Author Topic: Pending military retirement case study  (Read 10168 times)

Scooter

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Pending military retirement case study
« on: March 17, 2014, 08:46:53 AM »
Topic Title: Pending military retirement case study - 

Family of five. My wife is a stay at home mother

Monthly income:

Paycheck: 5186 (net)
Rental property: 1125 (after mgmt fee paid)
Sub total: $6311

I usually get about 10K back at the end of the year in taxes as well.

Current expenses:
Home mortgage(including tax and insurance): 1504 @ 3.5%
Rental mortgage(including tax and insurance): 1271 @3.25%
Vehicle: 11,300 @ 4%
Food: 800
Electricity: 245
Water/sewer/trash: 110
Auto fuel: 90
Insurance: 65
Cell phone: 129
Entertainment: 250 (golf, Netflix, internet, kids sports, movie rentals)
Clothing: 45
Subtotal: $4509

Assets:
Military pension: 3,555 per month in three years.
Roth IRA: 65k
Roth TSP: 21k
Checking acct: 21k
Primary home: probably around 60K in home equity

Liabilities:

Rental property: probably negative 25k in equity
Consumer credit cards: 16k @ 0% for 12 more months (this was used to fix up our primary home when we moved in. New flooring, paint, appliances)

Specific Question(s):

1. I am curious to hear thoughts on what I should do with cash on hand, (21K) consumer debt, (16K) car, (11k) and our rental property which is underwater to sell, but about a net zero monthly after depreciation and other tax advantages and should build equity in the future.

2. I will be receiving about $900(net) raise per month very soon. What should I be doing with that money?

3. I have looked at a few calculators and I'm thinking that if my spending stays pretty similar to current levels, I should be able to retire when I hit 375K along with my pension. Am I way the hell off here?

4. My family and I have moved so many times that we will most likely retire in lieu of moving again. I would think that with my pension I should be able to generate a similar or slightly better income post military, but I am open to recommendations to stay in if it makes overwhelming financial sense for some reason.

A few preemptive face punch deflection attempts:

Phone reception is really spotty with any carrier in my area: I switched from AT&T to Verizon when I moved here because I couldn't get a signal on my property. It is slightly less sucky with Verizon. I'm looking into Ting but nervous about reception. Republic map shows that it won't work here.

Entertainment is high due to $150 a month club membership. It is almost required because if we have to sell and don't have the membership it would would cost the buyer 24K to join the club ( a HUGE selling point in my neighborhood.) Plus, I really like golf and want my family to enjoy it with me.

We are working on the electricity and food bills, but I know we can do better. So, punch away suckas.

I just started reading MMM in the last two months and this is my first post. I really appreciate any feedback y'all care to give. I look forward to one day chiming in about my badassity.


tat96

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Re: Pending military retirement case study
« Reply #1 on: March 17, 2014, 12:05:55 PM »
First off, congrats on trying to figure this stuff out with a few years before retirement.  I know a ton of guys that just assume they will be fine when their pension checks roll in and find out that they are not in as good financial shape as they originally assumed.

1)  None of your debts seem to have ridiculous interest rates but I would try and knock down the car loan and then dump as much as possible into your ROTH TSP since the cap on that is 17k/year.  Maybe look into some Vanguard funds to reach your $375k goal.  I would shy away from using liquid money to get yourself our from under the rental unless you are itching to sell it.  Right now it is turning a profit so I would just leave it alone and let time solve that problem.  Plus, with a 3.25% interest rate I would not worry too much.

2) $900 dollar raise = TSP and IRA.  You didn't give your age but I am assuming late 30's to mid 40's.  You need to beef those retirement accounts.  Even with a pension you need more of a liquid cushion in retirement especially if you have a large $5,000+ bill that can't be covered by a monthly pension check. 

3)  $375k with pension? I think you will be fine.  Is your wife planning on doing any sort of work when you retire?  Even a minimum wage job will go a long way to ensuring your status as FIRE.

4) I am not normally a fan of staying past 20 unless you are looking at a promotion or two in the immediate future because you are working for half your paycheck with only a small increase in pay each year (which is subject to taxes further eroding it anyway).   

Good job on your food bill by the way. 5 people on $800 a month is still a little high according to some but I know families with 5 people that spend 3 times that number every month.  You already addressed the other stuff so I wont comment.

In addition, just attack your bills and monthly expenses and get them as low as possible before retiring.  I know a ton of retired military (me in a few years!!!) who end up working until they are 80 even though they are pulling an O-6 retirement with 30 years of service because they want to maintain a stupidly high standard of living and not have their wives do anything but stay at home and take care of an empty house.  Stay motivated, keep your head down, save money and you will be retired in 3 years.  Look into moving to a state that does not tax military retirement pay also.  Oh, and kids schooling doesn't have to be expensive.  Kids can get their own GIBills and ROTC Scholarships.  I did both!!!

Catbert

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Re: Pending military retirement case study
« Reply #2 on: March 17, 2014, 12:13:33 PM »
First pay off the car with cash on hand.  I wouldn't necessarily pay off the 0% cc in a lump sum but figure out how you'll pay-off w/o paying interest.  One way is to pay $1500 a month so it's paid off a month before your 0% is off.

I wouldn't keep more than 5K or so in your checking account.  Your job is secure and you have options for low cost emergency loans as a member of the military.

Why do you own the rental house?  Do you realistically anticipate great appreciation in the next few years?  If not, sell it even if that means coming up with 25K.  If you keep, it there anyway you and your wife can manage the property?  That will save you 10% or so the rent (typical property mngt fee).

Up your TSP contribution.    You pay almost an extra 1K a month on your taxes.  Adjust withholding and use it for TSP.  (I guessing that getting back a big refund is a common occurrence.)  I'd also use most of your coming raise to TSP to the max and then IRAs.

I'm not a fan of paying off 3% mortgages.  YMMV. 

Yep, $800 for food for a family of 5 is insane especially since you have a SAHM and access to a commissary.

GregO

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Re: Pending military retirement case study
« Reply #3 on: March 17, 2014, 03:17:26 PM »
1. I am curious to hear thoughts on what I should do with cash on hand, (21K) consumer debt, (16K) car, (11k) and our rental property which is underwater to sell, but about a net zero monthly after depreciation and other tax advantages and should build equity in the future.

Is your rental net zero?  The breakdown makes it look like it has negative cash flow.  What are your loan terms?  It looks like you don't have any allowance for maintenance, vacancy, or anything else.  If you can provide some more details, I think that should be looked at in more detail.

Why are you overpaying your taxes by so much? 

