The Money Mustache Community
General Discussion => Post-FIRE => Topic started by: DINKs on July 06, 2016, 11:00:39 AM
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Any FI service members in here? Did you do your 20 years or did you save enough to get out early?
I'm currently an E-5 in the Air Force with nearly 8 years of service. I have a goal of making it to at least an E-7 and retire at the ripe old age of 41. I calculated that my retirement checks will bring me ~$37K the first year and increase every subsequent year, ultimately accumulating to $2.4M over 40 years post service. This seems like a happy life when I factor in my TSP and other investments through Betterment, in addition to my wife's retirement.
I'm just wondering if anyone here is/was in the same situation, how you did it, what the transition was like, and are you comfortable with the money.
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Hey DINK's. I'm still active duty, but there are a few retirees around the forum. The ones I know of are Nords (went full 20), and Spartana (retired before 20). I'd suggest looking them up in the Members list, and looking at their posting history.
Also, read this: The Military Guide to Financial Independence and Retirement (https://www.amazon.com/Military-Guide-Financial-Independence-Retirement/dp/1570233195). Written by Nords. He also publishes a blog, which can be found in his siggy.
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Hey DINK's. I'm still active duty, but there are a few retirees around the forum. The ones I know of are Nords (went full 20), and Spartana (retired before 20). I'd suggest looking them up in the Members list, and looking at their posting history.
Also, read this: The Military Guide to Financial Independence and Retirement (https://www.amazon.com/Military-Guide-Financial-Independence-Retirement/dp/1570233195). Written by Nords. He also publishes a blog, which can be found in his siggy.
Wow thanks for the great info Sam! Nords has a new customer -- Kindle edition of course ;)
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I'm retired Military (Army) 24 years. I still elect to work right now because I'm very close to another pension & trying to help my Mom. It feels pretty good even with my job though since they appreciate me & know I could walk. They give me wide leeway it my hours & time off. Going into the service after College was the best decision I ever made though when I was in it, the lifestyle was challenging. No regrets. I am a newbie here and not as savvy as some but love my life.
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Welcome!
I'm still active duty, retiring in 2 years at 28. As you've been told, Nords is the man! He literally wrote the book on financial independence.
Spartana is another great poster who lives the dream, playing beach volleyball in SoCal.
Congrats on saving so well via TSP and planning on retiring fully after you do 20!
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Hubby did 20 in the Navy. That pension is exactly why we're close to FIRE. Since you have a quite a bit of time to go before 20 years and life can sometimes f-up best laid plans, work hard, budget hard, and read all the finance stuff recommended by MMM and Nords and the collective wise ones here. Good luck!
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As i grow older, and my service time keeps ticking forward, i realize that it's the prospect of medical coverage that keeps my short n' curlies locked into those golden handcuffs. The pension will be nice and I wouldn't turn it down but I'm pretty certain I can save enough money to keep my day-to-day pretty comfortable. Except for that huge, unknown wildcard called civilian health insurance.
Current coverage is estimated at $500 - $1000 per month, which is an extra $300,000 I'd have to save (1000x12x25). Yipes!
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I'm former Army, with a path to FI probably between 40-45.
I did four years as an enlisted reservist and four years active as an O-type.
I'm don't get any pension, but the combination of the GI Bill and the combination of combat pay / deployment money gave me an amazing head start. I left the service at 26 with $75K saved and most of my MBA paid for by the GI Bill.
Since then, I've gone the dual-income high earner route. While the pension would be nice, I think this route will get me to a higher SWR faster than the military would have.
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Hi. I did a somewhat non standard Army career but it added up to ~20 years. I retired almost 2 years ago to California.
The forum really helped. The typical post military career path is to exit then go contractor or government services. I didn't have the stomach for either. I did have a healthy portfolio and MMM and ERE convinced me I could go it alone. So far, so good.
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Almost. Did 22 years in the Army and have been FI since I retired from the service about a year ago. I'm working on a contract now, and will FIRE either when it ends or in June 2017 if it doesn't. Plowed as much as I could into TSP while I was in, including a nice chunk of tax exempt pay from combat zones. I have a paid off home and car and my pension covers all my basic expenses. Using a 3% withdrawal rate on my other savings provides me with more than I will ever spend.
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...and agree with Spartana that Tricare (I'm currently using US Family Health Plan for ~$250 a year!) and Tricare for Life are HUGE for FIRE and retiree dental isn't bad either.
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Although I'm Australian, I've pretty much done what you are asking ie. FIRED immediately after 30 years of service (age 45) currently funded entirely by my military pension, allowing me to keep my stash in reserve. While we don't enjoy the same veteran's medical support you guys get, our free medicare system takes up the slack. Transition was much easier than I expected. As our Army and Navy folks are known to say, being in the Air Force was as close as you could get to being a civilian in the military, so the transition gap was not huge. I'm nearly three years into FIRE now, enjoying the heck out of it and plan to stay that way!
