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Learning, Sharing, and Teaching => Case Studies => Topic started by: Huskerfan on February 27, 2019, 08:16:50 PM

Title: Case study: Military Life and retirement
Post by: Huskerfan on February 27, 2019, 08:16:50 PM
Good evening.  This post is a longtime coming. I’ve been a huge lurker, and rarely post.  I’m looking to change that and start moving away from Social Media stuff and being more productive around the house and at work. Warning:  some of this is military heavy, but I think I’ve seen a few military experts here.  I’ve been plugging away on a spreadsheet for a few years now and I “think” I have my numbers right but want to run this by the experts here to see if I’m missing something.  I wanted to mention a few upcoming plans, and get your ideas. This post is HOPEFULLY organized enough to help you get the big picture.  It’s not a “I have $1.5m saved, can I retire?” Type of post. I tend to think a military pension lowers your “number” that you need and want to make sure I’m not missing anything.

Goal has always been financial independence but not necessarily retiring early.  More on that in a few. I didn’t take any of this seriously until around 5 years ago.  Wife and I were living paycheck to paycheck and just floating by. Not desperate for anything, but not really planning for a future and kind of squandering things.  I sat in a week long class and everything clicked and changed for me.  I got the bug and decided it was time to “adult”.  Best decision ever.

Background:

Me- 41 (Military 24 years of service, 16+ Active Service.  Plan to stay until 50)
Wife - 43 (Union Member, likely will “retire” when I leave in 9 more years)
3 kids – one left living at home, going to be entering his senior year in High School soon

Income (monthly):

Me - $5800 take-home paycheck (after $1650 to 403B-TSP). (I technically get paid every two weeks.  Military Pay... the TSP is split between the two checks).  *note: base salary increases on an average 2.1% annually.  Sometimes more for BAH and COLA increases

Wife - $5000 take-home (after $700-800 to 401k thingy/defined contribution)

Total $ 10800ish take-home

Expenses (monthly):
Major expenses that we share. Sorry they are not exact.

$1200 mortgage (ins, escrow...).
$500 groceries/household
$300 cell phone - this is for four line unlimited data (it’s a vice and we pay for a line for my parents)
$$$ auto insurance - not really sure, but high due to Stupid rules in my state
$$$ natural gas not too sure
$$$ water: not too sure
$150 electric
$100 cable
$75 landline/internet
$250 transportation (gasoline) (guesstimate)
$40 pets (food/vet)
$12 netflix
$20 AMC a-list

Assets:
Primary residence (3-4BR/2ba, 1800 sqft) $95,000 left on the mortgage.  Bought for $175k, currently prices are skyrocketing in my area and house is estimated at $290k
2001 honda Insight-paid off
2013 Ford F-150-paid off
2014 Buick LaCrosse-16,000 owed
16ft camper-paid off

403b (mine) $90,000
401k thingy (hers) $86,000
Precious metals: $7500 worth
Robinhood taxable- $700

Emergency Fund $10k 
Cash (personal) $5k

Liabilities:

Primary mortgage $95k at 3.5%
Buick car loan: $16k
Credit card: $700

Plan:  not overly concerned about the debt.  We know the car payment is the only really big thing we are looking at.  The credit card simply came from needing to purchase a fridge, and not wanting to use emergency fund. We plan to tackle the car loan.  Then still add more to the house payment. We currently pay about $20k in principle on the house for the year. I plan to add more now that my TSP is maxed out and I’ll be getting a pay raise soon. (Next promotion is at around $1,200 a month. More on that in a minute). 

The the plan I have is to work an additional 9 years (military) which is 8 more years than needed for my pension.  The way the numbers will work out, the out-processing and last year will mainly be spent prepping for retirement.  So I think I’ll technically retire at 51.  That will place me at 28 active years. The pension breakdown to this (estimated basepay for average pay increases over past 20 years):


$6975 -Monthly pension (70% of basepay)
($450ish) -SBP
$937 -VA 50% disability estimate (concurrent pay)
$150ish -COLA annual increase (20 Year history is roughly a 2.1% average)
$7600 a month
I have not figured in taxes.  And the VA Disability will be tax free. 

So I say all of this to get to the point of our plan and hoping for someone to spot a hole or two so I can work on fixing it over the next few years. 

TSP: I still plan to max each remaining year. I estimate this will be at roughly $750k at age 60 if earning roughly 5.5% annual return rate. 
Roth IRA: just started and will make my first contribution following tax returns. I only anticipate this being around $150k at age 60. 

I currently contribute $1900 each pay check for my share of “bills”. I call this “blood money”. The remainder of my money: I tend to save roughly 75% of the remainder of my paycheck.  That’s a recent development. This is an additional savings my spouse doesn’t really know about, but it’s not really a secret either. 

Retirement outlook:
Ages 51-57: $7600 a month
Ages 58-60: $10700 a month (wife’s pension will kick in, and she can start pulling 4% from her defined contribution plan)
Age 60: $13100 a month (can start pulling 4% from my TSP and the Roth IRA)

The wife will “retire” when I do.  She won’t be able to contribute to her defined contribution as she’ll not be working for those seven years.  Yet her pension is solid and remains the same with the way a few changes went about in the union. 

We are really tossing money at the mortgage, being mortgage free is a goal.  We are planning to be done with that in 3-4 years being that I’m working on paying off the Buick as well.  The $1200 a month increase for an upcoming promotion is practically earmarked for the car payoff and then mortgage.  What is a recommendation for that cash AFTER that? 

Do you see holes with any of this?  Concerns?

We are considering buying a different house right before I retire (using the sale of this home, and some extra cash) in order to get a bit more land and to buy a more energy efficient home (looking at a LEED home as well as having geothermal heating/cooling).  We’d likely still be mortgage free after purchase. 

Thoughts?  Note I did not include things like social security.  If it’s there, great.  I likely will wait to withdraw that money at 67.  My wife will likely draw sooner.  I did take a liberty with the estimated VA disability percentage.  That’s where I believe I’m at right now.  So hopefully I can keep the body from falling apart before my plan is fully in motion. 

What pitfalls can you see with the years between retirement and my wife drawing a pension?  We are looking at a 6-7 year timeframe.  Technically she could always head back to the Union for a month or two of work if she wants to.  Not sure what she wants to do.  I plan to retire at that age and not go back to a second career. 

I also will have a few large pay increases popping up for the promotions within the next ten years. I don’t think the best avenue is tossing it in a savings, but I still want to have quite a bit sitting there for emergencies. If I tie that money up into a betterment account, won’t it be locked away until I’m 60? Should I not worry about that with the income that will be coming in?
Title: Re: Case study: Military Life and retirement
Post by: DoNorth on February 27, 2019, 11:57:03 PM
looks like you're pretty well set.

I would sell the house if you PCS especially if prices are increasing in you area.  I finally just got rid of a house I bought in 2009 and it was a huge relief.  Some people buy term insurance policies instead of selecting SBP--it's something worth looking at.  It's probably worth going to ACAP or whatever your service calls the transition course 1-2 more times over the next 8 years because the offerings do change and I personally got quite a bit out of several of the sessions.  Good luck.
Title: Re: Case study: Military Life and retirement
Post by: MrThatsDifferent on February 28, 2019, 12:13:41 AM
You should talk to and read everything @Nords
Title: Re: Case study: Military Life and retirement
Post by: Linea_Norway on February 28, 2019, 01:38:21 AM
We are considering buying a different house right before I retire (using the sale of this home, and some extra cash) in order to get a bit more land and to buy a more energy efficient home (looking at a LEED home as well as having geothermal heating/cooling).  We’d likely still be mortgage free after purchase. 

As you still have 9 years to go until FIRE, it might pay off to switch to a more energy effective home now. As long as it doesn't increase your mortgage. Of course commuting costs should also be considered. But saving energy over 9 years might have a significant effect.

Is there anything you can do with you current home? Install an air-air warmth pump? Extra insulation? Solar panels? HR windows?
Title: Re: Case study: Military Life and retirement
Post by: Linea_Norway on February 28, 2019, 01:47:15 AM

$1200 mortgage (ins, escrow...).
$500 groceries/household
$300 cell phone - this is for four line unlimited data (it’s a vice and we pay for a line for my parents)
$$$ auto insurance - not really sure, but high due to Stupid rules in my state
$$$ natural gas not too sure
$$$ water: not too sure
$150 electric
$100 cable
$75 landline/internet
$250 transportation (gasoline) (guesstimate)
$40 pets (food/vet)
$12 netflix
$20 AMC a-list

Cell phones with unlimited data + landline internet. What do you need the unlimited data for? At home and at work you can probably use wifi. Can't you switch to limited data on your cellphones? You can cut out your land phone line, at least.
Cable and netflix also sounds double? Can you cut out the cable?

Assets:
Primary residence (3-4BR/2ba, 1800 sqft) $95,000 left on the mortgage.  Bought for $175k, currently prices are skyrocketing in my area and house is estimated at $290k
2001 honda Insight-paid off
2013 Ford F-150-paid off
2014 Buick LaCrosse-16,000 owed
16ft camper-paid off

That is at least one car too many to 2 people. Get rid of one of the cars and pay off the car loan.
Can't you and your wife have just 1 family car (comfortable for long distance driving) and one small, fuel efficient car? The Ford F-150 looks very fuel inefficient. One car less is also less car insurance.

403b (mine) $90,000
401k thingy (hers) $86,000
Precious metals: $7500 worth
Robinhood taxable- $700

You probably know that precious metals are not considered a good monetary investment on this forum.

Primary mortgage $95k at 3.5%
Buick car loan: $16k
Credit card: $700


Prioritize paying off the credit card debt.
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on February 28, 2019, 04:26:23 AM
You should talk to and read everything @Nords

Very sound advice.  I’m going through his posts and taking notes.
Title: Re: Case study: Military Life and retirement
Post by: davisgang90 on February 28, 2019, 04:34:29 AM
You sound like you and your wife are in really good shape!

I just retired after 28 years in Uncle Sugar's Navy, so I have a similar pension and VA that you lay out.  The difference is that my wife hasn't worked outside the home so we only have the one pension.

@Nords is the man and will likely be along to give his thoughts.

Bottom line, you look to have a really solid plan!
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on February 28, 2019, 02:18:20 PM
You sound like you and your wife are in really good shape!

I just retired after 28 years in Uncle Sugar's Navy, so I have a similar pension and VA that you lay out.  The difference is that my wife hasn't worked outside the home so we only have the one pension.