I agree 100%.  It also appears that all of your retirement accounts are Roth.  Do you have any traditional retirement money?  Your situation is much different than the majority of people on here since you are active duty military but it appears that you should take a close look at your taxes, both now and for retirement.  It might make sense to contribute to a traditional IRA instead of a Roth.  I know that's also an option for TSP, but I've read (on this forum) that accessing and rolling over TSP money gets complex very quickly if you have a combination of Roth and Traditional money in it.

Either way, you should find out what the most efficient option is for you with your taxes and make the necessary adjustments so you don't have such a big tax refund at the end of the year.

2527

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Re: Pending military retirement case study
« Reply #4 on: March 17, 2014, 04:09:12 PM »
From my experience:

There are a lot of taxes and expenses you will have in retirement you probably don't have now:  full federal tax, state tax, city tax, vehicles fees, health care, gym membership, etc. 

Your pension is really only about 1/3 your retirement salary because your VHA isn't taxed, etc.

Work really hard on getting your transition right.  Almost everybody I know works for the DoD, a DoD contractor, or somehow the federal government.  Know what you want to do (high income, certain kind of job, semi-retirement, a certain place to live), know what the tradeoffs are, and be willing to make them. 

Outside of what I described above, my experience, and those of several of my friends is, corporate America isn't really interested in you.  They like officers at the 4-6 year point, not the 20 year point.

Don't believe all the inflated stuff written about you in your OPRs and told to you by bosses who want to motivate you.  It's tough out here and you will have to compete. 

I've enjoyed being geographically stable, not deploying, having my kids in a good school district, and not putting up with the craziness of the military at war that I live when I retired in 2007.

Good luck!

Scooter

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Re: Pending military retirement case study
« Reply #5 on: March 17, 2014, 04:46:40 PM »
First off, congrats on trying to figure this stuff out with a few years before retirement.  I know a ton of guys that just assume they will be fine when their pension checks roll in and find out that they are not in as good financial shape as they originally assumed.

1)  None of your debts seem to have ridiculous interest rates but I would try and knock down the car loan and then dump as much as possible into your ROTH TSP since the cap on that is 17k/year.  Maybe look into some Vanguard funds to reach your $375k goal.  I would shy away from using liquid money to get yourself our from under the rental unless you are itching to sell it.  Right now it is turning a profit so I would just leave it alone and let time solve that problem.  Plus, with a 3.25% interest rate I would not worry too much.

2) $900 dollar raise = TSP and IRA.  You didn't give your age but I am assuming late 30's to mid 40's.  You need to beef those retirement accounts.  Even with a pension you need more of a liquid cushion in retirement especially if you have a large $5,000+ bill that can't be covered by a monthly pension check. 

3)  $375k with pension? I think you will be fine.  Is your wife planning on doing any sort of work when you retire?  Even a minimum wage job will go a long way to ensuring your status as FIRE.

4) I am not normally a fan of staying past 20 unless you are looking at a promotion or two in the immediate future because you are working for half your paycheck with only a small increase in pay each year (which is subject to taxes further eroding it anyway).   

Good job on your food bill by the way. 5 people on $800 a month is still a little high according to some but I know families with 5 people that spend 3 times that number every month.  You already addressed the other stuff so I wont comment.

In addition, just attack your bills and monthly expenses and get them as low as possible before retiring.  I know a ton of retired military (me in a few years!!!) who end up working until they are 80 even though they are pulling an O-6 retirement with 30 years of service because they want to maintain a stupidly high standard of living and not have their wives do anything but stay at home and take care of an empty house.  Stay motivated, keep your head down, save money and you will be retired in 3 years.  Look into moving to a state that does not tax military retirement pay also.  Oh, and kids schooling doesn't have to be expensive.  Kids can get their own GIBills and ROTC Scholarships.  I did both!!!

Thanks for the reply! I am 41 years old. I agree with you, that it is time for some serious savings. Looks like TSP is the common consensus, so I will beef that up. My wife is happy to hear that you think 800$ is reasonable for food. She took umbrage with the "insane" comment in the post below yours :) Yes, we are reading it together. I am on board with college for the kiddos. They each get one year of school paid for via GI Bill. They will need to work and earn for the rest.

Scooter

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Re: Pending military retirement case study
« Reply #6 on: March 17, 2014, 04:52:53 PM »
First pay off the car with cash on hand.  I wouldn't necessarily pay off the 0% cc in a lump sum but figure out how you'll pay-off w/o paying interest.  One way is to pay $1500 a month so it's paid off a month before your 0% is off.

I wouldn't keep more than 5K or so in your checking account.  Your job is secure and you have options for low cost emergency loans as a member of the military.

Why do you own the rental house?  Do you realistically anticipate great appreciation in the next few years?  If not, sell it even if that means coming up with 25K.  If you keep, it there anyway you and your wife can manage the property?  That will save you 10% or so the rent (typical property mngt fee).

Up your TSP contribution.    You pay almost an extra 1K a month on your taxes.  Adjust withholding and use it for TSP.  (I guessing that getting back a big refund is a common occurrence.)  I'd also use most of your coming raise to TSP to the max and then IRAs.

I'm not a fan of paying off 3% mortgages.  YMMV. 

Yep, $800 for food for a family of 5 is insane especially since you have a SAHM and access to a commissary.

Thanks for the reply. Roger on paying off the car first. As for the rental property, we are reluctant landlords. Our house in FL and the market shit the bed right after we bought it. Then of course I came down on orders to move. I don't expect crazy appreciation, but I suspect that it should start to rise with the rest of the FL housing market. My wife's response to "insane" comment on food. "Fuck you, that is including cleaning products, diapers for two kids, and personal hygiene stuff!" I am laughing as I type, because I actually agree that we can be smarter about this... but then again she is sitting right next to me and I don't want a literal face punch right now.

Scooter

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Re: Pending military retirement case study
« Reply #7 on: March 17, 2014, 04:56:21 PM »
1. I am curious to hear thoughts on what I should do with cash on hand, (21K) consumer debt, (16K) car, (11k) and our rental property which is underwater to sell, but about a net zero monthly after depreciation and other tax advantages and should build equity in the future.

Is your rental net zero?  The breakdown makes it look like it has negative cash flow.  What are your loan terms?  It looks like you don't have any allowance for maintenance, vacancy, or anything else.  If you can provide some more details, I think that should be looked at in more detail.

Why are you overpaying your taxes by so much? 

I agree 100%.  It also appears that all of your retirement accounts are Roth.  Do you have any traditional retirement money?  Your situation is much different than the majority of people on here since you are active duty military but it appears that you should take a close look at your taxes, both now and for retirement.  It might make sense to contribute to a traditional IRA instead of a Roth.  I know that's also an option for TSP, but I've read (on this forum) that accessing and rolling over TSP money gets complex very quickly if you have a combination of Roth and Traditional money in it.

