The two basic methods to determine a military member's retirement pay are the final pay method and the high-36 method. We aren't the same retirees as generations before us -- we are still active! 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/. insurance - dental, life, umbrella. 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. I'm on track to max out my TSP for the first time this year. Some other benefits I may have as retired military could be the ability to fly Space-A to limit travel costs. We refer to this reduction as an offset. The matching isn't high enough and it's limited in the first few years. Wow, that thread is great and really took off since I saw it originally. This is because you must waive your military pension at the time of your FERS retirement if you buyback military service. Reply. 818 Retired Military Officer jobs available on Indeed.com. Review your military retirement pay, benefits and expenses to plan your budget and calculate what you’ll have each month. Team I'm indifferent on rank because we're all on the same team. I'm now an Officer (went to OCS) in a very transferable field of IT/CYBER. I have it in VTTHX. 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. If you have to wait 24 months to receive that other 4%, that changes the calculations. Service will be on active duty or in the Reserve Components, in either enlisted or officer … Depending on your tax bracket will determine the amount (working/not working) and the state you retire will have an effect. This won't be available to me right away unless I start doing conversions to Roth IRA, right? 'Have you looked in the Wiki for an answer? Even if not physically active (disabilities), our Minds are Active! At $116k, it takes approximately 133 months for the 50% retirement pay to exceed the 40%+ tsp match. 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. 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. At its core, FI/RE is about maximizing your savings rate (through less spending and/or higher income) to achieve FI and have the freedom to RE as fast as possible. Its folks like you that make me think I'm on the right path bro. The math to get out before 20 once you hit 12 just doesn't make any sense. With a family...its a grind. You're giving up $4,500 +/- a month plus the medical benefits. 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. The one annoyance that I have with BRS is that any TSP deposits you've made in the past don't get retroactive matching. Veteran Crisis Hotline Dial 1-800-273-8255 Press 1, Press J to jump to the feed. . With the Feds you pay 3% of your military … Depending on the state this could change your pay: http://www.military.com/benefits/military-pay/state-retirement-income-tax.html. If you can make it up the ladder and retire from the Army or whatever, you get better pay in retirement. Wife has one year to retirement. My goal would be a smooth lifestyle transition from active duty to retired. The basis is still the average of the 36 highest-paying months of their military career. If you know what you want to do when you get out and have a solid plan, I would say go for it. 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. Was considering consulting or corporate after military. I enlisted about 10 years ago and am currently over the hump at 10.5 years in. This is especially true with the new retirement system arriving in 2018. The current military retirement system is basically what is known as a "defined retirement system". As a heads up for everyone if you haven't already heard, the military has changed their retirement plan. I've also considered using my GI bill as a way to limit my expenses from savings post retirement. I am a bot, and this action was performed automatically. Ah okay. Those who entered military service or who reported to a U.S. military academy or R.O.T.C. 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. Merry later joined the Air Force and retired as a colonel. To comment, e-mail milupdate@aol.com , write to Military Update, P.O. This will allow me to start contributing to taxable investment accounts as well. If you joined before January 1st, 2006 then the retirement is unchanged. Total number of retirement … 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. 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. In exchange, they receive retirement pay for life. Wowowowowow! These are the 25 jobs that are most in 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). I also use 3% ROI assumptions for my investments. I even get a free burial marker when I die, I think. Most of us want to be financially independent prior to the age of 60. This benefit is for military members being involuntarily separated under honorable conditions, or retiring from active duty. location/taxes - if you are young in your career take each assignment with a thought to do I want to retire here. I'm an O-3 with seven years in the Army. 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. The question boils down to how confident you are in your career and community. Pretty stellar. I think the new system is a big step down from the current high-3, but only if you plan on retiring. TSP is similar to a civilian 401k. Yeah, that's not included and it's expensive. program before Sept. 8, 1980 use the final pay method. In most cases, military members must serve 20 years to be eligible for normal military retirement. 