@Nords is the man and will likely be along to give his thoughts.

Bottom line, you look to have a really solid plan!


Thank you.  I know we still have ways we can cut a few bills and we are definitely looking into that.  I’ll respond to a few of the suggestions above that someone made, and get some opinions. I think on the money side, we should be good.  I have been nervous about the floater years between my retirement and the day she can grab her pension, but without a mortgage payment, I’d like to think we should be good to go. 

I am considering tossing more money into the emergency fund.  I am also considering adding more to that fund, but ear-marking it for home improvement items.  Kind of a “it would be nice to have this” type of fund.
Title: Re: Case study: Military Life and retirement
Post by: Travis on February 28, 2019, 05:05:38 PM
Are you active duty? Are you living in the same house from now until retirement?
Title: Re: Case study: Military Life and retirement
Post by: Nords on March 02, 2019, 11:27:30 AM
Thanks for de-lurking, Huskerfan.  It looks like you know what you want to do and perhaps you’ll be fine, but I’m confused by some of your comments.  I can’t draw enough conclusions from the data to have an opinion one way or the other.

Me- 41 (Military 24 years of service, 16+ Active Service.  Plan to stay until 50)

The the plan I have is to work an additional 9 years (military) which is 8 more years than needed for my pension.  The way the numbers will work out, the out-processing and last year will mainly be spent prepping for retirement.  So I think I’ll technically retire at 51.  That will place me at 28 active years. The pension breakdown to this (estimated basepay for average pay increases over past 20 years):

$6975 -Monthly pension (70% of basepay)
How are you estimating your pension?

I don’t understand the comment about “an additional 9 years (military) which is 8 more years than needed for my pension” and how they add up to “28 active years” from the numbers 24 or 16. 

Are you in the Reserves or National Guard with 24 good years and 16+ years of points for a non-regular pension which typically starts at age 60? 

Yet you seem to be planning for your pension to start at age 51, so perhaps you’re on active duty now and will qualify for an active-duty High Three pension with 28 years of service?

Once I understand which type of military pension you’re receiving then we can check that $6975 number.

($450ish) -SBP
No matter what type of pension you’re receiving, at age 50+ the decision about the Survivor Benefit Plan is a little more complicated.

If your spouse simply feels more comfortable having an inflation-adjusted life annuity after your death, then you should pay for the SBP.  If it helps her sleep better at night then that’s behavioral economics and a good reason for making that choice.

If you have a child who’ll be a permanently disabled adult, then SBP is a great choice for funding a Special Needs Trust.

Financially, though, otherwise SBP seems unnecessary.  The policy is only paid up when you’re at least 70 years old and have made 360 payments.  You’ll essentially be paying premiums for the rest of your life.  Yet your spouse eventually has her own pension and Social Security.

For an active-duty pension, you might decide to buy a few years of term life insurance until your spouse is receiving her own pension and Social Security.  You could save/invest the rest of the 6.5%/month premium that would be spent on SBP.

For a Reserve pension, it might make sense to select SBP for the period when you’re “retired awaiting pay” before starting your pension.  RCSBP is a much more complicated decision than active-duty SBP.

But the detailed discussion on SBP can wait until I understand which type of pension you’re receiving.

$937 -VA 50% disability estimate (concurrent pay)
That’s a bold call, although you might have enough pension income & assets without it. 

If you haven’t already done so, you could have a Veteran Service Officer review your medical records to verify that (1) the records document the service-connected disabilities and (2) show the need for continued treatment.  Even then I’d hesitate to add $937/month to your income estimate.  You have no idea what the rating criteria will be when you file your claim or how the VA raters are going to handle the evidence. 

In any case, while you’re still in uniform, make sure you have all the documentation to support the VA disability rating to which you’re entitled.  It’s a lot harder to take care of that issue after you retire. 
 
Regardless, I’d be very careful about assuming how much VA disability income you’ll receive.

Expenses (monthly):
Major expenses that we share. Sorry they are not exact.
I have not figured in taxes. 
You already know this needs more clarity.

We see this issue a lot on FI forums.  You’re making incomplete estimates about your retirement spending and skipping over other factors. 

Military retirees have low income taxes, but you’d still want to account for any applicable state & local taxes.  You’ll possibly be paying property taxes, and if you’re taking Required Minimum Distributions from your TSP or her 401(k) then those are taxed as personal income.

The most conservative estimate would be to assume that your family spending in your retirement is the same as it is now, and then make reasonable adjustments for her retirement.  You’d factor in lumpy expenses like replacement vehicles, home repairs, college funds, and fantasy vacations. 

Coupled with my confusion about your pension and the uncertainty in anyone’s VA disability income, it’s hard to tell whether your retirement cash flow is positive or negative.  If it’s negative then you’d want to know that you have enough assets to make withdrawals at the 4% Safe Withdrawal Rate.

We are considering buying a different house right before I retire (using the sale of this home, and some extra cash) in order to get a bit more land and to buy a more energy efficient home (looking at a LEED home as well as having geothermal heating/cooling).  We’d likely still be mortgage free after purchase. 
You’re not starting a bridge career after military retirement, so that makes it a lot easier to pick your retirement location.  If you know your retirement location now, and you know that you’ll spend enough time there to make it worth buying a home, then that could work out great.  You could use the next few years to keep an eye on the neighborhoods and buy a discounted bargain from a distressed seller. 

However that’s rarely the case for military families.  Here’s some of the risks (that you already understand) and ways to minimize them:
https://the-military-guide.com/dont-buy-home-leave-active-duty/

Thoughts?  Note I did not include things like social security.  If it’s there, great.  I likely will wait to withdraw that money at 67.  My wife will likely draw sooner.  I did take a liberty with the estimated VA disability percentage.  That’s where I believe I’m at right now.  So hopefully I can keep the body from falling apart before my plan is fully in motion. 
I think it’s far more reasonable to expect 75% of your Social Security (the latest projections of the SSA for 2035) than to expect CRDP from your VA disability rating.

I also will have a few large pay increases popping up for the promotions within the next ten years. I don’t think the best avenue is tossing it in a savings, but I still want to have quite a bit sitting there for emergencies. If I tie that money up into a betterment account, won’t it be locked away until I’m 60? Should I not worry about that with the income that will be coming in?
As reasonable as your career expectations may be, I wouldn’t count on any promotions in your projections.  Your community may change dramatically over the next few years in an unpredictable manner, no matter what the last decade of drawdown promotion statistics may be.   I think it’s reasonable to expect 1.5% pay increases each year, and of course the longevity columns in the pay table.

For your retirement income projections, though, I’d assume the worst case of your current rank being your terminal rank.  If the numbers still work (as they probably will) then any promotions are a happy bonus.

You can absolutely tap your TSP, her 401(k), and your IRAs before age 60.  The withdrawals can be penalty-free and possibly even tax-free, and you have plenty of time to set things up.  Here’s most of the methods, including a few specific to the military or home buyers:
https://the-military-guide.com/early-withdrawals-from-your-tsp-and-ira-after-the-military/
Title: Re: Case study: Military Life and retirement
Post by: fuzzy math on March 02, 2019, 02:02:13 PM
What is your goal in retirement? Do you want to live a much more lavish life than you do now?
You're pulling in $10k a month post savings and saving a huge portion of it. From what I can gather if your home were paid off your pension alone would cover it.

You said you're eligible for retirement sooner. Any reason you wouldn't just quit then?
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on March 13, 2019, 07:41:16 PM
What is your goal in retirement? Do you want to live a much more lavish life than you do now?
You're pulling in $10k a month post savings and saving a huge portion of it. From what I can gather if your home were paid off your pension alone would cover it.

You said you're eligible for retirement sooner. Any reason you wouldn't just quit then?

I apologize for the delay.
The reason (at least in my head) to stay longer is to bridge the gap a bit more between the day I retire and the day my spouse can start pulling her pension.  Staying in a bit longer gains extra percentage towards my pension and makes that monthly pension larger, this enabling my spouse to “soft retire” at the same time I choose to walk away. 

Walking away at the moment I can retire: pension is worth about $4050 a month
Walking away perhaps 6 years after that: $15% percentage increase and multiple other things brings pensionto around $7600 per month.

I think I’m concerned about this part from my original post:
Retirement outlook:
Ages 51-57: $7600 a month
Ages 58-60: $10700 a month (wife’s pension will kick in, and she can start pulling 4% from her defined contribution plan)
Age 60: $13100 a month (can start pulling 4% from my TSP and the Roth IRA)

If I left when I could retire, that would be about three years; and I’d be gaining $4050 a month, until the age of 57.

That cuts things quite a bit. 

I don’t anticipate a lavish living. We are pretty simple and enjoy our quaint camper and simple vacations.  I don’t see us getting too extravagant. At most, we are considering buying a different home for retirement.  A more efficient home. I mentioned that above.  We are looking for a little more land.  Most would be covered by the sale of the current house and adding perhaps $100k. That doesn’t cut into any of the 401ks. 


Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on March 13, 2019, 07:45:33 PM
Are you active duty? Are you living in the same house from now until retirement?

I’m Active Duty, but for the NG.  Did the normal AD route, then switched to NG when I found out about the AGR stuff.  That’s where I sit currently. 

I am living in the same house until retirement, unless we decide to change that up a year or so before retirement.  We aren’t extravagant, but could reach a bit on an efficient home (we are considering something like a LEED Platnium type of home).
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on March 13, 2019, 09:04:50 PM



Nords!  I can’t thank you enough for diving into this. I’ll clear up a few things and try to address a few things as well.  I’ve added some explanations below. I hope it clears the mud a bit.  Obviously, I look forward to anything that catches your eyes as being incorrect.

Military Math explanation:
I am AGR with the NG.  So the timeframes/years and stuff are calculated a bit odd. But I will be looking at an Active Duty retirement, not the M-Day version of collecting at 60 years old.
 
I am at nearly 17 years Active Federal Service (AFS) right now.  I have served 24 years.  For the extra 7 years (between 17 years and 24 years), I’ve earned an additional amount of 1 year and 2 months of equivalent AFS.  The catch with that: I cannot count that towards anything until I hit 20 years of AFS.  When I hit that in 2022, I automatically jump to 21 years and 2 months of AFS as that time rolls into the 20 years. I will be 44 years old in 2022.  The goal is to stay until I am 50, perhaps 51.   That’s 6-7 years extra work.  Not 8-9.  My mistake.  It will still place me at 28 years of AFS if I stay until 51.

