the GI Bill offers financial assistance for education, up to the full cost of in-state tuition and fees plus a housing allowance and more. It can also be used to cover expenses while job training.

WHY WORK WITH A FINANCIAL ADVISOR WITH VETERANS’ EXPERTISE?

Edelman Financial Engines advisors have access to training designed to help them understand how VA and other military benefits can be integrated into a comprehensive/holistic financial plan.. Through veterans’ financial planning, a professional can help you:

• Avoid costly eligibility mistakes
• Maximize every benefit available
• Coordinate VA, Social Security and retirement income
• Create a tax-efficient and sustainable plan for the future

HOW TO GET STARTED WITH VA FINANCIAL PLANNING

Financial planning for disabled veterans is critical. An advisor can highlight benefits you may not realize you qualify for, explain the pros and cons of different investments and help develop a comprehensive plan based on your unique situation.

At Edelman Financial Engines, we recognize the selfless commitment you made to protect our nation as well as the profound impact that service-related disabilities can have on your life. Whether your injuries are visible or unseen, your sacrifice deserves more than just thanks – it requires a genuine commitment to supporting your health, well-being and financial security. Our goal is to ensure your courageous service is met with the care and stability you deserve.