Are you taking advantage of military retirement benefits?

RallyPoint Team — Wed, 17 Sep 2014 10:31:51 -0400

Financial institutions recommend saving at least 8 times your ending annual salary for 25 years of retirement. Are you on track? The military's retirement systems can help make preparing for retirement less stressful financially, but fewer service members are putting in over 20 years of service. Are the benefits worth sticking it out for 20 years?

The DoD covered nearly $50 billion in retirement pay in FY2013. Are the budget cuts and downsizing making it harder for service members to see the incentive to stay in long enough to retire?

Response by SFC Mark Merino made Sep 17 at 2014 12:39 PM

SFC Mark Merino — Wed, 17 Sep 2014 12:39:37 -0400

I did not save anything remotely close to what is recommended. I would have lost it all in the divorce anyway...lol. I always wanted to serve in the military as a career since I was a baby SFC/E-7 still running around outside with a stick playing Army. No one joined the military to get rich. It may have been the best choice for a great number of people, but no one joined to be mentioned in Forbes. I heard it again, and again, and again from other veterans growing up....."I should have stayed in! I'd be retired by now." My mind thinks back to Audie Murphy's mentor in "To Hell and Back" who said again and again "Biggest mistake I made was getting out............Why I'd be a General by now making more than I ever would working on the farm!"
Not all of us feel a strong calling to make the military a career. I have no idea what the percentage is that make it to retirement status, but it must be pretty low. It's a hard life for the service member and can be even harder for the rest of the family. "Honey, I'm going to work. Thanks for the coffee and see you in 15 months." Good luck getting anyone outside of a military family to be able to think that is normal. But there are benefits to a career in the military that are astounding as well. 30 days a year we can see if our beloved Air Force has some empty seats on a flight going to Hawaii, Germany, S. Korea, Guam, Italy, England, etc., and take the entire family round trip for free. During our time in we get $4,500 a year for education and reduced tuition. It is realistic to leave the service with a masters degree upon retirement. Medical coverage! Do you know what civilians pay for family insurance??!! My girlfriend pays over $400 just for herself every month! There are many "behind the scene" benefits to a career of service. Save your money for retirement. Look out for your family. There is life after the military, that is for sure! But for this kid, I wouldn't have done it any other way. There is no price tag on the camaraderie that we have as brothers and sisters of service.

Response by CW5 Private RallyPoint Member made Sep 18 at 2014 7:31 AM

CW5 Private RallyPoint Member — Thu, 18 Sep 2014 07:31:23 -0400

I stayed in for 30 years because I was enjoying it and the time just seemed to roll on by. I didn't save what is recommended either (like SFC Mark Merino), but I'm working on that now.

My plan (/hope) is to live a long and healthy life after retiring from the military. The retirement pay just keeps coming, so the longer I can draw it, the better. And military retirement allows you to adjust what the financial experts say about how much money you should have in an emergency fund. Retirement pay is part of the calculation.

Response by Maj Private RallyPoint Member made Sep 18 at 2014 2:34 PM

Maj Private RallyPoint Member — Thu, 18 Sep 2014 14:34:38 -0400

We are living very comfortably in retirement thanks to my military retirement and social security. Additionally, after I decided to retire we put away money for housing expenses, utilities, taxes, insurance and travel so that doesn't come out of our monthly income. I have to admit I didn't really save anything while I was in the military but since military retirement more than caught up. All of our real investments came after I joined the civilian work force. If you are going to continue to work after military retirement, recommend you try to hook up with a company who contributes the max matching for 401k and has a good bonus plan.

Response by CPT Ahmed Faried made Sep 23 at 2014 6:39 PM

CPT Ahmed Faried — Tue, 23 Sep 2014 18:39:17 -0400

Dave Ramsey is good source of knowledge for financial matters and this here grasshopper has been taking notes.

Response by SFC Dr. Joseph Finck, BS, MA, DSS made Sep 23 at 2014 7:26 PM

SFC Dr. Joseph Finck, BS, MA, DSS — Tue, 23 Sep 2014 19:26:24 -0400

The benefits outweigh the deficit of service. A known amount of pension plus any Thrift Savings Plan monies, with the knowledge of affordable and good health care is a large enough benefit alone, for me. This added to Space A flying, lodging, Commissary and PX/BX privileges and I am sold. That is the monetary benefit. The LARGEST benefit to me, is the PRIDE I feel when I tell someone, I SERVED in the UNITED STATES MARINE CORPS AND THE UNITED STATES ARMY and I am now retired after 24 years of SERVICE TO OUR COUNTRY.

