User Posts: Doug Nordman

  Over three years ago, I suggested that buying a home on active duty is setting yourself up for financial failure. That post has aged exceptionally ...


This post gets personal. Let me give you the permission to think about these questions in your own career. A reader writes: I'm active duty and coming up ...


[This post is brought to you by Stephanie Montague of Poppin' Smoke, where you can learn more about your military travel benefits and opportunities. If ...


[This post is brought to you by Dan, who’s done a lot of data runs with the BRS calculator.  His new website is freshly launched, ...


  A reader asks: I'm in the National Guard. I'll be deployed for about 45 days into a combat zone. I'm signing up for the BRS and I'm contributing my ...


[This post is brought to you by Dan, who's done a lot of data runs with the BRS calculator.  His new website is under ...

Browsing All Comments By: Doug Nordman
  1. Reply
    Doug Nordman February 27, 2018 at 10:08 AM

    Thanks for the followup, Queue!

    I wish DoD had done a better job with the January opt-in process, and I’m waiting to see how they’re going to address the legal differences between the federal law and the policy implementation.

    And I’m glad you got a copy of the pocket guide! That’s a clear sign that the seminar invested extra effort in getting out the financial-independence word.

  2. Reply
    Doug Nordman February 17, 2018 at 10:39 PM

    I’m starting a new comment here to answer Queue’s and Dan’s 24 January- February comments.

    We’ve heard back from the DoD BRS office and we’re going to hear more outreach in the coming weeks. Hat tip to Airmen MilDollar of the MilitaryDollar site for chasing this down. They wrote most of this post and I’ve added some clarifications/links.

    Just to reiterate what most people already know, the military is paid in arrears. The January mid-month pay deposit is technically an advance on the full pay deposited at the end of January. When that January LES is published, it’s predicting the end of the month. Those who contribute to their TSP accounts (which is less than half of the military) will also see on their January LES that money is being sent to the TSP. The TSP’s “January” contribution leaves your pay account at the end of January and ends up in the TSP in early February. It’s all reported correctly on tax forms at the end of the year.

    For those of you wondering about the January government contributions (1% automatic and up to 4% matching) and why you did/did not receive them:
    The BRS training and implementation documents all say something along the lines of “You will receive the Service Automatic (1%) Contribution, and Service Matching Contribution proportionate to your basic pay contributions, on the first pay period after opting in.”
    Since opt-in was first allowed in January, this would explain why many people didn’t receive January contributions – they should start receiving them in February (with DoD’s BRS matching TSP contributions going into the TSP in early March). However, the NDAA 2016 law actually says:
    “The Secretary concerned shall make a contribution…for any pay period during the period that begins…on or after the date the member makes the election.”

    The NDAA law means that anybody making their opt in election on January 1st (or Feb 1st, Mar 1st, etc) should receive government contributions for that month **because you made the election ON the day the pay period begins.** Anybody opting in later in the month has to wait until the following pay period.

    Hopefully that explains why some people received the January contributions and others didn’t.


    For those of you that think you should have received January contributions and didn’t:
    If you match ALL of the following criteria and are interested in having your situation looked at, please contact me or Airmen MilDollar privately. We’ll ask the BRS office to dig deeper into your pay record and fix what’s broken. If you don’t meet ALL of the criteria, this does not apply to you.
    1. You think you opted in between 0000 and 2359 EST on January 1st – AND –
    2. You have confirmed you did NOT receive government contributions for January – AND –
    3. You are willing to pass me your full name, branch of service, and (optional) approximately when you opted in (date and time, with the time zone if not already EST).

    Personally, I’m already passing my daughter and son-in-law’s names to DoD’s BRS office.

  3. Reply
    Doug Nordman December 4, 2016 at 12:32 PM

    Thanks, Peter, good points.

    The biggest issues are 50 different sets of state laws, along with balancing risk in each area. USAA is also concerned about keeping customers for life, so maybe it makes sense to insure more young adults.

  4. Reply
    Doug Nordman September 16, 2016 at 7:07 AM

    Great point, Gerald– the goals have to be worth the hassle factors.

  5. Reply
    Doug Nordman March 19, 2016 at 10:41 AM

    I haven’t seen anything yet, Casey, but I’m keeping an eye out for it.

    Perhaps the board did a much better job of treating the “candidates” fairly and of shaping expectations for the results, so nobody felt that it was necessary to leak the brief?

  6. Reply
    Doug Nordman March 9, 2016 at 5:38 AM

    Thanks, OSV and Peter, those are great groups and programs!

  7. Reply
    Doug Nordman February 28, 2016 at 6:54 PM

    Thanks, Richard! Let us know how it works out.

    One Sick Vet, that’s good advice. The Navy has called them Tricare Ombudsmen at their clinics, and they’re essential to cutting through the bureaucracy.

    Deserat, I wish I had an answer for that situation… possibly an advocate, or even a grievance. But that’s nearly impossible to deal with when you’re multiple time zones away.

    Peter, I’ve had the same concierge care experience in Bangkok. It’s tempting to sign up for it in Hawaii, too.

    Vanguard, I wonder if UnitedHealthcare was having a problem with their Hawaii database. I’m glad you got it sorted out!

  8. Reply
    Doug Nordman February 26, 2016 at 4:57 AM

    Thanks for your question, Stephanie. This conversation goes a lot better when it’s started by the person who misses the military, although I appreciate that spouses are concerned– or even tired of being driven nuts by the problem.

    The short answer is “No, you can’t return to active duty.” In this case it’s due to age, although all the services have experimented with waivers up through the late 30s. Some retirees have returned to active duty for short stints of 30-90 days for unusual skills like trauma surgeon or electrical utility grid operation in a battle zone. Other times it could be for a few months developing a special program or research project. Although the answer is usually “No”, if he has a unique skill then he can always ask the command or person who needs that skill and let that sponsor help with the waivers.

    Another idea is serving the military in another capacity. Contact your local base’s Retired Activities Office, volunteer with a JROTC program at a high school, volunteer as a candidate guidance officer for students considering a service academy, or work with a veteran’s organization like MOAA.

    Another idea is volunteer service. Look into disaster recovery with Team Rubicon, or helping with a local wounded warrior program, or volunteering with almost any other community non-profit organization. The key is to figure out what he really misses (leading a group? military camaraderie? mentoring and training?) and then find a way to do it without the military uniform.

    A final suggestion is Ernie Zelinski’s Get-A-Life Tree. You can find the form at this link: (and Mr. Zelinski wrote an outstanding book about it, too). Use it to jumpstart your thoughts and find creative answers that are way better than doing what you’ve always done before. This can also be used by couples and families to come up with shared activities.

    I’ve had a copy of the Get-A-Life Tree on my desk for nearly 14 years, but frankly I’ve been too busy to make the time to fill it out. I don’t want to get back in to the military, but I’ve found my own way to continue to pay it forward and mentor while I enjoy the camaraderie. When I’m not writing or talking with military & families, then I surf a lot, too!

  9. Reply
    Doug Nordman February 20, 2016 at 4:25 PM

    You’re welcome, Jay– we’re trying to motivate some saving and investing!

  10. Reply
    Doug Nordman February 20, 2016 at 7:00 AM

    Thanks, Peter, good advice!

  11. Reply
    Doug Nordman February 19, 2016 at 5:56 AM

    I hope your recovery goes better, Richard.

    Yes, Tricare For Life is Medicare supplemental insurance for the copayments. However it also has limits and may not cover all of situations or prescriptions that are not covered by Medicare, so you’ll need to coordinate your billing with both groups. I recommend that you talk to a Tricare ombudsman at a military clinic, or ask your Tricare contractor to assign a case manager to you.

  12. Reply
    Doug Nordman February 16, 2016 at 7:51 AM

    Sorry about your back injury, Mike. Of course your first priority is to work with your doctor to try to reduce the effects of the damage and slow its progress.

    You could ask your doctor whether your current condition is service-connected to the Marine laundry injury. If that incident is documented in your military medical records (or if a fellow recruit or staff can write a “buddy statement” on your behalf) then you may be able to file a claim with the Veterans Administration.

    Talk with your doctor and then find a Veterans Service Officer with a vet’s group in your area like the American Legion, the Disabled American Veterans, MOAA, or your local VA office.

  13. Reply
    Doug Nordman February 13, 2016 at 6:05 AM

    Peter, if your Vanguard funds were the equivalent asset classes of the TSP’s funds, and if the Vanguard funds had a higher expense ratio, then the returns of the Vanguard funds would have lagged the TSP’s performance by about the difference in expense ratios.

    If the Vanguard funds returned more than the TSP then they were probably invested in different asset classes with different risks. Hopefully the higher returns were enough compensation for taking the higher risks.

    They’re both good organizations to invest with, but the Roth TSP allows servicemembers (and federal civil servants) to build much more tax-deferred wealth. (I wish it had been available during our days.) And with the impending TSP matching starting in 2018, even Vanguard can’t compete.

  14. Reply
    Doug Nordman February 11, 2016 at 6:46 AM

    Thanks for asking the question, Bill!

    The best answer is “Call your local recruiter.” The issue is that you’re considering this during a military drawdown, and you’d also need an age waiver. The recruiter might be able to suggest ANG duties or projects that you could join. That depends on what type of service & camaraderie you’re seeking, and what openings they have.

  15. Reply
    Doug Nordman February 7, 2016 at 7:04 AM


    As far as I can tell from the information you’ve given, you’re being correctly credited for your active-duty time (active service) and IRR time (inactive service).

    For every year of qualifying service (a “good year”) in the IRR then you’d have an additional year of longevity for pay purposes. The good year would also count toward a Reserve/Guard retirement. Your promotion gives you a new paygrade, of course, but it doesn’t change your pay longevity or your retirement credit. In addition, the term “time in grade” for retirement is only used to determine your eligibility to retire at that grade.

    However only the points that you’ve earned would count toward an active-duty retirement, and only if you reached active-duty sanctuary while on Reserve/Guard active-duty orders.

  16. Reply
    Doug Nordman February 7, 2016 at 4:59 AM

    Thanks, Kevin, good point– I’ve clarified that in the post.

  17. Reply
    Doug Nordman February 6, 2016 at 11:15 AM

    Thanks, Mel!

    I heard your Pro Bowl comments from a lot of readers, and I’ve been passing them on to USAA.

    I can confirm that the Pro Bowl’s pre-game event planning was hampered by geography and not by USAA. (I put quite a few miles on my car that week even though I’m in Central Oahu.) I think the biggest issue is that years ago the NFL (or the players?) moved the players out of Waikiki lodging to Ko’olina. When the renovations caused a move to Turtle Bay, it created a 90-minute bus ride from just about everywhere.

    The events didn’t seem to have a lot of promotion outside of active-duty commands, although the schedule on the NFL site had the dates & times. Saturday’s football practice was open to the public, but I think the NFL logistics staff did not understand what the Volcom Pipeline Pro surf contest does to North Shore traffic.

    If there’s a “good” side to this, I saw many happy servicemembers & families at Naval Station, Wheeler, Schofield, and Kaneohe Marine Corps Base. There’s an undercurrent of sentiment that too many previous Pro Bowl pregame events were at Hickam and not enough at other military commands.

    I don’t know what the right balance of events and locations would be, but two of USAA’s execs are aware of the issues. Next week (once the Super Bowl commotion dies down), I’ll send an e-mail to USAA’s Communications people with anonymous reader feedback. Hopefully next year’s Pro Bowl events will be even more military-friendly.

    That’s a great rule of thumb on account contributions. A 401(k) match will generally be more valuable than an unmatched TSP contribution, but not every family has both– and not every year. And then when you add in entrepreneurs with SEP IRAs or HSAs… someone could write a book and run dozens of spreadsheets to optimize all of the decisions.

    I think everyone (who’s “older”) wishes they cared more about financial planning when they were younger. But you’ve proved (once again) that a high savings rate can overcome a lot of investing mistakes!

  18. Reply
    Doug Nordman February 5, 2016 at 5:08 AM

    Sorry to hear about the divorce, Kim. If you or your spouse are in the service, then one of you should meet with a military lawyer to figure out your choices. If the military lawyers won’t see both of you, then one of you can get the JAG’s referral to a civilian divorce lawyer who’s familiar with military benefits.

    In addition to financial and physical assets, the typical military divorce decides how to divide benefits like a pension, the Survivor Benefits Plan, life insurance, the GI Bill benefits, and child support. Your marriage didn’t meet the 10-year requirement of the federal law, but under state law the divorce court can make their own decisions. (Your children are also eligible for medical benefits as family members of the servicemember.) A lawyer who’s familiar with military benefits can make sure that the agreement accounts for military pay raises, promotions, disability ratings, and applicable medical benefits.

    Don’t try this on your own. Get a lawyer who understands military benefits and has handled military divorces.

  19. Reply
    Doug Nordman January 31, 2016 at 6:07 AM

    Thanks, Ryan– it’s fun, and I enjoy the way they’re showing off Hawaii!

    Believe it or not, I’m also getting lots of reader questions and comments for future posts. In between football plays.

  20. Reply
    Doug Nordman January 30, 2016 at 3:23 PM

    Good points, Gerald!

    If you see new training materials on the blended retirement system, or a calculator to help make the choice, then I’d love to add the links to this post.

  21. Reply
    Doug Nordman January 28, 2016 at 10:18 AM

    Thanks, Leftbucket, that’s exactly right!

    This type of sanctuary also comes from federal law (Title 10 sections 1176 and 12646). If a Reserve/Guard member reaches 18 good years then they have to be continued in the Reserves for the opportunity to reach 20 good years.

    It means that they cannot be separated before qualifying for a Reserve/Guard retirement, but they could still lose their drill billet and be put in the Volunteer Training Unit or IMA or IRR. The burden to perform (and obtain good years) is still on the servicemember.

  22. Reply
    Doug Nordman January 28, 2016 at 8:41 AM

    Thanks, Andrew!

    A minor emphasis on one point– if you maintain a 40% savings rate for 20 years, you might reach financial independence without the pension.
    The advantage of the high savings rate is that you don’t have to count on gutting it out to 20 for the pension. If you’re no longer challenged and fulfilled by active duty, you can choose to leave for the Reserves at any time. It’s far better than grimly hanging on for 20 years (and sitting on a slightly larger pile of money) after risking your health and burning out.

    I’m not sure where your numbers are coming from, and feel free to share them here or e-mail them to me. Frequently this difference arises when the taxable portfolio actually has a substantially different risk/return profile from the TSP. Your first check on your analysis would be to make sure that the taxable accounts are using benchmarks identical to the C, S, and I funds. Your second check would be that the fund performance is assessed over your remaining lifespan (or longer) or at least for the lifetime of the fund. Too many funds will cherrypick the dates for their performance claims.

    The reason I suggest this is because a passive equity index fund with low expenses will almost always outperform the vast majority of actively-managed funds (and their higher expenses) over several decades. There are a handful of exceptions to this generalization (like Berkshire Hathaway), but then you have to be able to pick out those exceptions from over thousands of funds.

    Here’s a link comparing the TSP’s funds to Vanguard & Fidelity funds:

    Our TSP portfolios were invested in the S and I funds. (Our contributions were made between 2002-2008, and today we’re in the process of converting them to Roth IRAs). For the last decade our taxable accounts have been >90% invested in equity ETFs at an average expense ratio of about 0.25%/year, at least 8x the TSP’s expense ratio. We paid much higher expenses than that (1%-2%) for over 20 years before that. Yet even at those high expenses we saved enough to reach financial independence– and despite two recessions over our 14 years of retirement, today that’s grown to “way more than enough”. My spouse and I may never touch our Roth IRAs (which will soon include all of our former TSP accounts). Life is definitely cushy.

    While you’re younger and on active duty, especially with dual incomes and a high savings rate, I’m a big proponent of investing in a high-equity portfolio. It doesn’t have to be microcap telcom stocks– the TSP’s L2050 fund or any equivalent of the C, S, and I funds will do just fine.

    Admittedly as an O-2 it’s tough to max out the Roth TSP (the $18K limit is nearly 40% of your base pay) plus two Roth IRAs. However if you fail to make the most of the Roth TSP (and the Roth IRAs) every year then that opportunity is lost forever. When you promote to O-3 (and have a 35% pay raise) yet continue to live like an O-2, then you’ll be able to max out those contributions much more easily.

    If your spouse’s income includes a 401(k) then you should try to contribute enough to least maximize the employer’s match. 401(k)s have higher expenses than the TSP, but the employer’s match will probably overcome even a higher expense ratio.

    So the priority for your 40% savings rate is TSP, 401(k) to the match, Roth IRAs, the rest of the 401(k) to the limit, and then even more in taxable accounts. Your asset allocation can be high in equities in passive index funds with low expense ratios, but your asset allocation also has to help you sleep comfortably at night despite stock-market volatility.

  23. Reply
    Doug Nordman January 23, 2016 at 11:52 AM

    Exactly– we’re still “seeing the world”, but now it’s on our terms!

    I’m in your camp on traveling with kids. Ours was challenging to travel with as a baby, but she got better every year.

  24. Reply
    Doug Nordman January 23, 2016 at 10:00 AM

    Carl, as near as I can tell Type 2 diabetes is not on the Camp Lejeune list.

    Here’s the current list of Camp Lejeune conditions that the VA is awarding compensation for:

    Here’s the proposed expanded list:

    I know of veterans receiving VA compensation for Type 2 diabetes, but it’s for exposure to Agent Orange in Vietnam. Here’s more info on the dates and locations:

  25. Reply
    Doug Nordman January 22, 2016 at 5:54 AM

    No worries, Ryan, I think most of the crowd will stick around for another week of personal partying after the Pro Bowl… nobody’s in a hurry to get back to the Mainland to enjoy more winter weather!

  26. Reply
    Doug Nordman January 21, 2016 at 5:32 AM

    Carl, I’m afraid your years of service do not qualify for a military pension. In almost all cases you have to serve for at least 20 years (active duty or Reserve/Guard “good years”). Servicemembers can also be retired early from active duty by a temporary program (like TERA) or for medical/physical disability that occurred while on active duty.

    If your health issues are caused by a service-connected condition then you may be eligible for compensation from the Veterans Administration. If a veteran is severely disabled or has minimal assets then they may qualify for additional VA financial support. ( However that’s a separate program from the Department of Defense.

  27. Reply
    Doug Nordman January 18, 2016 at 5:32 AM


    Although you must have more than enough good years (and a Notice of Eligibility letter) for a Reserve retirement, your active duty points alone do not qualify for an active-duty retirement.

    Reservists and National Guard servicemembers can only claim sanctuary if they reach 18 years of points while mobilized on active-duty orders (not for training). They’re continued on active duty until they reach 20 years of service, and then they’re awarded an active-duty retirement based on 20 years. Reserve points are not counted when calculating an active-duty retirement. Here’s how sanctuary works, along with the instructions for each service:

    Unless you’ve met the requirements to claim sanctuary, your Reserve pension is calculated using all of your points:

  28. Reply
    Doug Nordman January 16, 2016 at 6:28 AM

    Thanks, Bridget, you’re absolutely right!

    Congress and DoD have to treat that as a revenue-neutral change, and there has been insufficient interest in cutting other programs to fund early retirement for those mobilized between 9/11 and 28 Jan 2008.

  29. Reply
    Doug Nordman January 12, 2016 at 4:01 PM

    You’re welcome– I’m happy to help!

  30. Reply
    Doug Nordman January 10, 2016 at 5:26 AM

    Thanks, Peter. Good points about behavioral finance.

  31. Reply
    Doug Nordman January 9, 2016 at 6:55 AM

    Glad to help, Jeffrey!

    You can do points in the IRR, but before you make that leap you should make absolutely sure that you’ll earn a good year. The services have all been clamping down on the courses that qualify for IRR points, and it’s getting more difficult to access them without a valid CAC. It takes a certain amount of discipline (and free time) to keep up with the pace of correspondence courses to reach a good years’ worth of points, and if you can only access the website from a distant Reserve Center then you’re not going to be happy.

    I know people in the IRR who have come up one point short of a good year, and you don’t want to experience that feeling. Of course you already have enough good years for your Notice of Eligibility and your retirement, so it’s not critical in your case.

    Another option (if you haven’t already considered it) is to drill ahead over the next few months or do an extra AT (if available) to get your good year. Confirm your point count (and for those who are at 20 good years, make sure you’ll get your Notice of Eligibility) and then take a six-month Authorized Absence from drill weekends before retiring.

  32. Reply
    Doug Nordman January 7, 2016 at 4:05 PM

    Very good point, Vince, thanks for catching it.

    I also didn’t specifically break out National Guard mobilizations for disaster recovery operations. And, of course, the 2015 NDAA correction to the 2008 NDAA that allows mobilizations/deployments after 30 Sep 2014 be counted across fiscal years…

    These details are getting way too complicated. It’s probably time for me to write another separate wrapup post on early Reserve/Guard retirement.

  33. Reply
    Doug Nordman January 6, 2016 at 5:41 PM

    Thanks, Dave, I appreciate your comments!

    I’m looking forward to a comprehensive spreadsheet/calculator tool that everyone can use for weighing their numbers.

  34. Reply
    Doug Nordman January 5, 2016 at 8:27 PM

    Thanks, Hawkeye, sounds like you have a great plan!

    My 5 AM internal alarm clock is definitely a personal problem…

  35. Reply
    Doug Nordman January 5, 2016 at 8:23 PM

    I’m sorry to hear about DFAS’ slow processing, Valerie.

    I don’t have any other points of contact for you. From what I’ve seen before, I think DFAS is moving as fast as usual. Most Reservists retire years short of their 60th birthday and DFAS has rarely needed to move quickly in their retirement processing.

    If DFAS finishes their processing by 15 January then you could receive your first pension deposit on 1 February. However it’s more likely that they’ll use the rest of January and your first deposit will come on 1 March. The “good” news is that you’ll be paid all the way back to the amount that you were originally supposed to receive after your 60th birthday (on 1 December). The other news is that you may end up with a corrected 1099-R for 2015 before DFAS is finished with your pension processing.

    If you haven’t already read this post, it helps you with the pension calculation:

  36. Reply
    Doug Nordman January 3, 2016 at 4:28 PM

    You’re absolutely right, Vince, and I hope so too.

    Based on what we’ve learned from our experience with REDUX, I’d say that we have an educational challenge on our hands…

  37. Reply
    Doug Nordman January 3, 2016 at 4:26 PM

    You’re welcome, RL!

    Shameless name-dropping: Wes Moss gave a presentation at Digital CoLab15 and handed out copies of that book to us in the audience. It’s on my reading pile (an 18″ stack) and I’ll get to it in the next few months.

    And yes, he seems like a happy guy doing what he loves…

  38. Reply
    Doug Nordman December 31, 2015 at 5:05 PM

    Derrick, it’s generally permitted by law (if you meet the requirements) and you can always ask for waivers, but the military is in a drawdown and there may only be limited opportunities.

