Up to 50% of my base pay would be continued by the military after retirement. To figure out how much you need in a taxable account, figure out your yearly expenses and subtract your yearly pension. Yeah, that's not included and it's expensive. Nice. How much retirement pay a member receives is based on years of service and rank. At that point they cancelled the O-6 retention boards and we are seeing an increase in the force numbers. Alright, so I'm trying to work out some of the basic concepts when it comes to Military Retirement and FIRE (MilFIRE). Lol. Taxes and participation in the SBP are not considered. 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. 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. Qualifying for a Military Retirement. I think I'd owe an additional 3 years...thats what I was referring to, Finish 20 years, two checks is better than one, Considering but wifes career struggles in some of these smaller markets and on both sides, Enlisted as a Non Com and Officer, family time struggles the higher we go. I'm also hoping that some of you might be able to point out my blind spots. Although my wife and I do not need to work I want to see what the civilian world has to offer. Yes, the BRS does offer flexibility and that's why I'll probably switch. Who knows if there will be a RIF or my real estate investments might perform well enough to let me RE without the pension. The first is, of course, they get paid more… however, that’s not necessarily the only factor at play. On the other hand I get anxiety just considering being passed over for LTC and forced out at 17 years, likely pushing FIRE back at least a 10-15 years and forcing me to start a new career at 40 years old. For O-4s at the 12 year mark, that's something like $18k, minimum. I was enlisted for 23 years. Multiply the difference by how many years you have left between retirement age and age 59 1/2. Assuming I make it to Major and punch out at 20, it would be just slightly over $30k/yr in today's dollars after taxes (since it is taxed). Remember, that's the one where you multiply the number of … :(Unless it has changed, the Feds pay better. You get the idea. You also have to look at what the administration is going to do. And he’s doing it through the internet’s universal language: memes. Wow, that thread is great and really took off since I saw it originally. The math to get out before 20 once you hit 12 just doesn't make any sense. Military members do not have their paychecks reduced to pay for the pension retirement. The military retirement can be very confusing to understand and calculate. 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. Military members are also eligible for a 403(b)…a 401(k) for government employees. Military members are also eligible for a 403(b)…a 401(k) for government employees. Basically the discount rate will be around 8-9%, what is up in the air is whether they do the NPV has a whole sum (then never do this) or if they do it as a NPV of the annual cashflows (they might even do it as monthly cashflows), in which case you might want to do it. 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. This first chart depicts the estimated gross monthly retired payments under both retirement options. There are some exceptions, including the Temporary Early Retirement Authority (TERA), which allows members to retire with as few as 15 years of service, and Chapter 61 medical retirements. Some states offer tax breaks up to certain limits, others are tax free, and others will tax it like ordinary income. Third, a military retirement is paid for in sweat equity (20 years of service) not actual savings. We are here to support one another, and help resolve any VA / Veterans related issues. In 1993, a program was put into effect – the Temporary Early Retirement Authority, known simply as TERA. Facilitates the request of an officer to be retained in a retired status which is beyond the statutory retirement date. My goal would be a smooth lifestyle transition from active duty to retired. For me, I prefer knowing that the money is mine and if I die, I can pass it on to a significant other tax free. So, that officer who served 25 years can now expect a monthly retirement benefit of 50% of their active-duty paycheck rather than the 62.5% they could expect previously. If I choose the right school, I could work on a degree in something fun and have my expenses covered for a couple years before going into full on retirement. I know that retirement pay wouldn't count as FEI but at least I wouldn't have to worry about state taxes. Review your military retirement pay, benefits and expenses to plan your budget and calculate what you’ll have each month. I enlisted about 10 years ago and am currently over the hump at 10.5 years in. Most of the police struggle by on salary and then suffer on retirement pay. 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. Since I’m active duty Air Force, I’ll focus on the military side of the TSP. I have it in VTTHX. Unfortunately you can't forecast this just like you can't time the market. Step 1: Complete a separate Estimated Earnings During Military Service Request Form (RI 20-97) for each branch of service. First off, there's the 20 year pension. All others use the high-36 method. 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. A military COLA'd pension is generous and a GREAT vehicle for pursuing FIRE. I'm currently maxing out my Roth IRA. My target might be higher or lower depending on how well I can prioritize my investment vehicles between now and the 20 year mark. These are the 25 jobs that are most in Anyone who was in the military as of Dec. 31, 2017, is automatically grandfathered into the High-3 Legacy retirement system. It'll take 76 months for the normal pension to surpass the contributions without calculating any interest returns on the contributions themselves. I decided to switch into software engineering and now at 4 years of being out, I now make $277k/yr. Veterans Pension Versus Military Retirement. At $116k, it takes approximately 133 months for the 50% retirement pay to exceed the 40%+ tsp match. 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. - Suspending collection action or extending repayment terms on preexisting VA debts, as the Veteran prefers. 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. In exchange, they receive retirement pay for life. 