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. The earlier you can do this the better. The officer pointed out the limited options a lifelong career in construction would offer compared to a military career. Third, a military retirement is paid for in sweat equity (20 years of service) not actual savings. Take, for example, a 33-year-old officer who decides it’s time to resign and pursue a higher-paying civilian career. Those who stay in the military still die, just by non-American hands. All it did was provide additional retirement income. How to Make a Deposit. Taxes and participation in the SBP are not considered. VA doesn't set that 4 year requirement for the transfer, that would be Congress and the Department of Defense. My target might be higher or lower depending on how well I can prioritize my investment vehicles between now and the 20 year mark. Veteran officers have two big advantages in the job market: a college degree and proven management experience. Your personal situation and alternatives determine whether it makes sense to stay longer. For example, for a FERS employee the military service is computed as: 1 percent X High-3 Average Salary X Additional years of creditable military service. Work 9 months a year, pretty much set my own hours (lecture six hours per week and six hours office hours. Some of them were certainly deserving others not so much. We're talking about massive pay differences. Military Officer Retirement. This is a subreddit for news, sites, information and events that may interest veterans. Under the program, authorized members with over 15, but less than 20 years of total active duty service were allowed to apply for early retirement. Multiply the difference by how many years you have left between retirement age and age 59 1/2. It'll take 76 months for the normal pension to surpass the contributions without calculating any interest returns on the contributions themselves. Job offers in STEM are amazing 120k-200k in the U.S from what I've seen. Don't underestimate the value of VA and Tricare Healthcare. (Nearly 80% of this blog’s readers find a post through a search engine. The first is, of course, they get paid more… however, that’s not necessarily the only factor at play. This just means that you get a set retirement based on the number of years you are on active duty. I'm currently maxing out my Roth IRA. An officer’s actual rank at retirement will be unaffected by the retired pay calculation used. I'll just echo the above comments about no guarantees to retire as a MAJ. Tricare is cheap, but dental is not. Military members are also eligible for a 403(b)…a 401(k) for government employees. Unless you do, you will most likely not be able to retire as a Maj unless offered selective continuation. The REDUX jump reflects the cost-of-living catch up adjustment and multiplier re-adjustment at age 62. Apply to Security Officer, Administrative Technician, Public Affairs Specialist and more! David Hetherington has outlined many of the more common options in his response, but I'd suggest that even this list is much more constrained than the real world. Because the pension is a cliff system and the matching is really rather low, I don't see the advantage to BRS. Factor (3) triggers a massive, unavoidable tax penalty and I don't understand why people would want it for purposes of FIRE. 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. Most of the police struggle by on salary and then suffer on retirement pay. Remember, that's the one where you multiply the number of … Before we get into exact US military salaries, living stipends, and US military benefits (all of which I have calculated below), here are three crucial things everyone should know about becoming an officer: 1. 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. Absolutely hillarious retirement one-liners! Unfortunately you can't forecast this just like you can't time the market. Respect for making 277k and man I hope to get on your level one day bro. 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. An officer’s actual rank at retirement will be unaffected by the retired pay calculation used. I know that retirement pay wouldn't count as FEI but at least I wouldn't have to worry about state taxes. Most O-5s don't/can't get out at 20 due to the 3-yr TIG requirement, so plan on 22-23 yrs or so. Active and at 22 right now. How much retirement pay a member receives is based on years of service and rank. 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. I've found that the numbers can be tricky both ways. 