    I’d recommend contacting a recruiter to see what’s available.

  39. Reply
    Doug Nordman December 26, 2015 at 8:46 PM

    Hey, Gerald, good to hear from you again! I’m glad the book’s advice is working for you guys.

    And the next time I travel on a KC-135 I’ll have an extra pair of warm socks…

  40. Reply
    Doug Nordman December 26, 2015 at 12:57 PM

    Mr. Haines, please e-mail me (NordsNords at Gmail) to tell me more about your questions and how I can help.

  41. Reply
    Doug Nordman December 26, 2015 at 6:11 AM

    Jeffrey, there might be some confusion on the sanctuary requirements. In order to qualify you have to be on active duty (mobilization or other orders >29 days) at the date you go over the 18-year point. Then you’re continued on active duty (in a different personnel category) until you reach 20 years of service.

    When sanctuary is granted then DoD makes the services pay for the pension difference out of their own personnel funds. The services track servicemembers who have at least 16 years of points and aggressively restrict them from reaching sanctuary status. With your 6405 points, you’re probably already on their database warnings. You’d be able to continue to do drill weekends and ATs but the only way to get orders of more than 29 days (let alone mobilization) would be with a three-star general’s approval from AF personnel HQ (the active-duty HQ, not the Reserve HQ). I’ve seen a handful approved before the drawdown, but I haven’t heard of any sanctuary approvals in the last four years.

    However you could keep accumulating points on drills and shorter orders, even if you go over 18 years of points. I know of two Reservists with over 7400 points, although they’ll never be approved for any orders over 29 days.

    Here’s more info plus the AF sanctuary instruction:
    I’m not sure whether the 2011 edition is the latest version and I don’t have access to the .mil instruction databases, so you should check that with a Reserve center.

    This post links to all of the military’s sanctuary instructions that are on public sites:
    But again they may have been updated in the last year.

    So in your case you’ll remain “retired awaiting pay” (gray area) until your Reserve pension starts. If you were mobilized for at least 90 days to a combat zone (or, for National Guard, some domestic emergencies) then you might qualify for an earlier pension start date. Since you were mobilized in 2012, your combat zone deployment’s 90-day periods would have to be within a fiscal year to count for an earlier pension start. If you have 180 days in a combat zone in one FY (or 90 days in one FY and 90 days in another FY), then your Reserve pension would start six months earlier. But if you have less than 90 days in a FY then that does not count. 120 days in one FY and 60 days in another FY would only start your pension three months sooner.

    Keep in mind that while your Reserve pension may start sooner, your Tricare healthcare will still start at age 60.

    You probably already know that you should have your VA status reviewed now to see whether you’re still at a 30% rating (or higher) before you retire in Nov ’17. When your Reserve pension starts, it’ll be reduced (“offset”) by your VA disability compensation. If your disability rating is at least 50% (and combat related) then you may be able to receive both your full Reserve pension and your VA disability compensation.

    Let me know if the “90 days in a FY” or a higher VA disability rating might be an issue and I’ll go into the gory details.

  42. Reply
    Doug Nordman December 26, 2015 at 5:37 AM

    I like your plan, Jason!

    We haven’t had any security issues– it’s a combination of house sitters, living in a cul-de-sac with nosy neighbors, and not having anything worth stealing. No problems in 15 years, although I do bring the longboards inside the house before we leave.

    I’m ambivalent on the maintenance. We’d do well with a ground-floor townhouse or garden apartment (and access to a community garden) but I’m always concerned about noisy neighbors. When it comes to fixing a fridge or getting a tech to fix it for me, I think the former is a lot less time (with roughly equivalent hassle). A yard service while we’re gone would avoid a lot of catch-up work when we get back. I think I’m enough of a control freak that I’d prefer to own instead of rent, but we’ll see how I feel about my fierce independence in 20 years or so.

    Your financial approach works very well for us. I don’t think I’ve updated our annual budget since our daughter launched from the nest five years ago– there’s no point when we’ve reached financial independence and our wealth keeps rising faster than we spend it. I no longer balance a checkbook (just review the statements) and I’ve almost stopped using Quicken.


    C’mon in, Rob, the water’s fine!


    Thanks, Vanguard! I think you’ll do great with Guam and the rest of the Pacific– let us know how it works out. It’d make a great “Lifestyles In Retirement” post…

    Our lodging success is traveling during off-peak times in areas with extra rooms. July and Christmas would be tough. Most military lodging can barely handle a Reserve/Guard drill weekend, and they don’t make special accommodations for Space A travelers. (Except for flag or general officers…) We’re always willing to spend more money at a military lodge to upgrade from a standard room to a suite or VIP quarters, since it’s a short-term stay and not much of a price difference. Otherwise we’d end up catching a cab to the off-base hotels, getting a good night’s sleep, and revising our plan when we have a feel for the next passenger roll call.

    We do a lot of last-minute calling ahead because we don’t know our destination (let alone our date/time) until we make the passenger manifest. (We get the phone numbers from the Take-A-Hop app and the AMC base info sheets at the passenger terminals). Many military lodges seem to release their reservations near midnight. Just before we left Rota, the Travis Air Force lodge said “Reserve weekend, sorry, wait list.” When we landed on the Travis runway at 11 PM, the lodge said “No rooms, sorry.” When the passenger van dropped us off there just after midnight (so that we could stay on their wait list and then call a cab to town lodging), the lodge staff suddenly had a suite for us. We were only in it for six hours(!) so it was a great convenience at a good price. If we’d spent Thanksgiving week at Travis then we would’ve reserved the next available day in the lodge and gone out to a town hotel.

    I think the financial aspect is that you’re saving a lot on airfare (and commercial hassles) while spending some of the savings on lodging.

    I don’t know if this is a new AMC policy, but we’re seeing passenger terminals close at 2200 and re-open at 0400 daily. (Including Hickam & Travis, but not yet Rota.) I think it discourages “campers”. Peoples’ sleeping bags are probably for the aircraft: C-17s and KC-135s are freakin’ cold! But when you can stretch out on the fuselage deck then a sleeping bag (and perhaps a yoga mat) are luxurious.

    As for the adventure: Plan B can always be a commercial ticket for the next available flight. Plan C would be a different destination. Many airlines charge the same price for one-way or round-trip when it’s a last-minute purchase. We’re taking a hard look at this for our next trip because we need to be at a cruise port by a deadline date, so we may do part of it with commercial flights.

    I wish we could eat green waste! It really annoys me to go grocery shopping for veggies while I’m discarding the grass clippings, bougainvillea stalks, and palm fronds…

  43. Reply
    Doug Nordman December 26, 2015 at 3:41 AM

    Thanks for your comment, Peter, it’ll be interesting to see how Tricare reform goes.

  44. Reply
    Doug Nordman December 22, 2015 at 6:01 PM

    Great question, Sarah!

    The Reserve/Guard pension starts later in life, so its impact is smaller on the total retirement payout– whether it’s a 50% pay base or a 40% pay base.

    The biggest advantage I can see is the continuation pay and the TSP match. The Reserve continuation pay is a lot smaller than the active duty amount, and as you point out it’d be a challenge to make the DoD match on the TSP with drill pay and AT.

    However all of those funds would be in your TSP account instead of waiting until age 60 for DoD to pay them out as a pension. I suspect that an aggressive asset allocation (L2050 or the S and I funds) would grow the investment in your TSP account faster by age 60 than it would amount to as a pension payment starting at age 60.

    You’re right– there are a lot of factors and it’s a highly individual situation that needs a calculator.

    When you have a choice between a TSP and a civilian 401(k), I’d contribute to the TSP first for the maximum match, then the 401(k) for its maximum match, and then back to the TSP– for its lower expense ratio. And yes, it’s a challenge when you have both accounts. A good problem to have.

  45. Reply
    Doug Nordman December 19, 2015 at 8:11 AM

    Thanks, Bridget, you’re absolutely right!

    Joining the Reserves or Guard is not a panacea, but it’s a much better option than burning out on active duty. The top regret of our readers in their 40s or 50s is that they didn’t get enough good years in the Reserve/Guard to earn a pension.

  46. Reply
    Doug Nordman December 19, 2015 at 7:39 AM

    Thanks for your questions, RL, that’s a good plan after you’re out of uniform!

    You can roll over your traditional TSP once you’re out of the military, although you should leave your funds in your TSP account as long as possible (for the low expense ratios). But once you’re ready to make the conversion, that’s the plan. The best “conversion window” for active-duty retirees is in small annual increments before you start Social Security or RMDs. Reserve/Guard retirees would convert before their military pension starts.

    Either Vanguard or Fidelity is good (or even both). The former has rock-bottom expense ratios and the latter offers more services (for some higher fees). You’ll find policies and features to like (and dislike) at both firms.

  47. Reply
    Doug Nordman December 15, 2015 at 10:29 AM

    Edward, I’m sorry to read about this.

    Your first step is to talk with the hospital ombudsman and the Tricare rep. You can also file a grievance through the Tricare website ( If that doesn’t resolve the situation to your satisfaction then I’d consult a lawyer at the base legal office.

  48. Reply
    Doug Nordman December 12, 2015 at 7:57 AM

    Thanks, Ryan! I’ll keep everyone posted…

  49. Reply
    Doug Nordman November 29, 2015 at 9:32 AM

    Kelly, responding to your 28 Nov comment below:

    The recruiters have quotas, and they’re trying to find people for the biggest career fields with the lowest retention. If you’re qualified for (and interested in) a mainstream warfighting community like infantry, artillery, ships, submarines, flying, or missile officer then there maybe be openings. The smaller, more specialized support communities may already be fully staffed.

    Another key could be signing up during off-peak times like January-March instead of the huge graduation season in June and the smaller one in December.

    It’s quite possible that you’re talking with the wrong people. However if they’re focused on filling the urgent openings (and you’re not) then they may not be interested in talking with you. You could try another recruiter in another district or even another service. Another option would be finding someone on active duty in the field you’re seeking who could advise you on finding a position.

  50. Reply
    Doug Nordman October 22, 2015 at 7:10 PM

    Quick note– SoloPro closed out their $1.6M seed round this month:

  51. Reply
    Doug Nordman October 14, 2015 at 8:31 PM

    Great point, Jay!

    If you have the discipline (and make the time) for regularly transferring funds to a high-interest account, then that’s the more profitable approach.

    The intriguing feature of Digit (and their competitors) is that the transfer out of your checking account is automated for people who otherwise might never get around to it. Instead of having to make decisions every payday or every month, they only have to move their Digit funds a few times a year. This is especially useful for deployments where the servicemember is out of touch by being underwater (submariners) or away from personal bandwidth (infantry, special forces).

  52. Reply
    Doug Nordman May 6, 2015 at 4:46 AM

    A long-time friend just e-mailed me some commentary on this post. I’ve edited the words to avoid revealing their identity, but I think the sentiments still shine through:

    “Unlike you I decided to make my govt pension my primary means of retirement with O-6 and 30 years as my goal. Ironically I ended up as an O-8 but what I didn’t count on is the impact that stress and a sedentary life would yield. Now I have emerging health problems that may be unresolvable. (Hypertension is one of my new chronic diseases.) Sort of dampens the retirement plan. I’m thinking my major focus will be on health and an exit plan maybe in two years if I can swing it.

    “By the way I tell your story to my daughters. At the end of the day life is about, well, enjoying life. Sitting behind a computer at the beck and call of the bosses is not my idea of the stress free life I was hoping to achieve.

    “Please feel free to let your readers/subscribers know that rank does not equal quality of life. Quality of life is the absence of insane stressors and enjoying life while you have health to do so. While I’m fairly certain I could retire and be a professor or an administrator, I think retiring and teaching kayak lessons is more my speed.”

  53. Reply
    Doug Nordman February 14, 2015 at 8:44 PM

    Thanks, Ty, that’s interesting info on the glut of housing at military bases.

  54. Reply
    Doug Nordman September 19, 2014 at 11:11 PM

    Great comment, Mel!

    I don’t have the answers to those questions– we’re still assessing them ourselves. In our case, passive investments and automation seem to be more important than tweaking every last percentage point of performance. My spouse has also volunteered to take over the financial duties when I reach age 60, just so that she’s more familiar with the accounts & logins.

  55. Reply
    Doug Nordman September 10, 2014 at 5:34 AM

    Thanks, Bruce.

    I agree that federal law is being mis-applied to those who are eligible to retire, yet do not want to retire because of the huge financial penalty for reverting to an enlisted pension.

    I also hope the Army reviews their personnel numbers and does the right thing for those affected by this decision.

  56. Reply
    Doug Nordman September 8, 2014 at 4:34 AM

    Good point about taxes, especially with many universities beginning to offer in-state rates to military residents stationed there.

    While servicemembers are on active duty, I think they should attempt to become residents of states that don’t tax military pay– but there may be other factors affecting that decision. After the military I think that there are many more important criteria for choosing where to live. Taxes should be a part of the overall decision, but I don’t think that taxes should be the most critical part of the decision.

    As to Hawaii taxes, Hawaii’s real estate prices are higher than most of the country. However the property tax rate is roughly 3.5 mills. This puts me in the position of owning property that’s assessed at a value of 3x-4x some Mainland properties, and yet I’ll still pay as little as half of their property taxes.

  57. Reply
    Doug Nordman September 6, 2014 at 5:12 AM

    Thanks, Peter– great advice!

  58. Reply
    Doug Nordman September 1, 2014 at 9:58 AM

    Andrew, read the text at the paragraph titled “Army National Guard Retirement Calculator” and click on the second link:

    You can also do your own (manual) calculation at this post:

  59. Reply
    Doug Nordman August 30, 2014 at 7:08 PM

    Excellent points, Deserat– thanks!

  60. Reply
    Doug Nordman August 30, 2014 at 7:05 PM

    Good point, Bill, thanks. I’ll pass that on to him, although I don’t know if it tracks with his officer promotions.

  61. Reply
    Doug Nordman August 25, 2014 at 7:01 PM

    Stephen, you’d have to spreadsheet the math to decide whether finishing 20 for an enlisted active-duty pension is better than going to the Reserves for an officer’s pension. Some of the math depends on your age at retirement and when you’d start a Reserve pension.

    Regardless of rank or the size of the pension, I think the most significant factors in a military pension are the cost-of-living adjustment and the cheap Tricare premiums. Without crunching all of the numbers, it’s probably better to take an active-duty pension sooner at a lower rank.

    Of course the key is whether you’re able to stay on active duty to finish 20 years.

    The above paragraphs assume that you’re still enjoying your time in uniform. If you’re miserable on active duty then it’s probably better to transfer to the Reserves, enjoy the improvement in quality of life, and know that your pension will pick up at age 60. The cliché “It’s only money” certainly applies here.

  62. Reply
    Doug Nordman August 25, 2014 at 6:54 PM

    Thanks, Marvin!

    I hear that comment a lot these days, especially from people who would have been close to 20 years by now. But family is one of the best reasons for making a retention decision.

  63. Reply
    Doug Nordman August 24, 2014 at 1:49 PM


    Not quite. See this post:

    Here’s a summary: the services discourage sanctuary because they have to pay big bucks for it. When a Reservist reaches sanctuary (and is retained on active duty for an active-duty retirement) then that pension funding is not supported by DoD. Each service has to pay sanctuary active-duty retirements out of their own personnel funds until the servicemember reaches age 60 (the Reserve pension start date) and the funding obligation reverts to DoD.

    If a servicemember has over 5840 points (over 16 years of points) then they’re still allowed to keep drilling and doing AT and even multiple ADTs of up to 29 days each. That’s considered training, not active duty, and that’s all approved by the local Reserve Center and the gaining command. However BUPERS N9 (and CNO N13) screen orders when the servicemember is ordered to active duty (30 days or more) via ADT, ADSW, or even mobilization. That’s considered operational active duty, and that’s only approved by OPNAV.

    Servicemembers are also required to track their point counts and ensure that they don’t exceed sanctuary without OPNAV approval. If they “somehow” reach sanctuary without that approval then they could be involuntarily released from active duty and sent back to Reserve status. See paragraph 6 of OPNAVINST 1001.27 (

    I have seen a Reservist mobilized by a PACOM flag officer even though the servicemember was very close to sanctuary (17.9 years of points). The next morning BUPERS overrode the flag officer and canceled the orders, then told PACOM to submit a sanctuary request. (It was disapproved.) The Reservist was allowed to continue to do drills and ATs, and one 29-day ADT per fiscal year. They eventually retired with over 7400 points (over 20 years of points, and 25 good years) but for a Reserve pension.

  64. Reply
    Doug Nordman August 22, 2014 at 6:09 AM

    Good question, Stephen!

    Federal law includes a section called “sanctuary”: any servicemember, active or Reserve/Guard, who reaches 18 years of active duty must be continued on active duty to 20 years (and an active-duty retirement). The Reserve/Guard services want to avoid inadvertently letting their members reach sanctuary (and an active-duty retirement), so they track everyone with more than 16 years of points and restrict their mobilization opportunities.

    If a servicemember left active duty at 17 years for a Reserve/National Guard career, they’d already be on sanctuary tracking. They would be permitted to do drill and AT (for up to 29 days) but longer stints of active duty would require approval by the service’s personnel HQ. It was rarely approved during the last 13 years of war, and in a drawdown it would be extremely unlikely.

    Instead a Reserve/Guard member would drill (and do AT) for at least three more years to reach 20 “good years” of service, and then would be eligible for a Reserve/Guard (“non-regular”) pension. They would start that pension at age 60 or (depending on combat deployments) possibly a few months earlier.

  65. Reply
    Doug Nordman August 18, 2014 at 4:53 AM

    Thanks, Bill, I’m glad that’s working– and that you don’t have to do the paperwork!

  66. Reply
    Doug Nordman August 15, 2014 at 5:44 AM

    Great suggestion, Ryan! I’ve been e-mailed by another O-3E in this position who’s not eligible for retirement (not even TERA), and he says the Reserves/Guard are happy to have him.

  67. Reply
    Doug Nordman August 15, 2014 at 5:43 AM

    Thanks, Ryan, I sure hope so too. That “pending review” comment on slide #61 makes me hope that at least someone is looking at ways to work around the legal issues.

  68. Reply
    Doug Nordman August 8, 2014 at 6:27 PM

    Here’s a comment by reader Kay that was apparently lost during a technical glitch:
    “Great article!

    Another dual military retired couple here . . . I remember agonizing over the term/SBP/VGLI decisions, and at the time we crunched all kinds of numbers.

    What we finally decided was to opt for “child only” coverage on both of our pensions. This was a very cost effective way for us to insure. We had our last kid late in life — so this coverage would carry either one of us into our 60′s. Yikes! By then the survivor would be close to collecting whatever SS we qualify for after a couple of decades of retirement.

    Hopefully we won’t need it, but it would provide enough of an income stream through our last kid’s college years that neither one of us would have to return to work.”

    Thanks, Kay! That’s a very good choice for retirees with kids.

  69. Reply
    Doug Nordman August 7, 2014 at 7:10 PM

    Thanks, Deserat!

    This drawdown is a smaller percentage of the total force than the 1990s “peace dividend”, but it’s still every bit as painful.

  70. Reply
    Doug Nordman August 7, 2014 at 7:08 PM

    Thanks, Kate!

    I know that if I don’t check the numbers first, one of our alert readers will check them for us…

  71. Reply
    Doug Nordman July 15, 2014 at 1:15 PM

    Thanks, Lee, and I think you’re right about Solar City not wanting the panels back. The hardest part of your contract is not moving every seven years like most Americans.
    Our neighbors have both Volts and Leafs. My spouse and I go back & forth over which one we like the best– and which one can handle the biggest load of longboards…

  72. Reply
    Doug Nordman June 22, 2014 at 3:52 AM
  73. Reply
    Doug Nordman May 8, 2014 at 11:06 AM

    Thanks for your comment, Mary!

    Each situation is different, and the details make it complicated. It’s worth asking your medical provider why this wasn’t brought to your attention four months ago. If you’re not happy with their explanation then your next step would be discussing it with a lawyer at your base legal office.

  74. Reply
    Doug Nordman April 30, 2014 at 6:40 AM

    Thanks, Matthew, and congratulations on your wedding!

    You’re correct– the USDA’s numbers are real (adjusted for inflation) and my numbers are nominal. However it may be distracting you from the main issue, and there are better ways to adjust your estimate.

    Inflation is not as high as you might think. The “child-raising price index” is lower than the Consumer Price Index. The USDA’s infographic (the PDF link at the end of this post) says that their cost estimate has only risen 23% since 1960– that’s less than 0.4% annually. Child-raising tech and safety has made quite a few leaps since then, so the hedonic adjustment has been well worth the price.

    Although you could rigorously adjust your calculations for inflation, it’s (hopefully) only for two decades (unlike retirement). In the meantime, your personal child-raising costs are going to be very different from the median. The data is a huge bell curve with very fat tails from garage sales to Gucci. Inflation adjustments pale in significance next to your consumer choices.

    Instead of looking at the statistics, consider how you’re going to keep your family costs on the lower end of the bell curve while keeping quality at the top. For example, you could have a blowout $25K wedding– or you could have a more affordable $5K wedding with $20K left over to buy two decades of childcare and babysitting. You could pay full retail for baby gear, or you could start visiting the garage sales now. Read more here:

    I’m not suggesting that you go cheap– just frugal. Ideally you’ll choose a neighborhood with good public schools, nearby parks, and public libraries. A private school may deliver value, but you may find far more value in homeschooling or tutoring services like Kumon. You’ll cook healthy (inexpensive) meals instead of dining out. You’ll choose outdoor activities instead of the Fun Factory. You’ll borrow library books instead of buying video games. It’s all a matter of matching your spending with your values and balancing your own financial independence with your kid’s quality of life. Frankly, they’d much rather have your time than your money.

  75. Reply
    Doug Nordman April 25, 2014 at 4:24 AM

    Great, Mel, now I’m hungry again!

    Sanctuary was practically unheard of during the Cold War, although it’s been more common during the last 12+ years of war. I still get that question a couple of times a month, but I think sanctuary will disappear during the next few years of the drawdown.

    Thanks for the update on pension plans. The reader who left that comment never responded, and apparently nobody else has been able to find a better inflation-adjusted annuity. There are still plenty of paths to financial independence, but that particular route may not be heavily traveled.

    I’m very impressed with JO Rules. My daughter came across it on (a forum for Navy officers) and that submariner has written a whole new division officer’s guide!

  76. Reply
    Doug Nordman March 17, 2014 at 11:14 AM

    Thanks, Deserat!

    The statistic about Reserves costing 25% of active duty is all too easy to believe. It also explains why major commands like PACOM fill a third of their active-duty billets with Reservists, who sometimes have more experience at that billet than an active-duty servicemember.

    “Streams of income” is right. A Reserve deferred annuity makes it a lot easier to save for retirement, but I question its ability in a “new” retirement system to retain people on active duty. Like REDUX, I fear that in the next decade the DoD will decide to try out the new system to learn what effect it really has on retention.