Pension calculations:
I set up an excel sheet and did a lot of number crunching.  Basically I imported the pay chart as it was last year, main focus was on my ranks (Warrant Officer).  Then I looked at the historical annual increases over the past twenty years in the military. I made it to where I can adjust this year’s Pay Chart for this year’s pay increase, while leaving each year in the future adjusted to the historical value over the past 20 years (2.1%).  I understand that past performance does not guarantee future outcomes, but when I looked at the data I figured this was the best that I got.  Next year, I’ll add the 3.1% for that column, and it adjusts the future years off of that year’s column and then each year after that at 2.1% increase (historical value). That gives me a round about idea of what to expect a CW4 will be making in 2029.  Then I can base retirement pay off of: high three divided by 3.  Times .065 (SBP Payment).   I then added the Historical Cola increase (but that doesn’t start counting until retirement year and beyond).  That’s where I came up with the $6900ish number.  Let me know if the back of the napkin calculations figure out for you. ( I can shoot you my spreadsheet if you are interested in comparing)

SBP:
I think it’s a piece of mind thing.  If the pension is $6900ish, she’d receive 55% of that. It’s an amount that doubles her pension. If I were to pass away and she no longer sees that money coming in, she’s still have my TSP and Roth.  But $3800 is guaranteed cash she’ll keep getting. She’ll likely outlive me, her genetics seem better than mine.  However, I am interested in hearing more on this subject. My state retirement section tends to believe we are forced to make the election at the 20 year mark, and that we can’t change that.  I’d personally like to challenge that.

VA Disability: 
I’ve got everything documented very well. So I do have that part covered.  This section though, I completely agree with you. It’s a bold move to “count that” and to be honest I have a separate column on my sheet that shows the pension without that percentage.  You are correct as you never know what your rating will be.  Working closely with a few “friends” in the VA world, I’d like to think I’m a pretty good candidate to hit 50%.  They seem to think more.  I’ll count this section as a welcome Christmas present if it were to happen. I’ll remove it form normal calculations, just as I’ve removed the Social Security from my equations.

Speaking of Social Security:
I agree.  I think the assumption of Social Security payouts are higher than CRDP with VA Disability.  I believe I’ll be at 50%, even using the funky VA math, but you are correct and guessing right now is simply a crapshoot.  I feel good about the possibility, but I would not wager $100 of my pension on it.

Monthly Expenses:
I owe a detailed response to this.  I will try to get that together. 
 
Debt:  Credit card debt is gone.  That’s a small edit at least. I’m going to tackle my car payment now.

Counting future promotions:
The only reason I counted mine are because things are pretty step-based for Warrants.  If I was enlisted: I’d never count on a promotion as those can be a crap shoot in the AGR world.  Officers can be DA Non-Select.  But Warrants in the AGR, NG community, are basically TIG based. As long as you have the Military Education completed, and you reach TIG: they push the promotion forward.  The next promotion is practically guaranteed.   The last one: that is debatable on if I want to stay or not.  The staying to 51 figures in the staying to reach the High Three for that new grade.  I very well could tap out at 48-49 and take a cut.  Not 100% ideal, but numbers should still work.  I think. 
Title: Re: Case study: Military Life and retirement
Post by: Nords on March 14, 2019, 10:10:14 AM
Military Math explanation:
I am AGR with the NG.  So the timeframes/years and stuff are calculated a bit odd. But I will be looking at an Active Duty retirement, not the M-Day version of collecting at 60 years old.
 
I am at nearly 17 years Active Federal Service (AFS) right now.  I have served 24 years.  For the extra 7 years (between 17 years and 24 years), I’ve earned an additional amount of 1 year and 2 months of equivalent AFS.  The catch with that: I cannot count that towards anything until I hit 20 years of AFS.  When I hit that in 2022, I automatically jump to 21 years and 2 months of AFS as that time rolls into the 20 years. I will be 44 years old in 2022.  The goal is to stay until I am 50, perhaps 51.   That’s 6-7 years extra work.  Not 8-9.  My mistake.  It will still place me at 28 years of AFS if I stay until 51.
Whew.  No worries then.  You’re AGR, you understand how your pension works.  (There’s a very good reason that the blog’s post on calculating a Reserve pension has been the top-ranked post for over five straight years.)  Active-duty pensions are a lot easier to deal with in your projections.  No further questions there.

You could assume a hypothetical worst-case pension with your current rank and 21.167 years.  That builds in a conservative buffer where you don’t have to count on serving longer or getting promoted.  Stay with the AGR program as long as you’re feeling challenged & fulfilled, but if the fun stops then you’ll already know where you stand on pension income.

Pension calculations:
I set up an excel sheet and did a lot of number crunching.  Basically I imported the pay chart as it was last year, main focus was on my ranks (Warrant Officer).  Then I looked at the historical annual increases over the past twenty years in the military. I made it to where I can adjust this year’s Pay Chart for this year’s pay increase, while leaving each year in the future adjusted to the historical value over the past 20 years (2.1%).  I understand that past performance does not guarantee future outcomes, but when I looked at the data I figured this was the best that I got.  Next year, I’ll add the 3.1% for that column, and it adjusts the future years off of that year’s column and then each year after that at 2.1% increase (historical value). That gives me a round about idea of what to expect a CW4 will be making in 2029.  Then I can base retirement pay off of: high three divided by 3. 
Speaking as a nuclear engineer, you might be over-nuking this.

Instead of dealing with pay projections (let alone the political risk behind 3.1% press releases) you can format your spreadsheet in today’s dollars and then just update it every year or two until you retire.  That way it's ready to reflect your current thinking instead of locked on to a date in 2029.

I’d use the above worst-case assumptions (High Three CW3?>20 with 21.167 years).  If you’re feeling really confident about the NG AGR warrant community managers then give yourself one promotion.  (Regardless of your community and experience, I’m skeptical-- bordering on paranoid-- about military community managers of all the services.  You have awesome skills yet you have no control over drawdown policies or outsourcing.)  You can calculate your High Three average right now from your LESs or the pay tables (and looking back 36 months).  That High-Three calculation helps make sure you don’t inadvertently skip over a longevity raise.

By sticking with today’s dollars and pay tables, you avoid having to project history.  You can also use your expenses (in today’s dollars) and assume that both your pension and your expenses will go up with the CPI.  The reality is that your retirement expenses will stay flat or even go down, but your spreadsheet starts out with the conservative assumption and has room to add in new spending for new retirement activities.

This post just went up on that subject:
https://the-military-guide.com/retirement-spending-smile/

Better still, your spreadsheet reflects your current situation.  Then when military life gets tough (hopefully temporarily) you can compare your current pension estimate to your current expenses and ask yourself whether you want to retire tomorrow.  You won’t have to think about recalculating your spreadsheet for 2022 or 2026 and you won’t have to tempt yourself into gutting it out to your projected 2029 date.

SBP:
I think it’s a piece of mind thing.  If the pension is $6900ish, she’d receive 55% of that. It’s an amount that doubles her pension. If I were to pass away and she no longer sees that money coming in, she’s still have my TSP and Roth.  But $3800 is guaranteed cash she’ll keep getting. She’ll likely outlive me, her genetics seem better than mine.  However, I am interested in hearing more on this subject. My state retirement section tends to believe we are forced to make the election at the 20 year mark, and that we can’t change that.  I’d personally like to challenge that.
Since you’re getting an active-duty pension, the SBP decision is a lot simpler.

First, the behavioral economics (emotional) side is a perfectly valid reason for paying 6.5%/month SBP premiums for effectively the rest of your life.  (Retiring at age 44+ and paying 30 years of SBP premiums might exceed your lifespan.)  The SBP decision is made by your spouse, not you, but if taking SBP helps you both sleep more comfortably at night then you should opt for SBP. 

If you decided that you wanted to buy an inflation-adjusted survivor life annuity, then the SBP is the world’s best.  It’s subsidized by the federal govt.  Instead of paying for it all up front, you get to make ~360 easy monthly payments.  I’m not aware of any other annuities with those terms.

Financially you already have two inflation-fighting life annuities (your pension & Social Security).  If she loses your pension then she still has her SS or your SS survivor benefits (whichever is higher).  She’d also have all of your investments and her pension.  If she feels comfortable with the financial math then she can afford to skip SBP and spend the 6.5%/month on travel or other entertainment.  If she feels better about taking SBP then you guys should take it.

SBP depends on the type of pension you’re receiving, not what part of the military you’re in.  Since you’re receiving an active-duty pension then you’ll make the choice effective on the day you retire (and start your pension).  If you took a Reserve pension then you’d make the decision about RCSBP on the day you retired awaiting pay (not the date your pension starts), although RCSBP has three payment options. 

Should your spouse change her mind about SBP, both SBP and RCSBP allow you to cancel the SBP coverage between the 25th and 36th months.  The decision to decline SBP is irrevocable.
https://www.dfas.mil/retiredmilitary/provide/sbp.html
https://www.dfas.mil/retiredmilitary/provide/sbp/change.html

The best resource I know of for analyzing the SBP decision is Forrest Baumhover’s book.  He’s a retired mustang Navy Supply Corps officer and a fee-only CFP.  (I also helped him edit the book.)  It’s well worth the $5-$7 from Amazon:
https://www.amazon.com/Military-Transitions-Guide-Survivor-Benefit/dp/1534883959/ref=sr_1_fkmrnull_1

If you really want to dig into the detailed SBP rules then you can read the Financial Management Regulation (DoD 7000.14-R) Volume 7B Chapters 42-46 and 49.
https://comptroller.defense.gov/FMR/vol7b_chapters.aspx
That will help you win any wagers with your state retirement section, too.

VA Disability: 
I’ve got everything documented very well. So I do have that part covered.  This section though, I completely agree with you. It’s a bold move to “count that” and to be honest I have a separate column on my sheet that shows the pension without that percentage.  You are correct as you never know what your rating will be.  Working closely with a few “friends” in the VA world, I’d like to think I’m a pretty good candidate to hit 50%.  They seem to think more.  I’ll count this section as a welcome Christmas present if it were to happen. I’ll remove it form normal calculations, just as I’ve removed the Social Security from my equations.
I used to think that my medical/service records documented my situation, too, until I sat down with a VSO and watched him page through them for 30 minutes.  Regardless of what your experienced friends think, it’s well worth your time to make an appointment with the VSO (which is time-consuming) and spending an hour going over your record.  Or perhaps your VA friends would be able to do that page-by-page review with you.