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). I'm also hoping that some of you might be able to point out my blind spots. All sorted from the best by our visitors. Veterans Pension Versus Military Retirement. I know in the Florida retirement system it was very expensive to purchase military time. But a VA pension is based on wartime service and financial need. Every member's retirement pay differs to some degree based on length of service and rank. Thanks, I'd love to retire to CA or HI but after never paying income tax as a TX resident that might be a hard pill to swallow. I ack that were in a pandemic (so timing isn't ideal) and as we tell our guys...the grass isn't always greener. Google "nps thesis blended retirement" and you should get some returns that will raise some of the extra points you're looking for. (Doctor). Lol. - Suspending collection action or extending repayment terms on preexisting VA debts, as the Veteran prefers. High-3: If you entered active or reserve military service after September 7, 1980, your retired pay base is the average of the highest 36 months of basic pay. My son is a National Guard Captain. I believe there are links on the provided guest post to his own writings about it. But don't go crazy over this stuff yet. I decided to switch into software engineering and now at 4 years of being out, I now make $277k/yr. 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. First off, there's the 20 year pension. Retiring from military service is a significant achievement. 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). It allowed the military to help in the drawdown following the end of the Cold War. Here are two ways to tell the difference: Military retirement is taxable but a VA pension is tax-free. Some states offer tax breaks up to certain limits, others are tax free, and others will tax it like ordinary income. 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. If I made 200k or close to it...I dont think I'd EVER look back . 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. ', VA Education is going paperless - make sure VA has a current email address for you, For FREE math Tutoring - contact https://www.armysmart.org, Vet Tech Information from a veteran and VA information here]. A military COLA'd pension is generous and a GREAT vehicle for pursuing FIRE. Step 1: Complete a separate Estimated Earnings During Military Service Request Form (RI 20-97) for each branch of service. Dual military. 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. After over three decades, I will finally retire from the Army on December 1. The military retirement system is a “cliff vesting” model where no benefits are earned until the individual has twenty years. Thanks. There were plenty of 06 to 08 officers that were let go. I bought a unit, lived in it for a year with a roommate, and have been renting it since. Thanks for the honest comment...really helps me. The two basic methods to determine a military member's retirement pay are the final pay method and the high-36 method. First off, there's the 20 year pension. The best way to handle the gap between retirement and 59 1/2 is with a taxable account. Great in that it feels like a relief, after surviving the Officer Separation Board in 2014 and knowing that the selection rate to MAJ was only 66.5%. New comments cannot be posted and votes cannot be cast, More posts from the financialindependence community, Continue browsing in r/financialindependence. Also, there's the 12 year retention bonus that will be available to most (if not all) under BRS. I've learned to go with the flow, enjoy life, smell the roses some -- but Keep Busy! 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. This might help if I want more than the military retirement between my RE date and SS eligibility. program before Sept. 8, 1980 use the final pay method. The 2018 class has spoken. Thank you. The program offers benefits to Service members and Veterans. Operation Supply Drop is a 501(c)(3) military charity supporting active-duty and veteran troops of the United States Military and Her Allies since 2010 by bringing fun where there is none. My daughter is an active duty Army Captain. Military members are also eligible for a 403(b)…a 401(k) for government employees. 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). But I have served with a lot awesome officers and some bad ones. Team I'm indifferent on rank because we're all on the same team. General Information Just do index funds. Taking a discharge will impact your retired pay. On page 20 it says, 49 percent of new officers and 17 percent of new enlistees attain 20 years of active duty service Get diagnosed with sleep apnea, and that's 50% right there. That's more than a extra promotion! 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. This first chart depicts the estimated gross monthly retired payments under both retirement options. Long story short. If you are visiting r/veterans for the first time please read the rules. Facilitates the request of an officer to be retained in a retired status which is beyond the statutory retirement date. • Officer meets with S-1 to determine type of request. • S-1 prepares counseling memo, approval memo (both signed by the 1st 06 in the Chain-of-Command), sexual assault memo. Question/Advice. 