    A commissary closure in Hawaii would be inconvenient, but we’d make it work. We could do a lot with local grocery store loyalty programs along with bulk buying at Costco. Farmer’s markets would take more time but less money, and we still have room in our backyard for a few more fruit trees…

  77. Reply
    Doug Nordman February 21, 2014 at 7:58 AM

    You’re welcome, Jason, you’re helping a lot of military people!

    I completely agree with Pfau & Kitces’ analysis. The challenge will be convincing retirees (let alone elderly investors) that they have nothing to fear from volatility. Hopefully a cash stash approach helps them find their comfort zone.

  78. Reply
    Doug Nordman July 23, 2013 at 7:01 AM

    Thanks for the great questions, Tom! The answers are “sort of”.

    This post doesn’t cover all the details of every situation. Every time I write about the TSP (or IRAs) the caveats and exceptions and footnotes would triple the length of the text and make it read like the tax code.

    As you know, servicemembers make their contributions to the Roth TSP (or the conventional TSP) through payroll deduction– either from active-duty pay or from drill pay. The difference is that the Roth TSP contributions are after-tax dollars (servicemembers pay taxes separately on their contributions) while the conventional TSP contributions are pre-tax. And, of course, contributions from a combat zone are completely tax-free (but that’s a caveat for another post).

    The “over 50 catchup” provision allows an extra $5500 contributions, but admittedly that doesn’t apply to very many active-duty servicemembers. However I see a lot of Reserve/National Guard readers in their 50s, and the TSP is a much lower expense ratio than a civilian 401(k). Reserve/Guard servicemembers could do very well by contributing their drill pay & active-duty pay to the TSP. After their civilian employer’s 401(k) match (if any), that $5500 catch-up goes further in the TSP.

    Retired servicemembers can make contributions to the TSP if they’re back on duty and receiving earned income from a military salary (a very few elect to do this on occasion). Retired servicemembers can also roll over their conventional IRAs to the TSP. Now they can even roll over their Roth 401(k)s and other after-tax tax-deferred retirement accounts to the Roth TSP. See this chart:
    A military pension is not earned income, so that couldn’t go into any retirement savings plan. A military retiree in federal civil service could certainly contribute their civil-service pay to their civil-service Roth TSP account. But I’m not sure that any military retirees could contribute directly to their military Roth TSP from civilian earned income. They’d have to use the rollover tactic.

    The Roth TSP withdrawal rules are similar to TSP withdrawals. Take a look at this link:

    I’m not familiar with TSP or Roth TSP withdrawal provisions for kid’s college expenses, but I know that you could withdraw Roth IRA contributions at any time for any reason. Beyond the basic advice in this post, you’d want to chat with your financial adviser (or one of USAA’s CFPs). Aside from the tax code rules, I think any financial adviser would hesitate to recommend cannibalizing retirement assets to pay for a kid’s college degree.

    Let me know if these answers clear up your questions or just muddy the waters even further. I could turn this into several more posts on the topic…

  79. Reply
    Doug Nordman July 4, 2013 at 3:37 PM

    Thanks to a reader for his feedback:
    “Toward the end of your recent post, you have this line:
    ‘Let’s say that the worst case was zero points, and the best case was 75 points.’
    Actually, in those days, I believe it would have been a max of 60 points.”

  80. Reply
    Doug Nordman June 30, 2013 at 6:31 AM

    Thanks, Mike!

    The good news is that progress is quick when you’re motivated by the third step…

  81. Reply
    Doug Nordman May 24, 2013 at 5:09 AM

    Wow, thanks Rob, that’s a tax-free inheritance of $100 followed by a tax deduction on the same $100.

    I’ve added this to my list and to my “inheritance letter” for my daughter. I hope I won’t have to use this for a long time, but unfortunately these conversations are starting to happen more frequently among friends & neighbors.

  82. Reply
    Doug Nordman April 29, 2013 at 3:58 AM

    You’re welcome, Jeremy! We’ll both have to adopt a 20-year view of our lifestyles…

  83. Reply
    Doug Nordman April 13, 2013 at 5:08 AM

    Good points, Jan! I think that entrepreneurial and portable careers are also easier to put together today, and the military is much more aware of the retention impact.

  84. Reply
    Doug Nordman March 26, 2013 at 5:32 AM

    Thanks, Spencer!

    I’ve done my share of rate chasing, and I think I’m batting about .500. As I simplify my finances, I’m finding out that customer service is a lot more important to me than having to ride herd on a less-competent company. The challenge is avoiding the need for customer service in the first plsce.

    Maybe us DIY finance people are not USAA’s key customers. I think they cater to “trust” & “one-stop shopping”, and members are willing to pay a little more for the peace of mind.

  85. Reply
    Doug Nordman March 15, 2013 at 6:14 AM

    Thanks, Kate! I try to stick to the topics where I actually know more than the average reader, and sanctuary is a little-known program.

    In this case it’s personal experience. (You’ll notice I’m begging for links on the Army & Air Force sanctuary regs.) My spouse was subject to sanctuary monitoring during her Navy Reserve career (2001-2008) when she drilled at PACOM. PACOM mobilizes a lot of senior Reservists who are close to 18 years of service (6480 points) and the subject came up several times a year. She still has her (very thick) XO correspondence file, which got me started. I also spent a couple of hours last year plowing through Title 10 USC looking for changes to sanctuary case law, because now I can make the time to do things like that.

    Fortunately, Rob, one of the PACOM Reservists my spouse served with was a Marine O-5. He was a very experienced watch officer drilling in an active-duty billet which was chronically gapped. PACOM fills nearly a third of their active-duty billets with drilling Reservists, and J1 finally persuaded USMC Reserve to mobilize him under this exact same scenario with a similar retirement at 20 years. Shortly after he was mobilized, he was selected for O-6 and pretty much ruled PACOM’s Joint Operations Center (especially midwatches & weekends). He elected to serve his two years’ time in grade and retired in 2006. (I even ran into him once, literally, while we were surfing.) I e-mailed that Marine’s name and Linkedin profile to the reader who asked this question. I’ll have to tell you the rest of those sea stories over a frosty beverage at FinCon13.

    The POC for PERS-91B came from a very old NAVADMIN: I don’t know if Mr. Sam Wyvill is still serving as the Navy’s sanctuary expert, but he was a big help back then. Sadly he held the line on Navy sanctuary, too, and almost never approved those requests.

    The gory details on time in grade and retirement programs are in the DoD Financial Management Regulation manual (DoDFMR,, and I sure wish I’d known this one better while I was on active duty. I revisited it in 2011 while I was researching the details of the Temporary Early Retirement Authority because it was referenced in a message from my own thick 1990s correspondence file.

    The FMR used to have interim changes authorizing the services to reduce time in grade from three years to two. (For example, That change was finally made permanently (to public law) in 2004: Two-year TIG retirements were almost routine in the Navy Reserve. But the services would have to go to SECDEF to reduce TIG below two years, and SECDEF might even have to go to Congress.

    The FMR is a gold mine of retirement nuggets, but unfortunately you have to either be blessed with an outstanding personnel staff– or you have to be retired to make the time to read it. Everyone should review chapter 3 before they file their retirement request, and that’s especially important if there are medical or disability issues:

    Kate, when I was in your position (at-home parent married to an active-duty spouse facing a new set of transfer orders) I used to spend many a cozy evening with my spouse paging through the Joint Federal Travel Regs and the Officer Transfer Manual. Again, you practically have to be retired to make the time to learn this info– or you end up depending on your assignment officer to “take care of you”. The information we found in those references led to her leaving active duty to start her Reserve career. (More sea stories for our FinCon13 frosty beverages.) I hope you never have to defend yourself with these weapons of mass instruction!

    Thanks again for bringing this up– one of my older posts used a dead FMR link, so I fixed that too.

  86. Reply
    Doug Nordman March 12, 2013 at 4:16 AM

    Good points, everyone, I’m going to have to take more notes on our next trip…

    I logged in to find 68 coupons (way down from last week’s 115):
    24 “general” (including condiments, supplements, & skin care)
    2 produce
    3 beverage
    1 dairy
    3 frozen
    11 grocery
    6 meat/seafood
    1 packaged meat
    4 snack
    5 health/beauty
    4 baby
    1 cereal
    1 international
    1 home
    1 baking

    I’ve “clipped” coupons for a buck off toilet paper and 50 cents off packages of frozen fish. We’ll still save 2-3% this time, although not every time.

    Mike, it’s mostly convenience/processed foods and brand names. No fresh foods, although Dole canned pineapple made the list and I’ve bought bagged salads before. I noticed this time that there are no cleaning products but hair care is popular (and pricey). The cereal brands do not seem to be on board yet.

    I agree that it’s still cheaper to shop the generics and healthier to buy local fresh/raw. Coupons almost never inspire an impulse purchase, either– we only use them for items already on our list. However we’ve been using more of the rewards card coupons than the printed ones, and compared to paper it takes me a fraction of the time to manage the website.

    Good point about the military bases, Rob, and this card would also be useless for retirees far from a base. Our local grocery stores (even with loss leaders and their own rewards cards) can’t beat the commissary or Costco. Local stores are less than two miles from our house but it’s literally over a year between our trips there. Even just shopping loss leaders would take more time/gas than going straight to the commissary.

    Spencer, I’m going to have to check whether our commissary even has coupons on the shelf by the product anymore. They used to but I’ve stopped looking. I don’t know how much a manufacturer spends processing paper, but the rewards cards have to be a significant savings for the stores and the corporations. And if people have the card number on their grocery list or in their smartphone, they don’t even need to remember to bring along the card.

  87. Reply
    Doug Nordman March 8, 2013 at 5:46 AM

    Thanks Rob, it’s the best spending I’ve done all year!

    Mike, there’s enough information to keep you happily reading for hours. And if you’re a genealogy enthusiast like my spouse then you’ll keep going for months. “DNA USA” is a fascinating book, as is “Saxons, Vikings, & Celts”.

    You’re absolutely right about using the data to drive your behavior. That’s exactly how I felt when I read my results, and it’s the best motivation I’ve found in over 25 years. Even better, my daughter found our family’s info to be a tremendous relief and especially empowering– we can stop wondering, start planning, and keep an eye out for potential trouble.

    I’m heading down your path after coming from a different direction. Fitbits will be showing up in our house soon, as well as a few other tracking apps, because the habits only seem to change when you’re logging the behavior. But that’s a post or two for another day.

  88. Reply
    Doug Nordman February 19, 2013 at 4:02 AM

    Thanks, Jerome, Romeo, this needed to be said.

    I’ve told my daughter just about every one of my sea stories, too, so she has full disclosure…

  89. Reply
    Doug Nordman January 25, 2013 at 6:28 AM

    Thanks for the comments, everyone!

    @Anjali, I’m OK with being a public figure and it was a big help to see the problem on FIA’s website, but I was not at all happy with the snail-mail and telephone bureaucracy. They still seem to need signatures on paper and formal notification before they can act.

    @Jason, thanks for Clark Howard’s link; I hope that the fraud alert takes care of this. I’ll look at my free credit report in another four months and revisit the decision. I froze my Dad’s credit when he went into his care facility, and that process seems to work well. But my spouse and I are contemplating yet another mortgage refinance in a few months, so a credit freeze would get in the way of our short-term plans.

    @Gubmints, I’ve started putting our utility bills on a dedicated separate card too.

    @Janette and everyone who mentioned USAA, I’ve always had good credit-card service from them. The difference between Amex’s 2% rebate and USAA’s 1.5% rebate seems a lot less significant when you add back the hassle factor of dealing with FIA’s fraud process.

  90. Reply
    Doug Nordman January 4, 2013 at 5:47 AM

    You’re absolutely right, Romeo– just under 5000 words– and worth every one of them. This story is too powerful to break up into two posts. Judging from the traffic, it’s going to turn into a “pillar post”.

    Yes, the author is in the Army. He contributed the post with that information and I “sanitized” it to help readers of the other services identify with his situation. It applies to everyone.

    Thanks for the HARP advice! It always surprises me how many setbacks and mistakes we’ll see during our service, yet our finances can still recover. And I’m with you on the boredom part– after a decade of early retirement I feel busier than ever.

  91. Reply
    Doug Nordman December 28, 2012 at 6:26 AM

    Thanks, Jason, it’s on my list.
    Everyone saw Crystal’s comment, right? That coupon code drops her eBook price to only $17, which is only a few days of AdSense earnings– or just one individual ad– or a handful of affiliate commissions.
    Spencer, I’m just dipping my toe into affiliate sales now. We’ll see how it goes next month with USAA and then other Commission Junction offers.

  92. Reply
    Doug Nordman December 21, 2012 at 7:29 AM

    Thanks Chris, Romeo, I couldn’t have said it better!

  93. Reply
    Doug Nordman November 29, 2012 at 6:08 AM

    Thanks, Jason!

    I’m a big fan of TA, especially at commands who support giving their people the evenings/weekends free to take the classes. My training commands benefited from many MBA surveys, studies, & projects. Especially when the XO was working on his own MBA.

    I think a name-brand MBA program can help a marginal student grow into their skillset, especially by spending time with the mentors and top performers. Ironically the high-powered performers who can get into any of the top programs would succeed even if they attended a program at a community college. It’s the application that counts, not the source.

    I’d love to see the data on whether veterans have a higher demographic representation among startup entrepreneurs and small-business owners. That military experience shines through pretty brightly.

  94. Reply
    Doug Nordman July 15, 2012 at 8:26 AM

    Here’s another calculator to help estimate how long it takes to reach financial independence:

    Give it a chance to load. The website’s very busy.

  95. Reply
    Doug Nordman July 10, 2012 at 6:37 AM

    Mike, Al, thanks for your comments!

    Another reader said:
    1. Staying another year? If the assignment officer is sending you to Kabul– no way.
    2. Cash flow is king. Restructure debt to get required monthly payments lower. Flexibility is the key to Air Power you know.
    3. I had a guy in my office today saying that with his military retirement check he could be a civilian guard for $12 an hour and be just fine.

    I’m with you guys. It’s good to stay on active duty if it’s still fulfilling, but it’s tempting to choose the “comfort” of the uniform instead of the unknown of the transition. Unfortunately I think too many servicemembers leave their finances until it’s too late, and they feel they don’t have choices.

  96. Reply
    Doug Nordman July 1, 2012 at 3:23 PM

    Heh– nice to see that we all suffered some of the same plebe experiences… at the time I didn’t exactly appreciate how that skill would pay off.

  97. Reply
    Doug Nordman May 25, 2012 at 3:40 AM

    Thanks to Gunny at CitizenBlogger1984 for providing a link to news of the pending Marine Corps early retirement announcement:
    Marines to offer early retirement, with benefits

  98. Reply
    Doug Nordman May 7, 2012 at 4:01 PM

    My mistake; I didn’t mean to skip over the details. When NFCU said (perhaps mistakenly) that I’d still be subject to the $600/day ATM limit, I didn’t try to use it at the bank. Instead I used a credit card– for a 3% fee.

    I’ll lay it all out in the Wed 9 May post. But the bottom line is that if NFCU and I had understood each other then I would’ve tried to use the NFCU debit card first… and it probably would’ve worked, with no cash-advance fee.

  99. Reply
    Doug Nordman April 30, 2012 at 11:19 PM

    @Robbo, at least it saves the percentage fees that come with cash advances. Sounds like a wire transfer on paper, and doesn’t take much more time. By the time I was done talking with all the credit unions & banks, this would’ve seemed like the way to go.
    @ejw93, that’s the sort of transaction I hope everyone’s doing in a few years.
    She’s looking at three different cars in the next couple days. I can’t wait to see how this works out!

  100. Reply
    Doug Nordman April 3, 2012 at 7:42 AM

    Just got a note from the author– very cool!

    Name: Tom McBride
    Email: mcbridet [at] beloit [dot] edu (not dot com)
    Comment: Thanks ever so much for your review of our book, THE MINDSET LISTS OF AMERICAN HISTORY! If any of your visitors would like an autographed bookplate, free of course, just have them get in touch with me.
    Best, Tom McBride (and Ron Nief)
    Time: Tuesday April 3, 2012 at 6:48 am

    I wish I’d thought of doing this for “The Military Guide”!

  101. Reply
    Doug Nordman February 11, 2012 at 6:38 AM

    My trauma, er, memories have faded… I couldn’t remember whether it was you in there, or Samaha, or Carlson. You probably each deserve the troubleshooting credit from one time or another!

    Gosh I miss those sea-duty days. NOT.

  102. Reply
    Doug Nordman December 29, 2011 at 11:24 AM

    Thanks, Deserat!

  103. Reply
    Doug Nordman December 27, 2011 at 5:37 AM

    Thanks, guys– e-mails and “contact me” are running evenly split too. It’s also interesting to note that the servicemembers & veterans are much more critical of the graphic.

  104. Reply
    Doug Nordman December 11, 2011 at 10:38 AM

    Thanks, good question! The 1990s military drawdown was more about the end of the Cold War, not the politics. Remember the “peace dividend”?

    Your question about “retired benefits” leads right into the post scheduled for 5 AM HST Wed 14 Dec. And while there will be a slash & burn, I don’t think it’ll impact today’s active-duty personnel as badly as it did in the 1970s. I think the Reserves & National Guard will feel pain in their training, equipment, & travel budgets but not in the expenses for current personnel.

    I’ll put some thoughts together for a “drawdown predictions” post.

  105. Reply
    Doug Nordman November 15, 2011 at 4:24 AM

    Thanks, Jay! Real estate has been pretty good to us over the years, but I think we’ve seen enough of fixer-uppers for a few decades. I’m way behind on surfing.

    Neighbors have been very understanding. “This Trophy House” overlooks Kipapa Gulch. We’re on a cul-de-sac with one neighbor being a sewage-pumping substation. The neighbors across the turnaround circle never hear a thing since the familyroom’s all the way at the back of the property. The other neighbors just went through their own renovation from hell (new wood floors in the entire house, new kitchen) so they’re quite sympathetic.

    I can’t imagine doing this with kids in the house, although they’d be awful handy for getting a nailgun and a paint brush into those little nooks & crannies…

  106. Reply
    Doug Nordman October 27, 2011 at 3:59 AM


    I used to get teased about my car or about commuting by bicycle until I pointed out that they reflected my values, not my assets.

    We tell our daughter that we hope she finds an avocation that she loves, but that financial independence gives her the choice to do what she loves…

  107. Reply
    Doug Nordman October 17, 2011 at 5:19 AM

    From the comments of DoD and Congress, I think there’s a commitment to preserve the current system for those who are serving. Benefits changes would only affect those who join the service after they’re implemented.

    I’m also beginning to think that the DBB study will not be supported by the new SECDEF, although it certainly started a discussion.

    The TSP aspect of the proposal would shift military retirement from a defined benefits pension (which, like Social Security, DoD can only invest in government securities) to a defined contributions system (the TSP, which servicemembers can invest in other assets). This would allow retirees to control their own funds (through the TSP) for a hypothetical higher return. But most significantly of all, it would also reduce DoD’s pension obligations.

    I think most servicemembers would much rather choose a bigger TSP after their service obligation rather than wait for a 20-year pension vesting. It’s quite possible that DoD would offer new servicemembers (and perhaps even those currently serving) a choice between a much bigger TSP or the current defined benefits pension.

    It’s a logical extension of the existing Career Status Bonus/REDUX system, which offers a tempting choice but which we all know is not such a good deal for the servicemember. It’s also similar to the civil-service retirement system.

    How would that proposal affect everybody’s retention decision?

  108. Reply
    Doug Nordman October 15, 2011 at 4:38 AM

    Good point about the fireworks– although that’s getting better as the city council passes more laws against private New Years’ Eve blowouts.

    I really enjoyed the 4 AM surface off Oahu, rigging the bridge with all those stars overhead, and the smell of the first cup of morning coffee as it came up the bridge hatch!

  109. Reply
    Doug Nordman October 12, 2011 at 7:26 PM


    Thanks for letting me know– I don’t have an iPad and you’re the first to call attention to my blissful ignorance.

    This blog’s theme, WordPress’ Twenty Ten, has an iPad utility that lets me set some of the display features. It says “Onswipe displays a beautiful app-like experience to visitors browsing with an iPad.” It lets me select the “Cover Display”, “Cover Logo”, and the “Launch Screen Image”. I don’t have anything chosen for those and I’m not sure you should care about them, but now you know they’re options.

    The final option is “Display Font”, and there seem to dozens of them. If you have an iPad font that works well for you on other blogs or sites then I’ll set it up here.

    Here’s the support page for these settings:

    By March I suspect you’ll really be ready to visit here! Let me know if you have questions or if you’re looking for suggestions. A relatively new way to explore Oahu is…

  110. Reply
    Doug Nordman September 10, 2011 at 2:02 AM

    Thanks, Clif, my brain is definitely full and I have a lot of surfing to catch up on.

    USAA did a great job of answering our questions. I need to distill it all down into a couple of poignant posts for next week… but that’ll be after I drive to Houston today to visit my daughter!

  111. Reply
    Doug Nordman September 7, 2011 at 10:39 PM

    You know what they say about sea stories: every one starts with the disclaimer “This is a no-sh!tter”, when in fact it turns out to be the main subject…

  112. Reply
    Doug Nordman August 23, 2011 at 7:18 PM

    Thanks, Jay! Nearly a decade ago I never would’ve predicted a retirement like this. Must be all of that time I spent on surfing thoughtful contemplation…

    I’ll point out that it isn’t just this tiny island at risk for hurricanes and, of all things, earthquakes.

    And thanks, Stephanie, I’m looking forward to it too!

  113. Reply
    Doug Nordman August 20, 2011 at 7:00 PM


    We’ll get guardianship & conservatorship, although the courts make it a bit complex to have conservatorship from a different state. I might be able to do the court hearing by phone or by Skype, but I’m supposed to sign an extradition waiver with Dad’s state…

    Before you start “the talk” with your grandfather, it can be a tremendous help to hit it off with a geriatric care manager in his neighborhood. We ended up using three of them (in my town, Dad’s town, and my brother’s city) and I couldn’t have done it without them. They’ve seen it all, and they’re thrilled to get a request for help before it’s a crisis. They’re able to walk through ideas for your talk with your grandfather, and they’ll be standing by if he wants help.

  114. Reply
    Doug Nordman August 10, 2011 at 3:23 PM

    You raise an interesting point– I wonder if the assignment officer could play hardball with the 14-17-year servicemembers. It might be easier to vote with your feet for the Reserves/National Guard.

    But again, it’s good to be financially independent before getting to those critical decisions!

  115. Reply
    Doug Nordman August 10, 2011 at 4:38 AM

    Thanks for pointing out the budget’s million/billion typo. That’s been corrected. You’re the first reader to notice that error, and I appreciate the scrub.