Either way, you should find out what the most efficient option is for you with your taxes and make the necessary adjustments so you don't have such a big tax refund at the end of the year.

I don't know the hard answer if the rental is net zero. I have been assuming that the small amount that we pay out each month is made up in the big tax return we get every year. Maybe I am way off base on this. I'm not really sure dollar to dollar how it plays out with taxes.

I chose to go Roth this year due to making it into the lowest tax bracket last year. A lot of my paycheck is tax exempt due to military status. So, there is no advantage to paying taxes on profits in the future when I can only go up. At least that's the theory I am working with... am I wrong?

Scooter

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Re: Pending military retirement case study
« Reply #8 on: March 17, 2014, 05:01:29 PM »
From my experience:

There are a lot of taxes and expenses you will have in retirement you probably don't have now:  full federal tax, state tax, city tax, vehicles fees, health care, gym membership, etc. 

Your pension is really only about 1/3 your retirement salary because your VHA isn't taxed, etc.

Work really hard on getting your transition right.  Almost everybody I know works for the DoD, a DoD contractor, or somehow the federal government.  Know what you want to do (high income, certain kind of job, semi-retirement, a certain place to live), know what the tradeoffs are, and be willing to make them. 

Outside of what I described above, my experience, and those of several of my friends is, corporate America isn't really interested in you.  They like officers at the 4-6 year point, not the 20 year point.

Don't believe all the inflated stuff written about you in your OPRs and told to you by bosses who want to motivate you.  It's tough out here and you will have to compete. 

I've enjoyed being geographically stable, not deploying, having my kids in a good school district, and not putting up with the craziness of the military at war that I live when I retired in 2007.

Good luck!

Thanks for your the reply and also your past service! My situation may be even more dire than you give me credit for. I am enlisted. This means that my future plans need to be even more precise. We are quite happy with where we live (good schools and near (but not too near post)) and I think I may be able to parlay some kind of decent job to at least match what I currently make when I do retire. I like to plan for the worst and hope for the best. My current short term goal is to knock down our living expenses and try to be more mustachian. It's a little bit of a struggle because I don't think we are living too large, and yet our spending is pretty high.

GregO

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Re: Pending military retirement case study
« Reply #9 on: March 17, 2014, 05:21:23 PM »
I don't know the hard answer if the rental is net zero. I have been assuming that the small amount that we pay out each month is made up in the big tax return we get every year. Maybe I am way off base on this. I'm not really sure dollar to dollar how it plays out with taxes.

I chose to go Roth this year due to making it into the lowest tax bracket last year. A lot of my paycheck is tax exempt due to military status. So, there is no advantage to paying taxes on profits in the future when I can only go up. At least that's the theory I am working with... am I wrong?

I think my first comment stands then.  You need to get your past tax forms out and go talk to someone who can explain to you your tax situation and can help you estimate how much taxes you will pay this year.  They should also be able to explain what kind of tax benefits you're getting from the rental.  I do agree though, it sounds like Roth is the right way to go for your retirement.  But until you actually know the details of your situation, you're really just guessing.  And then if you actually can estimate your taxes, you can change your withholding so you're getting the right amount withheld every paycheck.

As for the rental, there's a whole forum here who can shed light onto that in the Real Estate board.  But before anyone can help you need to have the details: what are the terms of the mortgage, what is the current lease on it, what are your expenses for the house, how much is it currently worth, etc.

2527

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Re: Pending military retirement case study
« Reply #10 on: March 17, 2014, 05:44:17 PM »
Frankly, it might be easier as an enlisted…your expectations won't be so grandious (sp?). 

Milspecstache

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Re: Pending military retirement case study
« Reply #11 on: March 17, 2014, 06:10:08 PM »
What are your plans after retirement?  Get another job?  Sounds like you want to stay in the area.  If you plan on getting another job, any idea what income you are looking to get?  Those answers will explain your retirement goals.

Scooter

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Re: Pending military retirement case study
« Reply #12 on: March 17, 2014, 06:20:40 PM »
I don't know the hard answer if the rental is net zero. I have been assuming that the small amount that we pay out each month is made up in the big tax return we get every year. Maybe I am way off base on this. I'm not really sure dollar to dollar how it plays out with taxes.

I chose to go Roth this year due to making it into the lowest tax bracket last year. A lot of my paycheck is tax exempt due to military status. So, there is no advantage to paying taxes on profits in the future when I can only go up. At least that's the theory I am working with... am I wrong?

I think my first comment stands then.  You need to get your past tax forms out and go talk to someone who can explain to you your tax situation and can help you estimate how much taxes you will pay this year.  They should also be able to explain what kind of tax benefits you're getting from the rental.  I do agree though, it sounds like Roth is the right way to go for your retirement.  But until you actually know the details of your situation, you're really just guessing.  And then if you actually can estimate your taxes, you can change your withholding so you're getting the right amount withheld every paycheck.

As for the rental, there's a whole forum here who can shed light onto that in the Real Estate board.  But before anyone can help you need to have the details: what are the terms of the mortgage, what is the current lease on it, what are your expenses for the house, how much is it currently worth, etc.

Thanks for the recommendations. I have been lurking around the real estate forum a little bit already. I am pretty sure we are close to net zero monthly right now, though you're right, I def. need to dig into the particulars a little more.

Scooter

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Re: Pending military retirement case study
« Reply #13 on: March 17, 2014, 06:29:34 PM »
What are your plans after retirement?  Get another job?  Sounds like you want to stay in the area.  If you plan on getting another job, any idea what income you are looking to get?  Those answers will explain your retirement goals.

Ideally, I would like to be pretty close to FI, but I think I will have to work for a few years post military even if/when I go crazy on saving. So, I will probably be looking at some kind of admin position for the fed. govt. on post or nearby. Basically, I am projecting that I will need to replace 2/3rds income for a few few years.  I do love the area we live in now and don't want to move, but if it comes down to it, due to lack of a good income, we will move again and rent our current house or sell it. I am considering getting my master's degree in social work (and will probably use those skills when I'm FI as a way of helping others) and I should be able to cover the 2/3rds that way if a contract or GS position doesn't work out. It's about a 45 minute ride into work right now and that's a major suck factor. I would love to get off of the treadmill and have more free time while the kids are still young.

Scooter

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Re: Pending military retirement case study
« Reply #14 on: March 17, 2014, 06:33:40 PM »
Frankly, it might be easier as an enlisted…your expectations won't be so grandious (sp?).