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Any FI service members in here? Did you do your 20 years or did you save enough to get out early?
I'm currently an E-5 in the Air Force with nearly 8 years of service. I have a goal of making it to at least an E-7 and retire at the ripe old age of 41. I calculated that my retirement checks will bring me ~$37K the first year and increase every subsequent year, ultimately accumulating to $2.4M over 40 years post service. This seems like a happy life when I factor in my TSP and other investments through Betterment, in addition to my wife's retirement.
I'm just wondering if anyone here is/was in the same situation, how you did it, what the transition was like, and are you comfortable with the money.
Welcome to the forum, and thanks for buying the book!
Your calculations are correct. Keep maximizing your contributions to your Roth TSP and your Roth IRA, and see whether you can save even more in taxable accounts. (Particularly try to save 80% of every promotion, longevity raise, and pay raise.) If you're able to save 40% of your gross pay for 20 years then you'll reach financial independence without the pension.
The reason I suggest this is because you never know when your priorities will change. Stay on active duty as long as you're feeling challenged & fulfilled, but if the fun stops then be ready to transfer to the Reserves or National Guard. If you grimly clench your jaw and try to make it to 20 then you'll risk your mental, emotional, and physical health. The real value of a military pension is the COLA and the cheap healthcare, and if you get a Reserve/Guard pension at 60 then you'll enjoy the important parts of the benefits as you would if you'd stayed on active duty.
People always worry about tapping their TSP and IRA funds before ate 59.5. However there are several tax-free and penalty-free ways to tap a Roth TSP and a Roth IRA before that age, so for now just focus on maximizing the contributions.
The transition will separate your co-workers from your true friends. You'll have to retire to something instead of simply running away from the military routine, but you'll have no trouble figuring out what you want to do all day. You just have to be responsible for your own entertainment.
I've been retired for over 14 years on these guidelines (and the advice in the book and the blog). We retired with "enough" and today it's "far more than enough". Life is good!
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Hi Ya'll
Retired after 21 years in the Army. For the OP, I retired as an E-7 in 2012 and my retirement pay is nowhere near 37,000/yr, and last year we did not get an increase (though neither did social security recipients). It is best to plan on the conservative side and assume that the increases are not going to be as big as you think. That said, it is nice to be retired in your mid-40s and the monthly pension is a nice security blanket. I'm still kinda-sorta looking for work, but don't have to if the job isn't right. The retirement check allows you to be very picky with who and what gets your time. Currently I'm living in a military town (long story, house wouldn't sell, grrrr.....), and finding anyone who will hire a 45 year old for an entry level professional accounting position is so far very elusive. GI and VA preferences don't mean squat when all of your competition for employment are also veterans. I'm living on just my retirement at the moment, but I also have a house and car that are completely paid off, and I'm single so it isn't an issue.
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I thank you all for this amazing information. I have learned so much in the few months following MMM and now this blog. I would respond individually to all of you, but that would take quite some time. Just know I take every bit of this info to heart and will use it all.
Any FI service members in here? Did you do your 20 years or did you save enough to get out early?
I'm currently an E-5 in the Air Force with nearly 8 years of service. I have a goal of making it to at least an E-7 and retire at the ripe old age of 41. I calculated that my retirement checks will bring me ~$37K the first year and increase every subsequent year, ultimately accumulating to $2.4M over 40 years post service. This seems like a happy life when I factor in my TSP and other investments through Betterment, in addition to my wife's retirement.
I'm just wondering if anyone here is/was in the same situation, how you did it, what the transition was like, and are you comfortable with the money.
Welcome to the forum, and thanks for buying the book!
Your calculations are correct. Keep maximizing your contributions to your Roth TSP and your Roth IRA, and see whether you can save even more in taxable accounts. (Particularly try to save 80% of every promotion, longevity raise, and pay raise.) If you're able to save 40% of your gross pay for 20 years then you'll reach financial independence without the pension.
The reason I suggest this is because you never know when your priorities will change. Stay on active duty as long as you're feeling challenged & fulfilled, but if the fun stops then be ready to transfer to the Reserves or National Guard. If you grimly clench your jaw and try to make it to 20 then you'll risk your mental, emotional, and physical health. The real value of a military pension is the COLA and the cheap healthcare, and if you get a Reserve/Guard pension at 60 then you'll enjoy the important parts of the benefits as you would if you'd stayed on active duty.
People always worry about tapping their TSP and IRA funds before ate 59.5. However there are several tax-free and penalty-free ways to tap a Roth TSP and a Roth IRA before that age, so for now just focus on maximizing the contributions.
The transition will separate your co-workers from your true friends. You'll have to retire to something instead of simply running away from the military routine, but you'll have no trouble figuring out what you want to do all day. You just have to be responsible for your own entertainment.
I've been retired for over 14 years on these guidelines (and the advice in the book and the blog). We retired with "enough" and today it's "far more than enough". Life is good!