    I think DoD has always expected that military veterans will “complement” their service with bridge careers, even if it involves Wal-Mart. That’s why we wrote the book– to show how most servicemembers can achieve financial independence without having to tackle a bridge career. The “walking out the door” scenario you describe is exactly what DoD expects Reservists and National Guard retirees to do now. When servicemembers become financially independent before leaving the military then Wal-Mart is an option, not a mandate. I hope you can continue to serve on your terms, but if the military doesn’t cooperate then I hope the book and the blog will help you to retire on your terms.

    I agree that military specialties don’t compare to civilian jobs, and the DoD’s last couple of retirement experiments in that area (REDUX and NSPS) didn’t work out very well. The 10 August post presents more info from the DBB brief. If it still leaves you feeling that there’s more to be covered then let me know what you’d like to see in a future post.

  116. Reply
    Doug Nordman August 8, 2011 at 5:38 PM

    Thanks, Jay! The subject and the material are worth learning about, but I think a hardcopy book is a terrible format.

    Kaiaokamalie, I’m not a Clickbank reader but Ostrofsky mentions then a number of times. If you’re as local as your name suggests, there are three copies of his book at the Hawaii state library…

  117. Reply
    Doug Nordman July 29, 2011 at 11:05 AM

    Good to know– thanks. It sounds like you did exactly all the right things to come out ahead.

    One of the DoD’s other examples of “coming out ahead” is the E-9 who stays for over 30 years. But at 15 years of service, that’s a tough prediction to make.

  118. Reply
    Doug Nordman July 28, 2011 at 8:11 PM

    I’ve added your items to the list!

    I’ll pass on all our thanks to USAA. I think they understand that this type of marketing is truly priceless.

  119. Reply
    Doug Nordman July 28, 2011 at 7:59 PM

    Thanks, I enjoy Paycheck Chronicles too!

  120. Reply
    Doug Nordman July 21, 2011 at 8:40 AM

    You’ve asked a great batch of questions!

    As I drafted the answers, it turned into an entire blog post which I’ll put up on Monday 25 July. The good news is that I’ll have time to polish it and add reference links. The not-so-good news is that it won’t be up until Monday.

    Until then I’d recommend plowing through some of the links at . It all started in 1998 with this research:

  121. Reply
    Doug Nordman July 4, 2011 at 3:31 PM

    Note the update at the end of the thread with links to a spreadsheet where you can enter your own assumptions and calculate the results.

  122. Reply
    Doug Nordman July 3, 2011 at 7:01 AM


    My family & friends are just happy that I have a different outlet for these tales…

  123. Reply
    Doug Nordman June 29, 2011 at 6:37 AM

    I’ll keep tracking it. I don’t report the breathless blow-by-blow updates of’s Terry Howell or Tom Philpott. However when both Armed Services Committees agree then it’s probably going to happen.

    In the meantime, can I research a specific question? You could post it here, or use the “Contact” box, or send me an e-mail. Most of my posts come from reader questions!

  124. Reply
    Doug Nordman June 10, 2011 at 6:49 AM

    I think these guides are playing to the lowest common denominator of beginning investors. But it’s easy for military investors to overlook the inflation protection of a pension with a COLA…

  125. Reply
    Doug Nordman June 7, 2011 at 8:42 AM

    Sorry to hear that, G. An unsupportive command can turn the best of retirements into the worst of nightmares.

  126. Reply
    Doug Nordman June 5, 2011 at 5:45 AM

    Thanks! We’ll see how she does during sophomore year. “So far so good”…

  127. Reply
    Doug Nordman May 27, 2011 at 11:10 AM

    Jan, I’ve been back for a couple days of research on this one, and I have to admit that I’m stumped. There might be few enough dual-military retirees for us to count them all by listing our acquaintances!

    I’m pretty sure that this info (let alone any mutual support) was practically non-existent when spouse and I married in 1986.

    Seriously, though, the data is lacking. My usual DoD statistics & demographics PDFs seem to be silent on the subject. I’ve found a couple links that I’m still digging into:
    including the comment that “Out of the 1,387,674 Active Duty members, 6.7 percent are in dual-military marriages”,

    And, much to my surprise, here’s a Facebook group:!/pages/Association-of-Dual-Military-Couples-ADMC/117567518323623
    I think I’m going to strike up a conversation with COL Knighton…

  128. Reply
    Doug Nordman May 27, 2011 at 10:36 AM

    Thanks! That seems like a fast way to find a local planner.

    I remember that Vanguard also used to offer fee-only financial planning, although some of their customers complained of “cookie-cutter results” that were heavy on some of Vanguard’s less-popular funds.

  129. Reply
    Doug Nordman May 27, 2011 at 10:31 AM

    Guilty. Seems so simple, doesn’t it?

  130. Reply
    Doug Nordman May 19, 2011 at 6:37 AM


    I’ve been hearing about George for years but never got around to reading his blog. I’ll take a look at it.

    You could spend your entire day on this book-marketing stuff. It could turn into a full-time job…

  131. Reply
    Doug Nordman May 17, 2011 at 6:14 PM

    Here’s yet another update on Tricare fees.

    Last week the House Armed Services Committee forwarded an endorsement of the first Tricare fee hike in 15 years. ( “If approved the committee’s budget bill would allow DoD to increase premiums by $30 a year for individual coverage and $60 a year for family coverage. The HAS defense budget would also allow DoD to raise the TRICARE Prime premium on an annual basis, but not at the rate they requested.”

    There’s months of legislative process and political wrangling to go before this turns into law and a DoD implementation. I’ll keep an eye on it with updates to this post or a new Tricare post.

  132. Reply
    Doug Nordman May 11, 2011 at 1:26 PM

    It’s a great idea, but I haven’t heard anything yet!

    I haven’t plowed through the enabling legislation to see if that’s even permitted, but the key is whether the TSP managers want to do conversions. They’re already tracking the tax-free contributions (from combat zones) so it’s hypothetically possible to track conversions as well.

  133. Reply
    Doug Nordman May 1, 2011 at 4:22 PM

    Thanks, Scott. I’m just working through the John Hancock bureaucracy to make the claim on my father’s long-term care policy. It’s not a very enjoyable process but it seems to be going OK so far.

  134. Reply
    Doug Nordman May 1, 2011 at 3:29 AM

    Cherie, you ask a very good question– and one that’s being asked by many frustrated investors. The answer is an entire blog post, which I’m going to write today. I should have it ready to post tomorrow– check back after 5 AM Monday Hawaii time.

    You may not feel very happy about the answer. As they say on the discussion board, it’s pretty much “stay the course”. However you can take a look at your asset allocation plan and decide how the TSP’s low expenses can fit into your savings.

    As the market continues to recover from one of the worst declines since the Great Depression, your TSP funds will also continue to recover their value. Better still, they’re much more likely to return to the market’s long-term performance averages than anything else you could invest in. Best of all, you won’t have to invest a lot of fruitless efforts (and pay higher expenses) trying to chase that performance.

    See you back here in 26 hours.

  135. Reply
    Doug Nordman April 21, 2011 at 6:35 AM

    Thanks, Scott, good to know.

    I’m calling John Hancock this week to start my Dad’s claim.

  136. Reply
    Doug Nordman April 19, 2011 at 7:54 AM

    Kathy, I agree that the military retirement system seems pretty attractive… from the retiree’s side of the fence. From the active duty perspective I think it’s worth keeping in mind that there are a lot of family, deployment, and combat decisions standing between them and their retirement benefits.

    The adverse effects of job-related stress are pretty clearly documented– let alone the effects of military stress. If the military isn’t challenging, fulfilling, and even occasionally fun then the risks of trying to gut out the years to retirement far outweigh the rewards you mention.

    Today’s active-duty members have plenty of alternatives to the “no whining” approach. They even include pension benefits– a change of specialty or community or even service, including a transfer to the Reserves/National Guard. I know quite a few who have gone to the Reserves when their active-duty careers took a turn for the worse, and some who even decided to return to active duty when their lives got better.

    My spouse left active duty just short of 18 years, and it was the right decision. (For the record, her spouse was not whining. I was ready to go where she needed to go and do what needed to be done.) We conservatively calculated that she was giving up roughly $750K in pay and retirement benefits in order to choose a better quality of life. (Hint for those of you on active duty: when you find yourself attempting to assess the quality of the family counseling & support services at your new duty station, then it’s probably not worth the money.) Today she’s retired after another seven years in the Reserves. Life has never been so good. Our family was able to stay in Hawaii. She found plenty of drills and active duty, and the money worked out just fine. She even picked up a promotion (that never would have happened on active duty) and she expects to collect more pension as a retired Reservist than she would have collected by retiring from active duty at the lower rank.

    Among my shipmates who were trying to “gut it out to retirement”, I’ve seen too many divorces. I’ve seen families broken apart. I’ve seen too many disability screenings. I’ve seen antidepressants handed out like candy, and that was on sea duty as well as shore duty. I’ve seen three suicides that didn’t need to happen, and one of them included a homicide. Active duty was not the only cause of their problems, but it contributed. I wish every one of those people (and their families) had considered a transfer to the Reserves or even going cold-turkey civilian.

    The military retirement system is worth a lot. It might even be worth everything that we feel we need for a good life. But is it worth sacrificing everything? I vote “No.”

    But hey, that’s why we wrote the book– to help military members and their families assess the relative benefits and drawbacks of leaving active duty. Financial independence means working and retiring on your terms– and not having to stay on active duty if it’s not the right career anymore.

  137. Reply
    Doug Nordman April 14, 2011 at 7:21 PM

    I don’t have any solutions here, Jan, but one possibility is to keep alert to another open enrollment period for the SBP. But that’s unpredictable.

    When we first retired I kept a pretty tight grip on the purse strings. My spouse was fine with that because her frugality makes me look like a spendthrift. However nearly nine years later after coming through two recessions with an intact portfolio, we’ve both become a lot more comfortable with loosening up a little. We know we can always fall back on our black-belt frugal skills if it becomes necessary.

  138. Reply
    Doug Nordman April 14, 2011 at 6:02 PM


    I think the AF is unique among the services in letting their retired members return as drilling Reservists, but I don’t know each of the services’ Reserves or Guard as well as I know Navy.

    Navy Reserve would also prefer that their members not “homestead”, and eventually it can count against them at promotion boards. However in the Reserves there’s at least a choice, while we all know what would happen if we tried to homestead on active duty…

  139. Reply
    Doug Nordman April 11, 2011 at 6:27 AM

    After I’ve had a few years to reflect on submarine design, you’d think that by now we’d have figured out (1) how to build a waterproof electrical pump, and (2) how to put it away from hatches and other water sources. We certainly didn’t save any money from skimping on those two criteria.

    For those of you arriving from a search engine, please tell me what terms you used! This post had double the blog’s usual daily traffic, and three days later it’s still at the top of the list.

  140. Reply
    Doug Nordman April 11, 2011 at 6:19 AM

    Thanks, I’m glad those pingbacks are working.

    Thanks also to Deserat/Bridget for her draft on this subject. That chapter of the book comes from someone who really knows how to balance the Reserve and civilian aspects of life & work, and the chapter practically wrote itself.

  141. Reply
    Doug Nordman April 6, 2011 at 7:27 PM

    Man, I can’t believe the spam that this post has inspired.

    WordPress’ “Akismet” utility does a pretty good job of screening it out, but there’s a whole new wave of “Groupon”-style spammers who make their comments look more like an announcement. Somehow that gets through the filter, although I hope it’s learning.

    It might be a while before I put up another post on this subject. Please comment or “Contact” me or e-mail me if you have questions.

  142. Reply
    Doug Nordman April 6, 2011 at 6:25 AM


    And to think that people wonder what early retirees do all day…

  143. Reply
    Doug Nordman March 30, 2011 at 3:10 PM


    Most servicemembers (and even most veterans) have no feel for the expense of civilian health insurance. I think military healthcare will get more expensive, but I think it’ll still be a lot cheaper than the civilian equivalent.

  144. Reply
    Doug Nordman February 28, 2011 at 5:51 PM

    Keep saving as much as you can while active duty is still fun, and you guys will win the game. You’re already well on the way.

    My spouse and I found that our priorities began to conflict with the “active duty lifestyle” when we started a family.

  145. Reply
    Doug Nordman February 27, 2011 at 5:41 PM

    Speaking of higher Tricare premiums, here’s the latest DoD proposal: a much more modest 13 percent increase for retired TRICARE Prime enrollees for FY2012, with no enrollment fee or deductible changes for TRICARE Standard or TRICARE For Life. Specifically, the plan calls for:
    – Raising the 2012 Prime enrollment fees by 13% — from $230 single/$460 family per year to $260/$520
    – Indexing those fees in 2013 and beyond to a medical inflation index (based on a measure of Medicare cost growth projected to rise at 6.2% per year)
    – Minor changes to TRICARE pharmacy copays.

  146. Reply
    Doug Nordman February 24, 2011 at 7:51 PM

    Thanks! And wow. Good questions.

    I guess the first answer would be that I don’t see any big changes coming. Congress tried “big changes” in 1986 with REDUX and retention plummeted steadily over the next decade. There were other factors contributing to the drop, but the only factor to consistently correlate with retention (in both directions!) is money.

    The rest of the answers will be long enough to make an excellent post. Let me look up some references and put together a better answer for next Monday. And thanks again for asking!

    Asset allocation when you’re getting a military pension: the military pension is the equivalent of a lifetime of inflation-adjusted income from TIPS or I bonds. We’ll calculate how big that asset class would have to be to throw off that much income, and then talk about how to diversify it with other asset classes.

  147. Reply
    Doug Nordman February 23, 2011 at 7:45 AM


    That was a very interesting day.

    It was also interesting because the hospitality suite was on the 35th floor of the Hilton, where I could look down on Queen’s at a solid 4-6 feet swell all morning. It was killin’ me because I’d left the longboard back home, never expecting to get a chance to use it. I didn’t think this was quite the crowd for free surfing lessons…

  148. Reply
    Doug Nordman February 17, 2011 at 5:50 PM

    Thanks, Janet!

    You’ll have to keep us posted on how things work out. You’re turning into one of the retirement mentors now…

  149. Reply
    Doug Nordman February 17, 2011 at 7:44 AM

    Thanks. I have to admit that I’m a bit weak on the GI Bill and much more familiar with active-duty tuition assistance.

    I hope all the bureaucratic delays get straightened out before it turns into the military scandal of 2011…

  150. Reply
    Doug Nordman February 8, 2011 at 9:14 PM


    I’m looking forward to when I’ve been retired 14 years!

    We own a home and a rental property. We’re DIY & HGTV home-improvement enthusiasts, so in 1989 we were able to scrape together the down payment on a “quaint fixer-upper”. In 2000, after looking at dozens of homes, we were also able to scoop up another “handyman’s special” bargain during the pit of Hawaii’s decade-long real-estate recession. The sweat equity has been a substantial investment.

    Today’s prices are eye-popping, and we’ve improved our homes to the point where they’d be out of our reach if we had to buy them again. (I envy anyone who could live on the North Shore, especially during winter surf!) When I retired in 2002 we were carrying an 8% mortgage on our home but a couple months ago we were able to refinance down to 3.625%. That’s helped our financial situation quite a bit.

    Rental property cash-on-cash returns are particularly pathetic here and it ties up a lot of equity– 3-4% APY is common but it was a good hedge during the 2008-09 recession. Our rental is between Schofield and Hickam/Pearl Harbor so military tenants have been great.

    Although Hawaii’s real-estate prices aren’t for the faint of heart, there are bargains. Condo & townhome prices have been especially soft for the last couple years and they offer good ways to build equity over the next decade. I’ll have to work up a post on retiring in Hawaii, but feel free to comment or e-mail me with questions. Thanks!

  151. Reply
    Doug Nordman February 7, 2011 at 9:05 PM

    Thanks for your comment, Christopher. I’m hoping that the more military families learn about financial independence, the less pressure they’ll feel to get a job “just because” they’ve retired from the military.

    The best part about retirement is having the time for quiet contemplation and reflection, even if it’s “only” to decide what you’re doing this afternoon. I just added a link in the “Retirement” sidebar to Ernie Zelinski’s “Get-A-Life Tree”. It’s guaranteed to jumpstart your retirement activities. Keep in touch and let us know how things are going.

  152. Reply
    Doug Nordman February 6, 2011 at 7:51 AM

    Same here, and I think most ERs struggle with it. I try to turn the conversation back to them.

    When new acquaintances see the way I dress and learn about my surfer-bum lifestyle, though, I think they’re afraid I’m going to ask to borrow their money. So they’re happy to talk about something else…

    I’ve really enjoyed your blog over the years. I think you deal with the personal & emotional issues that most financially-oriented bloggers never get around to. (Those issues also seem to keep a lot of military veterans in the workforce even if they don’t have to be there.) It’s even more impressive with your background of accounting & venture capital, where very few seem to ever feel compelled to retire!

  153. Reply
    Doug Nordman January 18, 2011 at 4:59 PM

    Thanks! As you can imagine, there’d be some skepticism from certain segments of the military if I didn’t have equations & numbers to back up the claims…

  154. Reply
    Doug Nordman January 14, 2011 at 3:15 AM

    Thanks! So far so good…

  155. Reply
    Doug Nordman January 6, 2011 at 10:29 AM

    I wonder if it ever really goes away while we’re working.

    The only solutions seem to be a few weeks’ leave of doing absolutely nothing… and of course terminal leave!

  156. Reply
    Doug Nordman December 27, 2010 at 7:36 AM

    Thanks! We have one in college on a Navy ROTC scholarship, so these subjects are getting a lot of discussion & practical application.

  157. Reply
    Doug Nordman December 24, 2010 at 11:32 AM

    Thanks, Gary! Great website– I’ve added it to my blogroll.

    I’m also going to mention your website at Blogging has really broadened the resources that I’ve been recommending for military retirees.

  158. Reply
    Doug Nordman December 19, 2010 at 5:31 AM

    Well, you can also tap the Roth for first-time home purchases and education expenses! But you’re probably done with those categories.

    I need to finish estimating my 2010 income so that I can squeeze in a little bit more of a Roth IRA conversion. It seems easier to write blog posts than to chase down all the details of the income and deduction numbers.

    The biggest advantage of a Roth is NOT having to take distributions. A conventional IRA may grow so large by the time you turn age 70 that the required minimum distribution could be a huge tax hit. Instead that would be one of the first things you’d tap (definitely after age 59.5 and perhaps even earlier with 72(t)) to smooth out the tax bill over the years.

    After eight years of early retirement I’m beginning to wonder if frugal habits will ever change, although I still enjoy the challenge. Our spending habits have started to change, especially if the alternative jeopardizes safety or a bigger expense. For example I’ve reluctantly concluded that car tires on Oahu are pretty much worn out after six years, no matter how few miles we’ve put on them.

    Good comment about the spreadsheet– I need to put up a post about “lifetime consumption-smoothing” retirement calculators like ORP and ESPlanner. Those of you who want to explore on your own can check the retirement links in the sidebar.

  159. Reply
    Doug Nordman December 15, 2010 at 11:14 AM

    Yep, the trick is not being scared by those 5-10% withdrawal rates that consume a lot of savings before the pension(s) and Social Security kick in!

  160. Reply
    Doug Nordman December 6, 2010 at 10:21 AM

    Thanks! The next three posts are on Reserve/NG healthcare, pension comparisons, and handling those multiple streams…

  161. Reply
    Doug Nordman November 19, 2010 at 4:48 AM

    The book includes the story of a shipmate who was retiring (Yay!). He’d spent most of his Navy career avoiding Navy dentists (Booo…) so when it came time to fill out the retirement checkout sheet he left the dentist’s appointment until the absolute last possible moment. We practically had to drive him over there.

    You can see where this is going. They had to do six root canals: one every other week for three months. Not a good way to spend terminal leave…

  162. Reply
    Doug Nordman November 16, 2010 at 7:39 PM

    Thanks to Jerome and everyone else who nominated cover designs over at, Facebook, and e-mail! We have some pretty talented graphics artists out there.

    The publisher made the selections from our nominations and the contest is now over. I’ll post the results on the blog as soon as the press releases go out.

    Jerome, I’m afraid they didn’t go for the flaming financial house. I like the image, though, and I’m going to figure out a way to get some use out of it somewhere…

  163. Reply
    Doug Nordman November 4, 2010 at 9:07 AM

    WordPress flagged a comment from a German poster whose website translates to “daily cash winners”… smells like spam to me. (Please contact me if I’m mistaken.) However their comment is still worthy of response: “I don’t usually reply to posts but I will in this case. My God, i thought you were going to chip in with some decisive insght [sic] at the end there, not leave it with ‘we leave it to you to decide’.”

    Sorry you didn’t get the easy sound-bite answer you’re seeking. Early retirement is a highly individual decision all by itself, even without spouse/family considerations. Many veterans miss the opportunity to make the transition, let alone pursue the education or the self-confidence to handle the issues that arise.

    I can’t tell you the best way to live your life, but I can tell you that it can best be achieved through financial independence.

    I can also suggest that you read the book when it’s published next year! There’s plenty more material in it than I’ve put in the blog, and the book is packed with the personal stories of over 60 veterans. In the meantime you can join the discussion at and see what hundreds of others are doing with their ER lives.

  164. Reply
    Doug Nordman November 4, 2010 at 8:31 AM

    Yep, and I learned an epically awesome foreign language too!

  165. Reply
    Doug Nordman October 28, 2010 at 7:45 AM


    I’m sorry, I can’t ever recall ever seeing anyone ever taped to anything on any submarine. Why, you’d have to station a safety monitor to make sure that they could be freed in the event of an emergency, or you’d have to carefully design the taping method to ensure that they could free themselves.

    It sure was a different Navy back then… and I’m glad taping is no longer a part of it.

    And we division officers miss the heck out of that other stuff too. NOT.

  166. Reply
    Doug Nordman March 19, 2018 at 8:33 AM

    Thanks, Crew Dog, those are great points. And I hate paying full retail on sales fees & commissions, yet the FSBO alternatives are trading money for time & stress.

  167. Reply
    Doug Nordman March 16, 2018 at 6:16 PM

    Ted, I’d say that the answer is “Yes”, but you’d have to check with both Tricare and your employer’s dental program. Each may deny coverage if the other is used, or one will be second payer to the other.

    I’d also talk with the dentist about cash discounts for some of the procedures. That way you could save your coverage (and your cap) for the most expensive work while paying the smaller (discounted) amounts with cash out of pocket. The dentist is motivated by not having to file insurance claims.

    Note that in eight months you’ll have to make a choice of FEDVIP dental plans, because TRDP ends in December.

  168. Reply
    Doug Nordman March 16, 2018 at 1:15 PM

    I hear that, Sallie. The Reserve/Guard retirement system is so complicated that this has been the blog’s highest-ranked post every month for over five years.

    The good news is that you didn’t really have a “choice” on Final Pay or High Three. Final Pay is only for those who joined the military before 8 September 1980 (with a Date of Initial Entry into Military Service before then), so you’re most likely on the High Three pension calculation.