My expectations are grandiose enough already. Though I wouldn't mind fighting the battle of hedonic adaptation. I think I could handle it.

Nords

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Re: Pending military retirement case study
« Reply #15 on: March 17, 2014, 10:52:55 PM »
Welcome, Scooter!  In no particular priority order, here's some considerations:

Current expenses:
Home mortgage(including tax and insurance): 1504 @ 3.5%
Rental mortgage(including tax and insurance): 1271 @3.25%
Vehicle: 11,300 @ 4%
When's the last time you checked your insurance rates?  For example, USAA gives us the island's best vehicle insurance but their homeowner's insurance is hugely expensive.  We use Armed Forces Insurance for our home & rental property (and umbrella liability) but they don't insure vehicles in Hawaii-- so we insure our vehicles with USAA.

It may take you several hours to bargain with the insurance companies, but you may save a few hundred bucks a year.  If you're not with USAA already, then start with their customer-service reps who can quickly analyze a quote from just about any other company.  Next up you could try AFI.

I usually get about 10K back at the end of the year in taxes as well.
Hypothetically you're losing about 4%/year that you could be paying on that vehicle loan, or as much as $400/year.  So you could go several ways with the size of your refund:
1.  Adjust your W-4 in MyPay and (here's the hard part) make sure you pay down the debt with everything that you save by this maneuver.  Of course if you go over the top on deductions then you might have to pay a little more on your next tax return.
2.  Use the refund to buy I bonds.  But when you're getting a military pension (the equivalent of I bond income) then I would not do this.
3.  Leave the withholding alone for another three years and adjust it after you retire.  This attitude would be relevant if your excess withholding is due to promotions, re-enlistment bonuses, or tax-free pay in a combat zone.
4.  If the excess withholding is working for you as a forced savings strategy, then keep doing it-- and adjust it after you retire.

1. I am curious to hear thoughts on what I should do with cash on hand, (21K) consumer debt, (16K) car, (11k) and our rental property which is underwater to sell, but about a net zero monthly after depreciation and other tax advantages and should build equity in the future.
Do you need the checking-account cash for anything right now, like a Roth IRA contribution?  Because you could hammer out the vehicle loan tomorrow. 

First try to max out your Roth TSP and your Roth IRAs for the year (before their contribution deadlines pass).  Then you could pay off the loans with the extra cash from your promotion.

Of course you're probably already planning to pay off the $16K credit-card debt in 11.5 months-- or transfer the balance to another 0% offer.  So maybe you want to fence off some of your checking account cash for that due date as well.

I'd keep the mortgages-- those are nice interest rates.

2. I will be receiving about $900(net) raise per month very soon. What should I be doing with that money?
Blow $100 or so on the first month for something fun with the spouse & kids. 

Set aside an extra $50-$100/month in the entertainment budget for babysitters or a family local vacation-- small jolts of hedonistic pleasure.

Bank the rest!  Max out the Roth TSP and the Roth IRAs and then save more in a taxable account.
http://the-military-guide.com/2011/03/16/saving-base-pay-and-promotion-raises/

Side note:  is that $900/month due to a promotion?  If so, you may care to make sure that you serve long enough in your higher rank to have that rank on your retirement certificate.  It won't make a difference on your High-Three pension, but some retirees feel that it's worth staying longer to lock in that retirement rank.  In many cases, though, the service will waiver a three-year time-in-grade down to two years... just because it's a drawdown.

3. I have looked at a few calculators and I'm thinking that if my spending stays pretty similar to current levels, I should be able to retire when I hit 375K along with my pension. Am I way the hell off here?
$3555 pension - $4509 expenses - $100 (more entertainment) = -$1054/month = $12,650/year
Divide that by the 4% SWR (or multiply by 25) = $316,200.  Close enough.

In 12 years of retirement, our non-mortgage spending has largely remained flat.  (We've knocked 40% off our mortgage payments by serial refinancing.)  More importantly, my pension income has risen 27% from the COLA.  If you sleep more comfortably at night with $375K in savings, or $317K in savings, then that's what you should do.  But if you think that you can cut your spending in retirement then keep an eye on those numbers to see if you could retire with less.

You'll want to think about dental insurance and orthodontia.  If you have good hygiene then you can pay your own way, but if you're prone to root canals then you'll want the insurance.  Dental insurance might also be a wash with orthodontia-- we negotiated a huge cash discount with our daughter's orthodontist.

You don't mention whether that $3555 is before or after SBP.  Your spouse (it's her choice, not yours!) is probably going to want 6.5% of your pension for full coverage on her, and maybe child coverage as well.  You may also want to consider a cheap term life/disability policy to cover you for 10-15 years of bridge career or until the kids are firmly launched from the nest. 

4. My family and I have moved so many times that we will most likely retire in lieu of moving again. I would think that with my pension I should be able to generate a similar or slightly better income post military, but I am open to recommendations to stay in if it makes overwhelming financial sense for some reason.
I hear that. 

Regardless of your choice, your retirement transition benefits may include a free household goods move to the distance of your home of record.  (I'm not sure if this is current.)  If you rate that move, then you may be able to request an extension to 12-18 months after your retirement.  It's an option if you later decide to move "just one more time". 

I am on board with college for the kiddos. They each get one year of school paid for via GI Bill. They will need to work and earn for the rest.
Here's a thought:  if you use the GI Bill on an advanced degree/certification for yourself or your spouse, then your (or your spouse's) higher earnings during your bridge career could generate far more money for your kid's college fund than the GI Bill ever would have.  Consider this post by Kate Horrell-- she's a Navy spouse and good people:
http://paycheck-chronicles.military.com/2012/01/20/dont-transfer-your-gi-bill-to-your-kids/

I chose to go Roth this year due to making it into the lowest tax bracket last year. A lot of my paycheck is tax exempt due to military status. So, there is no advantage to paying taxes on profits in the future when I can only go up. At least that's the theory I am working with... am I wrong?
Agreed.  You're probably in the lowest tax bracket that you'll ever be in, especially since you're considering a bridge career.  Between the bridge career and your pension, you'll jump right up into the 15%-25% income tax bracket.

When you ER from the bridge career, you'll also have a 401(k) to roll over to an IRA and convert to a Roth.  So it's better to have the Roth TSP and the Roth IRA now (while you're on active duty) rather than having to start a Roth conversion ladder after you retire.

Though I wouldn't mind fighting the battle of hedonic adaptation. I think I could handle it.
Good problems to have!

