Author Topic: Best way to explain to Teen that Mom is retiring early  (Read 4662 times)

Heroes821

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Re: Best way to explain to Teen that Mom is retiring early
« Reply #50 on: January 06, 2022, 05:54:55 AM »
One thing that surprised me was that no one here said show him MMM.   I'm glad to hear it went well, but a few things I wanted to bring up that were brought up in this thread. 

1) if you are US. The military retirement system was changed recently so while you can retire at 20 years still you don't get a check until retirement "age" which really has taken the sales out of new enlisted staying for the full 20. Its utterly shocking to watch how many active duty folks I work with are upset about that.  Those in before the change are grandfathered though.

2) While I think we all hope our children won't have to go through a scarcity situation, I for one didn't really understand the importance of fiscal responsibility until I had to go through a time of scarcity even though I had frugal upbringings and heard all the words about being careful or smart with money. Especially as a know it all teenager, experience was worth so much more than words.

That being said presenting FIRE as a good and positive thing may help him want to know how to get out of the work grind earlier himself and come to you for advice.

Nords

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Re: Best way to explain to Teen that Mom is retiring early
« Reply #51 on: January 08, 2022, 01:55:51 PM »
One thing that surprised me was that no one here said show him MMM.   I'm glad to hear it went well, but a few things I wanted to bring up that were brought up in this thread. 

1) if you are US. The military retirement system was changed recently so while you can retire at 20 years still you don't get a check until retirement "age" which really has taken the sales out of new enlisted staying for the full 20. Its utterly shocking to watch how many active duty folks I work with are upset about that.  Those in before the change are grandfathered though.

@Heroes821, that scurrilous rumor was flying around during the implementation of the Blended Retirement System, and it's absolutely incorrect & untrue.  For the sake of whoever else reads this thread, here's the clarification.

1.  The BRS active-duty pension still starts as early as 20 years (like the legacy High Three retirement system) and retirees receive it as soon as they retire.  The BRS pension multiplier is only 2% per year instead of 2.5%. 

The reason that people still wanted to convert from High Three to BRS (and the reason that people still join the military today) is for the 5% match in the Thrift Savings Plan.  The BRS default contribution to the TSP is 5% in the longest-dated L fund, which (if a servicemember goes to 20 years) will more than make up for the smaller pension multiplier.

More importantly, for the 85% of military families who don't serve until retirement, the 5% match of the BRS gives them more money after leaving the military than they would have had under legacy High Three.

2.  The Reserve pension (for servicemembers retiring from the Reserves or National Guard) has also converted from legacy High Three to BRS, but it's always started at age 60. 

The most significant change to the Reserve pension is that members who mobilize for at least 90 days to a combat zone, or for some national emergencies, can start their pension three months earlier than age 60.  That program started in 2008 and it's been amended a few times over the years. 

There's no need for people to be utterly shocked, let alone upset.  Those "new enlisted staying for the full 20" are welcome to contact me if they have questions, or they can read more at the BRS website:
https://militarypay.defense.gov/blendedretirement/
There's a lot on the site and it can be hard to navigate, but I'm happy to help.

Dicey

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Re: Best way to explain to Teen that Mom is retiring early
« Reply #52 on: January 08, 2022, 01:59:54 PM »
You're a mensch, @Nords!

Nords

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Re: Best way to explain to Teen that Mom is retiring early
« Reply #53 on: January 08, 2022, 03:22:57 PM »

clarkfan1979

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Re: Best way to explain to Teen that Mom is retiring early
« Reply #54 on: January 12, 2022, 01:30:26 PM »
I think some communication is important, especially for a 14-year old.

My college girlfriend really struggled when her dad decided to retire in his early 50's in 2002 because he sold off all of his high status items. He traded them in for mountain bikes and kayaks. He was profiting about one million/year during the peak business years.

Once the business started to lose money, he closed it. He was like, "screw it, i'm done" In his mind, he had plenty of money and could easily pull the trigger. He worked his ass off and it was time to be with nature and enjoy life.

The college girlfriend thought he was going to be homeless. She grew up wealthy and didn't know any different. When he made a conscious decision to not work and adopt a lower cost of living lifestyle it really scared her.