    As Dave mentions, Combat-Related Special Compensation is different from Concurrent Retirement and Disability Pay. DFAS will choose the higher amount for you when your pension starts.
    Until your pension starts, you’ll continue to receive your VA disability compensation.

    Since you’re retired awaiting pay, you’re also eligible to purchase Tricare Reserve Retired health insurance until your Tricare starts at age 60. TRR is not subsidized like Tricare Reserve Select so the TRR premiums are higher. You might do better with employer health insurance or from the ACA health exchange, although you can continue to seek treatment from the VA for conditions that are related to your disability rating.

    Even if you’re eligible to start your pension earlier than age 60 (due to combat deployments or national emergencies of at least 90 days in a fiscal year), Tricare starts at age 60.

  169. Reply
    Doug Nordman March 15, 2018 at 1:02 PM

    Good question, Calseung73! The post lays out the rules for receiving a civil-service pension and a military Reserve pension.

    You already know that you can also use your active-duty time to buy your civil-service military service credit deposit. You can learn more about that system (and analyze its value to you) with Eddie Wills’ post from the “Related articles” links:

    It sounds like your HR might not have a handle on how your military active-duty time counts toward a Reserve retirement. Your Reserve point-count records should show that you’ve received one point for each of your days of active duty, along with 13 good years of Reserve retirement credit. You’ll continue to earn Reserve retirement points (and good years) until you reach 20 good years, at which point you’ll receive a Notice Of Eligibility for a Reserve pension. The 13 years of active duty count toward that pension, and you only need to earn seven more good years for the NOE.

    In other words, your active duty can be counted toward both your civil-service retirement and your Reserve retirement.

  170. Reply
    Doug Nordman March 13, 2018 at 5:34 PM

    Thanks for the update, Greg– do you happen to have a link to that reference for others to use? Would that be in the Financial Management Regulation or somewhere else?

    I still get the question every few months.

  171. Reply
    Doug Nordman March 12, 2018 at 12:31 AM

    Thanks, Dermot! Eddie has a lot of wisdom on his site (and from his experience) and I enjoy keeping in touch. He contacted me to chime in on the home debate, and I think the discussion needs opinions from all sides.

  172. Reply
    Doug Nordman March 7, 2018 at 9:41 PM

    It’s a tough decision, Troy.

    When you reach 18 years of service, federal law guarantees that you’ll be allowed to continue on active duty until 20. If you leave active duty for the Reserves or National Guard you’ll still be able to serve up to at least 20 good years, but you may also have a six-year commitment to the unit. (Talk with your Reserve recruiter to verify this.) You’ll also want to know that you have a Reserve/Guard unit near you, and that you can get a drill billet.

    If you have more than 16 years of active duty when you transfer to the Reserves or National Guard, then your service’s sanctuary policies will limit the active duty which you can take.

    You’ll also want to reassess your financial situation. If you’re near financial independence then you have a lot more flexibility. (Your savings/investments only have to cover the gap between leaving active duty and starting your Reserve/Guard pension at age 60.) If you’re still pursuing FI then you’ll have to consider the employment prospects for you and your spouse. A Reserve/Guard career offers more of what you enjoy about the military and less of the not-so-good parts, but you’ll still have to focus on work-life balance.

    If you still feel challenged & fulfilled by active duty, then maybe your goal is finding a billet in a location where your family can thrive– while knowing that you’d move back to your current area in a few years. That’s not an easy decision either, and you’ll have to have lots of long discussions with your family.

  173. Reply
    Doug Nordman March 7, 2018 at 7:31 PM

    Ha! You never know when you’ll run into another surfer!

    White Plains Beach is my favorite. Let me know when you have the time to paddle out… the winter has been pretty good and I’m really optimistic about south shore summer.

    Brandon’s at least 6’4″ and yeah, he makes a 10’0″ look like a toothpick. I think he’s surfing a used 9’6″ or 9’4″ that he just bought from Kimo’s Surf Hut. Kimo (James Moore) is a retired Marine and he takes good care of military surfers.

  174. Reply
    Doug Nordman March 7, 2018 at 7:24 PM

    Thanks, Jan, I appreciate your retirement moving experience!

  175. Reply
    Doug Nordman March 4, 2018 at 10:58 AM

    Thanks, Warner, you have a great long-term perspective on how priorities change during a military career!

    It’s the same way after military retirement.

  176. Reply
    Doug Nordman March 4, 2018 at 10:56 AM

    I appreciate your comment, Rebecca, and I’ve reached out to USAA’s Communications team.

    Another option is contacting the Member Relations team through the USAA app/website and a supervisor.

  177. Reply
    Doug Nordman March 1, 2018 at 12:49 AM

    You’re welcome, Derek!

    Military servicemembers, vets, and families are welcome to send a guest post anytime. If it helps with your writing, we have guidelines here:

    By the way, I know that many of the time-in-grade rules are different in the Coast Guard. However federal law for the other branches requires officer retirees to have at least 10 years’ commissioned service. That sounds like a different timeline than your plan for your final five years as an O-3E, so just make sure that you’ll still be able to draw a pension from the O-3E row of the pay tables.

  178. Reply
    Doug Nordman February 28, 2018 at 10:34 AM


    I’m happy to help with those numbers, although I depend on the manual calculation instead of those point charts.

    I’m going to assume that you did not deploy to a combat zone after 28 January 2008 for at least 90 days during a fiscal year. If you had, that would entitle you to start your pension three months earlier for each of those 90-day segments. If that might be an issue, though, you can read more about it at this post from my friend (and ANG officer) Ryan Guina:

    You could wait to start your Reserve pension on 1 January 2019, but it works against you with High Three. It can work with the Final Pay pension system (it’s usually less than a 10-year payback), which is applicable to those who started active duty before 8 September 1980. However High Three averages the final 36 months of pay tables before you start your pension. If you delay the start of that pension while the older base-pay numbers are dropping out of the 36-month average, you could be missing thousands of dollars a month in pension deposits which would take decades to make up.

    When you start your Reserve pension in November 2018, the 36 month average uses 11 months from the 2018 pay tables, 12 months from the 2017 tables, 12 months from the 2016 tables, and December 2015. You probably retired awaiting pay with at least three years time in grade as an O-6 (or a waiver down to two years), so your pension is calculated from that rank.

    If your Date of Initial Entry into Military Service is 17 March 1985 then (for pay longevity purposes) your DIEMS date puts you as an O-6>30 in March 2015. I happen to know that the pay tables top out for O-6 at 30 years (it’s the same pay for O-6>32) so it’s a little easier to look up the numbers.

    Here’s the numbers I’m using:
    2018 O-6>32: $11,599.80
    2017 O-6>30 and O-6>32: $11,328.00 for both
    2016 O-6>30 : $11,094.90
    December 2015 O-6>30: $10,952.40

    The November 2018 High Three average is:
    [(11 x $11,599.80) + (12 x $11,328.00) + (12 x $11,094.90) + $10,952.40] / 36 = $11,322.91

    4833 points / 360 x 2.5% x $11,322.91 = $3800/month.
    (The Financial Management Regulation requires DFAS to truncate the result to the lower dollar.)

    If you start your pension in January 2019 and there’s a 2.0% pay raise (which seems like a reasonable compromise on the 2.6% proposal), then your High Three average would drop December 2015 and January 2016 while adding December 2018 and January 2019’s 2% pay raise.

    The January 2019 High Three average would be:
    [($11,599.80 x 1.02) + (12 x $11,599.80) + (12 x $11,328.00) + (11 x $11,094.90) ] / 36 = $11,361.36
    and your new pension amount would be $3813/month. However you lost the entire month of December ($3800) and some days in November. Making up >$3800 at a higher pension of $13/month would take over 24 years. (It’d be an additional $126.67/day or 9.75 months per day for whatever you lost from your November birth date). Maybe you’d win that bet (it’d motivate me!) but I’m not sure it’s worth the payoff.

    Regardless of when you decide to start your pension, you can sign up for Tricare Prime or Tricare Select on your 60th birthday.

  179. Reply
    Doug Nordman February 27, 2018 at 10:04 AM


    One benefit of the BRS is exactly as you’ve said: taking more money with you (in your TSP account) if NOAA Corps doesn’t work out. You have no control over medical or physical problems, downsizing, lack of promotions, or other issues affecting your ability to get to 20. You might even choose to leave before 20 because of family issues or changing career priorities. If you make that choice under High Three (or if you’re forced out) then you get nothing.

    The overall retirement rate of the uniformed services is around 15%: 1 out of 6. I get e-mails every week from readers who were forced out (or who had to make the difficult decision to leave), and they wish they’d been able to take more money with them. They never vested in any pension benefits and they didn’t have TSP matching. Look around NOAA at the other officers and decide who’s the special snowflake among them who will make it to the pension. Is it you? How do you know?

    The best time to contribute to the TSP was when you joined the uniformed services. The second-best time to contribute to the TSP (and other retirement accounts) is today. When you opt in to the BRS and contribute at least 5% to the TSP, DoD’s matching BRS contributions to your TSP account will compound along with your contributions. If you invest aggressively (the L2050 fund or the C, S, & I funds) then your TSP account balance can grow to replace the difference between the High Three pension and the BRS pension. Run the BRS calculator for your situation and analyze your results. This post (with multiple calculator runs) can help you put that into perspective:

    Between 8-12 years of service you may also be eligible for a Continuation Pay contract. It runs concurrently with any other service obligations you may have (if permitted by the other obligation contract). When you invest your CP bonus in the TSP, it can also compound to an amount which would give you more in your TSP than the pension difference between High Three and BRS.

    For most servicemembers, the BRS decision results in more money because they’re not going to retire from the uniformed services. Even for most retirees, the BRS matching TSP contributions are better than the difference in pension. This post gives you a bunch of additional reasons why you’d rather have more in your TSP account than to have the federal government doling it out to you a month at a time.

  180. Reply
    Doug Nordman February 25, 2018 at 1:32 PM

    Chief, the amount of the DoD BRS TSP contribution for each month is determined by the amount of base pay which is contributed by the servicemember that month. It’s 5% of a month’s base pay for active duty because they’re on duty all month long and they contributed (at least) 5% of their base pay. For a Reserve/Guard servicemember, it’s 5% of the amount of base pay earned during that time period, assuming the Reserve/Guard member contributes at least 5% of the amount of base pay they earned.

    If the only military duty performed by a Reservist that month is the weekend drill, and they contribute at least 5% of that drill weekend’s base pay to the BRS, then the DoD BRS match would be 5% of the base pay earned during the drill weekend– not 5% of an entire month of base pay.

    As you said, it’s set by the base pay for both Reserve/Guard and active-duty servicemembers. The active-duty members worked all month. The Reserve/Guard members worked for a drill weekend.

    If the Reserve/Guard members were on active-duty orders of at least 30 days (and contributed at least 5% of their base pay to the TSP) then their DoD BRS TSP contribution would also be 5% of a month of base pay– the same amount of money the DoD BRS contributed that month to an active-duty servicemember’s TSP account.

    However you can still contribute up to $18,500 of your Reserve pay to your TSP every year, and the DoD BRS match is not included in that $18,500 elective deferral limit.

    DFAS’ MyPay software will allow up to 92% of all pay (specialty & bonus as well as base pay) to be contributed to the traditional TSP. (7.45% is reserved to pay FICA.) The various DFAS pay systems will allow about 60%-65% of all pay to be contributed to the Roth TSP. (Again the rest of the money is supposed to be set aside for tax withholding and FICA.) If I remember correctly, MyPay is set at 60% and Marine Online is set at 65%.

    When you do a drill weekend (four drills) as an E-7>12, that’s $558.24.
    If you contribute at least 5% of that to your TSP then the DoD BRS contribution will be 5% of $558.24 or $27.91. Over a year of 10 drill weekends that adds up to $279.10. If you do two weeks of AT (14 days of pay or 14 drills) then the BRS contribution is $139.56 x 14 x 5% = $97.69. The entire year’s DoD BRS contribution is $376.79. Over eight years that would be roughly $3200 (from DoD) because you’d continue to accrue seniority and receive annual pay raises.

    Meanwhile those 10 drill weekends and 14 days of AT earned 54 drills or 54 x $139.56 = $7536.24. You could contribute 92% of that to the traditional TSP ($6933.34) or 60% to the Roth TSP ($4521.74). Over eight years your contributions would add up and the entire account would compound in the TSP’s investment funds.

    For a Reserve/Guard member to contribute $18,500 to their traditional TSP account, they’d have to gross at least $18,500 / 92% = $20,108.70. For an E-7>12 earning $139.56 base pay per drill that’d be 144 drills– 10 drill weekends and 104 days of active-duty orders, or 12 drill weekends and 96 days of active duty.

    You can check your TSP balance in your TSP account (both traditional and Roth TSP). You can check your percentage contribution settings in MyPay (MOL for Marines, Direct Access for USCG and NOAA). Each month’s LES will also have fields reflecting the DoD BRS 1% agency automatic contribution, the DoD BRS 4% agency match.

    The TSP only accepts contributions from federal government pay (federal civil service and military). You can’t contribute civilian corporate pay directly to the TSP, although your employer might have a civilian 401(k) plan. (The TSP is based on the same Section 401(k) of the tax code.) You could also contribute self-employment income to similar retirement accounts like a Solo 401(k). The DoD training materials don’t include this information because it’s outside of the scope of the BRS and the TSP programs.

    However the TSP website mentions that you can roll a 401(k) account into the TSP ( You can even roll a traditional IRA into the traditional TSP.

    As for the quality of the explanations on the government websites, I can forward your (anonymous) feedback to the DoD BRS office for them to clarify the Reserve/Guard portions of the curriculum.

  181. Reply
    Doug Nordman February 25, 2018 at 12:21 PM

    I’m glad the podcasts & posts are helping, Steve! Please let me know your feedback on the book.

    The real insight into the cost of owning your home comes when it’s time to sell. The 6% commission to the realtor (paid by the seller) and all of the other seller’s closing costs can add up very quickly. This is where many servicemembers get “trapped” in home ownership (and perhaps landlording) with an unexpected move.

  182. Reply
    Doug Nordman February 25, 2018 at 12:15 PM

    Good points, Peter!

    I still get a lot of unhappy e-mails from Norfolk-area homeowners who are long-distance landlords.

  183. Reply
    Doug Nordman February 25, 2018 at 12:10 PM

    It looks like the letter will follow pretty quickly, Rich. More importantly, the benefits are retroactive to the date of your claim.

    As long as your financial & family info is correct in eBenefits, the VA may be able to start compensation by the beginning of April– and back pay to the date of your claim.

  184. Reply
    Doug Nordman February 23, 2018 at 10:59 PM

    Thanks, Rich, and I appreciate the Grant Cardone advice!

  185. Reply
    Doug Nordman February 23, 2018 at 6:16 PM

    Thanks, Tri, good niche question! I sent you a long e-mail, but the short answer is that you simply decline to retire (or don’t complete the 20 years of active duty) and resume drilling.

    The 20-year active-duty (and Reserve) retirement is voluntary (rank and high-year tenure permitting).

  186. Reply
    Doug Nordman February 22, 2018 at 11:26 AM

    It’s a tough decision, Michael, but when one spouse retires from active duty (and you’re financially independent) then the other spouse has more choices.

    The Reserve difference is just like any other community: the availability of billets and the promotion opportunity. Assuming she’s still feeling challenged & fulfilled (and especially if active duty has the higher probability of promotion & retention) then she’d stay with active duty. If she’s ready to go Reserve/Guard now, then some billets are more scarce at the senior ranks or might even require competitive selection. Not being in a pay billet can make it difficult to get enough points to meet the requirements for a good year, and correspondence courses are no longer an option for earning points. It might make more sense to get into a Reserve billet now so that she’s more competitive for other Reserve billets later.

    If she goes to the Reserves at 14 years then there’s the possibility of being mobilized for a deployment during the next six years. If she goes to the Reserves at 17 years that would be less likely (but still possible).

    You’d have to talk with other Reservists in her community (and with a Reserve recruiter) to parse the billets at each year (and at each prospective rank).

    I don’t think that the discussion is selfish– it just reflects that she has more options. Challenge and fulfillment are the entering arguments. There’s certainly no mathematical reason to raise your net worth from “enough” to “way more than enough”, but the extra margin of financial security (and behavioral financial psychology) might help her sleep better at night. How does she want to balance career, family, and quality of life? How will she feel 20 years from now when she looks back on her decision?

    For those readers with very long memories, there is no longer any requirement to finish a 20-year Reserve career with 6-8 years in a Reserve unit.

  187. Reply
    Doug Nordman February 22, 2018 at 10:45 AM

    Roger, I’m not able to answer that question.

    If you’re forced into retirement by a medical or physical evaluation board then the military is preventing you from willingly achieving the 10 years of commissioned service, and ideally that would enable you to request a waiver on the length of commissioned service. However I’m not sure whether “retired for medical reasons” means you were given a disability retirement. A regular retirement would be under Section 3911 of Title 10 of federal law:

    But a disability retirement uses a different calculation that does not depend on your length of commissioned service.

    I recommend you post more details about the nature of your retirement at the It was founded by a JAG who understands all of the legal aspects of the process, and the members probably include veterans who’ve seen your situation before. In addition to that you may need to review your service record with a local JAG (on a military base) or lawyer who can advise you on how the retirement was determined.

  188. Reply
    Doug Nordman February 19, 2018 at 10:02 PM

    Patterson James, you might be referring to these clauses in the FERS Handbook:
    “On account of a service-connected disability incurred in combat with an enemy of the United States; or

    On account of a service-connected disability caused by an instrumentality of war and incurred in the line of duty during a period of war…”

    This is a good time to consult with your OPM rep and talk to a JAG. These sections of the Handbook may be referring to a disability retirement (Chapter 61 of Title 10 U.S. Code) which is different from an active-duty retirement and also different from receiving compensation for a VA disability rating.

    In other words I’m not sure about the civil service interpretation of the word “disability” in the FERS handbook, and I strongly recommend checking with a lawyer.

  189. Reply
    Doug Nordman February 19, 2018 at 9:55 PM

    Good points, Warner25 and GaryW!

    I think the best conclusion from everyone’s data is that the Reserves and National Guard offer far more ways to achieve work/life balance than being on active duty.

    Of course the apocryphal joke is that you know you’ve achieved the work/life balance when your family, your civilian employer, and your Reserve/Guard unit are all equally annoyed with your time-management skills…

  190. Reply
    Doug Nordman February 19, 2018 at 9:52 PM

    Good points, Peter, and I think the Reserves and active-duty counterparts are much better integrated since 9/11.

    I hear you on the senior ranks in the Navy Volunteer Training Unit for all the wrong reasons. Many many senior enlisted and senior officer Reserve/National Guard servicemembers think that they have to continue drilling for the longevity raises. As you know, federal law guarantees that Reserves/Guard who “retire awaiting pay” will have their longevity continue to accrue (just as if they were on active duty) up to the start of their pension.

    Once those O-5s/O-6s reach time in grade (three years by law, two years with a waiver) they can apply to retire awaiting pay and they don’t have to drill for the longevity.

  191. Reply
    Doug Nordman February 19, 2018 at 9:46 PM

    I appreciate your insights, DK2055, and let me know if I can help with any of the details in your plan!

    The higher your savings rate (both cutting expenses and raising income) the faster it happens.

  192. Reply
    Doug Nordman February 17, 2018 at 9:44 AM

    Sean, that’s a very good question and the answer is outside my circle of competence. You need to consult with a JAG (or a civilian lawyer) who understands OPM regulations. You could also e-mail Eddie at ( to see if he’s heard the question before.

    Of course you can receive two federal pensions. You’ve earned both of them. The question is whether you can continue to receive the benefit of the military service credit deposit in your federal pension without having to waive a portion of your military pension.

    I see three possibilities:
    1. OPM regulations give you the credit for the first 10.5 years (because you were entitled to it at the time) and you elect not to take the credit for the latter 9.5 years (because you’d have to waive your military pension). You’d still apply for your additional FERS credit for annual leave:
    You’d retire to both pensions. It might be perfectly legal under OPM regs, although it’s certainly rare. The question is whether OPM actually has any regs to address this situation.

    2. OPM regulations determine that you’re no longer eligible to benefit from your military service credit deposit for the first 10.5 years and they return your money. You’d still apply for whatever FERS credit you can get for annual leave (the same post linked in #1).
    You’d retire to both pensions, although your FERS pension is smaller because you were no longer able to use the military service credit deposit.

    3. OPM regulations determine that you’re now going to have to waive a portion of your military pension in order to keep the military service credit deposit from the first 10.5 years. You’d have to negotiate a solution, because I think that an active-duty pension now is worth more than buying a larger FERS pension later.
    You’d retire to both pensions, although your military pension is smaller because you had to waive a portion of it.

    You might possibly find some way to apply for a waiver to enable #1.

    Again, please consult Eddie and a lawyer who understands OPM FERS regulations with military service.

  193. Reply
    Doug Nordman February 17, 2018 at 9:24 AM

    Thanks, Ryan!

    For anyone else who’s curious, Ryan is my blogging mentor and a good friend. (Not necessarily in that order.) TheMilitaryWallet is another outstanding resource for the details of pay & benefits.

  194. Reply
    Doug Nordman February 17, 2018 at 9:22 AM

    Thanks, FIndependentOne!

    Mike made a good point about those who have been involuntarily separated.

  195. Reply
    Doug Nordman February 17, 2018 at 9:20 AM

    Thanks, Caroline! I have high hopes for the industry’s new life insurance policies which include an optional long-term care rider. (Clients could use whichever part happens first.) However that still doesn’t solve the problems with claims processing and the payout bureaucracy.

    My father first noticed his cognitive symptoms in 2008 and managed to live independently until 2011, although (in retrospect) by late 2010 he was probably marginally safe. (And still refusing all help.) Between early 2011 and his death in late 2017 his care cost $625K. That averages out to just under $100K/year for everything in Denver, including his Medicare supplemental insurance policy, dental care, prescription co-pays, new clothes and dining/entertainment.

    Medicare paid for his hospitalization (perforated ulcer) which led to his move into a care facility. Medicare also paid for the first six weeks of rehab (the care facility is also a skilled nursing facility).

    Self-insuring is not easy to do because the costs vary so widely. Fidelity has estimated that end-of-life healthcare costs about $225K, but that number is several years old and that care is a highly individual experience. Dementia patients can live as long as 20 years (even with Alzheimer’s) but my father’s nine years is probably around the middle-long end of the bell curve.

    Your experience might be totally different. You might not need as much time in a care facility (especially if you have home care) and technology might reduce the expenses.

  196. Reply
    Doug Nordman February 14, 2018 at 9:21 AM

    Glad to help. Please let us know how it goes.

  197. Reply
    Doug Nordman February 13, 2018 at 11:24 PM

    Thanks for the editorial feedback, Mike. Military servicemembers, veterans, and families are welcome to submit a guest post to The-Military-Guide to share your side of the story as you’d like to see it. Perhaps I’d benefit from the constructive criticism of another perspective, especially when it’s written better than my post.