Being a veteran, service member, Soldier, Sailor, Marine, Airmen, or Coast Guardsmen is a badge of honor that only a few are allow and earned to claim. If a service member selects to leave the service at any point in their career that is their right, and I support it. Many people are shaped and influenced by their service and go on to extremely successful careers in other fields.

A few go the distance. Most for love of our great nation, service to that nation, and especially service to each other.

The greatest gift I ever earned was serving as the Detachment 1SG for my unit while we were deployed. I worked long hours seven days a week, but when we all came home, I knew my job was complete.

In sum, service is its own reward. If you stay to retire, you get an even bigger award.

SFC Joseph M. Finck USA (Ret)

Response by CPO Tim Dickey made Sep 27 at 2014 8:13 PM

CPO Tim Dickey — Sat, 27 Sep 2014 20:13:45 -0400

Not yet, just give me a few years. The Navy recently revised their High Year Tenure standard for the Navy Reserve. I might be able to continue to wear the uniform as a citizen Sailor for up to 30 years. By that time, I'll be close to 50 and should be ready to hang up my khakis once and for all.

Response by 1SG David Niles made Oct 27 at 2014 10:17 PM

1SG David Niles — Mon, 27 Oct 2014 22:17:03 -0400

I have to wait until 60 that is 15 years to go, I will have my work retirement as well so I think I am on track to make more retired then working at 60 and I am not planing on ss

Response by MSG John Wirts made Oct 28 at 2014 11:28 PM

MSG John Wirts — Tue, 28 Oct 2014 23:28:51 -0400

I was very fortunate in my younger years to make some good decisions. I joined the Army 9 days after I graduated from high school. Spent 2 years and 356 days active. Separated into IRR for 9 months, then Joined the Air National Guard, then the Arng, then Army Reserves for a total of 42 years and change. I Worked for U.S. Civil Service as a DOA civilian, and DAF civilian. I was retired on disability with a culmative lung injury. Went to work for Pacific Telephone for 23 years, retired from there. I am now fully retired and I draw 4 pensions. I do some traveling and when possible I shop the PX, and use military guest housing, or Navy Lodge, very affordable well maintained accommodations, normally off the main roads so they are quiet.

Response by SGM Mikel Dawson made Nov 9 at 2014 7:38 AM

SGM Mikel Dawson — Sun, 09 Nov 2014 07:38:24 -0500

Guess it depends on where you live. Living in Denmark about the only retirement benefit I will get to use is the money. If I go to Ram Stein in Germany I will be able to do Space "A". I've got my cousin in Oregon, retired Officer who uses the prescription drug thing for him and his wife, says they save bucks on that. As a USAR guy, I got about a year an a half before I get my retirement pay, but that's ok as it was my plan.

Response by GySgt Carl Rumbolo made Jan 6 at 2016 4:55 PM

GySgt Carl Rumbolo — Wed, 06 Jan 2016 16:55:15 -0500

My military retired pay (and benefits) are part of my long term financial planning. Like many , while in the service, there often wasn't enough to make retirement savings practical - I always had an emergency fund of around 2 months base pay, and some savings for big ticket items but planned on leveraging my retired pay as part of long term financial plan.

A combination of savings, including 401k contributions and investments, coupled with retired pay can provide a decent retirement income - but you have to have a financial plan.

I have been retired 20 years (come June 2016) and been fortunate in my post military employment, I have a good 401k , and between that, other investments and my retired pay and eventually social security it looks like I will have a decently comfortable retirement - though I plan on working till about 67.

The health care benefits are often overlooked - but if you make the effort to understand TRICARE and the complexities, it can be a useful supplement to a company health plan. Further, if you live within reasonable distance to a military hospital or pharmacy, or use the mail RX program, you can save significantly on prescriptions for chronic long term care.

I really don't find commissary or exchange privileges of significant value - I live too far from an exchange to use them regularly and typically can find better pricing (even accounting for the tax free status) in civilian retail outlets.

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