military pension help

[scrappykat]

Hi All,

I'm very new here and have read a little and searched for this topic but haven't really come up with something mirroring my scenario.  I recently got divorced and receive part of my ex's military pension (~$2600/mo).  It is adjusted for inflation and will hopefully continue for life (I am 47). 

I also was awarded quite a bit of maintenance (alimony) every month.  Plus we sold our house and I got a chunk of $ from that as well.  I currently have ~ $100,000 that's just sitting in a savings account.

I am currently not working and am not really motivated to find a *real* job at the present time.  I can live off the pension and I have no debt. 

Is it feasible that I could *retire* on what I have (the maintenance will probably amount to about 12,000/yr for the next 6 yrs----it was a lot more but my ex quit his high paying job and i don't want to fight him/make him stay in a job he hates just so he can pay me).

So I will have ~$75,000 more to *invest* in the next 5 yrs or so......

I guess I feel too young to retire  lol, what do you all think?

[Frugal Ninja]

Honestly, I think you should consider asking him (or having your lawyer tell him) to extend your payments in exchange for paying you less monthly.  My mother made the mistake of letting my dad slide on his payments and not protecting her own interests....and it ended up being a decision she regretted when she was faced with a decision of helping my sister with medical bills or keeping her retirement income. 

You can always pay give the money back if you want....but chances are if you don't protect your interests now, you may regret it in the future.

[Catbert]

What's your monthly post-divorce budget?  If you aren't sure, then don't retire yet!  Give it at least a year to figure out what your new life will cost you.  And to figure out the lifestyle you want as a single person.

Several other basic questions:  Will you buy another house/condo?  What will that take out of your 'stache?  Can you live on $2600 a month? Or $3100 (2600 + 4% of 175K)? Are you working now? 

[scrappykat]

thank you for your replies!  I just found out that my ex plans to file for a Disability rating which could potentially lower the amount of my portion of the pension. :(  There is a stipulation in my divorce decree that if my pension gets lowered for this reason, my ex has to pay me the difference, but I'm not sure how that would work------ugh!  He said i could possibly buy him out and he wouldn't file (like drop the maintenance requirement, etc.) but I'm not even sure this would hold up in court??  I'd prefer that the government keep paying me, obviously.

I do not want to buy another house.  I am not really working right now (small part time job that doesn't bring in hardly anything).  I can definitely live on $2600/month.  I only have ~$100,000 sitting in a savings account at the present time and if i *buy out* my ex, I won't be getting any more maintenance so that would be it.

[CommonCents]

Re disability, I believe (based on my dad's experience) that the disability portion isn't taxed.  So, it's to his advantage to have as high a disability as possible, even if he must pay you the difference between what you would otherwise collect.

(As a side note, it pissed my dad off that someone getting a 30% disability from 5 years in the military is paid a sum for their loss of use of X body part for the injury, but because he retired, he just gets it tax free, rather than *in addition* to the retirement salary earned from 30 years of working.)

[Nords]

I'm very new here and have read a little and searched for this topic but haven't really come up with something mirroring my scenario.  I recently got divorced and receive part of my ex's military pension (~$2600/mo).  It is adjusted for inflation and will hopefully continue for life (I am 47). 

I am currently not working and am not really motivated to find a *real* job at the present time.  I can live off the pension and I have no debt. 

thank you for your replies!  I just found out that my ex plans to file for a Disability rating which could potentially lower the amount of my portion of the pension. :(  There is a stipulation in my divorce decree that if my pension gets lowered for this reason, my ex has to pay me the difference, but I'm not sure how that would work------ugh!  He said i could possibly buy him out and he wouldn't file (like drop the maintenance requirement, etc.) but I'm not even sure this would hold up in court??  I'd prefer that the government keep paying me, obviously.

Your lawyer sounds like they're on the ball with military divorce issues.

If you haven't already, you should check that your ex-spouse has designated you the beneficiary on his Survivor Benefit Program.  It's possible that you're compensated in some other way for his death besides the SBP, but if you don't have SBP then when he dies the pension stops too.

A disability rating lowers "disposable military retired pay", but the divorce decree seems to have you covered for that issue.  You'll know that he has a higher disability rating if you ever see your share of the pension deposit drop (or fail to rise by the percentage of the annual COLA).  Another option would be to have him send you some sort of annual verification of the pension amount, which ideally would list any VA offset.  In any case, his disability rating could get worse with age so you'll need to keep an eye on the pension amount.  You have no reason to let him "buy you out" unless you want to exchange a future stream of revenue for its present cash value.

http://the-military-guide.com/2013/08/12/protecting-your-military-benefits-in-a-divorce/
http://the-military-guide.com/2013/07/04/divorce-and-a-military-reserve-pension/
http://the-military-guide.com/2013/05/06/military-retirement-and-divorce/
http://the-military-guide.com/2011/04/13/more-sbp-details/

[scrappykat]

Thank you for the in depth reply---much appreciated!  I am named as the SBC beneficiary. 

I guess my concern with the disability rating is that he won't pay me  or won't pay me  the COLA (and how will he figure that out etc) and i will *again* end up back in court fighting him (which takes a huge toll on my mental health). 

Is it correct that I can get a 65% garnishment of his pension if he fails to pay me what he's supposed to (Maintenance and/or the offset for a disability rating)?  That would make me feel more secure---knowing the VA is involved and the money would come directly from them.

Thank you again for any help you can give me with this----my lawyer just wants to go back to court all the time (she isn't answering my questions on this---just wants to litigate :(  and I would like to work something out with my ex thats fair to both of us.

[Nords]

I guess my concern with the disability rating is that he won't pay me  or won't pay me  the COLA (and how will he figure that out etc) and i will *again* end up back in court fighting him (which takes a huge toll on my mental health). 

That's a very realistic concern, but thousands of divorce settlements must have addressed this problem already.  Ideally your attorney already has a solution that could be added to your agreement-- for example providing you with an annual copy of a 1099-R or a DFAS Retiree Account Statement so that everyone can agree on the numbers.  If he doesn't provide a copy of the documents to you then he gets hauled into court to discuss it with a lawyer and/or a judge. 

Is it correct that I can get a 65% garnishment of his pension if he fails to pay me what he's supposed to (Maintenance and/or the offset for a disability rating)?  That would make me feel more secure---knowing the VA is involved and the money would come directly from them.

I've never heard of this.  I'm not a lawyer, so maybe a lawyer would be familiar with this.  Each state has its own divorce laws, and the federal law (the Uniformed Services Former Spouse Protection Act) just sets up the federal provision to divide a federal asset (the military pension) according to state divorce laws.  I highly doubt that you'd ever get anything from the VA because that's a disability payment.  However you may be able to get more from his military pension (paid by DoD) or his personal funds (to compensate for the reduced pension caused by the additional VA payments). 

Thank you again for any help you can give me with this----my lawyer just wants to go back to court all the time (she isn't answering my questions on this---just wants to litigate :(  and I would like to work something out with my ex thats fair to both of us.

Gee, I wonder whether lawyers get paid more to go into court or to answer questions.  If the lawyer's not doing what you want then perhaps it's time for a new lawyer.

[CheapskateWife]

I was here searching on a different topic, and since I am the "new" wife in a situation where the ex gets a portion of his retirement, I have gone and gotten educated on the topic.  OP should take a look at http://www.dfas.mil/garnishment/usfspa/legal.html which explains exactly how as DFAS to honor the decree and have his retirement garnished without having to worry about him "paying up"