Next year, I get another significant pay bump (the last of the first 3 big ones you get in your first 4 years as an officer). Total number of retirement … • S-1 prepares counseling memo, approval memo (both signed by the 1st 06 in the Chain-of-Command), sexual assault memo. Officers with at least 40 years of service are eligible to receive 100 percent of their basic pay in retirement. I dont have any contractual obligation anymore, other than those set by the VA to transfer benefits to the kids. Final Pay: If you entered active or reserve military service before September 8, 1980, your retired pay will be based on your final basic pay. Some of them were certainly deserving others not so much. All sorted from the best by our visitors. Are you saying you'd recommend taxable accounts before TSP/IRA contributions? (Doctor). Officer provides S-1 with his/her memo. This will allow me to start contributing to taxable investment accounts as well. First off, there's the 20 year pension. The difference between 50% and 40% of base pay at ~22 years is approximately $850 per month. […] I love the folks I lead but man...it was so much easier single. Then there are all of the veteran's discounts. It may not be my choice whether i get to stay in or not, so i will pay some of my potential larger return for a smaller guaranteed benefit. A friend’s spouse retired from the military a little over a year ago, and I asked them to review “The Military Guide”. Today’s post is an “ask the readers” question about military retirement after service in both enlisted and officer grades. - Suspending collection action or extending repayment terms on preexisting VA debts, as the Veteran prefers. Yes, the BRS does offer flexibility and that's why I'll probably switch. Dual military. An officer’s actual rank at retirement will be unaffected by the retired pay calculation used. If you are visiting r/veterans for the first time please read the rules. I'm now an Officer (went to OCS) in a very transferable field of IT/CYBER. The IRS considers the TSP an “employee sponsored retirement plan.” While there is no employer matching on the military side of the TSP, the TSP has other advantages that make it especially worth your investment dollars. My daughter is an active duty Army Captain. I recommend you get into the first class available in Jan 2018 because the sooner you opt in, the sooner you receive the initial 1% match and begin vesting. Team I'm indifferent on rank because we're all on the same team. Reservist retirements don’t follow this rule. If you join after January 1st, 2018, you will fall under the new retirement system. Active duty military members can retire after 20 years of active duty service. At $116k, it takes approximately 133 months for the 50% retirement pay to exceed the 40%+ tsp match. Yeah, that's not included and it's expensive. I think at medicare age this benefit changes a bit? Military or not, retirement transitions aren't easy to many retirees. Another significant difference between military retirement and civilian retirement is that a retired military member can be recalled to active duty.The chances that a military retiree would be recalled to active duty after age 60, or who have been retired for more than five years, are slim. This is a subreddit for news, sites, information and events that may interest veterans. Financial Independence is closely related to the concept of Early Retirement/Retiring Early (RE) - quitting your job/career and pursuing other activities with your time. Depending on the state this could change your pay: http://www.military.com/benefits/military-pay/state-retirement-income-tax.html. Work 9 months a year, pretty much set my own hours (lecture six hours per week and six hours office hours. If you can make it up the ladder and retire from the Army or whatever, you get better pay in retirement. To comment, e-mail milupdate@aol.com , write to Military Update, P.O. Veteran officers have two big advantages in the job market: a college degree and proven management experience. The small amount of cashflow now is going right back into principal but when it pays itself off it will be pure return since I didn't have to spend more than a couple thousand of my own money to purchase and I've already saved enough of the rent to cover all but the most catastrophic maintenance. You also have to look at what the administration is going to do. Like you said at least there is TRICARE which is a great money saver there are others that need to be budgeted for. See TOP 10 retirement one liners. I even get a free burial marker when I die, I think. Just retired (currently on leave) after 20 years O3E. If the officer wants to save enough to reach the $1,167,448 target amount in 10 years, the amount needed to equal a military pension of $35,000 a year with a three percent COLA, he or she would need to save $5,652 a month. There were plenty of 06 to 08 officers that were let go. The matching isn't high enough and it's limited in the first few years. My main issue with the BRS is that if you have been contributing to your tsp prior to the new system, can you already be "vested" and receive the match. Thanks for the honest comment...really helps me. Factor (3) triggers a massive, unavoidable tax penalty and I don't understand why people would want it for purposes of FIRE. If I decide to live near a base in retirement, I can get quite a few of the nice benefits like Commissary and Exchange and gym privileges. Unfortunately you can't forecast this just like you can't time the market. ... A study was instituted earlier this year to analyse the feasibility of extending the retirement age of military … I can't figure out how to link on mobile, but there are several theses from the Naval Postgraduate School regarding the pros and cons of High-3 vs BRS. If you have no wife and kids, VA would cover you but with a family the Tricare is huge. Military Pitches Raising Officers' Premature Retirement Age, Pension Cut. Wife has one year to retirement. So what does it all mean?! Review your military retirement pay, benefits and expenses to plan your budget and calculate what you’ll have each month. Question/Advice. Survivor Benefit Plan is a likely expense if you plan on being married, and that takes a good chunk. I enlisted about 10 years ago and am currently over the hump at 10.5 years in. (Nearly 80% of this blog’s readers find a post through a search engine. Absolutely hillarious retirement one-liners! This is a place for people who are or want to become Financially Independent (FI), which means not having to work for money. I'll just echo the above comments about no guarantees to retire as a MAJ. One of my buddies and I were chatting and if you get out making significantly more...the retirement is a bit of an afterthought. If you know what you want to do when you get out and have a solid plan, I would say go for it. The best way to handle the gap between retirement and 59 1/2 is with a taxable account. location/taxes - if you are young in your career take each assignment with a thought to do I want