If you know that you're retiring in three years then start learning now.  Consider a MOAA seminar like "Marketing Yourself For A Second Career".  Contact Lee Cohen at Lucas Group and see what their Enlisted Technical branch has to offer.  (I've been in Lee's database for over 25 years-- he hasn't given up on me yet.)  If you're a USAA member then log into their site and work through their "Military Separation Checklist".  Heck, if you're near San Antonio or one of their service centers then contact USAA about a job-- they're the only place that has impressed me about a bridge career.

Contact a local veteran's service organization about a VA disability screening-- like the DAV or even a MOAA chapter.  You want their advice on how to get ready now for a VA screening when you retire, because you're going to be awfully busy after you retire. 

You may be able to find a copy of "The Military Guide to Financial Independence & Retirement" at your local public or military base library-- or read the first six months of posts from the archives at:
http://the-military-guide.com/post-titles-by-month/
Those posts are excerpts from the book, minus the compelling personal stories and detailed checklists.

Scooter

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Re: Pending military retirement case study
« Reply #16 on: March 18, 2014, 06:52:32 PM »
Thanks for the reply Nords! There is so much great advice in here that it compelled me to actually learn how to use the quote buttons.

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When's the last time you checked your insurance rates?  For example, USAA gives us the island's best vehicle insurance but their homeowner's insurance is hugely expensive.  We use Armed Forces Insurance for our home & rental property (and umbrella liability) but they don't insure vehicles in Hawaii-- so we insure our vehicles with USAA.


I will check into Armed Forces. Thanks for the tip. We stuck with USAA because they were seemingly the best price when we shopped around for our FL house.

 
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Hypothetically you're losing about 4%/year that you could be paying on that vehicle loan, or as much as $400/year.  So you could go several ways with the size of your refund:
1.  Adjust your W-4 in MyPay and (here's the hard part) make sure you pay down the debt with everything that you save by this maneuver.  Of course if you go over the top on deductions then you might have to pay a little more on your next tax return.
2.  Use the refund to buy I bonds.  But when you're getting a military pension (the equivalent of I bond income) then I would not do this.
3.  Leave the withholding alone for another three years and adjust it after you retire.  This attitude would be relevant if your excess withholding is due to promotions, re-enlistment bonuses, or tax-free pay in a combat zone.
4.  If the excess withholding is working for you as a forced savings strategy, then keep doing it-- and adjust it after you retire.

I adjusted my withholding today after your and others' recommendations. It started off as a forced savings strategy but I think I can handle any temptations now.

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First try to max out your Roth TSP and your Roth IRAs for the year (before their contribution deadlines pass).  Then you could pay off the loans with the extra cash from your promotion.

I upped my TSP today as well. I am going to hold off on going whole hog until my promotion sequence # actually hits, just in case it takes longer. In June I will have been a year on the list. It's very unusual for HRC to not clear a promotion list within a year, but you never know with the draw downs.

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Blow $100 or so on the first month for something fun with the spouse & kids.
 

Great advice here. I appreciate it.

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Set aside an extra $50-$100/month in the entertainment budget for babysitters or a family local vacation-- small jolts of hedonistic pleasure.

Ha ha, $50 it is sir.

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Bank the rest!  Max out the Roth TSP and the Roth IRAs and then save more in a taxable account.
http://the-military-guide.com/2011/03/16/saving-base-pay-and-promotion-raises/

That seems to be the best way ahead.

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Side note:  is that $900/month due to a promotion?  If so, you may care to make sure that you serve long enough in your higher rank to have that rank on your retirement certificate.  It won't make a difference on your High-Three pension, but some retirees feel that it's worth staying longer to lock in that retirement rank.  In many cases, though, the service will waiver a three-year time-in-grade down to two years... just because it's a drawdown
.

Yes it is due to a promotion. I have a two year additional duty service obligation. I don't follow the logic of it not making a difference to the high three pension. It seems to me that it would make a difference. Can you explain this a little more?

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$3555 pension - $4509 expenses - $100 (more entertainment) = -$1054/month = $12,650/year
Divide that by the 4% SWR (or multiply by 25) = $316,200.  Close enough.

My initial figuring had some fudge built in due to unknowns when I retire/kids go to college/etc. It seems difficult to forcast, but I am guessing that the picture will become clearer as I get closer to my 375 goal.

 
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You'll want to think about dental insurance and orthodontia.  If you have good hygiene then you can pay your own way, but if you're prone to root canals then you'll want the insurance.  Dental insurance might also be a wash with orthodontia-- we negotiated a huge cash discount with our daughter's orthodontist.

Good call here. My net take home actually reflects my dental insurance, but I can see that I will need to investigate how much civilian dental insurance will cost.

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You don't mention whether that $3555 is before or after SBP.  Your spouse (it's her choice, not yours!) is probably going to want 6.5% of your pension for full coverage on her, and maybe child coverage as well.  You may also want to consider a cheap term life/disability policy to cover you for 10-15 years of bridge career or until the kids are firmly launched from the nest.


Another great point. It is before SBP. I was planning to go with something akin to the SGLV. Are you a proponent of the SBP?

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Regardless of your choice, your retirement transition benefits may include a free household goods move to the distance of your home of record.  (I'm not sure if this is current.)  If you rate that move, then you may be able to request an extension to 12-18 months after your retirement.  It's an option if you later decide to move "just one more time".
 

This is still policy. I am hoping I don't have to use it, but it's nice to know it's there.

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Here's a thought:  if you use the GI Bill on an advanced degree/certification for yourself or your spouse, then your (or your spouse's) higher earnings during your bridge career could generate far more money for your kid's college fund than the GI Bill ever would have.  Consider this post by Kate Horrell-- she's a Navy spouse and good people:
http://paycheck-chronicles.military.com/2012/01/20/dont-transfer-your-gi-bill-to-your-kids/

Very interesting perspective that I hadn't considered. It does seem to extend my working life a little longer than I want though. I will have to give this COA some serious thought.


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If you know that you're retiring in three years then start learning now.  Consider a MOAA seminar like "Marketing Yourself For A Second Career".  Contact Lee Cohen at Lucas Group and see what their Enlisted Technical branch has to offer.  (I've been in Lee's database for over 25 years-- he hasn't given up on me yet.)  If you're a USAA member then log into their site and work through their "Military Separation Checklist".  Heck, if you're near San Antonio or one of their service centers then contact USAA about a job-- they're the only place that has impressed me about a bridge career.


Thank you very much for so much good info. I will be looking into everything you recommend.

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Contact a local veteran's service organization about a VA disability screening-- like the DAV or even a MOAA chapter.  You want their advice on how to get ready now for a VA screening when you retire, because you're going to be awfully busy after you retire.
 