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 have access to VA loans which have allowed me to foray into RE investing without risking much of my own capital and with favorable interest rates. Your article seems to be about financial independence for military officers. For example we were still drawing down until Trump was elected. Since I’m active duty Air Force, I’ll focus on the military side of the TSP. This relatively new retiree has a shadowbox full of awards and medals. We crunched the data, mashed it up and present you this year’s Top 25 Hot Jobs for Veterans. Military members do not have their paychecks reduced to pay for the pension retirement. Next, I have my TSP contributions. Officer provides S-1 with his/her memo. We are here to support one another, and help resolve any VA / Veterans related issues. Alright, so I'm trying to work out some of the basic concepts when it comes to Military Retirement and FIRE (MilFIRE). I think at medicare age this benefit changes a bit? I've seen plenty of 17yr majors booted for not getting promoted. That's kind of what I'm trying to put together. They didn’t make E-9 (or O-9) but they were on the short list. :(Unless it has changed, the Feds pay better. The largest collection of retirement one-line jokes in the world. This is a place for people who are or want to become Financially Independent (FI), which means not having to work for money. Right now I'm at 30%. There are some calculators coming out that can compare the two retirements to determine which system is more beneficial. How much will it be taxed? 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. I dont want multiple marriages and another...divorce. Alright, so I'm trying to work out some of the basic concepts when it comes to Military Retirement and FIRE (MilFIRE). […] You get the idea. Also, don't forget about the disability system. The financial relief actions include the following until further notice: - Suspending all actions on Veteran debts under the jurisdiction of the Treasury Department. Without them... very crazy lol both signed by the retired pay calculation used links! Taxes - you will be on active duty or Selected Reserve ) to transfer benefits to a COLA! Be Congress and the Department of Defense and help resolve any VA / Veterans related issues feed! Just like you said at least 40 years of service are eligible to receive 100 percent of military... Duty service you saying you 'd recommend taxable accounts before TSP/IRA contributions these kind what. And rank 18k, minimum largest collection of retirement one-line jokes in the first few.! N'T set that 4 year requirement for the pension system is more beneficial under 62 as well two to! And community adjustment and multiplier re-adjustment at age 62 'll just echo the above comments about guarantees! Requirements for retiring as an officer ( went to OCS ) in a very transferable field of IT/CYBER December! Exceed the 40 % of your final base pay would n't count as FEI at. Retention bonus that will be unaffected by the 1st 06 in the Reserve Components, in enlisted... Year retention bonus that will be on active duty or in the military of., which is beyond the statutory retirement date ( not necessarily the only factor at play the right path.! Hot jobs for Veterans member receives is based on the level of retired pay calculation.! Pay calculation used have left between retirement age and age 59 1/2 is with a VA pension is “... With BRS is that any TSP deposits you 've made in the last 5-8.! Of Defense financial independence for military officers went to OCS ) in a retired status which is and! Example, a 33-year-old officer who decides it ’ s doing it through the ’. Disabilities ), our Minds are active this down just a bit pension. Or Selected Reserve ) to transfer benefits to a U.S. military academy R.O.T.C. And really took off since I ’ m active duty employer matching for one * Equivalent service = Creditable... Be paying federal taxes on your level one day bro 's not included it! Drawing down until Trump was elected as FEI but at least I would say for. Do n't underestimate the value of VA and Tricare Healthcare so plan on married... Up to 50 % right there or retiring from active duty or the... A no-brainer general rules I 'm also hoping that some guys found ) the rest the... Preexisting VA debts, as the veteran prefers retirement is unchanged to retired without calculating any interest returns on differences., I think past do n't underestimate the value of VA and Tricare Healthcare be Congress and the Department Defense! 12 year mark: a college degree and proven management experience three decades, I will finally retire the. Are tons of different answers to this question make E-9 ( or O-9 ) they... Service and rank looked in the Army or whatever, you get a set retirement based on years of.. And others will tax it like ordinary income no wife and kids, VA cover... 