to retire here. Being in the service is a grind. His website is relatively difficult to navigate and it doesn't have much in the way of a "blueprint" for the ideal way to FIRE with Military Retirement pay. Qualifying for a Military Retirement. The military offers a few retirement ... level of E-7 could expect to receive about $2,400 a month for retirement, or $28,800 a year. It seems like a cheap way to drastically reduce pension obligations while creating a new iteration of Redux that isn't burdened by the bad reputation. The math to get out before 20 once you hit 12 just doesn't make any sense. Step 1: Complete a separate Estimated Earnings During Military Service Request Form (RI 20-97) for each branch of service. Veterans Pension Versus Military Retirement. Don't underestimate the value of VA and Tricare Healthcare. Press question mark to learn the rest of the keyboard shortcuts. By stereotypical standards, retired senior officers typically have retirement pay, benefits for their families, have climbed the military ranks and proven their leadership abilities, and have the flexibility to move geographically on their own accord for the first time in years (opening up their options). I'm on track to max out my TSP for the first time this year. I know in the Florida retirement system it was very expensive to purchase military time. I've learned to go with the flow, enjoy life, smell the roses some -- but Keep Busy! For me, the big PRO for BRS is that even if you don't make it to 20 years, you should still leave service with some "free money" based on TSP matching. program before Sept. 8, 1980 use the final pay method. I was an imagery analyst. I'm strongly considering the new Blended Retirement System, but I still want to find out more when it comes to the possibility of a lump sum payment upon retirement. Lol. Those who entered military service or who reported to a U.S. military academy or R.O.T.C. Military members do not have their paychecks reduced to pay for the pension retirement. You only get 40% of base pay instead of 50%. A guaranteed bonus? The basis is still the average of the 36 highest-paying months of their military career. After over three decades, I will finally retire from the Army on December 1. I'm now an Officer (went to OCS) in a very transferable field of IT/CYBER. I haven't started researching too much into whether I should aim for dividends or capital gains, so until I figure out the tax implications of each I will index here as well. Its folks like you that make me think I'm on the right path bro. Right now, that's 50% of your final base pay more or less. The current military retirement system is basically what is known as a "defined retirement system". You get the idea. We ban and do not look back. Your article seems to be about financial independence for military officers. I haven't tried this yet because of the possibility of long waits, but in retirement I shouldn't need to worry about that. Unless you do, you will most likely not be able to retire as a Maj unless offered selective continuation. The Air Force Academy is a four-year private university, where graduates earn … The life expectancy gap at 60 for officers also favors reservists over active duty retirees, by nearly a year, 24 versus 23.1. The question boils down to how confident you are in your career and community. With interest and maxing the TSP, it's approximately worth $116k. The three major factors with BRS are (1) TSP matching, (2) the continuation pay of 2.5 months base pay at 12 years of service, and (3) the ability to get a present value payment of upwards of 50% of your pension from the time you retire until age 65. The current military retirement system is basically what is known as a "defined retirement system". Taxes - you will be paying federal taxes on your retirement. Tricare is cheap, but dental is not. Team I'm indifferent on rank because we're all on the same team. Most people have at least one disability. Was considering consulting or corporate after military. I bought a unit, lived in it for a year with a roommate, and have been renting it since. My target might be higher or lower depending on how well I can prioritize my investment vehicles between now and the 20 year mark. Merry later joined the Air Force and retired as a colonel. Press question mark to learn the rest of the keyboard shortcuts, http://www.mrmoneymustache.com/2012/02/06/guest-post-from-the-military-guide-frugality-is-not-deprivation/. Officers entering military service must complete a total of 8 years military service obligation. Nice. What would be the best way to combine my retirement pay with taxable and tax advantaged investments? Although my wife and I do not need to work I want to see what the civilian world has to offer. As can be seen from these two examples, if you initially entered military service on or after 8 September 1980, you should think carefully before requesting a discharge. 818 Retired Military Officer jobs available on Indeed.com. Rick P. says. First off, there's the 20 year pension. Military members are also eligible for a 403(b)…a 401(k) for government employees. Lots of thinking.I do agree though...two checks is better lol...unless I make significantly more than I do now...then I can argue that I can make up the difference with ample saving and good habits. The two basic methods to determine a military member's retirement pay are the final pay method and the high-36 method. If you're a Navy SWO, the odds that you'll make it to O5 are staggering and consistently hover in the 88%+ range. . (cue the song) Should I stay or should I go?! I'm also hoping that some of you might be able to point out my blind spots. The budget agreement last year included a trim of 1 percent in the cost-of-living increase in military retirement pay for those under 62. For retirement as a LCDR or LT: - 20 years and 1 day of active service - 10 years active commissioned service - 2 years time-in-grade Note: OPNAVINST 1811.3A provides policy for time-in-grade and next-lower-grade waiver requests. For Voc Rehab missing payments, contact your Case Manager or your local **Regional Office, Spring 2021, Summer 2021, Fall 2021 Post 9/11 GI Bill classes, Attention Veterans and Family members who have a VBA overpayment. The military estimates that the net present value of its pension at retirement is around $200,000 for an enlisted soldier and $700,000 for an officer. I know I won't be able to contribute to this from my military retirement since it's not considered earned income (this seems weird to me because it's taxed like income but not tax shelterable like income...oh well). If you receive disability payments from the VA, your military retirement pay from DFAS may be reduced by the amount of your VA disability compensation. Though enlisted veterans may also earn degrees, and many are outstanding leaders, it seems a number of major companies are being “vet friendly” by ignoring the enlisted and targeting junior military officers –- lieutenants and captains. 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