Why does a SM forfeit retirement money after completing there ADSO if less than 20yrs AFS?

First off, understand what "retirement pay" really is. It's not a true pension or a retirement fund like a 401K. It's more correctly a retainer fee. As a retired member of the armed forces, technically, you are STILL in the military. True, you are no longer subject to UCMJ, nor carry the authorities that you did as an AD SM, but you are also subject to recall whenever the military needs you. Someone who is totally out (officer who has resigned their commission and/or vet who no longer has an IRR commitment) is not subject to recall. They are no longer being retained, so they do not get any pay. Reduced pay for reduced service.

Second, it was designed to promote the longevity that is needed to make a professional military force possible. 20yrs may be an arbitrary number, but it does get the most value out SM's who may not be suited for higher rank or responsibilities.

It's not that you forfeit the retirement - it's that you haven't earned it yet. I know it sounds like splitting hairs, but it's not. When I enlisted in 1994, I knew that 19 years and 364 days was a job; twenty years was a career. I accepted that when I separated in 2004. I also understood that when I came back to resume my career.

CPT Benjamin S. The "fund" you are discussing is not a fund. The retainer pay that LTC Paul Labrador mentioned is part and parcel of the DOD budget. From my understanding there is no "set aside" in a "fund"...it is part of the annual budget. The only thing that is in a "fund" is Social Security and Medicare. Ergo, if you want the retainer pay, under current law you must complete 20 years of service. There is no retirement pay. You might contact your personnel - or whatever offie Army types go to in order to discuss finances to get specifics.