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). Team I'm indifferent on rank because we're all on the same team. program before Sept. 8, 1980 use the final pay method. Work 9 months a year, pretty much set my own hours (lecture six hours per week and six hours office hours. Thank you. LM, I retired from the Navy after 24 yrs of service. Good luck. The original pension plan can only be passed on through the SBP which you have to pay for and then it dies with your spouse or child dependent on what you opt for. I cannot offer direct advice however: http://www.mrmoneymustache.com/2012/02/06/guest-post-from-the-military-guide-frugality-is-not-deprivation/ is a guest post from (unless I am mistaken) someone who retired early due to military pension. Military Retirees Being Recalled to Active Duty . This will allow me to start contributing to taxable investment accounts as well. Each year we ask the Military Friendly® Employers to list the top 10 jobs they are recruiting veterans for. . Therefore, plan your calculations on O-5, unless you have prior service. To contact VA Education, 1-888-442-4551, for Voc Rehab VR&E (Veteran Readiness and Employment Program) assistance with appointments or problems with your Case Manager (not for missing payments): 1-202-461-9600. For example we were still drawing down until Trump was elected. We aren't the same retirees as generations before us -- we are still active! But I have served with a lot awesome officers and some bad ones. The REDUX jump reflects the cost-of-living catch up adjustment and multiplier re-adjustment at age 62. Question/Advice. This might help if I want more than the military retirement between my RE date and SS eligibility. Ensure you receive all the benefits to which you are entitled by reviewing the Retirement page on myPers.The following links go to myPers and provide information on: . If I made 200k or close to it...I dont think I'd EVER look back . There may be helpful information in there. The military definitely has a nice retirement program. Apply to Security Officer, Administrative Technician, Public Affairs Specialist and more! I'm on track to max out my TSP for the first time this year. Job offers in STEM are amazing 120k-200k in the U.S from what I've seen. Your personal situation and alternatives determine whether it makes sense to stay longer. Level C - Direct Entry Officer (DEO) Level D - University Training Plan Non-Commissioned Member (UTP(NCM)) and Officer Candidate Training Plan - Former Service (OCTP-FS) Level E - Commissioned from the Ranks (CFR) 3. Even if the stock market doesn't make great gains...at least you have that employer matching. TSP is similar to a civilian 401k. I know in the Florida retirement system it was very expensive to purchase military time. I'll retire with an additional (minimum) $1700/mo due to my issues, that's at 70% disability, and I think I can get higher. Depending on your tax bracket will determine the amount (working/not working) and the state you retire will have an effect. 818 Retired Military Officer jobs available on Indeed.com. I just made the O-4 list last month, which is great in some ways and terrifying in others. The same keywords […] First off, there's the 20 year pension. Those who entered military service or who reported to a U.S. military academy or R.O.T.C. Also, don't forget about the disability system. Landed a job at a university. Also, there's the 12 year retention bonus that will be available to most (if not all) under BRS. As the pension system is a cliff, you end up questioning the logic of leaving in the last 5-8 years. 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. (Nearly 80% of this blog’s readers find a post through a search engine. I've read his stuff before and it's alright. They didn’t make E-9 (or O-9) but they were on the short list. Leave which workforce? Member’s percentage of disability determined by the military service; Years of creditable service times 2.5% or 2.0% (Based on whether the member was a participant in one of the legacy retirement programs or the Blended Retirement System prior to the disability) Note … I love the folks I lead but man...it was so much easier single. All sorted from the best by our visitors. What would be the best way to combine my retirement pay with taxable and tax advantaged investments? I am going to second the point you are making regarding leaving before 20. Don't underestimate the value of VA and Tricare Healthcare. Mitchell stood to lose his pension, an annual lifetime retirement benefit that military personnel qualify for after serving 20 years on active duty. I got out at 9.5 years, albeit enlisted though. Survivor Benefit Plan is a likely expense if you plan on being married, and that takes a good chunk. For us, Our officer Corps is so small that i have seen a lot of extremely qualified people get bounced out since there was nowhere for them to go. This can get a bit complicated, so I wrote a full guide that covers the service requirements for retiring as an officer. Right now, that's 50% of your final base pay more or less. Active duty military members can retire after 20 years of active duty service. If you're a Navy SWO, the odds that you'll make it to O5 are staggering and consistently hover in the 88%+ range. Thats crazy. In a civ job...if its too much I can leave. If I have to be somewhere quick, I'm sure I'll still be churning. Some other benefits I may have as retired military could be the ability to fly Space-A to limit travel costs. Thanks for the honest comment...really helps me. We crunched the data, mashed it up and present you this year’s Top 25 Hot Jobs for Veterans. The Air Force Academy is a four-year private university, where graduates earn … I've also considered using my GI bill as a way to limit my expenses from savings post retirement. Most of us want to be financially independent prior to the age of 60. 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. There are some calculators coming out that can compare the two retirements to determine which system is more beneficial. If you are visiting r/veterans for the first time please read the rules. Being a full time, international traveler is appealing, too. That's more than a extra promotion! That means I need to figure out what the number is that I need to save to not have a decrease in spending level while also not accidentally saving more than I need. Unless you do, you will most likely not be able to retire as a Maj unless offered selective continuation. But both groups live longer from age 60 than Americans in general. Veteran officers have two big advantages in the job market: a college degree and proven management experience. 'Have you looked in the Wiki for an answer? With regards to your lump sum questions, I had a very informative exchange going on in this thread. You could try your hand at real estate, but I think it's risky and just easier to put money in an index fund and not have all the worries and have to pay property management fees due to your transient lifestyle. (cue the song) Should I stay or should I go?! Keep in mind that there are a lot of benefits that you can take advantage of to pay for these things without paying for it. With the Feds you pay 3% of your military … Merry later joined the Air Force and retired as a colonel. How to Make a Deposit. This will affect school systems if you don't have kids now, state taxes, quality of life, social situations, etc. An officer’s actual rank at retirement will be unaffected by the retired pay calculation used. Most of the police struggle by on salary and then suffer on retirement pay. This just means that you get a set retirement based on the number of years you are on active duty. 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. The officer pointed out the limited options a lifelong career in construction would offer compared to a military career. New comments cannot be posted and votes cannot be cast, More posts from the financialindependence community, Continue browsing in r/financialindependence. May 23, 2012 at 5:46 am. The current military retirement system is basically what is known as a "defined retirement system". 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