Posted on Jan 6, 2016
What can you expect when you RCP out of the military?
28.2K
12
13
2
2
0
Posted in these groups: 
RCP
Transition
RCP Transition
Posted 9 y ago
Responses: 3
3
3
0
Since you are affected by this RCP, you may qualify for the National Guard or Army Reserve, but must sign a contract in order to receive their separation pay.
However there are two kinds of sep pay; full pay and half pay.
http://www.armyreenlistment.com/separation-pay.html
I would talk to a career counselor right away to find your options whether they be in the Army Reserves or National Guard, don't delay.
Taxes will be withheld from your separation pay, usually at a rate of 20% or 25%. So far as I know, you cannot change the withholding rate. If you overpay your taxes, you will receive a refund when you file your tax return the following year. Taxes will be handled in a similar manner to taxes on a military bonus.
You may be eligible to join the Guard or Reserves after leaving active duty military service, even if you receive separation pay. However, if you go on to retire from the Guard or Reserves, you will be required to pay back your separation pay. DFAS will withhold 40% of your retirement pay until you have paid back the separation pay you received. There is no option for repaying the balance in a lump sum, but you can request that DFAS increase your withholding to speed up your repayment of the separation pay. Note: The VA will only recoup the after-tax amount from your disability payments (for federal taxes already paid). You have already paid taxes on the amount of severance pay received, so the VA will not withhold beyond the amount of money you actually received.
http://www.dfas.mil/retiredmilitary/plan/separation-payments/vsi-ssb-recoupment.html
Federal law requires the VA to withhold compensation pay for veterans separation pay, severance pay, and readjustment pay, less any federal taxes already paid. This applies to both voluntary and involuntary separation pay. So if you accept separation pay and you file a disability claim, you cannot receive VA disability payment until the entire amount is recouped, thereby causing a delay. The DoD Reg for separation pay is over 60 pages long:
http://comptroller.defense.gov/Portals/45/documents/fmr/archive/07aarch/07a_35_Jun10.pdf
RCP in the Guard or Reserves is a bit different provided you are not on a Title 10 AGR tour.
As part of the RCP, it is mandatory now to attend ACAP when separating whether by retirement, ETS,etc. So take advantage of that for resume writing translating your skills to civilian. You can take your GI Bill and convert to Post 9/11, if you considered it.
My suggestion, is look long and hard and highly encourage to continue your service. If you put this much time in, why stop unless you truly feel you just don't want to do this anymore.
However there are two kinds of sep pay; full pay and half pay.
http://www.armyreenlistment.com/separation-pay.html
I would talk to a career counselor right away to find your options whether they be in the Army Reserves or National Guard, don't delay.
Taxes will be withheld from your separation pay, usually at a rate of 20% or 25%. So far as I know, you cannot change the withholding rate. If you overpay your taxes, you will receive a refund when you file your tax return the following year. Taxes will be handled in a similar manner to taxes on a military bonus.
You may be eligible to join the Guard or Reserves after leaving active duty military service, even if you receive separation pay. However, if you go on to retire from the Guard or Reserves, you will be required to pay back your separation pay. DFAS will withhold 40% of your retirement pay until you have paid back the separation pay you received. There is no option for repaying the balance in a lump sum, but you can request that DFAS increase your withholding to speed up your repayment of the separation pay. Note: The VA will only recoup the after-tax amount from your disability payments (for federal taxes already paid). You have already paid taxes on the amount of severance pay received, so the VA will not withhold beyond the amount of money you actually received.
http://www.dfas.mil/retiredmilitary/plan/separation-payments/vsi-ssb-recoupment.html
Federal law requires the VA to withhold compensation pay for veterans separation pay, severance pay, and readjustment pay, less any federal taxes already paid. This applies to both voluntary and involuntary separation pay. So if you accept separation pay and you file a disability claim, you cannot receive VA disability payment until the entire amount is recouped, thereby causing a delay. The DoD Reg for separation pay is over 60 pages long:
http://comptroller.defense.gov/Portals/45/documents/fmr/archive/07aarch/07a_35_Jun10.pdf
RCP in the Guard or Reserves is a bit different provided you are not on a Title 10 AGR tour.
As part of the RCP, it is mandatory now to attend ACAP when separating whether by retirement, ETS,etc. So take advantage of that for resume writing translating your skills to civilian. You can take your GI Bill and convert to Post 9/11, if you considered it.
My suggestion, is look long and hard and highly encourage to continue your service. If you put this much time in, why stop unless you truly feel you just don't want to do this anymore.
Military Compensation: Separation Pay
Many servicemembers involuntarily separated from active duty may be eligible for separation pay.
(3)
(0)
SSG (Join to see)
Great information. Thanks and I must have overlooked this information on the Armyreenlistment site. But I have it now and will continue to look into it. thanks again.
(1)
(0)
Capt (Join to see)
Not sure if it is still available. But, I softened the tax blow by doing income averaging on my next tax filing.
(0)
(0)
1
1
0
SSG (Join to see)
Thank you CPT Gonzalez. Just trying to prepare myself and make the decision that is best for me.
(0)
(0)
SGM (Join to see)
To clarify, in order to receive separation pay you must be a member of the SELRES - selective reserve which include the Army National, Army Reserve or the Individual Ready Reserve. If you are hitting your RCP, you should probably give some serious thought to continuing in the Reserve Component for a Reserve Retirement since you probably have at least 8 plus years of Active duty service. It could easily be a $1500.00 a month depending on which grade you retired and how long you continue Reserve component service. This is a link to a Reserve Retirement pay calculator. For example, multiply the number of years of active duty X 360. (10 years X 360 = 3600) and Use 75 X number of years of Reserve Service (10X75= 750) Add 3600 + 750 = 4350. Ten years active duty plus 10 years of Reserve Component Service for 20 years of qualifying service. Figuring retiring at the grade of E-7 would bring you 1,344 a month for retirement in todays dollars. You should be able to use this link yourself for a more accurate calculation.
https://www.hrc.army.mil/calculators/retirementcalc.aspx
https://www.hrc.army.mil/calculators/retirementcalc.aspx
(2)
(0)
SSG (Join to see)
Thank You SGM Curry. I am considering joining the Guard or Reserves if I do in fact hit RCP. Jut trying to prepare with the most information I can.
(0)
(0)
SGT Sgt Lukas
SGM, i just recently hit RCP after 14 years, and i was told that because I had a flag for overweight i was not even entitled to the 50 percent. Is this true? I already understand that i cannot join the guard or reserves straight from AD, therefore my sep pay would go down from 52K to 26K... I am just hoping that i dont loose it all.. thanks!
(0)
(0)
0
0
0
I want to say thank you to everyone that left me some input. I really appreciate the positive information. After thinking on it I am going to see our local reserve/Guard recruiters this week see if I would qualify to join either organization if I do in fact RCP. Since I still have a few months to make up the points I lost with the new point system and max out. Again thank you all for your input.
(0)
(0)
Read This Next
Continue with Facebook 
Continue with Google