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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: mrmoneycleanshaven on January 29, 2015, 05:12:22 PM

Title: Proposed military retirement, should I opt-in?
Post by: mrmoneycleanshaven on January 29, 2015, 05:12:22 PM
Spidey sense says heck no, but given they are also in the midst of healthcare overhauls I am not sure I'll be doing 20 for them anymore. I've got to do 10 no matter what, but given the way things are changing I am not sure if the next ten are worth it to get 50% of my base pay and so I think I might hedge my bets and opt into the new system.

Scenario 1: Opt into new plan, get 5% of base pay matched for years 2-20, plus 40% of base pay until I die.

Scenario 2: Opt out of new plan, get 50% of base if I do 20, nothing if I do 19.999.

If I hedged and took scenario 1 I'd get an additional 35k contributed into my TSP in todays dollars if I got out at 10, but I'd lose $13k a year in if I stuck around for retirement vs if I went with scenario 2.
Title: Re: Proposed military retirement, should I opt-in?
Post by: RFAAOATB on January 29, 2015, 05:50:25 PM
I don't think they're making these retirement change proposals for your benefit.  You didn't mention your rank or how much you despise your coworkers, so I would recommend you stay in unless you really hate it or someone is offering your comically sized bags of cash to join their firm.  Getting both a defined benefit pension and a defined contribution TSP is a pretty sweet deal.

I on year nine now, switched from Active to Guard after four years.  I'd look at that as a hedge instead of switching to a new retirement plan.
Title: Re: Proposed military retirement, should I opt-in?
Post by: SaintM on January 29, 2015, 06:06:28 PM
These proposals require Congressional action, and all we seem to get is inaction. I wouldn't hold my breath that major changes are coming.

I will say that if the Air Force reinstitutes last year's 15-year retirement option next summer (when I hit 15), it will be hard to pass up.