Nords,
I have made the uneducated mistake of only contributing to traditional TSP over the last 7 years (started at 4%, slowly increased to 10%, and then recently to 30%). Now that I've researched more and more about the Roth vs Traditional, I will certainly switch over to Roth first thing Monday morning. I will also increase the contributions so that they are maxed out. I'm already halfway finished with your book and will recommend it to all of my coworkers!
Once again, thank you all for the fantastic information.
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Nords,
I have made the uneducated mistake of only contributing to traditional TSP over the last 7 years (started at 4%, slowly increased to 10%, and then recently to 30%). Now that I've researched more and more about the Roth vs Traditional, I will certainly switch over to Roth first thing Monday morning. I will also increase the contributions so that they are maxed out. I'm already halfway finished with your book and will recommend it to all of my coworkers!
Once again, thank you all for the fantastic information.
You're welcome! Glad it's helping.
Just by having a TSP account, and by contributing to it, you're ahead of more than half of the U.S. military's servicemembers. A high savings rate will overcome just about all of the other "mistakes".
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ETA did take advantage of GI Bill for college after I got out as well as pieced together a degree while in (very hard to do but worth it). I also have a 30% rated service-connected disability with the VA so can use them for medical if I want. Staying in just for Tricare for life for you and your family is probably worth it alone but a pension at 40ish is awesome.
Hi Spartana! Do you also use private insurance or supplement the VA care somehow, or is that all you use? I find the system incredibly confusing.
Husband and I are both vets, he did 5.5 years and got out with a med discharge, I did 6. We're DINKs now and both working on masters degrees which will be partially funded by the GI Bill. We didn't really save much for retirement while in (young and dumb), so we're trying to make up for it now.
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I find the system incredibly confusing.
Concur.
I've learned a tremendous amount from the Facebook group "Veteran 2 Veteran Info"
https://www.facebook.com/groups/626936820727015/?ref=group_browse_new
Some drama and lots of kvetching, but the admins put out many references and have years of VA experience.
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Thanks Nords! Joining now.
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Prior military (6 years), now Fed LEO. As a Fed FERS employee, I was able to "buy back" my military time toward my FERS pension. I still have to reach Minimum Retirement Age (MRA) and service requirements (20 years at age 50 or over, 25 years at any age), but that buy back gives me 6 additional years towards my FERS pension, which amounts to 1% of my High-3 base salary for each year (i.e., an additional 6%). High-3 base will be in excess of $150k when I retire in < 3years, so that's an additional $9,000/year (COLA'd) minimum for the rest of my life. That is pretty significant, especially considering I paid pennies on the dollar for that 6 years. Federal Employees Health Benefit (FEHB) health insurance is also a huge benefit. While not as generous as Tricare, it is still very reasonably priced compared to other options out there (essentially, Uncle Sam subsidizes like 72% of my premium), and for very good plans (I have Blue Cross Blue Shield).
So not living that FIRE life yet, but all the pieces are in place. I just have to finish out my obligation for another 34 months or so.
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Prior military (6 years), now Fed LEO. As a Fed FERS employee, I was able to "buy back" my military time toward my FERS pension. I still have to reach Minimum Retirement Age (MRA) and service requirements (20 years at age 50 or over, 25 years at any age), but that buy back gives me 6 additional years towards my FERS pension, which amounts to 1% of my High-3 base salary for each year (i.e., an additional 6%). High-3 base will be in excess of $150k when I retire in < 3years, so that's an additional $9,000/year (COLA'd) minimum for the rest of my life. That is pretty significant, especially considering I paid pennies on the dollar for that 6 years.
For those vets seeking more information on the military service credit deposit, here's two excellent posts from Eddie at GubMints. This also includes servicemembers who are drilling in the Reserve or National Guard:
http://gubmints.com/2013/03/26/gubmints-comprehensive-military-service-credit-deposit-guide/#.V4O0GrzEyrU
If you're retired from active duty, you can still receive valuable credits:
http://gubmints.com/2013/04/15/military-service-credit-deposit-retired-from-active-duty/#.V4O0HLzEyrU
This is such a big deal for federal civil-service employees that Ryan Guina of TheMilitaryWallet.com added it to his podcast series:
http://gubmints.com/2016/04/06/military-service-credit-deposit-podcast/#.V4O05rzEyrU
And finally, even if you end up retiring from the Reserve/Guard, you can still buy the federal civil-service benefit of the military service credit deposit. This is a specific exception to OPM's "double dipping" rules.
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Prior military (6 years), now Fed LEO. As a Fed FERS employee, I was able to "buy back" my military time toward my FERS pension. I still have to reach Minimum Retirement Age (MRA) and service requirements (20 years at age 50 or over, 25 years at any age), but that buy back gives me 6 additional years towards my FERS pension, which amounts to 1% of my High-3 base salary for each year (i.e., an additional 6%). High-3 base will be in excess of $150k when I retire in < 3years, so that's an additional $9,000/year (COLA'd) minimum for the rest of my life. That is pretty significant, especially considering I paid pennies on the dollar for that 6 years.