The real issue is not so much what’s in your record.  It’s whether the physical/medical situation requires continuing treatment and whether the treatment is also in your record.  If you do that review with a VSO now then you can make sure your records continue to add everything necessary to fully document your claim when you retire.  (In my case it was showing continuing physical therapy for damaged knees.)  It’s a lot easier to do this while you’re on active duty, not when you’re on terminal leave.

If the VSO is convinced that you’re eligible for CRDP then I’d add it to your spreadsheet.  Otherwise you’re right, it’s money that you really didn’t want to earn but would appreciate having as a Christmas present. 

Even if you start your retirement with a 40% disability rating, that still lowers the tax on your pension and leaves the possibility that your deteriorating health will rise to the 50% threshold in the future to start CRDP at a later date.
Title: Re: Case study: Military Life and retirement
Post by: fuzzy math on March 14, 2019, 01:21:56 PM
What is your goal in retirement? Do you want to live a much more lavish life than you do now?
You're pulling in $10k a month post savings and saving a huge portion of it. From what I can gather if your home were paid off your pension alone would cover it.

You said you're eligible for retirement sooner. Any reason you wouldn't just quit then?

I apologize for the delay.
The reason (at least in my head) to stay longer is to bridge the gap a bit more between the day I retire and the day my spouse can start pulling her pension.  Staying in a bit longer gains extra percentage towards my pension and makes that monthly pension larger, this enabling my spouse to “soft retire” at the same time I choose to walk away. 

Walking away at the moment I can retire: pension is worth about $4050 a month
Walking away perhaps 6 years after that: $15% percentage increase and multiple other things brings pensionto around $7600 per month.

I think I’m concerned about this part from my original post:
Retirement outlook:
Ages 51-57: $7600 a month
Ages 58-60: $10700 a month (wife’s pension will kick in, and she can start pulling 4% from her defined contribution plan)
Age 60: $13100 a month (can start pulling 4% from my TSP and the Roth IRA)

If I left when I could retire, that would be about three years; and I’d be gaining $4050 a month, until the age of 57.

That cuts things quite a bit. 

I don’t anticipate a lavish living. We are pretty simple and enjoy our quaint camper and simple vacations.  I don’t see us getting too extravagant. At most, we are considering buying a different home for retirement.  A more efficient home. I mentioned that above.  We are looking for a little more land.  Most would be covered by the sale of the current house and adding perhaps $100k. That doesn’t cut into any of the 401ks.

I didn't see your Roth listed above. You know that you can withdraw contributions (but not growth) at any time right? So if you only made it to age 54 or so you could still augment your pension (which would be more than at retiring at age 51)... just a thought. I am a big advocate for not working too many years!
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on March 18, 2019, 03:58:01 PM

I didn't see your Roth listed above. You know that you can withdraw contributions (but not growth) at any time right? So if you only made it to age 54 or so you could still augment your pension (which would be more than at retiring at age 51)... just a thought. I am a big advocate for not working too many years!

Id never work to 54.   50/51 is my deadline.  That’s my line in the sand. It can move left, but I don’t want to move it to the right.   I’m aware I can draw from the contributions.  But I’ve always been in the mindset of: if it is pushed to an investment account, it stays there until I withdraw from it when I am 60.

I’m looking at different things to see if I want to retire earlier. Some of the stuff Nords mentioned and some that you mention (“not working too many years”).  I do know if the final promotion I expect is not in the works by 47, I’ll likley bow out and call it good around there.  I’m “saying” I’m going 9 more years... but honestly, it may be around 7.
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on March 18, 2019, 04:07:25 PM
Speaking as a nuclear engineer, you might be over-nuking this.

I think you might underestimate the amount of nuking I’m doing here. Lol
The spreadsheet now works to where I can enter this year's annual pay increase, and it adjusts all of the pay scale for the future years (all future years are calculated with the “historical increases”.  If I insert 3.1% for 2020, it calculates that year, and the following years calculate off of that at a 2.1% rate).  So now that the spreadsheet is complete, it’s pretty easy to use and figure out. 

However I am heeding your advise to stop the nuke strikes here.  Now that it’s all done, I plan to visit it every 6 months or so to see if I’m “still in track”.  In other words, I’m going to focus on other things instead of staring at this thing.   

I’ll dissect the rest of your post later.  I found myself in a wormhole on your site and reading those articles. Thank you!
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on May 01, 2019, 03:18:15 PM
So, I’ve spent a fair amount of time looking at things on Nord’s site and digesting things a bit more with a few of the comments here. 

401k (TSP) rollover to Traditional and than eventually Roth IRA:
Is there a calculator or a favorite “go to” spot you can plug numbers in in order to try to calculate what you would save by converting x amount of dollars as opposed to leaving it in TSP and then paying Taxes later? 
My understanding of it, in order to be beneficial, you’d want to do it when your in a smaller tax bracket.  When doing so, can you signal TSP that you think not want to withdraw a certain amount for this purpose and then leave the rest in the account?  Example: if I have $600k in TSP, could I basically say I want to withdraw $30k a year for 10 years (for the purpose of rolling it over to Roth IRA).  Then still have $300k sitting in TSP?   Looking at Nord’s site for me thinking that I’ll hit the higher tax bracket once my wife’s Pension kicks in about 7-10 years after I retire.  So I’m curious if there’s a reason to leave some in the TSP, or simply move the assets if I’m going to start down that path anyways.

Second thing I really started thinking more about:  I mentioned I may stay 9 years more.  Instantly the Pension will place me in the 22% tax bracket (or higher if there are changes later down the road). By retiring just three years sooner, i wouldn’t be in the 22%, yet could benefit from withdrawing from the Roth IRA if needed to bridge the gap.  Retiring in 6 years is just as sustainable as retiring in 9 when I redid the numbers.   Sure... the TSP numbers would be down a bit.  But that’s all just bonus money. 

Interesting things to think about.
Title: Re: Case study: Military Life and retirement
Post by: Nords on May 01, 2019, 11:09:59 PM
401k (TSP) rollover to Traditional and than eventually Roth IRA:
Is there a calculator or a favorite “go to” spot you can plug numbers in in order to try to calculate what you would save by converting x amount of dollars as opposed to leaving it in TSP and then paying Taxes later? 
My understanding of it, in order to be beneficial, you’d want to do it when your in a smaller tax bracket. 
You could go through the extra pain of converting income-tax brackets to dollars saved, but all you really need to care about is:
1.  Am I in my life’s lowest income-tax bracket now?  (Then contribute to a Roth TSP and, if within the income limits, a Roth IRA.)
2.  After I leave the military, will my bridge career (or my pension, if I earn one) put me into a higher income-tax bracket?  (If so, when after that could I convert?  Should I convert some of my traditional IRA now?)
3.  Will my income-tax bracket be lower at any time after my last earned-income paycheck and before age 65 (Medicare)?  (That might be the best time to roll over my TSP.)
4.  When I reach Required Minimum Distributions at age 70.5, will my RMD be big enough to jack me up into a higher income-tax bracket, and make me pay IRMAA on my Medicare premiums?  (If so then convert as much as you can whenever you can.)

When doing so, can you signal TSP that you think not want to withdraw a certain amount for this purpose and then leave the rest in the account?  Example: if I have $600k in TSP, could I basically say I want to withdraw $30k a year for 10 years (for the purpose of rolling it over to Roth IRA).  Then still have $300k sitting in TSP?   
You can’t do it now, but later in 2019 the TSP is adding more withdrawal flexibility.
https://www.tsp.gov/PDF/formspubs/tspfs10.pdf

A simpler method would be to just roll over the entire traditional TSP balance (or whatever part you plan to convert) in one withdrawal.  The expense-ratio gap between the TSP and Vanguard has declined over the last decade so you’re not paying a significant amount more (when you stick to passive index funds).  You’d move it from whatever TSP funds you owned into their passively-managed index-fund equivalents in your traditional IRA.  (There are no tax issues because it’s a rollover.)  Then you’d be completely finished with the TSP.

Once the TSP funds are in your IRA you can convert a little each year, at your convenience, and accelerate or pause the process if your projections change. 

When I retired from active duty, I started converting my traditional IRA to a Roth IRA.  Then I rolled my traditional TSP into my traditional IRA and converted that to a Roth IRA.  Then we started converting my spouse’s traditional IRA to a Roth IRA.  Finally we rolled over my spouse’s traditional TSP to her traditional IRA and converted that to a Roth IRA.  Each of those steps took a few years (for a total of 16 years) but we only had to go through the rollover process once for each TSP account.

Here’s the paperwork process for rollovers:
https://the-military-guide.com/how-and-why-to-transfer-your-tsp-to-an-ira/
I’m not sure whether the TSP’s new withdrawal options will enable you to set it up once for 10 years of annual withdrawals, but you should see more about that by the end of 2019.

Looking at Nord’s site for me thinking that I’ll hit the higher tax bracket once my wife’s Pension kicks in about 7-10 years after I retire.  So I’m curious if there’s a reason to leave some in the TSP, or simply move the assets if I’m going to start down that path anyways.
In that case you could do the TSP rollover in Year #1 of 7.  You could convert about 15-20% of it (in order to finish by the end of year seven).  Or you could convert just enough each year to stay in a lower income-tax bracket than the bracket you’ll be in when your spouse retires.  The difference between those two methods is probably not enough money to make you stay awake at night tweaking more spreadsheets. 

Another advantage of converting all of a traditional TSP or a traditional IRA to a Roth IRA is that you don’t have to spend your 70s putting up with RMDs and complicating your Medicare premiums (IRMAA).  I think it’s worth converting to a Roth IRA even if the tax savings are a wash.

Second thing I really started thinking more about:  I mentioned I may stay 9 years more.  Instantly the Pension will place me in the 22% tax bracket (or higher if there are changes later down the road). By retiring just three years sooner, i wouldn’t be in the 22%, yet could benefit from withdrawing from the Roth IRA if needed to bridge the gap.  Retiring in 6 years is just as sustainable as retiring in 9 when I redid the numbers.   Sure... the TSP numbers would be down a bit.  But that’s all just bonus money. 
You could stay on the job as long as you’re feeling challenged & fulfilled, and retire as soon as the fun stops. 

The extra income (three years of salary & benefits) will more than make up for any higher income taxes that you pay on the Roth IRA conversions. 

Interesting things to think about.
Good #FirstWorldProblems to have!
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on May 03, 2019, 07:54:00 AM
Lots of great information again, Nords.  Thank you.
I have a better grasp of the transferring/rollover now. It makes a lot of sense. At first I didn’t realize you could still invest the dividends (I thought they counted as part of the annual contribution, but they don’t). I see the overall potential with rolling everything over.  I think this will be my plan for sure. Rolling over mine and my wife’s funds may be a bit hectic, but worthwhile.

