Epic FU money? How about giving up $750K-$1M in salary & pension?http://the-military-guide.com/2013/12/12/hanging-on-for-the-military-pension/
As most of you have read by now, I stayed on active duty for 20 years to vest my military pension. In retrospect that was about eight years too long for my physical & mental health, but I survived the stress. I should have gone Reserves as soon as my career peaked at the 12-year point, but I was ignorant and overworked and too afraid to even pay serious attention to the Reservists around me. I didn't understand how a Reserve pension worked, and fear was the main reason I kept chasing those paychecks.
In 1999, three years before my retirement, my active-duty spouse was picking up the wrong kind of signals from her assignment officer. She was at her 16-year point, where they know that you're motivated by the pension and unlikely to resign from active duty. An assignment officer's rationale is that "Needs of the Navy" take precedence over personal (and family) priorities. My spouse was needed in Norfolk or Yokosuka, but she couldn't stay in Hawaii.
Up until this point the Navy had kept us dual-military spouses together, but now I was on my final tour and my assignment officer had no reason to send me to my spouse's new homeport. Her orders would be an unaccompanied tour. My daughter and I would stay in Hawaii until I retired (18-24 months after Mom left) and then we'd go to Mom's duty station.
We all wanted to feel at home in a place that has the things we like and is closer to Hawaii. We didn't want to try to live in a foreign land with an unfamiliar culture and no friends-- so my spouse chose Yokosuka.
We resigned ourselves (yet again) to the inevitable and began talking about the family logistics. One afternoon on the way home from 3rd grade, my daughter broke down in tears. She only knew a few words of Japanese and she didn't think that she'd be able to learn enough in time to handle the schools. I explained to her that she'd go to an English-speaking school (on base) where they'd also teach her Japanese, but her feelings made clear that she wasn't happy about being separated from Mom-- and then having to leave her friends (and Hawaii) to get Mom back.
I wasn't very happy about the separation either, although I was in supportive-spouse mode. But this would be our 14th move, dammit, and I'd had enough. We'd been in Hawaii since 1989 but we'd had to leave once before ('94-'97 in San Diego) so we knew we wanted to retire in Hawaii. We were definitely not interested in moving just so that my spouse could check a career block before retiring from active duty.
Things came to a head in early 2000 when my spouse and I were tweaking our transfer plan. She mentioned that a friend had recommended great family counselors in both Hawaii and Yoko to help us deal with the unaccompanied tour. When it became clear that this career move might require the assistance of mental-health professionals, we finally asked ourselves: "Why are we doing this?!?"
I ran the numbers. If she resigned from active duty and joined the Reserves, then my pension and our savings should bridge the gap until her Reserve pension started in 2022. By resigning from active duty now (and giving up an active-duty pension in 2003) she'd pass up at least $750K while awaiting her Reserve pension. Depending on the cost-of-living adjustments to the active-duty pension, the forsaken amount could've been over $1M.
Her attitude was "Well, if we run out of money then I can always get a real job." She drafted her resignation letter that night, had her CO endorse it the next morning, and faxed it in to BUPERS before lunch.
Nobody took her seriously. A Navy officer's resignation letter can give 12 months' notice, so it's traditionally regarded as merely the start of serious
negotiations, and the assignment officer ignored her bluff. He issued her resignation orders, which he expected her to cancel at any minute. He found her a relief and stopped returning her calls. We ran our financial numbers again-- still good. (We didn't appreciate that the stock markets had reached their peak.) We attended my retirement seminar together and became even more firmly convinced that she'd made the right choice.
In June 2000 we stumbled across our dream home four miles over in the next neighborhood. Bigger house, better school system, bigger yard, fantastic views. It was absolutely filthy and in crappy material condition but it has good bones for DIY sweat equity. It was the pits of Hawaii's decade-long real estate recession, the sellers were desperate, the price was ridiculously low, and our conclusion was "We have to buy this place". We closed the deal and rented out our old home. Surprisingly our FI numbers still (barely) worked. Hey, I could always get a real job too.
You military veterans know what comes next: we used my spouse's resignation orders to ship our household goods at the Navy's expense.
When the assignment officer saw the invoice, he went nuts. "Do you realize what you've done?!? When you cancel your resignation and go to Yoko, you're going to have to pay that back!!" Spouse got her CO's finger-wagging lecture on "Are you sure you know what you're doing? I don't think you appreciate the significance of your mistake." Coworkers asked "Are you guys OK? Have you started your job search yet?" None of them could even spell FI, let alone FIRE.
Surprisingly enough, our numbers still worked. We were hugely leveraged (with an 8% mortgage!) and a job could certainly provide a safety margin, but our rental would offset our gargantuan mortgage payments. The stock market was a little shaky by late 2000, but we were finally staying in Hawaii.
When she left active duty in May 2001 she had 17 years, 11 months, and 10 days. She affiliated with the PACOM Reserve unit the next day.
The stock markets sucked, but our ohana quality of life took a prompt jump. My spouse spent the first few months taking naps and getting her life back. During Reserve drill weekends she found a whole new Navy community that appreciated what she could do. We dug into the DIY home improvement on our new home. Our daughter thrived in the new school with her new friends. I cruised on down my retirement glide slope.
Then 9/11 happened.
When the stock markets re-opened on 17 September 2001, I ran the numbers one again. Our portfolio was melting down like an ice cube at the beach and the college fund was in jeopardy, but we still had... barely enough. I retired in June 2002. We cut expenses and delayed our home improvements, and October 2002 was ugly, and we ate through our cash reserves, but by 2003 we were back on track.
"Losing" $750K-$1M has not affected our lifestyle one bit. Pursuing it would have wrecked our family.