For those vets seeking more information on the military service credit deposit, here's two excellent posts from Eddie at GubMints. This also includes servicemembers who are drilling in the Reserve or National Guard:
http://gubmints.com/2013/03/26/gubmints-comprehensive-military-service-credit-deposit-guide/#.V4O0GrzEyrU
If you're retired from active duty, you can still receive valuable credits:
http://gubmints.com/2013/04/15/military-service-credit-deposit-retired-from-active-duty/#.V4O0HLzEyrU
This is such a big deal for federal civil-service employees that Ryan Guina of TheMilitaryWallet.com added it to his podcast series:
http://gubmints.com/2016/04/06/military-service-credit-deposit-podcast/#.V4O05rzEyrU
And finally, even if you end up retiring from the Reserve/Guard, you can still buy the federal civil-service benefit of the military service credit deposit. This is a specific exception to OPM's "double dipping" rules.
Fantastic info, Nords! Thanks for sharing!
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Also many States do the military buy-back too. It is not always state wide and depenent on which agency/dept you work for. My agency had it so was able to do a military buy-back towards my California's pension plan CalPERS. That time didn't count towards time-in-service for retiree health insurance but it did add time and $$$ for pension benefits.
Excellent, thanks! I did not know that.
A five-minute search for Hawaii doesn't show that benefit, and the keyword "credit" triggers a bunch of results for military payday lenders. I'm going to have to figure out what states (and departments) offer this...
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Thanks Spartana. We have both applied for VA healthcare and been accepted, I just haven't actually used it for anything. My husband works for an insurance company now, so we get health insurance through them but idk if that will always be the case, so I was just interested in more info.
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Active-duty Air Force E-9, retiring in 2.5 years. Read Nords book...and pick up JL Collins new book " The Simple Path To Wealth". With these two books...might be all you need. Feel free to contact me anytime as well.
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I am just gonna pop in awkwardly to say this sub-community to MMM has always been my favorite people.
Consistently excellent postings-- Nords and Spartana are legends on the boards! You simply must listen to these smart people when they have something to say.
Reed (Sailor Sam) has an awesome journal-- her shit is da bomb.
Felt like I needed to shout out with some respect. My DH's late father was CWO in the Marines through the Cuban Missile Crisis and Vietnam. I miss that man so much. He worked way beyond any early retirement timeline and delivered to me my favorite guy on the planet, my DH. Salt of the earth. Carry on.
Carry on, Aye ma'am!
Though I cant help but notice, can't help but take note that Nords & Spartana were called out for wisdom, and all I got was wit. ;)
In all seriousness, great respect towards you, and your father. One personage no one fucks with is a Master Chief, and a Warrant. At least not for long.
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I am just gonna pop in awkwardly to say this sub-community to MMM has always been my favorite people.
Consistently excellent postings-- Nords and Spartana are legends on the boards! You simply must listen to these smart people when they have something to say.
Reed (Sailor Sam) has an awesome journal-- her shit is da bomb.
Felt like I needed to shout out with some respect. My DH's late father was CWO in the Marines through the Cuban Missile Crisis and Vietnam. I miss that man so much. He worked way beyond any early retirement timeline and delivered to me my favorite guy on the planet, my DH. Salt of the earth. Carry on.
Carry on, Aye ma'am!
Though I can't help but notice, can't help but take note that Nords & Spartana were called out for wisdom, and all I got was wit. ;)
In all seriousness, great respect towards you, and your father. One personage no one fucks with is a Master Chief, and a Warrant. At least not for long.
That cause we're old people ;-)! Old = wise right? Or is that senile? I can never remember.
No, it's 'cause you both (forgive me, spartana) have giant brass balls and pulled the trigger on this FIRE shit long before it was the cool thing to do, and you've both been living kickass FIRE lives for a lot of years. You are the empirical evidence that this shit can work! Tribal "elders," if you will. Mad respect for you both.
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About one year out from retiring. Wife is a 05 with 22 years. We keep running the numbers on the retirement pay and can't quite use the pay up. We have a paid off house, older car and a simple life. Been planning for this since she got in. Always did 11 percent tsp, IRA's and saved between 30-50 percent of our pay. We are looking to have more time to exercise, gardening, spending time together and raise our two boys. We see others in our circle of similar officers who can't even dream of retiring because they are so far in the red on (toys, huge houses, CC debt and a crazy wasteful lifestyle) Looking forward to the last year and planning for the end of military life.
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Posting to follow!
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Retired after 22 years enlisted in the Navy, still with DOD as a civilian. Close to FI but holding off on seriously considering RE any time soon due to the what ifs. Job is tolerable and I have three kids still in the house (youngest is 4) so it isn't killing me to stay a while longer.
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About to begin my 20th year of service, then trade in the CAC for my blue card in 2017. Have saved enough assets over the years to live in most of the US without the retirement pay, but...............plan is to live in one of DC's most expensive suburbs, where we already have a house, and the kids have been in the schools, have friends, etc. So that retirement pay is a nice cushion.