One last question on that front: when you transferred to the Traditional IRA, you promptly invested that so the money was still working for you, right?  And then rolled over whatever % you wanted to the Roth IRA to completed the process.  Rinse and repeat the next year...
Title: Re: Case study: Military Life and retirement
Post by: Nords on May 03, 2019, 09:05:28 AM
Lots of great information again, Nords.  Thank you.
You’re welcome!  I’m glad it’s helping.  Lots of other forum members (and military families) ask similar questions.

One last question on that front: when you transferred to the Traditional IRA, you promptly invested that so the money was still working for you, right?  And then rolled over whatever % you wanted to the Roth IRA to completed the process.  Rinse and repeat the next year...
Yep.  The TSP cashed us out of the shares (which happened to be in the C & S funds) and transferred the dollars to Fidelity (an S&P500 fund and a small-cap fund).  Once the dollars were in the traditional IRA we immediately bought the equivalent funds, so the money was still invested.

Each year when we did the Roth IRA conversions, Fidelity transferred the specified number of fund shares from the traditional IRA to the Roth IRA without cashing out anything.
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on May 23, 2019, 08:13:18 PM
Question regarding rolling over accounts:
Are there any issues rolling over from traditional to Roth IRA beyond the age of 60?  For instance, if I want to roll over my wife’s account first, then delay mine and start rolling it when I’m 57 or so and extending that to 64.  Does that cause any issues or concerns?
The reason I was considering it was to limit the amount of taxes as it would be a bit more considerable to pay on her account and my account.  Just thinking out loud and wondering if there are issues with that. Obviously if I delay the conversion beyond 60 I wouldn’t draw from that account until the rollover is complete (well... technically I could start withdrawing some I suppose...)
Title: Re: Case study: Military Life and retirement
Post by: Nords on May 24, 2019, 03:55:54 AM
Are there any issues rolling over from traditional to Roth IRA beyond the age of 60?  For instance, if I want to roll over my wife’s account first, then delay mine and start rolling it when I’m 57 or so and extending that to 64.  Does that cause any issues or concerns?
No worries about doing Roth IRA conversions at any age, although past age 62 your income might be higher if you’re taking Social Security withdrawals.

My spouse and I (dual military, each of us with a TSP account) spent 16 years of my retirement rolling over our traditional TSPs to traditional IRAs and then converting them to Roth IRAs.  We did a little each year up to the top of an income-tax bracket (15%) because when we’re in our 70s (and had to take Required Minimum Distributions) we could see that we’d be paying income taxes in the 25% bracket.

Some years our conversions (from traditional IRA to Roth IRA) were only a few thousand dollars, while other years we’d convert $20K.
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on August 20, 2019, 07:39:44 PM
Ran into another question: 
I have been planning to continue contributing to a Roth IRA following retirement, but just read that military pension is not considered to be earned income.

If I’m reading correctly, I think I need to produce $6000-7000k of income to still contribute to my Roth.  Is that correct?  I wasn’t planning on that (working)
Title: Re: Case study: Military Life and retirement
Post by: Nords on August 20, 2019, 08:08:54 PM
Ran into another question: 
I have been planning to continue contributing to a Roth IRA following retirement, but just read that military pension is not considered to be earned income.

If I’m reading correctly, I think I need to produce $6000-7000k of income to still contribute to my Roth.  Is that correct?  I wasn’t planning on that (working)
You're correct.  Military pensions are not considered earned income for IRA contributions.
See Table 1-1 on page 6 of IRS Publication 590-A:
https://www.irs.gov/pub/irs-pdf/p590a.pdf
"What Isn’t Compensation?
Compensation doesn’t include any of the following items.
• Earnings and profits from property, such as rental income, interest income, and dividend income.
• Pension or annuity income.
• Deferred compensation received (compensation payments postponed from a past year).
• Income from a partnership for which you don’t provide services that are a material income-producing factor.
• Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b.
• Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs."

I haven't contributed to a Roth IRA in over a decade!

Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on August 22, 2019, 07:33:04 PM
I should be able to still complete a conversion without earned compensation, right?  But I just can’t contribute the $6k or so to the Roth. I planned one starting the conversion the year I retire.  The first year, I’ll have some income I can report so I can still contribute to my Roth.  But after that...
Title: Re: Case study: Military Life and retirement
Post by: Nords on August 22, 2019, 08:19:28 PM
I should be able to still complete a conversion without earned compensation, right?  But I just can’t contribute the $6k or so to the Roth. I planned one starting the conversion the year I retire.  The first year, I’ll have some income I can report so I can still contribute to my Roth.  But after that...
That's right, Roth IRA conversions can be done at any level of earned income.  Of course you can pay a lot less income tax on the conversion of a traditional account to a Roth account when your earned income is zero.
Title: Re: Case study: Military Life and retirement
Post by: macmoneysaver on August 24, 2019, 08:19:12 AM
This looks good, you should be set up well.

I see one possible hole.  For your VA disability, did you subtract that from your pension?  This VA amount is not in addition to your pension, but subtracted off, then sent in a separate deposit. The benefit is you don't need to pay taxes on the VA portion.

Best of luck to you!
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on August 26, 2019, 07:17:17 PM
This looks good, you should be set up well.

I see one possible hole.  For your VA disability, did you subtract that from your pension?  This VA amount is not in addition to your pension, but subtracted off, then sent in a separate deposit. The benefit is you don't need to pay taxes on the VA portion.

Best of luck to you!

Caveat to the VA Disability: over 50% with a 20 years Active Duty pension (it may be for the 20 year Guard pension as well) you get concurrent pay (your pension + the amount earned via the VA compensation).

If less than 50%, it indeed borrows from the pension like you mentioned.

I fall into the first option (or hope to by getting 50%)
Title: Re: Case study: Military Life and retirement
Post by: M5 on August 30, 2019, 05:13:39 PM
There's a lot of unknowns here surrounding your career longevity that probably only you can answer. What's the likelihood of your unit actually letting you hang around for another 6 years past your 20 AGR? Are you an E-8 now? Are you Army or Air? Would you be holding anyone else up for promotion? Can't speak for the Army side, but holding up a control-grade for that long after your 20 in the Air Guard is probably a long shot. If you plan to put on E-9 you can almost guarantee you'll be gone in 3 years unless you manage to move into a headquarters position or similar.

I'm sure you know where you stand fairly well, I've just seen several people blind-sided by non-retention letters when they were hoping to stay for much longer. It looks to me like you'd be just fine even if retiring when you hit 20.
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on September 02, 2019, 08:10:22 PM
There's a lot of unknowns here surrounding your career longevity that probably only you can answer. What's the likelihood of your unit actually letting you hang around for another 6 years past your 20 AGR? Are you an E-8 now? Are you Army or Air? Would you be holding anyone else up for promotion? Can't speak for the Army side, but holding up a control-grade for that long after your 20 in the Air Guard is probably a long shot. If you plan to put on E-9 you can almost guarantee you'll be gone in 3 years unless you manage to move into a headquarters position or similar.

I'm sure you know where you stand fairly well, I've just seen several people blind-sided by non-retention letters when they were hoping to stay for much longer. It looks to me like you'd be just fine even if retiring when you hit 20.

Likelihood of staying past 20 years:  very good. The NG does not push out Warrant Officers.  They typically leave on their own terms; medically, or if they screw up and get in trouble with the law. So if I choose to go 28 Active years; I don’t anticipate any issues at all.
Rank situation: answered above. Warrant Officer. Army. Promotions for AGR Army WOs are time
Based.  No boards/DA Boards, etc.  go to the military school needed for the next level, and wait out the Time in Grade requirements.  Obviously you don’t want to be a turd
Sack just hanging in to hang on.  That’s never my intention.  Once I am bored or feel it’s time to move on, I’ll submit that paperwork.
Holding people back:  it goes back to how the promotions work in the guard.  Worse Case Scenario i might be holding an AGR slot perhaps a new up and coming Warrant would like.  Building a bench in the guard takes a long time.  So finding a backfill can take two to three years.  Currently we are
Working on our bench, but the not many are willing to make that commitment to become a Warrant for some strange reason.  Slots are not an issue for the guard with recent changes in our promotion cycle. Example: It used to be where you would have to wait 5 years for a promotion to CW3 if you were sitting in an undergraded slot (CW2 slot).  That changed a few months ago and they got rid of the extra year of waiting.  You can now be a CW3 at 4 years TIG regardless of the slot you are in.  This also changed the requirements for CW3 to CW4 as well. All
Great news for people planning the promotions better.


So all that said; I completely agree with your post though. It appears as though a lot of people are indeed blindsided by that non-retention letter right around that 20 year mark. It mainly happens on the enlisted side of the house.  Most stagnant officers are weeded out by non-selections. I just don’t see Warrants weeded out.  Running numbers though, I agree that I think 20 years could indeed be enough. A more comfortable number would be at 24 years for me. Thus far we have been great at keeping spending under control while still getting every opportunity to spoil our new grandchild. That’s what matters
The most right now. And to be honest: that grandchild may be a reason to toss a
Retirement packet in a bit early as well!  :)
Title: Re: Case study: Military Life and retirement
Post by: M5 on September 03, 2019, 12:42:41 PM
There's a lot of unknowns here surrounding your career longevity that probably only you can answer. What's the likelihood of your unit actually letting you hang around for another 6 years past your 20 AGR? Are you an E-8 now? Are you Army or Air? Would you be holding anyone else up for promotion? Can't speak for the Army side, but holding up a control-grade for that long after your 20 in the Air Guard is probably a long shot. If you plan to put on E-9 you can almost guarantee you'll be gone in 3 years unless you manage to move into a headquarters position or similar.

I'm sure you know where you stand fairly well, I've just seen several people blind-sided by non-retention letters when they were hoping to stay for much longer. It looks to me like you'd be just fine even if retiring when you hit 20.