    I think those who’ve dealt with injuries & wounds should also stay on active duty as long as they’re feeling challenged & fulfilled. I appreciate that not everyone can get the approval of the MEB/PEB process to do that. However I’ve also seen many stories of veterans who’ve been forced out of uniform and have gone on to even greater careers, entrepreneurialism, volunteerism, and public service. They’ve improved on the hand they were dealt.

    I think that anyone who’s gutting it out to 20 is not only risking their own health but possibly weakening the team by poisoning its morale and affecting everyone’s safety. I served with a few of those people who were simply charming company as well as facilitating a hostile workplace environment.

    You also raise a good point. To those of you who are worried about leaving active duty with physical or medical problems, the Reserves and National Guard are still recruiting servicemembers who have a VA disability rating. I know servicemembers as high as 30% who are in drill billets, and that’s just my limited experience. If you’re hoping to get through 20 years without further injury, then I’d encourage you to find a Guard/Reserve mentor who can show you how to make the transition.

  198. Reply
    Doug Nordman February 13, 2018 at 3:04 PM

    Thanks, Peter.

    “You will know when it’s time to go.”

  199. Reply
    Doug Nordman February 13, 2018 at 3:03 PM

    Thanks, Linda– yours is one of the most frequent comments from readers in their 50s (and older).

    Wise words for the younger servicemembers…

  200. Reply
    Doug Nordman February 13, 2018 at 3:01 PM

    Thanks, Military Dollar!

    The Reserve/Guard pension system is probably one of the world’s most complicated. I regularly have to quote the federal law and the CFPs from the military-association websites.

  201. Reply
    Doug Nordman February 13, 2018 at 10:12 AM

    Victor, I don’t know how the National Guard would reduce someone in rank. If your current rank is a temporary or probationary promotion then that could be vacated (and you could be returned to your previous rank). Being reduced in rank for unsatisfactory performance usually refers to Article 15 proceedings or a court-martial.

    If you already have 18 good years for a Guard/Reserve retirement (or if you have more than 18 years of active duty for a regular active-duty retirement) then federal law allows you to stay in the military until you reach retirement eligibility. This section of federal law applies to enlisted ranks:
    and there’s a similar provision for warrant officers and other commissioned officers. For example,

    You might be hearing rumors of a new Department of Defense policy to reduce the number of MND servicemembers. However this is still in draft and it’s not a new law or a new instruction– just a new policy focus on the existing system.
    If you’re already over 18 then you’re allowed to serve until 20, and if you’ve been promoted to a rank (not just “selected for promotion” or “temporarily promoted”) then you’re entitled to keep it until your medical condition has been properly treated and reviewed. That’s the medical evaluation board process, and that does not include reductions in rank.

  202. Reply
    Doug Nordman February 12, 2018 at 11:15 AM

    Gwendolyn, I’m very confused by the facts you’ve stated.

    If you have an ID card stating that you’re a retired Army Reserve veteran then yes, you’re presumably awaiting a pension.

    If you have 14 years of active duty and four good years in the Reserve then you’d have a total of 18 good years. When your Form 249 point count shows 19 good years, though, it means that you have a total of 19 good years.

    A typical Reserve/National Guard retirement is based on reaching at least 20 good years, regardless of the the point count or the mix of active/Reserve years. However if you’ve indeed been medically retired then you have a disability retirement, which is a different section of federal law. It’s also based on your Reserve medical disability rating and does not require 20 good years.

    Here’s a couple of options:
    – Check your retirement letters from the Army Reserve and Army HRC and let me know more details. The first question is whether you’re “retired awaiting pay”, or whether you’ve been given a disability retirement. (It’s also possible that the Army Reserve has given you a “separation” or “discharge” type of retirement, but those are very rare.) You could comment here or e-mail NordsNords at Gmail.
    – Post your questions at the It’s founded by a JAG and has hundreds of disabled veterans who’ve been through the medical evaluation board process. They can walk you through all of the issues of both your medical disability retirement and your VA disability compensation.

  203. Reply
    Doug Nordman February 11, 2018 at 5:13 PM

    Thanks, Queue, I’m sorry to read about that. This does not seem to be a consistent policy, let alone a fair one. Do you have any Reddit links that I can run by the DoD BRS office for a followup?

    The BRS policy document can give that impression too:…/Combined%20BRS%20Policy%20…
    7.b.(6).(c): “Commencing with the pay period that follows a Uniformed Service member’s election to enroll in the BRS, in accordance with procedures in paragraph 9.b., the Secretary
    concerned will contribute an amount that matches the individual Service member’s individual contribution of basic pay and/or inactive duty pay to TSP in accordance with Table 1.”

    If you opt in on 1 January, technically by that document verbiage you’re already in the January pay period and the match will happen in the February pay period, which means the money hits the TSP account in early March. But 1 January is also a federal holiday, and we have seen servicemembers who opted in on 1 January get a DoD match on their LES:

    Yet I also remember being told several times during DoD’s BRS blogger conference call (and a couple of e-mails) that servicemembers had to opt in right away to get the January match (in a TSP account in early February).

    I can understand that people make mistakes, and I can see that the contract rules are hypothetically perfectly clear, but DoD’s hair-splitting still leaves a bad taste in military mouths.

  204. Reply
    Doug Nordman February 5, 2018 at 9:43 AM

    Thanks, Queue, I hope your accounts are updated (or “backdated”) on Monday 5 February!

  205. Reply
    Doug Nordman February 11, 2018 at 5:06 PM

    Thank you, and congratulations on your 20-year letter too!

  206. Reply
    Doug Nordman February 5, 2018 at 9:40 AM

    Thank you, Vikyat. I hope it keeps spreading.

  207. Reply
    Doug Nordman February 3, 2018 at 1:34 PM

    You’re welcome, Daryl! I’m glad I only had to do the interview once…

  208. Reply
    Doug Nordman January 30, 2018 at 2:17 PM

    As others have mentioned, Austin, I think we’re using different words for the same concepts. It looks like DFAS and the TSP are giving early-opt-in BRS members their January DoD match, and another week will produce more evidence.

    First, military pay (and pensions) are in arrears. We have to stick around for an entire month before we get the full pay (mid-month pay is just an advance) and an LES. People who opted in to BRS in early January are getting the match at the end of January, and it’s showing up in their LES. DFAS will probably deposit the DoD match to TSPs around 2 February, and we’ll be able to check that on TSP account activity. The 2018 end-of-year match (deposited on 2 January 2019) will probably show up in 2018 summaries and tax forms.

    Second, I think the different services are showing the DFAS transactions at different times. There shouldn’t be a cutoff between an Air Force servicemember who signed up at 6 AM EST 1 Jan and an Army officer who signed up six hours later, despite the lack of LES evidence. Most of the services process their payrolls during the second half of the month (~20th) so I’d opt in as soon as possible.

  209. Reply
    Doug Nordman January 30, 2018 at 2:15 PM

    (1) has a high probability, Phil, even if the rate of return isn’t quite 7%. It’s also an issue over whether a few thousand dollars a year over a 40-year retirement justifies the risk and inflexibility of High Three, or if it’s worth trading that small amount of annual income for the flexibility of BRS.

    (2) absolutely.

    (3) is not the case. There’s plenty of penalty-free ways to tap the matching contributions, and vets will probably pay lower taxes on a Roth IRA conversion than on a military pension that’s taxed by the federal government. These two posts have more details: (See the section near the bottom on “There has to be a catch.”)

    I concur with you about forecasting 20 years of service and 7% APY returns… and it’s probably tough for people at every age.

    I absolutely agree that a high savings rate is more important than either High Three or BRS pensions. A 40% savings rate for most of 20 years will achieve financial independence even without a pension.

  210. Reply
    Doug Nordman January 29, 2018 at 8:35 AM

    Thanks for the question, NLDekker, but the whole point of the sentence (in the intro to the post) is that most of the Reserve calculators aren’t accurate. (Even when they’re available. *) This post goes into all the details necessary to determine an accurate estimate, and (more importantly) to understand how the rules affect your pension.

    [* I think you’re referring to the DoD calculators at . We at The-Military-Guide are never going to try to fix that problem. You might find a service-specific calculator behind a CAC login, at a Reserve center, or at a Guard armory– but of course a lot of Reserve/Guard servicemembers don’t have CACs and might not have convenient base access. Yet everyone can do a manual calculation.]

    Good retirement calculators are hard to create. (I share your frustration. I’ve been using them for over 30 years.) Accurate Reserve/Guard retirement calculators are even more difficult because of the incredibly varied and highly individual career parameters. That’s why this post shows you how to make sure that your estimate is accurate.

    This has been the blog’s most popular post nearly every day for almost six years, and it’s because the manual method works better than any existing calculator.

    If you want help verifying your numbers then feel free to comment here, use the “Contact me” form, or e-mail NordsNords at Gmail.

  211. Reply
    Doug Nordman January 26, 2018 at 10:10 AM

    My condolences on the loss of your friend, Ray. has a basic survivor checklist, with contact information near the bottom of the list:

    MOAA also has a longer list:
    That link downloads a PDF.

    You’ll want to contact your state’s veterans affairs office to learn more about their support programs. If you reach out to a local ANG unit they may also offer volunteer assistance with memorial services and honors.

  212. Reply
    Doug Nordman January 25, 2018 at 10:59 PM

    Gwen, I’ve just sent you an additional e-mail from NordsNords at Gmail. You might have to look for it in some other folder.

  213. Reply
    Doug Nordman January 22, 2018 at 8:52 PM

    Phil, you’re missing the point but I’ll answer your questions first.

    The 4% Safe Withdrawal rate (your first line) is indeed pretty safe because humans are not robots. You don’t have to cut spending during a recession, but people will do it anyway.

    The “4% withdrawal every year” is safer because it always leaves you with 96% of your portfolio. You’ll never run out, even if you only have 25 cents left. However in volatile bull/bear markets you’ll withdraw way more than you need, or way less than you want. People generally prefer a more predictable withdrawal.

    The “4% fixed” is indeed the safest because your portfolio probably rises over the years with inflation (especially if your asset allocation is heavily invested in stocks). It turns out that most financial advisors have noted that most of their clients actually have declining spending during retirement until just before the end of their lives. Search for the term “retirement spending smile” for more info.

    Here’s where you’re missing the point: you’re trying to make these withdrawal systems absolutely safe, and that’s going to keep you in the workforce for far longer than necessary. You can guarantee the survival of a portfolio with an annuity (as much as there are guarantees for portfolio survivability), and for most retirees their Social Security is sufficient annuitized income.

    Instead of trying to make the 4% SWR even safer, use it as a tripwire. When you reach the point that your assets are 25x expenses, then you’re almost certainly financially independent. You’ll review your spending every year for the first decade or so, and you’ll lower your spending during bear markets (because you’re a human). Maybe you’ll keep a year or two of expenses in cash for bear markets for the first few years of FI (because of sequence-of-returns risk). You might discover a hobby which pays for itself or even generates a little side-hustle income.

    While you’re doing all of that, your FI portfolio will be chugging along making you richer in over 80% of the historical simulations. If you happen to encounter a 16-year bear market like 1966-82, you’ll have an annuity (like Social Security). You might even return to work for 10 hours a week to get your finances over a bad recession (or for a fantasy vacation). Most people don’t want those jobs (even in a recession) because they can’t support their living expenses. But you’ve already covered your living expenses (with your FI portfolio) and you’re just trying to give it more breathing room.

  214. Reply
    Doug Nordman January 21, 2018 at 12:39 PM

    That’s certainly an issue, Gwen. I can believe that PERS-9 has made a horrible mistake, but it’s very unlikely that they missed the officer going over 16 years in their tracking system.

    Let me check some numbers with you.

    First, sanctuary has to be declared while the servicemember is still on their active-duty orders. They’ve met that requirement.

    Next, the 18-year threshold is based on active-duty days and not drills. In other words, it’s not just 18 years of points but rather 18 years of active-duty points. The sanctuary point count subtracts out drills and other points which did not qualify as active duty.

    Finally they’d need to check their active-duty orders and make sure that they have not signed a waiver of their sanctuary rights. This frequently happens with voluntary mobilizations but the significance is not always appreciated by the servicemembers.

    Unless those requirements are met, then the Reserve officer is not in sanctuary. They’re someone who has over 18 years of points (>6480 = 18 x 360), but not enough active-duty points for sanctuary. There are a handful of those servicemembers in the Reserves and National Guard, and many of them have well over 7500 points. I’ve met most of them through the blog, many via e-mail after reading this post.

    When the updated (corrected) point count is submitted to the Reserve personnel branch, if the officer is over 18 years of active-duty points then all sorts of alarms will go off. If your review indicates that they may have reached sanctuary then the officer should immediately fill out their sanctuary declaration and send it to BUPERS.

    If the updated point count has over 16 years of active duty then they’ll be tracked in the PERS-9 system. Further active-duty orders will be restricted to make sure they either demobilize short of 18 years or have signed a waiver of sanctuary.

    Once someone declares sanctuary, they’re moved from the Reserves or Guard to their active-duty service. They’re given a new set of orders to take them to 20 years (for their active-duty pension) but no further. They could be eligible for worldwide assignment but they’re usually left at the command where they declared sanctuary (due to their short time remaining on active duty). On the other hand they’re certainly able to deploy with their active-duty command (or on temporary duty).

    The active-duty officer could request a conversion to FTS (or any other community for which they’re qualified) but selection is up to the other community. The decision is probably based on their potential for long-term service in the new community, and that’s unlikely if they’re retiring at 20.

  215. Reply
    Doug Nordman January 21, 2018 at 11:44 AM

    Good point, Phil, we started with the 4% Safe Withdrawal Rate (initial 4% and then raising withdrawals by the rate of inflation). The excess (over our usual spending) went to charity.

    The portfolio still grew quickly (as the 4% SWR statistics show is the usual result) despite two recessions.

    If you start your financial independence with a fixed 4% withdrawal rate then you’ll do even better than the 4% SWR. You’ll automatically withdraw fewer dollars during recessions (because your portfolio shrinks during the market’s down years).

    One key point about the 4% SWR is that, despite two nasty recessions, our portfolio still grew faster than our inflation-adjusted spending. When that growth happens, your withdrawal rate sinks below 3% (even if you robotically follow the 4% SWR method.) After 5-10 years your portfolio becomes immune to the sequence-of-returns risk.

    Another key point is that people should stop worrying about the failure rate of the 4% SWR and instead use it as a tripwire to launch their FI. The best insurance against portfolio failure is some annuitized income, and for most people Social Security is more than enough. (A military pension is also quite sufficient.) People can use variable spending schemes to get through a recession, or keep two years’ expenses in cash for the first decade of FI, or even earn a little part-time income.

    Most importantly of all, people should not prolong their working days out of “Just One More Year” syndrome. Too many of my friends have died at work because they were afraid to live off the 4% SWR.

  216. Reply
    Doug Nordman January 20, 2018 at 8:55 AM

    Thanks, Peter, that’s a great long-term perspective!

  217. Reply
    Doug Nordman January 20, 2018 at 8:54 AM

    Good points, everyone, I’ve updated the post and added a note about the DoD’s BRS matching contributions going into the traditional TSP.

  218. Reply
    Doug Nordman January 19, 2018 at 9:23 AM

    Smitty, I’m not sure what “a Guard/Reserve junkie” means. Please let me know if that’s a specific term or program, or whether it’s your description of someone who continues drilling (and doing active duty) even after they’re eligible to retire awaiting pay for a Reserve/Guard pension.

    If a Guard/Reserve member has enough days of active duty to reach 18 years of active-duty service for an active-duty pension, then they meet one of the requirements for sanctuary. However to receive an active-duty pension they have to be actually on active duty at the time they reach 18 years, and they have to continue to serve until 20 years of active duty. The program is also heavily monitored by the services to make sure that they know who’s approaching that 18-year tripwire.

    The short answer to your question is “Generally not.”

  219. Reply
    Doug Nordman January 19, 2018 at 9:13 AM

    Thanks, Mark, and your question has a simple answer! It’s all the same.

    The only changes to your military pension are the different multiplier (2.0% per year for BRS instead of High Three’s 2.5%) and your DoD BRS matching contributions to your TSP.

    You still earn the same number of days of active duty for your ADSW, and your military service credit deposit amount is still based on those days. None of those OPM civil-service procedures were changed by the DoD BRS.

  220. Reply
    Doug Nordman January 19, 2018 at 8:59 AM

    That’s an interesting question, Michele, because Tricare’s website doesn’t show an expiration date like “3 January” or “the first month after dropping out”. However the young adult loses their Tricare eligibility the minute that they stop being a full-time college student. ( For your question that would presumably be when they formally withdraw from the college. It could also be the first date that they stop paying their fees or don’t show up for attendance.

    A young adult (dependent child) is dropped from the DEERS database on their 21st birthday– unless the sponsor provides a “letter of attendance” from the college to verify enrollment (“full-time in an accredited college in pursuit of an Associate’s Degree or higher”, This DEERS drop happens even if the young adult is a full-time student taking 22 credit hours on a ROTC scholarship. Let’s not get into how I know this.

    The next tripwire would be college graduation or their 23rd birthday (whichever happens first), when they age out of Tricare for college students and have to purchase their own health insurance. (

    If a young adult drops out of college between those two birthdays, they’ll still have to have an updated address in DEERS ( Tricare will only have a reason to formally verify their attendance if they seek medical care. And, of course, if they claim medical benefits when they’re not eligible for that insurance policy then it’s considered fraud. Tricare would probably pay the claim but then check attendance letters and mailing addresses and start asking questions.

    The answer to your question: when your young adult reaches age 21, they have to be a full-time college student to retain their Tricare eligibility. If they decide that they’re no longer a college student or if the college drops them (whichever happens first), then they’re no longer eligible for Tricare health insurance.

  221. Reply
    Doug Nordman January 14, 2018 at 5:51 AM

    Yes, Wayne, and it’s only six good years of Reserve/Guard drills away from qualifying for that pension!

  222. Reply
    Doug Nordman January 6, 2018 at 7:10 PM

    Good question, Phil, and a very frequent one.

    This post explains all of the ways to tap IRAs and TSPs before age 59.5. All of those methods are penalty-free, and most of them are free of taxes.

    A number of readers have retired on their military pensions, although they prefer financial independence to caviar & champagne. FI is based on saving up at least 25x your projected net expenses, which is the tripwire for the 4% Safe Withdrawal Rate. That can be reached within 20 years (even without a pension) by a high savings rate of at least 40% and an asset allocation high in equities. If a servicemember is among the 1 out of 6 who make to a pension then their FI portfolio survival is amply protected by an inflation-fighting lifetime annuity and cheap healthcare.

  223. Reply
    Doug Nordman December 28, 2017 at 12:50 AM

    Peter, Warner, the good news is that we have at least eight more years to educate BRS servicemembers that the lump-sum pension is the Senate’s version of a payday loan. Even DoD’s board of actuaries wrote a letter to Congress asking for its removal.

    The other good news is that new BRS servicemembers not only default to the 3% TSP contribution to the L2050 fund, but attempts to disenroll from the TSP will be met with automatic re-enrollment the following year. That’s in the implementation policy paragraph 7.b.(4).(d) on page 14:

  224. Reply
    Doug Nordman December 24, 2017 at 10:07 AM

    Warner, the “oft-cited less than 20%” number comes from the Defense Manpower Data Center and has also been backed up by RAND studies. I’ve pulled those details from the DoD BRS office and from the RAND database. A number of us military personal-finance bloggers have asked for a breakdown by rank, service, & specialties, and we may have to put in Freedom Of Information Act to get it. In the meantime there’s the thrill of wandering around the RAND archives for hours searching for the same info.

    One of those RAND numbers is an estimate that officers have a much higher retirement probability of nearly 49%. That number is spread across all the services, and I suspect it’s lower for infantry than aviation. If you have data showing that Army officer exit points are extremely bimodal then I’d appreciate a link to whatever is publicly available.

    Whether the retirement odds are the roll of a die or a coin flip, there are still risks of not reaching 20 years due to factors outside of our control. I’ve personally experienced it, my spouse personally experienced it in her active-duty career, and I’ve seen similar stories from many readers. This is why so many servicemembers (and their families) requested the BRS.

    You describe the risks in terms of houses and college educations. Others see the risks in terms of life energy, health, and family harmony. All of those perspectives are rooted in behavioral financial psychology (not so much in math or logic), and that complicates apples-to-apples comparisons.

    I’ve moderated a comment which could be interpreted as an ad hominem response. You’re also welcome to send over a guest post presenting your side of the debate. I’m at NordsNords at Gmail.

  225. Reply
    Doug Nordman December 22, 2017 at 12:32 PM

    You raise a good point, Aaron, and it’s going to be a perpetual debate through 2018 (until the opt-in period ends).

    Let me make my usual comment about not being distracted by math. The most important point about the pensions is the probabilities: only 15% of servicemembers even qualify for a pension. For 5 out of 6 people reading this post, it makes more sense to choose the BRS and have a little more in your retirement accounts, whether or not you serve the full 20. For those who are sure they’re the 1 out of 6 special snowflake, well, I wish everyone luck with the factors beyond our control of that assumption. It’s far better to have the BRS flexibility (and a little more money in your retirement account) than to force yourself to gut it out to cliff-vest at 20.

    DoD’s BRS office and we military personal-finance bloggers had some intense discussions about the algorithms, and DoD’s decision was to leave all other savings/investments out of the BRS calculator. (Fewer than half of today’s servicemembers even have a TSP account, and fewer than half of the military account owners are still contributing.) To even up the calculations on both pension plans you’d have to either add in the servicemember’s 5% TSP contributions to the High Three or subtract them from the BRS.

    I’ll go a step further: anyone adding 5% to the High Three TSP should also add the Continuation Pay contract (2.5 x monthly base pay) to the BRS.

    In the big picture, it’s doubtful whether that 5% over 40-50 years will make a meaningful difference in the BRS flexibility. That’s especially applicable to those servicemembers in communities struggling with retention and likely to have higher multiples on their Continuation Pay contracts.

    As always, every servicemember who can save at least 40% of their gross income in a high-equity asset allocation (like the TSP’s L2050 fund) will reach financial independence in 15-17 years– even without a pension. It also gives them a lot more flexibility with their retirement accounts (instead of being locked into a High Three pension) and even lowers their income taxes. Those issues are not reflected in the BRS calculator either.

    Bottom line: most servicemembers won’t retire from the military anyway. Understand the math, but give it the proper priority behind the BRS’s career flexibility.

  226. Reply
    Doug Nordman December 22, 2017 at 12:15 PM

    Thanks for pointing that out, Randy! You’re right, and it just makes the retirement date even more complicated (in a good way). Ryan’s linked post at TheMilitaryWallet explains all the changes since 2008.