Getting a bit tired of hearing the questions "What will you do?" and "Where will you work?" 99% of people don't get it, or are militant that people have to work until they are 65. Easy answer for me to reply with is "Consulting" or "Defense consulting." I don't feel the need to tell people that my fees are outrageously high, and I plan to go years between consulting contracts!
Right now I am in an OIC role, so I need to get copies of Nords's book for all my junior officers.
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Getting a bit tired of hearing the questions "What will you do?" and "Where will you work?" 99% of people don't get it, or are militant that people have to work until they are 65. Easy answer for me to reply with is "Consulting" or "Defense consulting." I don't feel the need to tell people that my fees are outrageously high, and I plan to go years between consulting contracts!
You could always go for the "financial asset guardian" or "private investment manager" labels.
I was once sternly admonished by an O-5 that I needed to take up golf in order to develop my contact network. I wonder how that worked out for him when he retired...
Right now I am in an OIC role, so I need to get copies of Nords's book for all my junior officers.
Thanks, Hawkeye! You have several options for that.
The first one, as the fiscal year draws to a close, would be to ask your Command Financial Specialist to sweep up your command funds to buy them through the GSA schedule at no personal expense to you:
https://www.gsaadvantage.gov/advantage/catalog/product_detail.do?gsin=11000033421435
That link keeps changing, so you may have to search GSAAdvantage.gov for the title or the author name "Nordman".
Another option would be the pocket guide. You'd be using government funds with GSA, and you'd get a discount for bulk orders. The pocket guide is a great gateway drug to the full-length book, and it's a lot easier to get enough copies for everyone in the command (not just the wardroom):
https://www.gsaadvantage.gov/advantage/catalog/product_detail.do?gsin=11000038695709
If you're using your personal funds then the pocket guide is only available from Impact Publications, and there are discounts for buying at least 25 copies:
http://www.impactpublications.com/militaryfinancialindependenceandretirementpocketguide.aspx
You could buy a mix of pocket guides and paperbacks from Impact:
http://www.impactpublications.com/militaryguidetofinancialindependenceandretirement.aspx
And finally, the paperback and the Kindle version are cheapest at Amazon.
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I'm an active duty Soldier with almost 14 years of service. I plan on retiring between 22 and 26 years of service, likely at the rank of Major. I spent my first 8 years enlisted so I don't really have plans to get any higher in rank than that. My plan is to be fully retired from all work no later than the age of 50. I do TSP and have Roth IRAs for my wife and I that get maxed out each year. Getting ready to start focusing on wealth building though some regularly funded ETFs to help fill the gap between 50 and 59 1/2 when I can pull tax free from my Roths.
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Most submarine officers, from my experience, seem to be on an easy FI trajectory, regardless of whether they recognize it as such.
At my last command, we had a commander who had about 20 of us new guys come in to listen to his presentation. It pretty much started with "you guys are going to be making a lot of money. You should think about snapping up a few houses here and there for rental properties, and your bonuses alone will be enough to give you a huge cushion." Then he showed us his savings/investment spreadsheet, much in the same vein as the ones that show up around here. Beyond the fact of decent pay, it seems that there a lot of guys who are naturally quite frugal. I hear stories of living on boats, driving Uber on weekends and selling plasma, and some extreme things that are pretty funny.
To answer the actual question, not me; I don't imagine I'll go far beyond my first sea tour. I've been committed out to 2021/22 since early 2013. I've been in schools since 2011, and have another 12-18 months before I join an operational unit. Couple that with the reputedly miserable tour I'm preparing for, and I guess I'm just burnt out. I also promised my fiancee I wouldn't sign on for more unless we both agreed.
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Hi Ya'll
Retired after 21 years in the Army. For the OP, I retired as an E-7 in 2012 and my retirement pay is nowhere near 37,000/yr, and last year we did not get an increase (though neither did social security recipients). It is best to plan on the conservative side and assume that the increases are not going to be as big as you think. That said, it is nice to be retired in your mid-40s and the monthly pension is a nice security blanket. I'm still kinda-sorta looking for work, but don't have to if the job isn't right. The retirement check allows you to be very picky with who and what gets your time. Currently I'm living in a military town (long story, house wouldn't sell, grrrr.....), and finding anyone who will hire a 45 year old for an entry level professional accounting position is so far very elusive. GI and VA preferences don't mean squat when all of your competition for employment are also veterans. I'm living on just my retirement at the moment, but I also have a house and car that are completely paid off, and I'm single so it isn't an issue.
Maybe the OP was including BAH and BAS when he determined he is going to get $37k a year as an E-7. Hopefully he figures out that he will only be getting a percentage of his base pay for retirement.