Likelihood of staying past 20 years:  very good. The NG does not push out Warrant Officers.  They typically leave on their own terms; medically, or if they screw up and get in trouble with the law. So if I choose to go 28 Active years; I don’t anticipate any issues at all.
Rank situation: answered above. Warrant Officer. Army. Promotions for AGR Army WOs are time
Based.  No boards/DA Boards, etc.  go to the military school needed for the next level, and wait out the Time in Grade requirements.  Obviously you don’t want to be a turd
Sack just hanging in to hang on.  That’s never my intention.  Once I am bored or feel it’s time to move on, I’ll submit that paperwork.
Holding people back:  it goes back to how the promotions work in the guard.  Worse Case Scenario i might be holding an AGR slot perhaps a new up and coming Warrant would like.  Building a bench in the guard takes a long time.  So finding a backfill can take two to three years.  Currently we are
Working on our bench, but the not many are willing to make that commitment to become a Warrant for some strange reason.  Slots are not an issue for the guard with recent changes in our promotion cycle. Example: It used to be where you would have to wait 5 years for a promotion to CW3 if you were sitting in an undergraded slot (CW2 slot).  That changed a few months ago and they got rid of the extra year of waiting.  You can now be a CW3 at 4 years TIG regardless of the slot you are in.  This also changed the requirements for CW3 to CW4 as well. All
Great news for people planning the promotions better.


So all that said; I completely agree with your post though. It appears as though a lot of people are indeed blindsided by that non-retention letter right around that 20 year mark. It mainly happens on the enlisted side of the house.  Most stagnant officers are weeded out by non-selections. I just don’t see Warrants weeded out.  Running numbers though, I agree that I think 20 years could indeed be enough. A more comfortable number would be at 24 years for me. Thus far we have been great at keeping spending under control while still getting every opportunity to spoil our new grandchild. That’s what matters
The most right now. And to be honest: that grandchild may be a reason to toss a
Retirement packet in a bit early as well!  :)

Ah, a Warrant Officer. I don't know very much about the program but I've heard nothing but great things. It's interesting how much differently WOs are treated vs enlisted and officers. I have to say I'm a bit jealous - I wish the Air Force had WO aviators and I'd jump on that in a heartbeat!
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on September 03, 2019, 08:49:08 PM
WOs are a special breed. Lol
I count it as a blessing to be a part of the group. 
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on September 19, 2019, 07:08:51 AM
I asked this in a different forum, likely shouldn’t because Nords is not lurking around in that forum.
I should have know better.

When all is said and done upon retirement and upon transferring the TSP correctly over to a Roth IRA... how easy is it to pull monthly payments like you can with TSP?  If I have a Fidelity account, and let’s just say I’ve got $500k in VTI stock.  I’m earning dividends on this stock as well. 

Will Fidelity allow you to set up something like “I want $2500 a month going back to my bank account” and this effectively it sells $2500 worth of stock and transfers over (or “shoot over 4% to my bank account”?  Same question I suppose with the dividends.  I assume there is a DRIP option or perhaps something you can tell Fidelity to reinvest that dividend each time it comes in.

I’m curious as to how easy and how automated this process is on the back end.  The last thing I really want to do is spend a lot of time on the phone or laptop if I just want automated payments coming to me.

I would suppose limiting transactions may be a bit helpful as well to avoid extra costs/fees. But 12 transactions don’t seem like a lot for the year...
Thoughts?
Title: Re: Case study: Military Life and retirement
Post by: Nords on September 20, 2019, 11:16:38 PM
When all is said and done upon retirement and upon transferring the TSP correctly over to a Roth IRA... how easy is it to pull monthly payments like you can with TSP?  If I have a Fidelity account, and let’s just say I’ve got $500k in VTI stock.  I’m earning dividends on this stock as well. 

Will Fidelity allow you to set up something like “I want $2500 a month going back to my bank account” and this effectively it sells $2500 worth of stock and transfers over (or “shoot over 4% to my bank account”?  Same question I suppose with the dividends.  I assume there is a DRIP option or perhaps something you can tell Fidelity to reinvest that dividend each time it comes in.

I’m curious as to how easy and how automated this process is on the back end.  The last thing I really want to do is spend a lot of time on the phone or laptop if I just want automated payments coming to me.

I would suppose limiting transactions may be a bit helpful as well to avoid extra costs/fees. But 12 transactions don’t seem like a lot for the year...
Thoughts?
I wandered through my Fidelity account settings, and I was able to find menu options to set up monthly withdrawals from my Roth IRA.

It requires a login, and it’s under Accounts & Trade | Update Accounts/Features | Automatic Withdrawals for a plan type of “fixed amount”.  The help bubble says:
“Select this option to have a specific amount distributed to you on a schedule of your choosing. For example, you could choose to withdraw $2,000 each month until the account is depleted.”
There’s also a disclaimer that this particular withdrawal option does not satisfy the IRS RMD requirements.  Fidelity wants to make sure you consider their “life expectancy” withdrawal option for retirement accounts, even if it’s a Roth IRA.

I’d talk it over with Fidelity to make sure this works the way you interpret their words.  A year or two ago I set up automatic withdrawals from dividend distributions in a taxable account.  What Fidelity’s description meant to me was “When cash is distributed to my account, send it to me.”  To Fidelity it meant “Let all of the cash distributions pile up in this account until the beginning of the next month, then send it to him.”

The way it actually worked was that a dividend would be paid on the 1st of the month, the cash would sit in the account for the rest of the month, and then it’d be sent to me on the first day of the following month.

This might mean that your account would pile up any dividends/interest in cash (without reinvesting) during the month, and then Fidelity would send you the regularly scheduled payment at the beginning of the next month.  If there wasn’t enough cash in the account for that payment then Fidelity would sell some shares to reach the distribution amount.  If there’s more than enough cash in the account, then Fidelity would send you your requested distribution and let the rest of the cash sit in the account until the following month.


I asked this in a different forum, likely shouldn’t because Nords is not lurking around in that forum.
I should have know better.
I’m intrigued. 

Is this a forum I should be lurking in?  Can you post a link or send me a PM?
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on September 21, 2019, 06:07:57 PM
Thanks again for the explanation. I found some info on the Fidelity site after I was doing more research when this forum went down for a bit.  Curious minds needed to know. But I wasn’t too clear as to how easy it was.  It appears to be pretty easy.  So that will be worth investigating more!

As for the site I was at: TSPCENTER. In my opinion, the site is interesting for the TSPFantasy aspect and to read things like the Seasonal Musings thread. It also introduced me to TSPCalc. Other than that the forums aren’t too much to really get excited about.  Politics seem to have been getting in the way of many there
Title: Re: Case study: Military Life and retirement
Post by: Nords on September 21, 2019, 10:12:13 PM
Thanks again for the explanation. I found some info on the Fidelity site after I was doing more research when this forum went down for a bit.  Curious minds needed to know. But I wasn’t too clear as to how easy it was.  It appears to be pretty easy.  So that will be worth investigating more!
We’re keeping an eye on this too. 

In 20 years or so, my spouse and I will turn over our money management to our daughter... because our finances will all be in autopilot.  Part of our plan involves harvesting whatever dividends that our Fidelity accounts throw off.  We joke that our daughter will give us each a debit card and put us on an allowance, so that she can monitor our Fidelity account spending to keep an eye out in case we’re duped by elder fraud.

As for the site I was at: TSPCENTER. In my opinion, the site is interesting for the TSPFantasy aspect and to read things like the Seasonal Musings thread. It also introduced me to TSPCalc. Other than that the forums aren’t too much to really get excited about.  Politics seem to have been getting in the way of many there
Thanks.  I’ve heard of it.  In the limited time that I devote to reading forums, I’ve never found a reason to spend my time there.
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on September 23, 2019, 09:00:50 PM

Thanks.  I’ve heard of it.  In the limited time that I devote to reading forums, I’ve never found a reason to spend my time there.
[/quote]

There really isn’t much there.  So that’s a good call. I like using TSPCalc (the free version, but that’s still more of an experiment if anything else for the time being).  The forums haven’t really brought me anything.  Not like the forums here. 
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on January 20, 2020, 08:44:15 AM
Nords (or anyone)...
What strategy would you employ in regards to starting your conversion from TSP to Roth IRA with the following situation:

If someone is choosing to stay and contribute a Max to their TSP for 9 more years, but wants to start the conversion process early in order to bridge the gap until 59.5 years of age.  What strategy is best for this scenario?  More details:
Let’s say the person has $500k in TSP.
In 5 years he or she starts the process and transfers to Traditional IRA; plopping everything into VTI or some other flavor they like.  For the remainder of the time the person stays in, they continue maxing TSP and converting say $100k each year to the ROTH IRA. Basically this allows money to be available for withdrawals the year after he or she chooses to retire.
Do they miss out on potential gains in their account by splitting the amounts (I would assume plopping the money into Traditional IRA will keep the ball rolling for gains and/or losses)?

Would you simply do the same with the remainder of the TSP Balance when retirement comes? Push to traditional and convert to Roth? 

Trying to work out different scenarios to include converting my spouse’s defined contribution plan (non-military).  We know we will be paying taxes to convert, but ultimately the goal would be to eventually make things a bit more automatic later in life as well as easing the tax burden later on. 

If I’m gathering attention for a question; I have yet another one for everyone to consider:
(I’m not too bashful...)

Saving account question.  Emergency fund already established.  But now there’s an additional savings account I’m tossing money in.  The concept of this account was to use perhaps a year or two before I retire (maybe a year or two after) to use as a lump payment towards possibly building a more energy efficient home on land that we purchase (when we find what we want).  Not ruling out buying a home already built, but we are looking for specific things and want a couple of things. 

So the question about the savings account: a large sum of money won’t really be working FOR me in that account.  It’s extremely liquid.  But not something gaining anything of value in a savings account.  I’ll already have money available for withdrawal via ROTH IRA, yet I’ve always been a bit of a believer not to touch that money.  But isn’t that the purpose of converting it, to have it available if needed for things like this?  Obviously I don’t need $100k available every year while I’m bridging the gap. But could see it as a scenario if buying that piece of property by the hiking trails or whatever.  I guess what I’m asking is how much is too much in a savings account?  What would be some strategic ways to manage this.

I think in 5 years, the significant other and I may just book an appointment with Nords on a beach in Hawaii to go over our strategic plans.  😂
 

Title: Re: Case study: Military Life and retirement
Post by: Nords on January 21, 2020, 07:55:12 AM
Nords (or anyone)...
What strategy would you employ in regards to starting your conversion from TSP to Roth IRA with the following situation:

If someone is choosing to stay and contribute a Max to their TSP for 9 more years, but wants to start the conversion process early in order to bridge the gap until 59.5 years of age.  What strategy is best for this scenario?
The only way to take military TSP in-service withdrawals is if you’re out of the military (retired from active duty, or retired awaiting pay [gray area] from the Reserve/Guard, or separated) or at least 59.5 years old.  If you’re still in uniform at age 59.5 then you’re allowed to take four in-service withdrawals per year.
https://www.tsp.gov/PDF/formspubs/tspfs10.pdf

You could technically take a TSP loan or a hardship withdrawal, but we’ll ignore those options for now because they don’t work in this scenario.