  227. Reply
    Doug Nordman December 17, 2017 at 10:55 AM

    Thanks! I’m glad it’s helping. And, of course, surfing is the other therapy.

  228. Reply
    Doug Nordman December 17, 2017 at 10:51 AM

    Thank you, Julie. I completely understand the “living in the present” part.

  229. Reply
    Doug Nordman December 13, 2017 at 10:51 AM

    Alex, that information is locked away in the databases of the Defense Manpower Data Center, and it’s not public. The best we know is that about 50% of officers, across all of the services and specialties, will serve for 20 years. I suspect that percentage is the lowest for infantry officers.

    We’ve asked DoD to publish information on retirement eligibility broken down by rank, service, and community. We’re probably going to have to submit a Freedom Of Information Act request to get it.

  230. Reply
    Doug Nordman December 13, 2017 at 10:47 AM

    Peter, I think you’re also describing the financial counseling available at military bases and the lifetime employment for personal-finance bloggers.

    Another way to look at the question would be where civilian corporate employees get their professional advice and financial counseling. I doubt that most companies do more than offering a video about their 401(k) benefits. Maybe DoD’s financial-responsibility counseling to its military servicemembers, as rudimentary and flawed as it may be, is better than most corporate programs.

  231. Reply
    Doug Nordman December 13, 2017 at 10:44 AM

    Good points, Kristen, and I’m not aware of any calculators which account for this. (It’s one of the reasons I wrote the post.) The SBP premium will be the same under both pension systems (6.5% of the pension) and the payout will be the same (55% of High Three or BRS). Of course the amount of the BRS survivor annuity will be 20% less than the High Three survivor annuity, just as the years-of-service multiplier for BRS (2%) is 20% less than the YOS multiplier for High Three (2.5%).

    And yes, the BRS’ matching contributions to a servicemember’s TSP means that can be passed on to the survivors.

  232. Reply
    Doug Nordman December 9, 2017 at 11:34 AM

    As SITM says, absolutely. You’re still contributing $18,500/year but DoD is kicking in another $2000 of free money that does not count against this lower limit.

    When you’re in a situation for the annual addition limit (combat zone or direct support), then the math gets more complicated. However several active-duty military personal-finance bloggers are already doing this during their deployments, and I know several more readers who are working through it. When you approach a deployment, contact us to go through the details and make it work for you.

  233. Reply
    Doug Nordman December 9, 2017 at 11:28 AM

    Thank you, J!

  234. Reply
    Doug Nordman December 9, 2017 at 11:28 AM

    Thank you very much, Eva!

    Financial independence has completely changed the culture during the last couple generations. That’s a very good thing.

  235. Reply
    Doug Nordman December 4, 2017 at 5:38 PM

    I’m happy to help, Phil, and this is good keyboard therapy while I’m working on my father’s estate.

    Your method should work. He’ll contribute at least 5% of his base pay per month (which will ensure the maximum DoD matching contribution of the BRS), he’ll space the contributions through all 12 months, and he’ll still hit $18,500 for the annual limit. When that promotion comes through he can keep saving at least 80% of that pay raise to accelerate his journey to financial independence.

    You’re also right about the Continuation Pay bonus. However if he signs the contract in a combat zone then his TSP annual addition limit is $55,000 (which now includes the DoD matching contributions). In that situation, a lot of that continuation pay could end up in the TSP. And if he’s not in a combat zone then you’re right– it’ll flow over into a Roth IRA and a taxable account. All of that makes the BRS a revenue-neutral (at least) choice over High Three, and offers an opportunity to save enough to compound even more than the bigger High Three pension.

    I hear you on the leadership issue. You’d hope that a command financial specialist could help, or that there’d be enough bandwidth to log in via smartphone or workstation.

  236. Reply
    Doug Nordman December 3, 2017 at 2:29 PM

    Thanks, Mel, I appreciate your thoughts.

    If there’s anything good about my father’s finances, it’s that we had over six years to organize them after he entered the care facility.

    You know that we have a “Death Folder” in our family too.

  237. Reply
    Doug Nordman December 3, 2017 at 2:26 PM

    Good question, Phil, and it causes a lot of confusion.

    The DoD match does not count toward the annual elective deferral contribution limit ($18,500 in 2018) but it does count against the annual addition limit ($55K in 2018). See those details at this TSP link:
    Note all the fine print below the table explaining the limits in the traditional TSP and Roth TSP accounts.

    The annual addition limit only kicks in for deployments to combat zones (or similar areas)– those are designated by DoD and listed by the IRS. You can see those areas here:
    A servicemember in this area could contribute a total of $55K/year, but servicmembers enrolled in the Blended Retirement System would have to reduce their contribution by $2750 (5% of $55K) to make sure that they receive the full DoD matching contribution. As you mentioned in another comment, that’s more MyPay percentage math to make sure the servicemember’s TSP contribution stayed below $4354.17/month.

    And yes, we do hear from readers in combat zones who contribute 60%-92% of their base pay (and other incentive pays) to their TSP in order to reach the $55K annual addition limit. They do it by living off a spouse’s income or by drawing down their taxable investment accounts. See this post:

  238. Reply
    Doug Nordman December 3, 2017 at 2:13 PM

    That’s partially correct, Phil. If you wanted to maximize the 2017 TSP contribution of $18,000 then you’d need to figure out the percentage of $1500/month in base pay. (Because $1500/month x 12 months = $18K.) In 2018, with a TSP contribution limit of $18,500, it’d need to be $1541.67/month.

    The good news is that $1541.67/month is far more than 5%/month for everyone. (Even for an admiral or general it’s still nearly 10%.) Every servicemember putting in at least 5% of their base pay will still maximize their BRS match from DoD without going over the contribution limit. (The matching contributions do not count toward the $18,500 annual limit.) However a servicemember putting a re-enlistment bonus, an annual incentive bonus, or a Continuation Pay amount in their TSP would have to make sure that they leave enough room for a full year of contributions in order to earn a full year of DoD matching contributions.

    And yes, that contribution percentage needs to be checked every year to make sure that the servicemember is going to reach the limit. The good news is that if the member goes over the limit then the TSP will accept part of the contribution (up to the limit) and then kick back the rest to DFAS. We’ve verified this several times through personal experience with other milbloggers in various services.

    The reason that the TSP contributions have been changed to percentages (instead of fixed dollars) is to allow enough remaining income to pay federal & state income taxes. Traditional TSP contributions are limited to 92% (the other 7.45% goes to FICA) and Roth TSP contributions are limited to about 60%-65% (varies by service) to allow for regular income taxes (because Roth TSP contributions are made before taxes).

    Another reason that the TSP contributions are in percentages is to make it easier for servicemembers to “set and forget”. Even if they get a pay raise, a longevity raise, or a promotion then they’ll still contribute the same percentage (yet a higher dollar amount) to the TSP. Sadly, many TSP account owners have never changed their contribution percentages from the day they signed up.

    I understand the access problem of being at a FOB. (During my submarine sea duty I would be locked out of communicating for up to 90 days at a time.) On the FOB, however, this is a situation requiring the command to send message traffic or an e-mail to a finance office to have them take care of the servicemember. It’s not a problem with the TSP or the SDP– it’s a problem with the leadership.

  239. Reply
    Doug Nordman November 25, 2017 at 10:43 AM

    You’re welcome– servicemembers & vets need to see these transition success stories!

  240. Reply
    Doug Nordman November 21, 2017 at 11:05 AM

    Thanks, SITM, exactly.

    As for the rest of your comments, Peter, I don’t think that future servicemembers’ financial behavior can get much worse than that of todays’ servicemembers. At least those new young adults will *have* a TSP account and some actual contributions. Today’s hope of cliff-vesting at 20 is not a plan.

  241. Reply
    Doug Nordman November 21, 2017 at 11:01 AM

    Thanks, I updated the link! I guess the memo has to be tracked down at AFPC behind a firewall.

  242. Reply
    Doug Nordman November 21, 2017 at 10:52 AM

    You’re welcome, Matt!

    First, you should read Rich’s blog posts about his real estate. Next you should read all of Bigger Pockets’ free material (and maybe buy a book or two). I know the founders well and they have one of the nation’s largest networks of real estate investors.

    It’s not just the time and the work (and the hassle). How well will your roommates take care of your place? How about total strangers after you move on to the next duty station? It’s also the risk. Will you be adequately compensated for the money you invest, and could you have achieved a higher return somewhere else? Or could you at least achieve the same return with less risk?

    At this point in your career, you don’t have a lot of time. However you have a relatively high income and you can easily contribute more to the Roth Thrift Savings Plan. Pay off your consumer debts. Try to save at least 15% in the Roth TSP (in the L2050 fund or more aggressively in the C, S, & I funds). Continue to maximize your Roth IRA contributions. Get 99% of the market’s return (with diversification) and about 1% of the effort. Live with roommates and save your excess housing allowance (in a money market or CDs) for the first down payment on your first property.

    Now spend your time getting qualified. O-1s don’t have a lot of time (or qualifications) and you’ll earn far more from practicing your craft than from managing real estate on the side. Choose your investing asset allocation by deciding how much you’ll invest in passively-managed index funds and how much you’ll invest in real estate. Learn more about real estate while you’re getting qualified, but don’t jump in until you finish your military training.

    By the time you’re qualified you’ll be much better at picking out distressed & discounted rental properties and analyzing their cash flow. That’s the real “head start”.

    Any time you find a big fat return from an asset, invert the question and find the asset’s hidden risks. Make sure the price you pay accounts for the risk you’re taking on.

  243. Reply
    Doug Nordman November 18, 2017 at 10:42 PM

    Thanks, Military Dollar, I just hope people start discussing and deciding.

  244. Reply
    Doug Nordman November 18, 2017 at 10:41 PM

    Thanks, MM!

  245. Reply
    Doug Nordman November 15, 2017 at 8:15 PM

    Thanks for the update, Donald. Sorry that this isn’t going the way it should.

    I know that tinnitus is a presumed condition (with a 10% rating) because there’s no diagnostic test. You tell the audiologist about your tinnitus symptoms and they add it to their C&P report for the rater to assign 10%.

    Hearing loss has a longer and more detailed exam that you’ll probably read about in your letter. Personally, people are already sneaking up on me from behind and I’m having trouble hearing in a crowd, and yet I’m still rated at 0% for hearing loss. I’d hate to experience how bad it has to get for a disability rating… hearing aids?

    You’re right about the PTSD recognition and connection. For some reason the C&P doctor was unable to connect your PTSD (and your buddy statements) to a service-related situaton. That could be an issue with your service record or your medical record not sufficiently connecting your symptoms to a specific time or location. It’s even hypothetically possible that the doctor didn’t have all of the VA’s info (that you’d already given to the VA) or that the doctor or rater simply made a mistake.

    Your first step is visiting your VSO to review your eBenefits update and then to file the request (a Freedom Of Information Act form) for your claims file (your C-file). Once you receive the C-file then you’ll have the details of the C&P doctor’s exam and diagnosis. (You’ll be able to see whether the buddy statements were even visible to the doctor or the rater.) You could also ask your VSO if they can access your C&P doctor’s report online. (I don’t know whether that’s possible.) From there it’s a matter of getting the information into (or back into) the C&P doctor’s hands and the rater’s report.

    If the VA decided that even the buddy statements didn’t establish the service connection in the first place then you might have to depend on more buddy statements, unit histories, awards citations, or performance evaluations. Your VSO will know how to deal with the next steps, including an appeal. You might also try discussing the PTSD appeal on the It’s founded by a lawyer and the vets there have a wide variety of experience with VA exams and appeals.

    In the meantime it’s important to continue seeking therapy or treatment for any PTSD symptoms. It shows the VA that the condition still persists and that you’re not “healed”.

  246. Reply
    Doug Nordman October 25, 2017 at 7:45 AM

    Great question, Donald.

    The C&P doctor works from a VA website that’s supposed to contain the relevant documents. However there’s no guarantee that the VA’s doctor website has everything, and a 781a could be absent from the documentation displayed for the doctor.

    You should take copies of the 781a, the supporting statements, and your Disability Benefits Questionnaires to the C&P exam and offer to give the doctor their own copy. Ideally the doctor would review them all and factor them into their report. The doctor’s report back to the VA might even include the copies you gave them.

    The doctor’s report goes to the VA’s rater, who actually determines the disability rating for that issue. The rater would ideally have your entire claims file, including the 781a and attached statements. There’s no way for you to contact the rater (or provide additional copies) so you have to initially trust that they have everything they need to do their job. Once you receive your VA disability rating you can request a copy of your full claims file (everything the VA used to determine your rating) and check that the documents were in the file.

  247. Reply
    Doug Nordman November 8, 2017 at 8:45 PM

    Great question, RP! The answer is “No”: insurance proceeds are almost always free of taxes.

    I’m sure there are niche cases with trusts or estates over $11M, but the vast majority of beneficiaries receive tax-free proceeds.

  248. Reply
    Doug Nordman November 8, 2017 at 8:39 PM

    Congratulations on putting the money to good use, Clayton, but there are two issues with your logic:
    1. It’s totally unreasonable to ask someone at 15 years of service to make assumptions about staying for another 5-15 years, let alone getting promoted to the top of their rank structure. Good work, and I know you worked hard for it, but I doubt anyone (least of all you) saw that coming at 15.

    2. When you compare the cost of those years of a percentage point of COLAs that you gave up in exchange for $30K, your home is a very expensive purchase. You’re going to be paying that “interest rate” for the rest of your life.

    It’s a very good thing that REDUX will end with 2017.

  249. Reply
    Doug Nordman November 5, 2017 at 12:55 PM

    Great questions, Coldsteel, and I’ll answer them individually.

    “What happens to my present TSP account if I go with the BRS?”
    Nothing. The same Roth TSP and traditional TSP accounts are used with both systems. The BRS and High Three pension laws are different, but the TSP accounts stay the same even if you opt in to the BRS.

    By law, the DoD match of the BRS has to go to a traditional TSP account. If you contribute to a Roth TSP account, then DFAS and the TSP will direct your DoD match to your traditional TSP account. If you don’t have a traditional TSP account (yet) then you’ll create it during the opt-in process.

    “How about if I choose the old retirement system?”
    Nothing changes in your TSP here either. You can continue to direct your contributions to your Roth TSP account (which is usually the better choice for servicemembers who have low income taxes) or to your traditional TSP account.

    “I contribute to a Roth account inside my TSP, how does that affect what I contribute to a Roth IRA?”
    No effect at all! They’re two completely different accounts with two completely different limits. Senator Roth helped write the laws for both of them, but that’s the only reason his name is on them. That causes a lot of confusion.

    You can contribute up to $18K in your TSP in 2017 and up to $18,500 in 2018. That can be divided any way you want between your traditional TSP and your Roth TSP accounts, but the limit is the total of the two sets of contributions to those accounts.

    “I also contribute to a 401 at the airline I fly for, does my TSP contributions effect what I can contribute to that account?”
    Yes! The TSP is a type of 401(k) account, and those contributions are tracked by your Social Security Number. This means that your total contribution to your 401(k) and TSP accounts have those same limits above. This can get messy, especially during a deployment to a combat zone, so I recommend reading this post:

  250. Reply
    Doug Nordman October 25, 2017 at 7:50 AM

    I’m sorry to read about the problem, Billy.

    The best approach is for the VSO to keep asking the VA to confirm receipt of the documents. (If you and your VSO aren’t getting along then I’d suggest trying a new VSO.) In addition, when you go to your C&P exams, take along copies of whatever records you have for the doctor. They can include those records in their report to the VA.

    I’ve read that if the VA receives an inquiry from a member of Congress, then the VA ceases working on the claim until the Congressional inquiry receives a satisfactory response. That may or may not be correct, but I’d try to work through the VSO and the C&P doctor before using a Congressional inquiry.

  251. Reply
    Doug Nordman October 25, 2017 at 7:36 AM

    I think I see the issue, Steve, although you’d definitely want to review this with a JAG and do your math. The Army instruction uses the term “RCSBP premium” when it should specify “RCSPB Reserve Component Premium”.

    Here’s the federal law regarding the RCSPB premiums. It actually consists of the regular SBP premium plus an additional “Reserve Component Premium” charged to cover the insurance between the time you retire awaiting pay and the date on which the pension actually starts.
    The pertinent part is in section (a).(1).(B).(i) at that link.

    The RCSBP premium definitions are covered under DoD 7000.14-R, the Financial Management Regulation. This includes Chapter 45 in volume 7B.

    Sections 5409 (on page 54-16) and 540902.C describe the RCSBP’s Reserve Component Premium:
    “The SBP Premium consists of a Standard Premium, Reserve Component Premium, and a Survivor’s Annuity Premium Deduction. The Standard Premium is the reduction in retired pay made to provide coverage for the period after a member becomes entitled to retired pay. The Reserve Component Premium is the reduction in retired pay made for the RCSBP coverage that was already provided while the member awaited the requisite age of entitlement to retired pay. The Survivor’s Annuity Premium Deduction is a further premium applied to the survivor’s annuity for the RCSBP coverage provided while the member awaited the requisite age of entitlement to retired pay. The premiums described in paragraph 541002 pertain only to the Reserve Component Premium and the Survivor’s Annuity Premium Deduction. The method to compute the Standard Premium may be found in Chapter 45. The amount of the Reserve Component Premium depends on the type of beneficiary option elected, the annuity type elected, and the ages of the member and the beneficiary.”

    Section 540902 goes on:
    “C. To calculate the Reserve Component Premium, multiply the member’s base amount at age 60 by .03 (3 percent).”

    That’s just the basic rule, and the chapter goes on to cover a lot of different situations for spouses, ex-spouses, children, and “insured interests”.

    My interpretation (subject to your JAG’s check) is that the Reserve Component Premium is the only part which continues after you opt out of the SBP. You’d opt out during months 25-36 of coverage, which would cancel the SBP premium. However the Reserve Component Premium would continue “for life”.

  252. Reply
    Doug Nordman October 21, 2017 at 8:13 PM

    Thanks for your comment, Steve, that’s an interesting change. Do you happen to have a reference for being required to pay 360 months of RCSBP premiums if you had the coverage during retired awaiting pay and wanted to withdraw in the 25-36 month window after starting your pension?

  253. Reply
    Doug Nordman October 17, 2017 at 7:09 PM

    Thanks, Tori! I love these testimonials. And here’s another endorsement for!

  254. Reply
    Doug Nordman October 14, 2017 at 3:14 PM

    Dave, you’ve asked a very logical question, but there’s a different rulebook.

    The military High Three pension averages the highest 36 months of the base pay scale, not the average of the amount of the pay you’ve earned. It just goes straight by the pay tables in effect for your type of pension, not by your total earnings. But you can see how this question rises from the military’s plagiarizing of the civilian high-three pension system.

    When you “retire awaiting pay” from the Reserves and National Guard, that base pay scale also includes the pay tables for the years up until your pension starts *and* at the longevity for your rank at the age your pension starts. In other words the Reserve/Guard pension starts at the pay tables in effect at the future date, just as if you’d been on active duty the entire time you were waiting for that first pension deposit. If you turn age 60 in 2026 (or three months earlier for the right mobilizations of at least 90 days), then your High Three pension will look at the highest pay scales during the years of 2023 – 2026 as well as all of the pay scales back until the year you joined the military. It’ll also be at the longevity for your rank, which (if you joined at age 18 and by the time you turn age 60) could be 42 years. For the vast majority of Reserve/Guard retirements, the pay scale is at the maximum longevity pay of that rank.

    If you go on a year of active duty then you’ll rack up 365 points (another 2.53% for your pension) and you’ll also have a year of additional pay, savings/investments, and active-duty benefits. But the only numbers that count for your High Three Reserve/Guard pension are the numbers on the pay tables.

  255. Reply
    Doug Nordman October 14, 2017 at 1:18 PM

    I’m glad it helped, Donald!

    The fully-developed claim is processed much more quickly by the VA, because you’ve already done most of the work for them. They don’t have to hunt down other medical or service records (although that is eventually accomplished) and they don’t have to chase down other sources like civilian medical records (or buddy statements). You’ve already given them everything they need to make their decision, or at least that’s what you’ve promised them. From that perspective, the buddy statement greatly speeds up the process.

    The real benefit of a buddy statement is that it’s how the VA verifies your disability claim is service connected. Unless you have other documentation in your service or medical records, it’s probably impossible to get the claim approved without the buddy statement.

    The buddy statement gets your claim into the system (because your claim is now service connected). After that, the timeline and the final rating depends on the C&P exams and the VA’s raters. You’re already using a VSO, so you’ve already optimized your claim. Make sure you have your eBenefits account set up, along with the correct family & financial data, and then check it every few weeks. You should continue to seek treatment for your symptoms. That not only can improve your health, but it also demonstrates to the VA that your disability is “continuing” instead of “cured”.

    Please let us know how it works out.

  256. Reply
    Doug Nordman October 9, 2017 at 9:50 PM

    Thanks, MrInTheWheat, at this point I’m barely attracting any attention on the issue.

    I’d love to know a better way to show people how compound interest works for them!

  257. Reply
    Doug Nordman October 5, 2017 at 7:22 PM

    We see this question a lot, JC!

    First check your eBenefits account to make sure that the VA has entered the numbers for your financial institution correctly. It’s very easy for them to make data-entry errors on their systems.

    Next I’d ask a Veteran Service Officer to inquire with the VA about your payment, or you could send them an e-mail through eBenefits.

    When the deposit situation is straightened out, the payments will be made retroactive do the effective date of your claim. Even if it’s a month later, you should get everything you’re owed back to the starting date.

    Please let us know how this works out.

  258. Reply
    Doug Nordman October 5, 2017 at 7:18 PM

    Thanks, Peter, those are all good points.

    Consolidation, convenience, trust– and understanding that servicemembers (& families) might be calling from anywhere in the world at any time of day.

  259. Reply
    Doug Nordman October 5, 2017 at 7:16 PM

    Rob, I realize it’s too late for corrective action, but if you should happen to encounter this situation again I’d ask to speak to the Member Advocacy team.

    Car loans: USAA doesn’t subsidize financial products with loss leaders. Here’s more in the USAA answers post that I’ve linked at the top of the page:

  260. Reply
    Doug Nordman October 2, 2017 at 1:23 AM

    Good questions, Tom!

    “Retired awaiting pay” is the status chosen by almost all retiring Reserve/Guard servicemembers. It means that they’re retired from Reserve/Guard duties (and waiting for the pension to start) yet have agreed to remain eligible for a total mobilization (which last occurred in WWII). In exchange for retired awaiting pay (instead of resigning or discharge) they’ll continue to accrue longevity in the pay tables as if they were on active duty, and their pension will be based on the pay tables in effect when they start drawing it.

    You’ll be in retired awaiting pay status, and then a few months before turning 58 years old you should receive the paperwork to start your pension deposits.