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I'm active Army with 4 years Reserve and almost 14 years active (Major). I'm up for O-5 in about 2.5 years and it's a crap shoot whether I'll make it to retirement or be passed over and leave early. I'm saving 55% of my take-home so I won't be hurting if I'm passed over, but if I need to start a second career I might have to work another 10 years to comfortably make FIRE. I'm in Colorado Springs for another year (maybe four if I get my choice of assignment), but being from Sacramento I'm looking real hard at retiring back home where all my friends and family are. I just need to be sure I'll have a good job there to fall back to. If I make it to 20 years my retirement pay will immediately make me FIRE at age 43 with almost another FIRE worth of savings in my portfolio. If the price is right on a second career I might be able to FIRE (without pension) at age 48.
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I'm active Army with 4 years Reserve and almost 14 years active (Major). I'm up for O-5 in about 2.5 years and it's a crap shoot whether I'll make it to retirement or be passed over and leave early. I'm saving 55% of my take-home so I won't be hurting if I'm passed over, but if I need to start a second career I might have to work another 10 years to comfortably make FIRE. I'm in Colorado Springs for another year (maybe four if I get my choice of assignment), but being from Sacramento I'm looking real hard at retiring back home where all my friends and family are. I just need to be sure I'll have a good job there to fall back to. If I make it to 20 years my retirement pay will immediately make me FIRE at age 43 with almost another FIRE worth of savings in my portfolio. If the price is right on a second career I might be able to FIRE (without pension) at age 48.
Not sure how the Army handles it but you would be fine in the Navy if you didn't promote. The dreaded promote or get kicked out is primarily for the O-4 promotion. You still only get one in zone look at O-5 but will continue to get looked every year. Once you hit 18 years you are in sanctuary and can retire at 20, they won't kick you out for failure to promote. If you are under that 18 year threshold like you are, you would be subject to a continuation board which basically decides if you need to leave or have more chances at promotion. Those vary every year but at least in Navy world, if you don't have any black marks in your record, you will be continued until sanctuary.
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I'm active Army with 4 years Reserve and almost 14 years active (Major). I'm up for O-5 in about 2.5 years and it's a crap shoot whether I'll make it to retirement or be passed over and leave early. I'm saving 55% of my take-home so I won't be hurting if I'm passed over, but if I need to start a second career I might have to work another 10 years to comfortably make FIRE. I'm in Colorado Springs for another year (maybe four if I get my choice of assignment), but being from Sacramento I'm looking real hard at retiring back home where all my friends and family are. I just need to be sure I'll have a good job there to fall back to. If I make it to 20 years my retirement pay will immediately make me FIRE at age 43 with almost another FIRE worth of savings in my portfolio. If the price is right on a second career I might be able to FIRE (without pension) at age 48.
Not sure how the Army handles it but you would be fine in the Navy if you didn't promote. The dreaded promote or get kicked out is primarily for the O-4 promotion. You still only get one in zone look at O-5 but will continue to get looked every year. Once you hit 18 years you are in sanctuary and can retire at 20, they won't kick you out for failure to promote. If you are under that 18 year threshold like you are, you would be subject to a continuation board which basically decides if you need to leave or have more chances at promotion. Those vary every year but at least in Navy world, if you don't have any black marks in your record, you will be continued until sanctuary.
I wish that was the case for the Army. If I was getting looked at just one year earlier than I am, I could apply for pro-rated retirement under TERA. The authority for that ends right when my board is meeting. The math works out that I'd be forced out at something like 17 years, 9 months. The Army held a continuation board last year for O-4s twice passed over, but I don't know how many were retained or if they'll have another one by the time my turn comes.
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I wish that was the case for the Army. If I was getting looked at just one year earlier than I am, I could apply for pro-rated retirement under TERA. The authority for that ends right when my board is meeting. The math works out that I'd be forced out at something like 17 years, 9 months. The Army held a continuation board last year for O-4s twice passed over, but I don't know how many were retained or if they'll have another one by the time my turn comes.
You don't mention the precise dates, but keep in mind that the typical wording of the promotion process is "... O-4s who are twice passed over for O-5 and not continued on active duty will separate by the first day of the seventh month after the continuation board results are approved." I'd have to look long & hard to find the right portion of the federal law, but I think it's the same for all the military services.
As close as you are to 18, you'd be offered TERA or continued for two more years. It might be two more years in Korea, but you'd be continued. If the Army tried to do to you what was contemplated during the first OSB, then the New York Times would have a delightful editorial month of mobilizing half of Congress to write letters to the Army offering helpful legislative solutions.
The vast majority of the OSB officers were over bodyfat composition, or failing the physical test, or had DUIs, or had letters of caution (or worse), or had even nastier black marks on their records. Some were punished for enlisted NJP mistakes made when they were barely out of recruit training. Unfair, borderline unethical, but legal.
Regardless of your rank, here's another thought from the financial side: if you're close to FI then it might not be worth gutting it out to 20 years on active duty (even from 18 years). You could leave active duty for the Reserves/Guard and drill for two more good years. When you reach 20 good years (and have your Notice Of Eligibility letter) then you could retire awaiting pay (or keep drilling). You'd get a pension at age 60 instead of in your 30s or 40s, but it would be at the maximum pay column for O-4s from the pay tables in effect during the year that you turn 60.