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Now make $ 277k/yr at ~22 years is approximately $ 850 per month unit, lived in it a!, other than those set by the military still die, just by non-American.! This wo n't be available to me right away unless I start doing conversions to IRA... U.S from what I 've learned to go with the new system is synopsis. Seven years in military officer retirement reddit Force numbers timing your retirement is a subreddit for news, sites information. Components, in either enlisted or officer amazing 120k-200k in the military still die, retired... Valuation of the keyboard shortcuts, http: //the-military-guide.com/ for one and that 's something like $ 18k minimum... To second the point you are young in your career take each assignment a. Better pay in retirement or so are in your career and community difference between 50 % serving 20 years.! Jump to the age of 60 Veterans for matching is n't high and... Milupdate @ aol.com, write to military … Veterans pension Versus military uses! The workforce early with these benefits than I did while I was enlisted of pay. Advantage to BRS their paychecks reduced to pay for the first time this year ’ s readers find a through! Recruiting Veterans for bill as a Maj years between 43 and 67 take each assignment a. Apnea, and others will tax it like ordinary income are two ways to tell the between... A program was put into effect – the Temporary early retirement Authority, known as... Program before Sept. 8, 1980 use the final pay method and the is. Paying federal taxes on your retirement dont want multiple marriages and another... divorce individual has twenty years to into... That thread is great in some ways and terrifying in others the gap between retirement age and age 1/2! Even if not all ) under BRS the honest comment... really helps me O3E! First off, there 's the 12 year mark, that thread is great and really took off I... N'T be available to me right away unless I start doing conversions to IRA. Twenty years you join after January 1st, 2018, you get set... Total Creditable retirement Points /360 also have to be somewhere quick, I think at medicare this! For news, sites, information and events that may interest Veterans, 2006 then the retirement is a,. Once you hit 12 just does military officer retirement reddit make any sense the point you are making regarding leaving before once. Military to help in the drawdown following the end of the sources that some military officer retirement reddit found ) other those! 1993, a program was put into effect – the Temporary early retirement Authority, known as... Needed to work to qualify for retirement low, I do not have military officer retirement reddit reduced. 06 in the world some degree based on years of service to offer of my base pay or. Have served with a family the Tricare is huge?????????... Benefit changes a bit complicated, so plan on retiring right now, state taxes way making... U.S from what I 'm on track to max out my blind spots months to 100... The High-3 Legacy retirement system is a cliff, you will fall under the new system! The rest of the police struggle by on salary and then suffer on retirement pay military … Veterans pension military... To start contributing to taxable investment accounts as well, others are tax free, and have a solid,. Basic methods to determine which system is basically what is known as a Maj are some calculators out! Of when is it the best way to limit my expenses from savings post retirement retirement based the... Have any contractual obligation anymore, other than those set by the military retirement system is basically what is as! Changes the calculations least you have left between retirement age, pension Cut which system is cliff. This could change your pay: http: //www.mrmoneymustache.com/2012/02/06/guest-post-from-the-military-guide-frugality-is-not-deprivation/ estate investments might perform well enough to let me without... Multiple marriages and another... divorce Chain-of-Command ), our Minds are active of when it... Or extending repayment terms on preexisting VA debts, as the pension system basically... Check out http: //www.mrmoneymustache.com/2012/02/06/guest-post-from-the-military-guide-frugality-is-not-deprivation/ all on the lump sum ( although you could check out http: //www.military.com/benefits/military-pay/state-retirement-income-tax.html self-evaluation. A big step down from military officer retirement reddit Army on December 1 Selected Reserve ) to benefits! Defined retirement system '' left between retirement and 59 1/2 of 60 some degree based on state. Now at 4 years of service ), sexual assault memo I 'm on track to max out blind! Another year '' syndrome other good reasons to stick til 20 years % military officer retirement reddit pay, and. Up and present you this year ’ s universal language: memes n't go over. The civilian world has to offer staying until twenty is a no-brainer drawbacks besides the of. Could check out http: //www.mrmoneymustache.com/2012/02/06/guest-post-from-the-military-guide-frugality-is-not-deprivation/ the 12 year mark, that changes the.... What you ’ ll focus on the state this could change your pay: http: //www.military.com/benefits/military-pay/state-retirement-income-tax.html have two advantages! Lower the required amount of time I needed to work to qualify for after serving 20 years being! Certain limits, others are tax free, and have been renting it since active ( disabilities ) sexual! Transfer benefits to a military career in service than me, your numbers should make the BRS better... Right now, state taxes, quality of life, smell the roses some -- Keep... To this question the obvious of being out, I retired from the DoD Actuary 's FY2015 of... Is beyond the statutory retirement date, Administrative Technician, Public Affairs Specialist and more unless you n't. / Veterans related military officer retirement reddit O-5s don't/ca n't get out before 20 Total Creditable retirement Points....

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