And yes, there are people on active duty and in the Reserves/Guard who are older than 59.5 years.

The good news is that under the TSP’s new withdrawal rules (September 2019), after you’re out of the military you can take partial withdrawals as often as every month.  But again you’d rather take those as rollovers to a traditional IRA (or Roth IRA) instead of paying taxes and penalties. 

More details:
Let’s say the person has $500k in TSP.
In 5 years he or she starts the process and transfers to Traditional IRA; plopping everything into VTI or some other flavor they like.  For the remainder of the time the person stays in, they continue maxing TSP and converting say $100k each year to the ROTH IRA. Basically this allows money to be available for withdrawals the year after he or she chooses to retire.
Do they miss out on potential gains in their account by splitting the amounts (I would assume plopping the money into Traditional IRA will keep the ball rolling for gains and/or losses)?
You’d only be out of the market for a day or two during the rollover, and it’s not a significant asset-allocation risk.

When you transfer funds from the traditional TSP to a traditional IRA (or from the Roth TSP to a Roth IRA) the TSP cashes you out of their funds and sends an electronic payment to your IRA custodian.  Your shares disappear from both accounts for a few days but everything is back-dated to take 1-2 business days days from the TSP to your IRA company. 

The last time we rolled over from the TSP to an IRA was in 2015.
https://the-military-guide.com/how-and-why-to-transfer-your-tsp-to-an-ira/
Others may have a more recent experience.  If the TSP still has that transfer wizard on their website for requesting the transfer then I’d strongly recommend using it.  You may also have to have your spouse agree to the TSP rollover, and it may need to be notarized.

After the transfer it’s a question of asset allocation.  Vanguard’s VTI is a total stock-market index, and the TSP fund equivalent would be roughly 70% C (S&P500) plus 30% S (small-caps).  You’d buy VTI (or the mutual fund VTSAX) all in one transaction and be back in the market.  Both of those Vanguard funds pay dividends, so you’d have to keep an eye on the cash balance of the IRA-- unless you’re doing a Roth IRA conversion that year.

At this point you’re probably out of the military (or over age 59.5).  You might not be contributing more funds to the TSP, but you could still contribute earned income to an IRA.

If you have combat zone tax-exempt TSP contributions in your traditional TSP, some IRA custodians don’t want to accept those specific dollars because they don’t have the computer systems to track that particular tax basis.  In that case the TSP tells them how much of the dollar amount is CZTE contributions, the new custodian sends you a check for those CZTE contributions, and you’re on your own.  They’re tax-exempt so it’s the equivalent of withdrawing contributions from a Roth IRA, even if they originally came from the traditional TSP and bounced back from the custodian to you.
https://www.tsp.gov/PlanParticipation/LoansAndWithdrawals/withdrawals/withdrawingAccount.html
This used to be an issue 5-10 years ago, but it’s been a few years since I’ve heard of anyone dealing with it.  It’s possible that today’s IRA custodians will happily accept CZTE contributions and might even track the basis. 

Would you simply do the same with the remainder of the TSP Balance when retirement comes? Push to traditional and convert to Roth? 
Yep.

You could leave the money in the TSP, especially if you’re considering buying an annuity from the TSP.  When you have a military pension then you have no need to buy a TSP annuity, but some vets prefer the simplicity.

People used to stay in the TSP because the expense ratios were so much lower than 401(k)s or IRAs.  This advantage has dwindled over the years.  You could also roll other traditional 401(k)s into the traditional TSP if your spouse left her employer or could take an in-service withdrawal, but you’d probably just roll that into her traditional IRA anyway.

Trying to work out different scenarios to include converting my spouse’s defined contribution plan (non-military).  We know we will be paying taxes to convert, but ultimately the goal would be to eventually make things a bit more automatic later in life as well as easing the tax burden later on. 
Here’s the big picture on early withdrawals.

1.  You can withdraw Roth IRA contributions at any time for any reason, tax-free and penalty-free.

2.  You can convert your traditional IRA to a Roth IRA anytime.  You can do it in annual increments (to build a ladder and minimize taxes) or all at once.  There’s no penalty although the income tax you’d pay on the conversion depends on your other earned income and your income-tax bracket.  Five tax years after that conversion then you could withdraw the amount of the conversion (but not any gains since then) from that Roth IRA.

3.  If those two methods don’t give you enough cash to bridge the gap, then reduce your TSP contributions and start saving that money in taxable accounts.

Here’s more details:
https://the-military-guide.com/early-withdrawals-from-your-tsp-and-ira-after-the-military/

Saving account question.  Emergency fund already established.  But now there’s an additional savings account I’m tossing money in.  The concept of this account was to use perhaps a year or two before I retire (maybe a year or two after) to use as a lump payment towards possibly building a more energy efficient home on land that we purchase (when we find what we want).  Not ruling out buying a home already built, but we are looking for specific things and want a couple of things. 

So the question about the savings account: a large sum of money won’t really be working FOR me in that account.  It’s extremely liquid.  But not something gaining anything of value in a savings account.  I’ll already have money available for withdrawal via ROTH IRA, yet I’ve always been a bit of a believer not to touch that money.  But isn’t that the purpose of converting it, to have it available if needed for things like this?  Obviously I don’t need $100k available every year while I’m bridging the gap. But could see it as a scenario if buying that piece of property by the hiking trails or whatever.  I guess what I’m asking is how much is too much in a savings account?  What would be some strategic ways to manage this.
The term for this temptation to earn more on liquid funds is “chasing yield”.  Don’t do that.

If you know that you’re going to need a specific amount of cash within a few years, then put it into a CD or a high-yield (insured) savings account.  You might lose a little to inflation, but the real advantage of liquidity is negotiating discounts for cash when you buy the thing for which you’ve been saving.  That’s especially useful if you’re buying raw land and building a home-- you don’t have to deal with lenders and you can convince the seller that you’ll close much more quickly... and you’d like a discount for being so flexible.

If you know you won’t need a certain amount of money for 5-10 years then you could consider a short-term bond fund, a TIPS fund, or I bonds.  There may be issues with volatility, short-term capital gains, and annual limits on buying I bonds in larger amounts.

If you know it’s going to be at least 10 years then you could go for the higher returns of the stock market, but you’re going to start shifting that to bonds and CDs as soon as your planned date is within 10 years.  This question is more typical for college funds.

Here’s more on chasing yield:
https://the-military-guide.com/chasing-yield/

I think in 5 years, the significant other and I may just book an appointment with Nords on a beach in Hawaii to go over our strategic plans.
Buy a plane ticket or sign up for Space A!

When you’re financially independent, you have a once-in-a-career Space A opportunity on your way out of the military.  If you’re taking terminal leave before you retire, then during that 60-90 days you’ll be an active-duty CAT III Space A passenger.  Once you retire, though, you’ll be down in CAT VI with the rest of us retirees.

My friend Stephanie Montague can guide you through all the rules, tips, tricks, and pitfalls.
https://www.poppinsmoke.com/
Title: Re: Case study: Military Life and retirement
Post by: moneypitfeeder on January 23, 2020, 03:53:55 PM
What's the likelihood of your unit actually letting you hang around for another 6 years past your 20 AGR?

The NG does not push out Warrant Officers.

Just to play devil's advocate, the NG does push out Warrants. We are a case study. SO was pushed out at 17 yrs AGR with 30yrs total service (W4). He was had a profile due to spinal injuries but the profile was the reason they were letting him go--not because he couldn't do his job (instructor pilot) but because he was deemed undeployable. His 17 yrs AGR were all at the same schoolhouse and he was highly respected in his field. Only blessing was he was able to get his disability processed prior to nonretention. His pay was cut to 70% of his pay 3 years earlier than we were expecting, and that was only if he retired at 20.

Maybe where you are stationed where being deployable isn't as big of a deal, and maybe the playing field has changed in the past few years, just wanted to mention you might want a plan A, B, and C just in case. Best of luck to you!
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on February 03, 2020, 07:28:38 AM
What's the likelihood of your unit actually letting you hang around for another 6 years past your 20 AGR?

The NG does not push out Warrant Officers.

Just to play devil's advocate, the NG does push out Warrants. We are a case study. SO was pushed out at 17 yrs AGR with 30yrs total service (W4). He was had a profile due to spinal injuries but the profile was the reason they were letting him go--not because he couldn't do his job (instructor pilot) but because he was deemed undeployable. His 17 yrs AGR were all at the same schoolhouse and he was highly respected in his field. Only blessing was he was able to get his disability processed prior to nonretention. His pay was cut to 70% of his pay 3 years earlier than we were expecting, and that was only if he retired at 20.

Maybe where you are stationed where being deployable isn't as big of a deal, and maybe the playing field has changed in the past few years, just wanted to mention you might want a plan A, B, and C just in case. Best of luck to you!

I shouldn’t speak in absolutes.  Lol
Yes, they can push you out.  That is definitely a possibility.  They don’t actively pursue to push out Warrant Officers.  Obviously medical is a different situation. I’m a bit shocked in your SO’s situation they didn’t work out a plan to get him to 20 years so he could get concurrent pay.  That’s a shame.   I definitely have a plan B ready, just in case.  :)
Title: Re: Case study: Military Life and retirement
Post by: M5 on February 04, 2020, 10:32:36 AM
What's the likelihood of your unit actually letting you hang around for another 6 years past your 20 AGR?

The NG does not push out Warrant Officers.

Just to play devil's advocate, the NG does push out Warrants. We are a case study. SO was pushed out at 17 yrs AGR with 30yrs total service (W4). He was had a profile due to spinal injuries but the profile was the reason they were letting him go--not because he couldn't do his job (instructor pilot) but because he was deemed undeployable. His 17 yrs AGR were all at the same schoolhouse and he was highly respected in his field. Only blessing was he was able to get his disability processed prior to nonretention. His pay was cut to 70% of his pay 3 years earlier than we were expecting, and that was only if he retired at 20.

Maybe where you are stationed where being deployable isn't as big of a deal, and maybe the playing field has changed in the past few years, just wanted to mention you might want a plan A, B, and C just in case. Best of luck to you!