This would mean that your investments (and any income from a bridge career) would only have to bridge the gap from leaving active duty until you reach age 60.
Because Korea. After you reach 16 years of active duty the assignment officers feel that you're their b... er, I mean, theirs to send to only the most challenging promotion opportunities.
My spouse and I have tested this concept. In 1999 we reached FI solely on investments assets, and even after 9/11 we were still above the 4% SWR. At that point she had decided to leave active duty (bad assignment officer) because "It's only money". She officially separated with 17 years 11 months and 10 days and affiliated with a Reserve unit the next day.
Our assets would have easily bridged the gap from her separation until starting her Reserve pension at age 60. Better yet, our family quality of life quickly shot up above awesome.
If it's no longer challenging or fulfilling, and if the fun has stopped, I strongly recommend considring leaving active duty for the Guard/Reserve.
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Hi Ya'll
Retired after 21 years in the Army. For the OP, I retired as an E-7 in 2012 and my retirement pay is nowhere near 37,000/yr, and last year we did not get an increase (though neither did social security recipients). It is best to plan on the conservative side and assume that the increases are not going to be as big as you think. That said, it is nice to be retired in your mid-40s and the monthly pension is a nice security blanket. I'm still kinda-sorta looking for work, but don't have to if the job isn't right. The retirement check allows you to be very picky with who and what gets your time. Currently I'm living in a military town (long story, house wouldn't sell, grrrr.....), and finding anyone who will hire a 45 year old for an entry level professional accounting position is so far very elusive. GI and VA preferences don't mean squat when all of your competition for employment are also veterans. I'm living on just my retirement at the moment, but I also have a house and car that are completely paid off, and I'm single so it isn't an issue.
Maybe the OP was including BAH and BAS when he determined he is going to get $37k a year as an E-7. Hopefully he figures out that he will only be getting a percentage of his base pay for retirement.
Not sure what I used to calculate that?...
Anyhow, here is a more accurate pension calculator.
http://militarypay.defense.gov/Calculators/Active-Duty-Retirement/High-36-Calculator/
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If you're retired from active duty, you can still receive valuable credits:
http://gubmints.com/2013/04/15/military-service-credit-deposit-retired-from-active-duty/#.V4O0HLzEyrU
Whoa! My office mate is a 15yr federal employee and 23yr active duty retiree before that. When he started up as a civilian, the local authority told him he would have to start at the bottom for leave accrual. This indicates that he was likely entitled to start much higher on the scale. Going to help him apply for the time he is apparently owed and see if he can't get something retroactive.
Looks like yet another visit to the anti-personnel office is in order.
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If you're retired from active duty, you can still receive valuable credits:
http://gubmints.com/2013/04/15/military-service-credit-deposit-retired-from-active-duty/#.V4O0HLzEyrU
Whoa! My office mate is a 15yr federal employee and 23yr active duty retiree before that. When he started up as a civilian, the local authority told him he would have to start at the bottom for leave accrual. This indicates that he was likely entitled to start much higher on the scale. Going to help him apply for the time he is apparently owed and see if he can't get something retroactive.
Looks like yet another visit to the anti-personnel office is in order.
That could be the case. It depends on exactly what kinds of deployments they've had.
It starts here in Eddie's post:
" For leave accrual, retirees receive credit only for:
• Actual service during a war declared by Congress (includes World War II covering the period December 7, 1941, to April 28,1952) or while participating in a campaign or expedition for which a campaign badge is authorized; or
• All active duty when retirement was based on a disability received as a direct result of armed conflict or caused by an instrumentality of war and incurred in the line of duty during a period of war as defined in 38 U.S.C. 101(11). “Period of war” includes World War II, the Korean conflict, Vietnam era, the Persian Gulf War, or the period beginning on the date of any future declaration of war by the Congress and ending on the date prescribed by Presidential proclamation or concurrent resolution of the Congress."
... and it quickly gets more complicated. Your office mate would want to print out that entire post, check their military archives for their deployment dates, and then sit down with the personnel folks for a long discussion.
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If you're retired from active duty, you can still receive valuable credits:
http://gubmints.com/2013/04/15/military-service-credit-deposit-retired-from-active-duty/#.V4O0HLzEyrU
Whoa! My office mate is a 15yr federal employee and 23yr active duty retiree before that. When he started up as a civilian, the local authority told him he would have to start at the bottom for leave accrual. This indicates that he was likely entitled to start much higher on the scale. Going to help him apply for the time he is apparently owed and see if he can't get something retroactive.
Looks like yet another visit to the anti-personnel office is in order.
That could be the case. It depends on exactly what kinds of deployments they've had.
Indeed...I've passed the information along and offered to help him sort through it if he needs an extra set of eyes.