I will also be looking into this.

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You may be able to find a copy of "The Military Guide to Financial Independence & Retirement" at your local public or military base library-- or read the first six months of posts from the archives at:
http://the-military-guide.com/post-titles-by-month/
Those posts are excerpts from the book, minus the compelling personal stories and detailed checklists.

Will do sir! You have been most helpful! Thank you for your time and recommendations.
 

 

Nords

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Re: Pending military retirement case study
« Reply #17 on: March 18, 2014, 10:35:01 PM »
Quote
Set aside an extra $50-$100/month in the entertainment budget for babysitters or a family local vacation-- small jolts of hedonistic pleasure.
Ha ha, $50 it is sir.
Credit goes to Laura Vanderkam in her book "All The Money In The World".  For example, a blowout $10K wedding could fuel 200 $50 date nights.  When you're parents (before or after the wedding!), which experience delivers the biggest bang for the fewest bucks?
http://the-military-guide.com/2012/06/21/book-review-all-the-money-in-the-world/

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Side note:  is that $900/month due to a promotion?  If so, you may care to make sure that you serve long enough in your higher rank to have that rank on your retirement certificate.  It won't make a difference on your High-Three pension, but some retirees feel that it's worth staying longer to lock in that retirement rank.  In many cases, though, the service will waiver a three-year time-in-grade down to two years... just because it's a drawdown
.
Yes it is due to a promotion. I have a two year additional duty service obligation. I don't follow the logic of it not making a difference to the high three pension. It seems to me that it would make a difference. Can you explain this a little more?
The High-Three pension will be based on your highest 36 months of pay, whether or not you have two years' additional service or three years time in grade.  It's just the average of the highest 36 months of pay.

However your retirement rank is based on complying with the terms of your latest promotion.  If you promote to E-8 but retire 18 months after the promotion then you're retired as an E-7 (and that's what it says on your certificate), while your High Three pension calculation will still reflect 18 months of E-8 pay.  If you promote to O-5 but only serve a year in that grade then you'd retire as an O-4, although your pension calculation would reflect a year of O-5 pay.

The old Final Pay retirement system used to penalize servicemembers for retiring without meeting the requirements of their final promotion.  People would promote to O-5, the assignment officer would serve them a hardball, and they'd retire:  as an O-4, and at the percentage of O-4 pay instead of O-5 pay.    All their earnings as an O-5 counted for nothing in the pension calculation.

Trivia fact:  in the year 2000, according to the U.S. Navy's own statistics, it was easier to promote to O-5 than to E-8.  This may be true across a large span of services, years, and officer/enlisted ranks.

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You don't mention whether that $3555 is before or after SBP.  Your spouse (it's her choice, not yours!) is probably going to want 6.5% of your pension for full coverage on her, and maybe child coverage as well.  You may also want to consider a cheap term life/disability policy to cover you for 10-15 years of bridge career or until the kids are firmly launched from the nest.

Another great point. It is before SBP. I was planning to go with something akin to the SGLV. Are you a proponent of the SBP?
You may have to do both.

First, keep in mind that you don't get a choice on SBP-- your spouse signs the papers.  The SBP premiums are subsidized (at least) 50% by DoD, so you cannot get a better policy from any other insurance company.  When you've paid SBP premiums for 30 years, and you're older than age 70, then you're considered "paid up" with no further fees.  SBP also has a built-in COLA.  So, yeah, I'm a huge proponent of the SBP because there's no better insurance deal.

The only time your spouse would skip the SBP would be if she had enough of her own assets to self-insure.  For example, dual-military retiree couples (like my spouse and I) should probably skip the SBP and enjoy spending the extra 6.5% of their pensions.  If your spouse is going to have her own pension or if she has a huge investment portfolio then she may want to skip the SBP.  Or she may figure that you owe it to her anyway-- as I said, it's totally her choice.

You may also decide that you need more insurance than "just" the SBP-- especially when you're working a bridge career, your kids are at home, and you're perhaps paying mortgages.  You can cover that "insurance gap" with term insurance by converting your SGLI to VGLI.  You may also be able to find cheaper term insurance with any of the military-friendly insurance companies (starting with USAA) but the caveat is that they may require a physical exam and underwriting.  The SGLI-->VGLI conversion is guaranteed and is only paperwork.

http://the-military-guide.com/2011/04/13/more-sbp-details/
http://the-military-guide.com/2012/08/21/military-insurance-sgli-vgli-sbp-and-other-benefits/

I'm not an insurance expert, but those posts have links to other insurers.  You could also start your search at LifeInsuranceByJeff.com, run by military veteran & CFP (and rockstar personal finance blogger) Jeff Rose.

Side effect of SBP:  I received an e-mail from an upset adult child of an 89-year-old military retiree.  His first spouse (the adult child's mother) had died and the man had quickly married a much younger woman.  (The clear implication was that Dad had married a gold digger.)  The Dad told everyone that he had married the new spouse so that she could get his military pension when he died.  The adult child felt that was unethical and perhaps even illegal.  However he'd been paying into SBP for 30 years and was over 70 years old, so his policy was "paid up".  It turns out that it's transferable (and it takes effect after a year of marriage) so it's also perfectly legal.  I'm not sure about the ethics, but if he traded his SBP for a year (or hopefully more) of eldercare then everybody should be happy.  In the early 20th century this marriage/eldercare situation was common among Civil War veterans.

Milspecstache

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Re: Pending military retirement case study
« Reply #18 on: March 19, 2014, 06:04:46 PM »
Instead of SGLI/VGLI I recommend Navy Mutual Aid life insurance:
https://www.navymutual.org/Life-Insurance/

Unless you are a smoker their premiums are cheaper and will continue past retirement.  Much better deal, in my opinion.  Only negative I've ever heard is that they pay slower than VGLI (day or two after vs a month for NMAA).  They also sometimes give rebates back at the end of the year if they had few payouts.

Scooter

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Re: Pending military retirement case study
« Reply #19 on: March 19, 2014, 06:24:22 PM »
Instead of SGLI/VGLI I recommend Navy Mutual Aid life insurance:
https://www.navymutual.org/Life-Insurance/

Unless you are a smoker their premiums are cheaper and will continue past retirement.  Much better deal, in my opinion.  Only negative I've ever heard is that they pay slower than VGLI (day or two after vs a month for NMAA).  They also sometimes give rebates back at the end of the year if they had few payouts.

Thanks Milspecstache. I will be looking into this as well. I am glad I decided to post here on MMM. Y'all have been great!

