Posted on Dec 10, 2013
OSB Early Retirement or continue to serve in the reserves?
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I could use some advice from GS employee / reservists out
there.
After a quick review of my file I think may be at risk for
the Officer Separation Board. Looking at
the board timeline and how much time they give you to separate I will have just
enough active duty time to retire early at 15 years at a much reduced rate. I will also be very close to a reserve retirement.
How does an active retirement vs continuing to serve in the
reserves impact a civilian GS retirement?
Are there any advantages to continuing to serve the reserves
if I qualify for a retirement at 32.5% of my high 3?
Officer Separation Board (OSB)
Retirement
Army Reserve
Posted >1 y ago
Responses: 7
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MAJ Millier,
Part is pure math, part is intention.
The math is a little involved, but not rocket surgery.
Calculate what you would get per month between now and age 60 under TERA. (32.5% of your high three, approx + realistic COLA). Don't forget to figure in which Spouse/Family annuity option you want. That is X.
Calculate what you would earn per month in the Reserves between now and your MRD (it's still 28 Yrs Commissioned - Unless you make COL+). I would assume around 70 "days" of pay a year (48 Battle Assemblies, 15 days of AT, an a few misc days here and there.). Assume a realistic rate of pay chart increase. That is Y.
Calculate what your likely Reserve Retirement amount will be. The basic rule is:
Take your number of retirement points (you get one per day of active duty, 1 per assembly [4 for the average MUTA 4 assembly) and divide by 360 (NOT 365). This is your equivalent active service (forget the exact term). Take that number of years and multiply by 2.5. There are TWO annuity options you will need to make between your "retirement" and age 60. Figure how you would decide both of those. This is Z.
There are four things you care about here:
1. Is X greater than Y? (I can guarantee it is!)
2. How much of a gap do you have between your MRD and age 60? (Y is ZERO for those years!!)
3. Is X greater than Z? (Z will be bigger, though by how much I can't guess for you)
4. Do you feel it is a better deal for you to take X or take Y+Z over the long term.
Translation: You'll take it in the shorts going into the Reserves in the short term. Over the longer term, it may make more financial sense - or not - really depends on your financial plans, life expectancy, risk aversion, etc.
For me, the real question is intention. I will make the very broad assumption that if selected for the QSB, you will not be selected for the AGR program. I know of no guidance that says that, but I think that is where the smart money is. This means you will need a Real Job™. Do you want to continue to do the Army as an additional part-time job? With the caveat that you will but in a lot more hours than you are ever paid for?
I have my 20 year letter and still continue to serve, and am getting ready to commute 1500 miles round trip to my new unit, so I know where I fall on that question - I'm in until they kick me out. That said, it is a LOT of work to do it fully-assed.
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COL Vincent Stoneking
Oh, I forgot - There is an important decision between RESIGNING and joining the Retired Reserve.
If you resign, your base pay for calculation purposes is frozen as of that year (you don't get the annual pay raises "applied") - but except in absurd circumstances, you can't get called up.
If you join the retired reserve, you get credit for additional longevity & military pay raises. Effectively, your "high three" base pay for the calculation will be higher. However, you are subject to recall.
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My active time all counted towards my GS FERS retirement (assuming I was willing to buy back the amount). More importantly, those years counted towards tenure as a GS employee.
I believe that, if you retire from AD, your years will NOT count toward GS FERS nor tenure.
You can continue "drilling" in the Army Reserve until you reach mandatory removal. As long as you complete professional education and get good evaluations, you will get promoted. You may have the opportunity to volunteer for active duty tours (not AGR) which significantly build your retirement points.
Many soldiers I recruited to join my units had gotten off active duty and spent a year or two wishing they could go back. Our USAR units provided that connection while enabling them to have a civilian career.
I was performing 48 drills (one day pay for each), upwards of 29 days of active duty (spread here and there among various missions, unit visits, conferences, etc) and some schools every year. I averaged 100+ points a year for most of my USAR career.
Considering that you can only earn 365 points in a year, it becomes clear that USAR membership is a way to significantly grow that retirement.
Most importantly, I remained connected to the Army until I hit 30yrs of commissioned service. A lot of friends, professional connections and life experiences that I would not trade for anything.
As an Accountant, I suggest you work the numbers. Just remember that the numbers you work will be significantly enhanced by USAR duty. 100 points a year is a reasonable expectation.
Also note that USAR duty is not for everyone. Some people I know can't handle a full time job working 50-60 hours a week, a family, community and a different part time job that requires you to be proficient enough and ready to be called to serve just like any Army soldier on active duty. I wonder how many active duty officers could do their job, attend ILE at night, work a part time job one weekend a month, mentor Boy Scouts, coach youth sports and spend 8-10 hours on weeknights preparing for the USAR mission. I'm sure some could, but not all. I'm proud to say I did and I'd do it all over again.
I believe that, if you retire from AD, your years will NOT count toward GS FERS nor tenure.
You can continue "drilling" in the Army Reserve until you reach mandatory removal. As long as you complete professional education and get good evaluations, you will get promoted. You may have the opportunity to volunteer for active duty tours (not AGR) which significantly build your retirement points.
Many soldiers I recruited to join my units had gotten off active duty and spent a year or two wishing they could go back. Our USAR units provided that connection while enabling them to have a civilian career.
I was performing 48 drills (one day pay for each), upwards of 29 days of active duty (spread here and there among various missions, unit visits, conferences, etc) and some schools every year. I averaged 100+ points a year for most of my USAR career.
Considering that you can only earn 365 points in a year, it becomes clear that USAR membership is a way to significantly grow that retirement.
Most importantly, I remained connected to the Army until I hit 30yrs of commissioned service. A lot of friends, professional connections and life experiences that I would not trade for anything.
As an Accountant, I suggest you work the numbers. Just remember that the numbers you work will be significantly enhanced by USAR duty. 100 points a year is a reasonable expectation.
Also note that USAR duty is not for everyone. Some people I know can't handle a full time job working 50-60 hours a week, a family, community and a different part time job that requires you to be proficient enough and ready to be called to serve just like any Army soldier on active duty. I wonder how many active duty officers could do their job, attend ILE at night, work a part time job one weekend a month, mentor Boy Scouts, coach youth sports and spend 8-10 hours on weeknights preparing for the USAR mission. I'm sure some could, but not all. I'm proud to say I did and I'd do it all over again.
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If you have more than 3 years TIG as a MAJ, you probably won't get picked up for AGR, so Reserves won't be a viable option for an active duty retirement.
If I were you, I'd take the guaranteed money now and start the next career. The money you'll make between now and age 60 (when you can collect a reserve retirement) will be significantly more than if you retire from the reserves and then wait until 60.
If I were you, I'd take the guaranteed money now and start the next career. The money you'll make between now and age 60 (when you can collect a reserve retirement) will be significantly more than if you retire from the reserves and then wait until 60.
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