I am so grateful to this community for all the knowledge that you share!
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The math works out that I'd be forced out at something like 17 years, 9 months.
Yet, I made E-6 at 9 years of service and can retire 11 years later as the same rank. Awkward.
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The math works out that I'd be forced out at something like 17 years, 9 months.
Yet, I made E-6 at 9 years of service and can retire 11 years later as the same rank. Awkward.
Yep. I keep reminding my NCOs that our promotion and retention systems are veeery different every time they ask me what's wrong with retiring as a Major.
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Thank you to all participants for making this site such an excellent resource!
Nords, thank you in particular for your thoughtful spreading of information/resources across so many sources. I am excited for the potential of your insurance project. Insurance of all types is such a big unknown for so many military members!
Insurance info written from a FI perspective is an even more rare commodity. It's tough to know when, and to what degree, self-insurance is appropriate in different categories, especially in light of military members' "unique risk profiles".
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Thank you to all participants for making this site such an excellent resource!
Nords, thank you in particular for your thoughtful spreading of information/resources across so many sources. I am excited for the potential of your insurance project. Insurance of all types is such a big unknown for so many military members!
Insurance info written from a FI perspective is an even more rare commodity. It's tough to know when, and to what degree, self-insurance is appropriate in different categories, especially in light of military members' "unique risk profiles".
You're welcome! It's the topic that I get the most questions on.
Part of the answer is the comfort factor (behavioral financial psychology) so it's not simple math. If you can't sleep at night then it doesn't matter how much money or insurance you have...
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Fair enough! The animal brain part, never seems to go away.
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Did 11 years in the Marine Corps before getting out on a medical retirement. Now I'm working with the VA doing disability compensation. Was able to buy back some time and I'm hoping to get to RE in the next 5 years, have enough FU money now that I don't have to work full time while my investments continue to grow untouched (32 now). Such an abundance of knowledge here, it's awesome! Now I just have to find a FERS expert that can explain the best way for me to (hopefully) get some of that pension without working my life away.
I don't have nearly the knowledge that the rest of the folks on this thread have, but I am pretty well versed with the disability compensation side of the house, if anyone has questions about that.
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I retired as a Gunny (E7) from the Corps. I then did 14 years as a FED with DoD. When DoD offerED a series of VERA/VISP early retirement incentives, I bought back my military time to qualify. This was financialLY viable for me as I retired mid-grade NCO and was a GS-14 as a Fed. Buying back a full 20 years of military service is not always financial sound. You have to do the math. I also have a very well funded TSP account which I could access using SEPP, also known as 72(t) distributions, before turning 59.5. The calculations for figuring out SEPP can be confusing as there are several methods and getting the calculations wrong can result in hefty penalties from the IRS. Taking monthly distributions from TSP based on life expectancy automatically qualifies as SEPP. AGREE WITH Spartana that hanging around til retirement for Tricare is worth it, especially if you have a family. Agree with previous posts that Nords and Spartana are the bomb. Really smart people and I try and read all of their posts.
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I retired as a Gunny (E7) from the Corps. I then did 14 years as a FED with DoD. When DoD offerED a series of VERA/VISP early retirement incentives, I bought back my military time to qualify. This was financialLY viable for me as I retired mid-grade NCO and was a GS-14 as a Fed. Buying back a full 20 years of military service is not always financial sound. You have to do the math.
You're the only military retiree I've ever heard of who bought their military service credit deposit. Did that math make sense because shortly afterward you retired from the civil service?
(For other readers, here's what I'm asking about:
Military veterans who are not retirees--
http://gubmints.com/2013/03/26/gubmints-comprehensive-military-service-credit-deposit-guide/
For active-duty military retirees--
http://gubmints.com/2013/04/15/military-service-credit-deposit-retired-from-active-duty/ )
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Nords, it made financial sense, barely, because I wanted to retire and to qualify for VERA/VISP I needed the 20 years my Military service provided. The VISP amount more than covered the buy-back amount by around 2500.00. Again, if I would have retired an officer or E9, the buy back amount would have exceeded the VISP amount and I would have ended up paying Uncle Sam to retire. And since I was a high grade civie, the annual pension based on total service of 34 years was enough to comfortably live on. It doesn't always work out financially, but it did in my case.
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Nords, it made financial sense, barely, because I wanted to retire and to qualify for VERA/VISP I needed the 20 years my Military service provided. The VISP amount more than covered the buy-back amount by around 2500.00. Again, if I would have retired an officer or E9, the buy back amount would have exceeded the VISP amount and I would have ended up paying Uncle Sam to retire. And since I was a high grade civie, the annual pension based on total service of 34 years was enough to comfortably live on. It doesn't always work out financially, but it did in my case.
Thanks for the explanation, and congratulations on a major score in an edge case! Like you said, you can do math...
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Nords, I bet pipe line is pounding about now.. I miss Oahu. Be safe out there
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Sparty, you are too humble. Thank you for volunteering with our vets. Very noble cause.