2527

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Re: Pending military retirement case study
« Reply #20 on: March 19, 2014, 06:27:45 PM »
Personally, I didn't get any insurance when I retired. I figured that in the event I die, my wife will have my pension, and our investments, and she will be able to handle the rest. 

Nords

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Re: Pending military retirement case study
« Reply #21 on: March 19, 2014, 06:32:46 PM »
Instead of SGLI/VGLI I recommend Navy Mutual Aid life insurance:
https://www.navymutual.org/Life-Insurance/
Yep.  Again, it's not an either-or decision-- you (and your spouse) may decide that you need SBP, plus SGLI/VGLI, plus even more term insurance. 

VGLI was raised in 2011 to $400K, but (depending on your family situation) it still might not be enough.
http://the-military-guide.com/2013/10/31/reader-question-on-veterans-group-life-insurance/

Scooter

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Re: Pending military retirement case study
« Reply #22 on: March 21, 2014, 11:04:35 AM »
So after taking on board all of the recommendations I have received so far here is my near term proposed plan of action. Let me know if I missed anything or need a good ol' punch in the face.

I raised my Roth TSP contributions by 3% but will continue to raise it as my income increases or if I have been too conservative and wind up with surplus cash
I changed my witholding from zero to three dependents to produce extra cashflow now to assist in paying off credit card debt
I decided today to hold onto the cash while I attempt a rent increase on my rental property. My prop. manager claims and my own research shows that we are underpriced at least $150 a month and the renters are on a month to month basis. We are seeking a $100 rent increase and contract. If the renters bail then I will use the cash to cover carrying and repair costs.
Once the rental issue is resolved (30 days hopefully we will have the contract) I will use the cash to pay off the car loan and keep 5K on hand for E. fund and the rest will go to paying off credit cards (I hate having that debt even though its 0%
I will increase our entertainment budget by 50$ per month
I will get an answer our home/vehicle insurance options compared to USAA by no later than the end of next week to determine if we can get it cheaper
I will continue to nag my family about turning off lights and using less energy
I have stopped (two weeks now) buying any lunches unless it's a going away / command function

I thank you all for your many gracious suggestions. I will continue to analyze all of these suggestions while developing/refining my long term plan in regards to SBP, insurance, etc.
« Last Edit: March 21, 2014, 11:11:45 AM by Scooter »

GregO

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Re: Pending military retirement case study
« Reply #23 on: March 21, 2014, 01:20:05 PM »
Phone reception is really spotty with any carrier in my area: I switched from AT&T to Verizon when I moved here because I couldn't get a signal on my property. It is slightly less sucky with Verizon. I'm looking into Ting but nervous about reception. Republic map shows that it won't work here.

When I was looking into low-cost cell phone plans, I found that a lot of the companies actually provide the ability to roam to multiple carriers.  Ting uses Sprint towers, but can roam to verizon or us cellular towers if you don't have sprint coverage.  The catch is that you have to be on sprint towers to use your data.  But at least if you are in another area you still have coverage for phone calls.  So all that to say, you *might* actually have better coverage with a MVNO than you would with one of the main carriers.  Just something to help push you over the edge to looking for a low-cost plan.

oldfierm

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Re: Pending military retirement case study
« Reply #24 on: October 28, 2014, 08:42:21 AM »
I know no one's commented on this topic in a while, but I was just curious.  Why all the talk about Roth TSP?  Why not allocate some money to the regular TSP?  Are you doing that and I just missed it?  The Roth TSP is after tax dollars (just like the Roth IRA you are already paying into).  The regular TSP is pre-tax dollars, so you get the added benefit of lowering your current tax liability when you allocate money to the regular TSP.  If you allocate $300 a month to the regular TSP, for example, you won't actually see your paycheck go down by $300 because you won't be paying tax on that $300.  So putting in $300 really lowers your paycheck by only about $260 or something like that. 

Just wondering whether you had considered this...I didn't see it mentioned by any of the other posters.  I personally have a non-TSP Roth for myself and my wife, max out both, and then attempt to put as much as possible in the regular TSP (still haven't managed to max it out, but working on it).  I guess I just think of it as diversifying my future tax liability while lowering my current tax liability.  Just curious if you had considered that.   

Scooter

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Re: Pending military retirement case study
« Reply #25 on: October 30, 2014, 06:18:31 AM »
OLDFIREM, the reason that I am putting into the Roth vs Trad TSP is because I was already in the lowest tax bracket. However, I was promoted since I last posted in this thread and it may make sense for me to put some money into the Trad TSP going forward.

oldfierm

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Re: Pending military retirement case study
« Reply #26 on: October 31, 2014, 01:48:09 PM »
OK, I see the logic! 

I love reading any military threads on here.  I'm not really super-mustachian, but I have some distant, vague idea that I'd like to not have to run out and immediately get a civilian job in my field upon retirement.  To that end, I love to see what other military folks are up to.   

RFAAOATB

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Re: Pending military retirement case study
« Reply #27 on: October 31, 2014, 03:46:08 PM »
OK, I see the logic! 

I love reading any military threads on here.  I'm not really super-mustachian, but I have some distant, vague idea that I'd like to not have to run out and immediately get a civilian job in my field upon retirement.  To that end, I love to see what other military folks are up to.   

I'm off my rocker to get my rocker.  Dream goal is to train up, get accepted to, and pass OCS so I can escape the swarm of enlisted serfdom.  Then I will never retire.  I will be continuing to work toward "Operation Next Bar".  It's going to be Army Strong all life long.

Scooter

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Re: Pending military retirement case study
« Reply #28 on: October 31, 2014, 07:49:12 PM »
I'm glad you guys find this useful. MMM is a great site to go to others for outside perspectives. I have truly learned a lot, and have made adjustments to my lifestyle based off of the things I have learned here. The only problem... now I realize that I have so much more to learn :) 
OK, I see the logic! 

I love reading any military threads on here.  I'm not really super-mustachian, but I have some distant, vague idea that I'd like to not have to run out and immediately get a civilian job in my field upon retirement.  To that end, I love to see what other military folks are up to.   

I'm off my rocker to get my rocker.  Dream goal is to train up, get accepted to, and pass OCS so I can escape the swarm of enlisted serfdom.  Then I will never retire.  I will be continuing to work toward "Operation Next Bar".  It's going to be Army Strong all life long.

civil

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Re: Pending military retirement case study
« Reply #29 on: November 01, 2014, 08:40:11 AM »
What are your plans after retirement?  Get another job?  Sounds like you want to stay in the area.  If you plan on getting another job, any idea what income you are looking to get?  Those answers will explain your retirement goals.