I shouldn’t speak in absolutes.  Lol
Yes, they can push you out.  That is definitely a possibility.  They don’t actively pursue to push out Warrant Officers.  Obviously medical is a different situation. I’m a bit shocked in your SO’s situation they didn’t work out a plan to get him to 20 years so he could get concurrent pay.  That’s a shame.   I definitely have a plan B ready, just in case.  :)

I felt the same way when I read that, shame on leadership. Surely there was a non-deployable position they could've stuck him in for 3 years. I'm also curious if he was non-retained or medically separated. That would definitely make a huge difference in what you were entitled to.
Title: Re: Case study: Military Life and retirement
Post by: Michael in ABQ on February 04, 2020, 12:09:10 PM
What's the likelihood of your unit actually letting you hang around for another 6 years past your 20 AGR?

The NG does not push out Warrant Officers.

Just to play devil's advocate, the NG does push out Warrants. We are a case study. SO was pushed out at 17 yrs AGR with 30yrs total service (W4). He was had a profile due to spinal injuries but the profile was the reason they were letting him go--not because he couldn't do his job (instructor pilot) but because he was deemed undeployable. His 17 yrs AGR were all at the same schoolhouse and he was highly respected in his field. Only blessing was he was able to get his disability processed prior to nonretention. His pay was cut to 70% of his pay 3 years earlier than we were expecting, and that was only if he retired at 20.

Maybe where you are stationed where being deployable isn't as big of a deal, and maybe the playing field has changed in the past few years, just wanted to mention you might want a plan A, B, and C just in case. Best of luck to you!

I shouldn’t speak in absolutes.  Lol
Yes, they can push you out.  That is definitely a possibility.  They don’t actively pursue to push out Warrant Officers.  Obviously medical is a different situation. I’m a bit shocked in your SO’s situation they didn’t work out a plan to get him to 20 years so he could get concurrent pay.  That’s a shame.   I definitely have a plan B ready, just in case.  :)

I felt the same way when I read that, shame on leadership. Surely there was a non-deployable position they could've stuck him in for 3 years. I'm also curious if he was non-retained or medically separated. That would definitely make a huge difference in what you were entitled to.

To further play devil's advocate, what about the next guy who has to wait three years to get promoted because someone who is not medically fit is still holding a slot? I've got an NCO who just got pretty seriously injured (playing basketball of course) and was sent home to recover. He has 18 years in so he will probably get medically retired.

If you're non-deployable for whatever reason these days you've basically got one year to show how you can get better or you might be shown the door. With the new Army physical fitness test and the lack of age-based standards or alternate events, there will probably be another round of people getting forced out. 
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on February 05, 2020, 06:02:01 PM
What's the likelihood of your unit actually letting you hang around for another 6 years past your 20 AGR?

The NG does not push out Warrant Officers.

Just to play devil's advocate, the NG does push out Warrants. We are a case study. SO was pushed out at 17 yrs AGR with 30yrs total service (W4). He was had a profile due to spinal injuries but the profile was the reason they were letting him go--not because he couldn't do his job (instructor pilot) but because he was deemed undeployable. His 17 yrs AGR were all at the same schoolhouse and he was highly respected in his field. Only blessing was he was able to get his disability processed prior to nonretention. His pay was cut to 70% of his pay 3 years earlier than we were expecting, and that was only if he retired at 20.

Maybe where you are stationed where being deployable isn't as big of a deal, and maybe the playing field has changed in the past few years, just wanted to mention you might want a plan A, B, and C just in case. Best of luck to you!

I shouldn’t speak in absolutes.  Lol
Yes, they can push you out.  That is definitely a possibility.  They don’t actively pursue to push out Warrant Officers.  Obviously medical is a different situation. I’m a bit shocked in your SO’s situation they didn’t work out a plan to get him to 20 years so he could get concurrent pay.  That’s a shame.   I definitely have a plan B ready, just in case.  :)

I felt the same way when I read that, shame on leadership. Surely there was a non-deployable position they could've stuck him in for 3 years. I'm also curious if he was non-retained or medically separated. That would definitely make a huge difference in what you were entitled to.

To further play devil's advocate, what about the next guy who has to wait three years to get promoted because someone who is not medically fit is still holding a slot? I've got an NCO who just got pretty seriously injured (playing basketball of course) and was sent home to recover. He has 18 years in so he will probably get medically retired.

If you're non-deployable for whatever reason these days you've basically got one year to show how you can get better or you might be shown the door. With the new Army physical fitness test and the lack of age-based standards or alternate events, there will probably be another round of people getting forced out.

There are alternate events for those with permanent profiles.  They are also rehashing the profile system to work better for the ACFT. 

WOs in the National Guard (AGR or MDay) aren’t waiting for a person to move along for promotion purposes.  The rules allow them to be promoted in place, unless you are trying to become a unicorn (CW5).  So really; you aren’t holding anyone up.  This is mainly an issue on the NCO side of the house.
Title: Re: Case study: Military Life and retirement
Post by: moneypitfeeder on February 09, 2020, 03:46:13 PM

I don't want to further hijack this thread, but I'll quickly reply to those that expressed concern, and thank you. SO is currently out on a medical disability retirement. He wasn't going to pursue the medical, but the non-retention just shy of normal retirement forced his hand. The chain did this to several others that had medical issues that weren't actively seeking to retire from them at the same time--they wanted everyone to be deployable, even though the schoolhouse instructors rarely deployed (if so, it was normally a voluntary deployment [person-by-person]). As was indicated by another here, he wasn't holding up a slot as a W4. It really was a shame, if I were a newbie pilot, I'd want the oldest, crustiest instructor available to teach me how to fly and (successfully) land in an emergency. Note: he's not that old or crusty (now early 50s), but was taught by Vietnam-era pilots, who had a wealth of knowledge. :)

Glad to hear the OP has a plan B, it sounds like you are really on-track to a successful and fully funded retirement. It's great you are really taking the time now to maximize your eventual benefits!
Title: Re: Case study: Military Life and retirement
Post by: Huskerfan on April 15, 2022, 06:04:04 PM
I just wanted to drop a line on here to give a slight update on things.

I spoke to Nords quite a bit in the thread and his advice is solid on so many levels. So we’re many other things people said.  So all of that is appreciated.

I’ll eventually update some of my totals and show the gains and differences from the beginning of this post to where I currently sit. 
There’s been pay increases, a promotion for my spouse and I, significant gains in the 401ks, and reductions in the mortgage.  All great stuff.

Original plan was to stick around and remain in the military until I was 51.  But as Nords and some mentioned: take each moment in smaller chunks. You really never know what lies ahead when it comes to your circumstances or your health. 

Since this post: there’s been a pandemic.  I’m VERY thankful for my profession as it kept me secure in my future plans for FIRE.  Likewise it changed the entire work dynamics when it comes to things like telework. 

I also had some significant injuries within the military that have finally been fixed.  Sort of.  But it changes perspective.  Not to mention grandchildren.  That factor alone really changes priorities and makes you rethink things quite a bit. 

So the update is: there’s absolutely no way I’m heck I’ll work until I’m 51.  No way at all.  I can quit at this point if I want to, but I’m going to hold off for about another year and start processing out for retirement (which will take about a year as well when you factor in my leave time and all of that wonderful stuff).  Cutting things short doesn’t really seem to change to overall aspect of things.  Perhaps slightly less money, but then again the injuries and surgeries are likely to add more money to things like VA Disability.

As a last note, it looks like I may attempt to move over to a line of work for a couple of years following my retirement to assist fellow vets.  I like to help people and have been working towards becoming a VSO to assist others with their VA Disability claims. But, that also appears to be at the luxury of my own home mostly, and a local office 7 minutes from my house.  This convenience is something I never would have thought to be possible prior to COVID and when I posted this thread. 

Times change.   Roll with them, prepare to set yourself up for the best future you can.  It truly makes decisions easier later on.
Title: Re: Case study: Military Life and retirement
Post by: Nords on April 16, 2022, 10:51:11 AM
I also had some significant injuries within the military that have finally been fixed.  Sort of.  But it changes perspective.  Not to mention grandchildren.  That factor alone really changes priorities and makes you rethink things quite a bit. 
That always realigns your priorities.  I'm glad the injuries are getting fixed... as well as they can.
 
As a last note, it looks like I may attempt to move over to a line of work for a couple of years following my retirement to assist fellow vets.  I like to help people and have been working towards becoming a VSO to assist others with their VA Disability claims. But, that also appears to be at the luxury of my own home mostly, and a local office 7 minutes from my house.  This convenience is something I never would have thought to be possible prior to COVID and when I posted this thread. 
Fantastic.  Good to read.  We need more VSOs.
Title: Re: Case study: Military Life and retirement
Post by: garylee on April 17, 2022, 10:23:34 AM
I just wanted to drop a line here to give a slight update on things.

I spoke to Nords quite a bit in the thread, and his advice is solid on so many levels. So we’re many other things people said.  So all of that is appreciated.

I’ll eventually update some of my totals and show the gains and differences from the beginning of this post to where I currently sit. 
There’s been pay increases, a promotion for my spouse and me, significant gains in the 401ks, and reductions in the mortgage.  All great stuff.

My original plan was to stick around and remain in the military until I was 51.  But as Nords and some mentioned: take each moment in smaller chunks. You never know what lies ahead when it comes to your circumstances or your health. 

Since this post: there’s been a pandemic.  I’m VERY thankful for my profession as it kept me secure in my plans for FIRE.  Likewise, it changed the entire work dynamics regarding things like telework. 

I also had some significant injuries within the military that have finally been fixed.  Sort of.  But it changes perspective.  Not to mention grandchildren.  That factor alone really changes priorities and makes you rethink things quite a bit. 

So the update is: there’s absolutely no way I’m heck I’ll work until I’m 51.  No way at all.  I can quit at this point if I want to, but I’m going to hold off for about another year and start processing out for retirement (which will take about a year as well when you factor in my leave time and all of that beautiful stuff).  Cutting things short doesn’t seem to change the overall aspect of things.  Perhaps slightly less money, but the injuries and surgeries are likely to add more money to things like VA Disability.

As a last note, it looks like I may attempt to move over to a line of work for a couple of years following my retirement to assist fellow vets.  I like to help people and have been working towards becoming a VSO to assist others with their VA Disability claims. But, that also appears to be at the luxury of my own home mostly, and a local office 7 minutes from my house.  I never thought this convenience would be possible before COVID and when I posted this thread. 

Times change.   Roll with them, and prepare to set yourself up for the best future you can.  It truly makes decisions easier later on.

It was a great case study to learn.