Ideally, I would like to be pretty close to FI, but I think I will have to work for a few years post military even if/when I go crazy on saving. So, I will probably be looking at some kind of admin position for the fed. govt. on post or nearby. Basically, I am projecting that I will need to replace 2/3rds income for a few few years.  I do love the area we live in now and don't want to move, but if it comes down to it, due to lack of a good income, we will move again and rent our current house or sell it. I am considering getting my master's degree in social work (and will probably use those skills when I'm FI as a way of helping others) and I should be able to cover the 2/3rds that way if a contract or GS position doesn't work out. It's about a 45 minute ride into work right now and that's a major suck factor. I would love to get off of the treadmill and have more free time while the kids are still young.

Please look carefully at the GS rates before you consider a GS job. Most of the retiring military near me go to contractors instead of GS. My agency has unwritten "rules" on the transition, like "military officers with master's degrees can usually get GS-13" or "retired enlisted get education level [usually GS-7] plus a grade for experience." If you're enlisted, it's a terrible deal.

The pay scales are public, so ask the civilians around you if they can explain their take-home pay, or show you an LES. You can see what taxes look like in your state, and how much comes out of GS pay for FERS. My agency is full of veterans who got used to making a nominal $38K and taking home $66K... then they become civilians making $75K taking home $43K, and finances fall apart. BUT if you know what you're getting into, and have reasons other than pay for joining the feds, go for it.

Live close to a military base. The exchange and commissary will save you thousands each year. And military bases are often surrounded by businesses that give discounts to active duty and retired service members. Especially with kids, it's worth chasing those discounts.

Scooter

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Re: Pending military retirement case study
« Reply #30 on: November 01, 2014, 09:07:00 AM »
Thanks for the good advice Traffic Girl. 

DollarBill

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Re: Pending military retirement case study
« Reply #31 on: November 01, 2014, 11:20:46 AM »
Spot on again Nords.

I did most of those things heading into my retirement...which by the way I started my life as a civilian today (YAY). The main thing I did was to pay off all of my debt before heading into retirement (Including house). This was a big relief for me because now all of my living expense is covered by my check. To pay it all off I did have to stop my TSP contributions...some might not agree with it but it made sense to me.

I thought your retire pay calculations seemed high ($3555) but I didn't see your rank or total yrs. I skimmed the post. I can't wait for the first check to arrive to see if my calculations were correct.

I'm kind of screwed in regards of the VA side. My medical records were lost in Korea (2007). When you have lost records the VA won't side with you. Plus, when I got copies of my MD records for the VA I found out that they don't have any of the records if you had a referral to see an off-base doctor. Those doctors are not required to send them back to the base. So now I'm jumping through hoops to get copies from all of those doctors too. 

Traffic girl: What kind of contracting jobs are you talking about? Any good websites?

Can anyone recommend a dental plan?

Scooter

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Re: Pending military retirement case study
« Reply #32 on: November 01, 2014, 11:32:14 AM »
Dollar Bill, congrats on your retirement and thank you for your service! Also, congrats on paying off your house prior to getting out. My pay grade is E-9 and I used the DOD website to determine my retirement pay. I was thinking this was conservative because I will probably qualify for some disability, but I am not counting on it.

Please send an update when you find out if your calculations were correct.

civil

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Re: Pending military retirement case study
« Reply #33 on: November 01, 2014, 12:01:05 PM »
Traffic girl: What kind of contracting jobs are you talking about? Any good websites?

I'm in the DC area, so we are usually comparing GS with federal contractors. Which is kind of everyone around here. Big ones are places like General Dynamics, Lockheed, Northrop Grumman. Stuff like that.

Nords

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Re: Pending military retirement case study
« Reply #34 on: November 01, 2014, 08:42:49 PM »
Spot on again Nords.

I did most of those things heading into my retirement...which by the way I started my life as a civilian today (YAY). The main thing I did was to pay off all of my debt before heading into retirement (Including house). This was a big relief for me because now all of my living expense is covered by my check. To pay it all off I did have to stop my TSP contributions...some might not agree with it but it made sense to me.
Thanks, and congratulations-- welcome back to civilian life!

Paying off the house is just as much a "sleep at night" comfort decision as a financial decision.  You have to choose which is more important to you, and it's a highly individual choice.

I'm kind of screwed in regards of the VA side. My medical records were lost in Korea (2007). When you have lost records the VA won't side with you. Plus, when I got copies of my MD records for the VA I found out that they don't have any of the records if you had a referral to see an off-base doctor. Those doctors are not required to send them back to the base. So now I'm jumping through hoops to get copies from all of those doctors too. 
I don't have any good answers to this problem. 

Hopefully you can recreate whatever your service had on you in electronic format and reprint that to submit with your VA claim.  They can make the same request, but nobody really tracks it and if the records-transfer request gets "lost" then the VA will never be very slow to chase it down.  Whatever paper copies you get from your service you should also scan to a PDF so that you can make multiple paper copies on demand.

You're also correct about the off-base doctors-- you have to track them down for copies.  Make paper copies for the VA (and for you) and scan everything into your own personal PDF again.  You can also give your VSO representative a copy of your PDF on DVD if they think it'll help.  If nothing else, it'll save you a trip when if the VA loses your paper copies-- the VSO can reprint from your DVD.

Can anyone recommend a dental plan?
I don't have a specific recommendation, although Delta and Tricare's dental contractor are probably the biggest. 

You could ask your local VA clinic about dental exams, and you might be eligible for free care through them.  Some VA clinics are very good.  Some... not so much.

If you have a favorite civilian dentist, you could ask their billing clerk what insurers they prefer.  Depending on who pays claims the fastest (or with the least hassle), you may be able to negotiate a discount for using their favorite insurer.

Which brings me to my next point:  discounts.  Unless you're prone to root canals or periodontia (hopefully you know by now), you might consider going without dental insurance.  Most annual premiums are barely less than cost of the six-month visit recommendations, especially if you ask your dentist for a (no-insurance) cash discount.  Most dental insurance has huge deductibles for kid's orthodontia (yours too, if applicable) and other procedures. 

Personally, for the last 12 years I've been going to the dentist every 2-3 years for a set of X-rays, an exam, and a cleaning:  $160-$185.  (Of course if you do this in Bangkok then it's only $30-$40.)  It also inspires me to wear a mouthguard when I'm sparring, floss regularly, brush frequently, and pay attention to my diet (sugar).  But again the key is knowing whether you're prone to tooth decay, root canals, or gum disease.  I may just be genetically lucky or exceptionally thorough.  It certainly annoys my dentist every time he looks at my record, but then he backpedals a little when he sees how clean everything is.
« Last Edit: November 01, 2014, 08:44:25 PM by Nords »