    The penalties for early withdrawal of 401(k) accounts (like the TSP) still apply. However there are several ways to tap your retirement accounts (penalty-free and possibly even tax-free) before age 59.5. This post has more details:

  261. Reply
    Doug Nordman September 24, 2017 at 11:39 AM

    Very good question, DC! Thank you for stepping up to ask it– I fear you’re not the only one who might be overthinking it.

    You’re correct– that’s exactly how the CDs would be laddered. In general, three-year CDs offer the benefit of a higher medium-term interest rate with a lower penalty for early redemption. Otherwise we’d use seven-year CDs.

    After years when the stock market was up (or flat), I’d replenish the money-market cash (by selling shares from our asset allocation) and let the CDs roll over to their new terms.

    After years when the stock market was down, I’d stop selling shares to replenish the money market. During that next year I’d cash in the first three-year CD when it matures, and during the second year I might cash in the second three-year CD. If it’s a nasty recession then I’d take an early redemption on the third CD (and give up the six-month penalty). After that I’d start selling shares from our asset allocation in whatever order makes the most sense at the time.

    Here’s a final note which confuses some readers: this is only done to handle sequence-of-returns risk in the 4% Safe Withdrawal Rate. That generally applies only during the first decade of the 30-year portfolio survival, and that risk dwindles during later years. After 10+ years of financial independence, the portfolio will probably (>80% chance) grow big enough to do away with the cash allocation to two years’ expenses. After that you’d simply keep replenishing your checking account by selling shares every year, but by then the portfolio would be big enough that the withdrawal would almost never exceed 4% of the portfolio’s value.

  262. Reply
    Doug Nordman September 14, 2017 at 10:44 PM

    Thanks, Mark, and I agree with your ceremony perspective about honoring (and thanking!) family & friends.

    The author of this post is a personal acquaintance, and I know that they preferred not to have their command devote a week (or more) to the planning & execution of a retirement ceremony. In their rank & billet at the time, it would’ve tied up quite a group of people and presented a significant backlog of visitors at the base gate.

    Personally, my family & friends didn’t care for the planning & logistics. (My spouse was also active-duty military.) During my attendance at submariner retirement ceremonies I’d seen too many steely-eyed killers of the deep break down at the podium, and I wasn’t going to risk that in my case. Instead, the people with whom I worked the most closely devoted our time to a Friday-afternoon BBQ farewell ceremony, where I had the chance to say thank you personally and in front of our peers. It was way more relaxing, fulfilling, (and fun!) than a formal ceremony.

    15 years later, many commands still seem afraid to let a servicemember retire without formal recognition. Maybe it’s because the command “knows better” that the retiree will appreciate the closure, or the command is making a major effort to recognize their contribution. (A few commands want to make sure that there’s no complaints later about not getting a ceremony.) Yet a significant minority of servicemembers tell me that they don’t need the formal recognition, and their families & friends have already been honored & thanked without the command’s traditional ceremony. I hope more servicemembers get their choice, guided by the wisdom and experience of comments like yours.

  263. Reply
    Doug Nordman September 13, 2017 at 12:15 AM

    Good questions, Peter, thanks!

  264. Reply
    Doug Nordman September 9, 2017 at 3:39 PM

    Thanks for the update, Charles. We’d heard about the appeals but I missed that final announcement.

    In case BUPERS changes that link, here’s an excerpt of the text from the FAQ:
    1. How did the policy for Midshipman cruise credit for retirement pay change?

    In 2009, after a legal review by both Navy Personnel Command and Defense Finance and Accounting Services (DFAS), it was determined that Title 10 U.S.C. § 2107(g) actually prohibits the awarding of any credit for NROTC midshipman time, including summer training cruises for those officers who entered the NROTC Program after the enactment of the 1964 Reserve Officers Training Corps Vitalization Act (ROTCVA).

    3. How will I know if I am personally affected?

    All personnel affected by this change will receive individual letters from Navy Personnel Command notifying them that their official record has been modified to indicate the correct retirement credit and/or points, as applicable. In addition, DFAS will notify each individual by separate letter of how much their retirement pay will be affected.

    4. How much credit is being taken away from my retired pay calculation?

    The amount of time deducted from your total active duty creditable service or retirement point credit will be equal to the time you served on active duty for training during midshipman cruise periods. The average time credited was approximately 30 days each summer.

    7. What do I need to do to not have to pay the money back? I owe less than $10,000.00.

    The Secretary of the Navy has requested, on your behalf, a waiver of indebtedness if less than $10,000.00.

  265. Reply
    Doug Nordman September 9, 2017 at 3:19 PM

    Good question, AFDave, but I’m not sure of the AGR’s latest requirements. I’m assuming that you’re on active duty now (with 21 years) and that you’re considering a move to the ANG’s AGR program.

    You’re eligible for an active-duty pension now, of course, and after retiring from active duty it’s hypothetically possible to mobilize to full-time active duty in the AGR (in the right billet). Your active-duty pension would be suspended while you’re receiving active-duty pay & allowances, and then your pension would resume when you left the AGR billet. That AGR service would also make you eligible for a larger active-duty pension when you finished with the AGR.

    However the ANG and the AGR programs might not need your skills and you might not be able to make the switch.

    Another option might be to retire from active duty now, and then affiliate with a ANG unit (if they have a billet for you). You’d forfeit your pension or your ANG pay (whichever is less) on drill days and orders, but when you finish with the ANG then the points would be added to your active-duty pension.

    In either case, you would not have to wait until age 60. You’d receive your active-duty pension as soon as you retired.

  266. Reply
    Doug Nordman September 1, 2017 at 12:15 AM

    You’re welcome, Fred!

    Your math agrees with another post:

  267. Reply
    Doug Nordman September 1, 2017 at 12:11 AM

    Good question, Brian! I’m not aware of any interest in extending the law. There are pros & cons to extending the law, but I haven’t read anything about an actual proposal.

    When you apply for retirement in a few months, it’s still worth requesting the two-year waiver. The law is in effect until the end of September 2018, but the law is worded for the authority of the Army to authorize the retirement. In lawyer terms, that might mean *approval* of your retirement request within the next 13 months– even if the date of the actual retirement is after 30 Sep 18.

    Note that the Army does not have to approve your request, but you have to ask before you’ll find out.

  268. Reply
    Doug Nordman August 31, 2017 at 2:06 AM

    Thank you!

  269. Reply
    Doug Nordman August 26, 2017 at 11:10 PM

    Thanks, Joe, good to hear from you!

    I didn’t go into detail on our spending, other than “flat for most of the last 15 years”. The drop in 2010-11 was discretionary from three factors: a home renovation, a number of charitable donations, and a couple of investments in startups (which flamed out).

    I think 2006-07 were outlandishly bullish years, too, and our investment portfolio was ballooning in value. I spent a good bit of time in 2007 slowly liquidating my individual investments in large-cap stocks. Valuations had gone from “high” to “ridiculously overpriced”.

    If our net worth vaporized from 212% back down to 100%, we’d still be FI. I wouldn’t be sponsoring the bar tab for FinCon but our lifestyle would not change. As of today, though, the 2017 number is higher than 2016 by about seven percentage points. I hope that’s not a harbinger of the next recession, but it wouldn’t affect our lifestyle.

    You picked a very good decade for continued investing! We have no plans to add to our portfolio.

  270. Reply
    Doug Nordman August 26, 2017 at 10:25 PM

    Thanks, Peter, I’m open-minded about the commune but I’m not sure whether my spouse is interested…

    I haven’t stopped writing but most of my output was going toward book manuscripts and reader questions.

    Those three key points are straightforward in principle & logic, yet the emotions are a tad more difficult.

    BRS is strongly focused on giving more assets to the 85% who don’t make it to a military retirement. Among those who beat the 1-out-of-6 odds and retire, I suspect it’s revenue-neutral for most. It’s more profitable for those who aggressively invest their matching DoD contributions, and it’s almost certainly more profitable for those who have a large continuation pay multiple in their specialty..

  271. Reply
    Doug Nordman August 26, 2017 at 10:19 PM

    Thanks, Mel!

    KLG, there’s not enough dual-military retirees to populate a database for a statistical analysis, but… all of the dozen-plus dual-military retiree couples who I personally know have assets ranging from “more than enough” to “way more than enough”.

    The real power behind the military pension is not the amount of money. It’s the cost-of-living adjustment and the cheap healthcare.

  272. Reply
    Doug Nordman August 26, 2017 at 10:16 PM

    Thanks Darren!

    I think you’re right about having spouses on board. That’s not a financial problem– it’s a communication problem or even a marital problem.

    Your spouse could be showing you exactly where the line needs to be drawn between frugality and deprivation. Frugality is challenging & fulfilling while deprivation is not sustainable. You might have been FIREd sooner but you probably would’ve been unhappy. Especially, as you’ve noted, if your spouse is unhappy.

    No need to fear the next recession when you’re improving on the 4% SWR with the techniques of a two-year cash stash and variable spending. (4% SWR computer models are still struggling with that simulation code, but it’s working just fine for the humans.) And I like your idea of being FI from having to work, not necessarily from wanting to work. That makes a great 140-character meme!

  273. Reply
    Doug Nordman August 16, 2017 at 11:10 AM

    Sherry, I’ve never heard of this before.

    If you’d retired from active duty with a 90% VA disability rating then you’d probably be eligible for Concurrent Retirement and Disability Pay. (My friend Ryan Guina has an excellent post on the details: Since you’re now receiving your Guard retirement, you’d expect to be under the same CRDP rules that would add your VA disability compensation to your pension. In other words, as DFAS said about your future pension payments, you’d not only get your pension but you’d get the VA compensation on top of that.

    It’s possible that DFAS doesn’t have you properly entered in the system for CRDP. If that’s the cause of the problem then when they fix it they should be able to credit you back to 2 July. You could apply for CRDP (so that you’re paid back to 2 July) but if they’re going to do the right payment on 1 September then it seems that they already have you assigned to CRDP.

    I can think of one other place where someone might know the cause (and the solution). You could try posting your question on It was founded by a JAG and lots of the members have both VA disability compensation and Reserve/Guard careers. Someone may have run into this situation before.

    Other readers on this blog post, any help?

    I’ll keep asking a few other bloggers and people I know with high disability ratings. I’ll let you know when I learn more, and please let me know what you hear from PEBForum or DFAS– and what advice you’d want me to pass on to other servicemembers & vets.

  274. Reply
    Doug Nordman August 12, 2017 at 12:34 PM

    Penelope, you can request the waiver and reference the federal law, which should be enough for even Army HRC. Or maybe the Army MILPER message refers to keywords like Title 10 U.S. Code Section 3911:

    Here’s the text:
    (a) The Secretary of the Army may, upon the officer’s request, retire a regular or reserve commissioned officer of the Army who has at least 20 years of service computed under section 3926 of this title, at least 10 years of which have been active service as a commissioned officer.
    (1) The Secretary of Defense may authorize the Secretary of the Army, during the period specified in paragraph (2), to reduce the requirement under subsection (a) for at least 10 years of active service as a commissioned officer to a period (determined by the Secretary of the Army) of not less than eight years.
    (2) The period specified in this paragraph is the period beginning on January 7, 2011, and ending on September 30, 2018.

    Note that although you’ll have more than 20 years of service, you’ll reach eight years of commissioned service in August 2018 and the waiver legislation expires in September 2018. The issue will be whether the Army is willing to waive your commissioned service down to eight years, or whether they’re trying to retain officers in your specialty and want you to stick around for a couple more years.

  275. Reply
    Doug Nordman August 12, 2017 at 9:36 AM

    RAG, you’re going to have to check your divorce agreement and discuss that question with a lawyer. The Uniformed Services Former Spouse Protection Act lets the military pension be divided as an asset during a divorce, but it doesn’t specify how to divide it. The actual terms of the division are handled by state law. The state law of your divorce court can specify whether the pension payments end upon remarriage.

    The USFSPA and other federal law says that when an ex-spouse remarries, that ends any access privileges to the military base and any Tricare benefits. In other words their ID card is no longer valid and they’re no longer in DEERS.

  276. Reply
    Doug Nordman August 10, 2017 at 7:39 PM

    Great point, Ranger Vic– thanks!

  277. Reply
    Doug Nordman August 9, 2017 at 3:32 PM

    Thanks, Paul, and at least we’re trainable!

    I hate to give away the surprising conclusion of this saga, but here’s the post:

    The short version is a 10% disability rating for tinnitus (because it’s what everyone gets for that condition) and a 10% disability rating for each knee (plus the bilateral factor).

    My hearing is still good enough that it’s rated at 0% disability, and my chronic rhinitis (respiratory problem) is also rated at 0%. The significance of 0% is that they’re considered service-related, so if they get worse then we won’t have to revisit that question– just whether they reach the 10% threshold.

    Although the volcanic ash from the Mt. Pinatubo eruption undoubtedly affected my lungs in the short term, the VA has not observed any long-term issues among us survivors– yet. The “good” news is that my presence at the eruption is documented in the claim file, so if there ever is a medical issue then the VA already knows it’s service-connected.

    The disability ratings math is subtractive (not additive), and there’s a lot of rounding of the numbers, but the result is (barely) 30%. For a married veteran without other dependents, that’s $455.75 per month. Since I’m receiving a military pension, I’m giving up $455.75 of (taxable) pension for the tax-free VA compensation. That amount is indexed to inflation so it goes up a little every year, the same as a military pension.

    Getting to a 40% disability rating would be a big step, and it’s not as simple as “just” another 10%. I’ve read what it’d take to have a 40% disability rating, and I’m trying to stay out of that club.

    After I received my rating (and the VA compensation) I filed a FOIA request for my claims file (the “C-file”). That took a year, and it came in the mail on a CD. I can tell that the VA pulled my medical & dental records from the St. Louis archives, as well as all the documents that I filed with my fully-developed claim. It’s nice to have everything in one place, and I’ve backed up that CD.

    Make sure you work through those Disability Benefits Questionnaires so that you understand what the C&P doctors are seeking:
    I even offered the doctors a copy of my completed DBQs, and I can tell (from the C-file) that they used them.

  278. Reply
    Doug Nordman August 9, 2017 at 2:51 PM

    I’m glad to read your comment, Steve! You’re the first CSB/REDUX retiree I’ve read about who’s succeeded with it instead of using the money to deal with debt or losing it in a business.

    For everyone else reading this post, you won’t be tempted much longer. The CSB program (and its REDUX retirement) will end on 31 December 2017. That applies to everyone in the military now, not just to those who join after 2017. Servicemembers will only be able to sign up for the rest of 2017.

    The details of the death of REDUX are in paragraph 10 (at the end) of the implementation guidance document for the Blended Retirement System:

  279. Reply
    Doug Nordman August 8, 2017 at 2:46 PM

    I hear that, Ann. The laws are a chaotic patchwork among the states, and every insurer has a different tolerance for risk versus market share.

    If you decide to use the “Automatic License” hardware, please let us know how it works out!

  280. Reply
    Doug Nordman August 1, 2017 at 10:30 AM

    I’ve never heard that rumor before, Frank! You probably have credit for a good year during that time and have not lost any longevity.

    You could check it by reviewing your point-count records. If your anniversary date is still based on when you joined the military, then being in the IRR did not change it. If you have credit for a good year during that first year since your anniversary date (after active duty) then the IRR didn’t affect your good year. If you obtained any drill points while you were in the IRR and those are on your point-count record, then they transferred correctly into the system.

    If you check more details then we can figure out what else may have happened. Maybe you already had a good year when you left active duty for the IRR. For example, if you leave active duty exactly on your anniversary date (no extensions or stop-loss or other delays) then you enter your first Reserve/Guard year (drilling or IRR) with zero points. However if you stayed on active duty past your anniversary date (longer than exactly three years & zero days) then your days of active duty after that anniversary date would be credited toward your point count in the first year of Reserve/Guard duty.

    IRR is still a bad deal if you’re trying to reach 20 good years. All of the services have recently made it very hard to obtain points in the IRR, especially for correspondence courses. In addition if you transfer to the IRR from drill status, even for a single day, then you lose eligibility for Tricare Reserve Select health insurance. You have to be a drilling Reserve/Guard member to maintain TRS coverage.

    I’m not sure about badges or conduct awards. All of the services have different rules for those, and I’m not familiar with the details.

  281. Reply
    Doug Nordman July 30, 2017 at 12:59 PM

    Mark, here’s the answer from the DoD Blended Retirement System staff on the Max TSP Account Value number:

    “The max account values for the TSP SM and TSP Gov are the account values for the month prior to when payout begins. It’s a similar methodology to TSP PV account values at separation or retirement, we just take the account value as computed. If a user is trying to recreate those values then they would need to ensure that all computations are done with monthly rates, computed monthly. The pay table updates and the servicemember’s grade progression would have to be the same.”

  282. Reply
    Doug Nordman July 20, 2017 at 8:33 AM

    Mark, I have an e-mail in to DoD. Our milblogger huddle hasn’t come up with any answers yet. This question is on my tickler list and (as many of my XOs used to tell me) it will be tracked to completion.

    However there’s speculation about the calculator’s assumptions and their cumulative effect. ( You may have already seen this, but for the rest of the readers here’s a few of the non-intuitive ones:
    1. Basic Pay Table and Growth Rates
    As of December 2016, the Board of Actuaries’ annual across-the-board basic pay assumption is 3.25% per year. [Note: this assumption excludes promotion and longevity increases]

    5. Thrift Savings Plan (TSP) Elective Deferral
    The calculator assumes the annual cap is increased, on average, $500 annually to account for anticipated IRS cap increases. In reality, IRS maximums are not increased at a set rate each year, but have averaged approximately $500 annually since 1996. The cap will be adjusted accordingly each year, no later than December 31, based on the actual IRS elective deferral set for the following year, resulting in subsequent adjustments to all future years as a consequence.

    7. Thrift Savings Plan (TSP) Continuously-Applied Rate of Return
    The default rate of return for the BRS Comparison Calculator is 7% (in nominal economic terms). This is based on the TSP C-Fund average 10-year annual return, which is currently 7.36% after expenses.

    (and, since that’s a nominal return,)

    2. Cost of Living Adjustments (COLA)
    As of December 2016, the Board of Actuaries’ annual inflation assumption is 2.75% per year.

    (So DoD appears to be assuming that annual pay raises (3.25% in #1) will exceed inflation.)

    9. TSP Withdrawal Age
    TSP withdrawal age is set to age 67, the federally-defined full Social Security retirement age for the majority of current Service members.

    15. Continuation Pay Contribution to Thrift Savings Plan
    The default is set to 0%. Total user contributions, including individual contributions from basic pay combined with the continuation pay, cannot exceed the annual IRS Elective Deferral limit.

    16. Continuation Pay Installment Payments
    The default is set for continuation pay to be paid in one installment.

  283. Reply
    Doug Nordman July 28, 2017 at 11:24 PM

    Dayana, I’m afraid that I don’t have the answer to that question. The issue is that it’s very difficult to qualify for a good year in the IRR, and the terms of your incentive bonus might require you to be a drilling National Guard member with a good year. That would include both drills and AT, neither of which you’d do in the IRR.

    You could review the terms of your contract with a JAG or your S-1 or HRC, but if I was in your situation then I’d try very hard to find a way to stay in a drill status for that third repayment bonus. You’d really hate to mess this up during your only opportunity.

  284. Reply
    Doug Nordman July 28, 2017 at 11:20 PM

    That’s a good question, Em, because you’re considered 100% disabled by the military and the VA.

    I think you’re eligible to make a penalty-free distribution, but some conditions apply. The best way to handle this question is to consult a fee-only CPA or tax preparer. If you’re near a military base then you could also consult their VITA office (during tax-prep time), but that only helps for deciding what to do next year.

    Let me answer your question for both the Thrift Savings Plan and IRAs.

    Here’s the IRS rules for permanent disability:
    A person is permanently and totally disabled if both 1 and 2 below apply.
    1. He or she can’t engage in any substantial gainful activity because of a physical or mental condition.
    2. A qualified physician determines that the condition has lasted or can be expected to last continuously for at least a year or can be expected to result in death.”

    The TSP website says: “Permanent Disability – For the purposes of determining whether Roth earnings are qualified, the TSP cannot certify to the IRS that you meet the IRC’s definition of a disability. You must provide this justification to the IRS when you file your taxes.”
    That’s also in the TSP withdrawal instructions.

    You probably meet the conditions for a TSP withdrawal, and the TSP will probably give you the money.

    The IRS Pub 590-B handles disability withdrawals:
    “Disabled. If you become disabled before you reach age 59 1/2, any distributions from your traditional IRA because ofyour disability are not subject to the 10% additional tax. You are considered disabled if you can furnish proof that you cannot do any substantial gainful activity because of your physical or mental condition. A physician must determine that your condition can be expected to result in death or to be of long, continued, and indefinite duration.”

    “A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements:
    1. It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and
    2. The payment or distribution is:
    a. Made on or after the date you reach age 59 1/2, or
    b. Made because you are disabled (defined earlier)…”

    You’ll also need the correct distribution code on the 1099-R that your IRA custodian issues for tax returns:
    “Number codes. Some of the number codes are explained below. All of the codes are explained in the instructions for recipients on Form 1099-R.
    1—Early distribution, no known exception.
    2—Early distribution, exception applies.

    That’s on pages 21, 25, and 30 of this PDF file, and the flowchart on page 32:

  285. Reply
    Doug Nordman July 28, 2017 at 10:59 PM

    Good question, Denise, and you’re going to want to talk with a JAG or a lawyer who’s experienced with military law.

    Enlisted members with more than 18 years of service do have “retention protection” to get to retirement eligibility at 20 years of service:
    The key phrase in that law is “other than for physical disability or for cause”. If the administrative separation was for one of those reasons then you may not be protected under Title 10 Section 1176.

    In addition, for Reserve/National Guard members that depends on good years– not just total years. Even though you may have been drilling just before reaching your 20th year, you would have to have at least 18 good years, and not just have been in the military for over 19 years.

    Again, I’d recommend consulting a lawyer. Please feel free to e-mail me (NordsNords@Gmail) with more details if you have more questions.

  286. Reply
    Doug Nordman July 22, 2017 at 12:04 PM

    Good questions, Paul!

    Once you have your NOE in hand then you can start planning your service options. (Wait for that NOE, because sometimes the services have problems with auditing days of duty and point counts.) The retirement rules are a little confusing and there have been a number of changes in the last few years.

    First, you only need three years time in grade for O-5 and above. Here’s the federal law for officers:
    Note that the three years can be waived down to two years.
    And for National Guard enlisted:
    With more details here:

    Once you have the appropriate time in grade for your rank, your first option is to simply “retire awaiting pay”. You’ll continue to gain longevity in your retirement rank (just as if you were on active duty) but you’ll no longer have drills or military duties.

    Another option (once you have time in grade!) is to transfer to the IRR and wait until later to file for retirement. You’ll no longer have to show up for drills or AT. Mobilizing from the IRR doesn’t happen very often, so you won’t have many duty obligations. However good years can be a problem in the IRR, because the Reserves and National Guard have made it difficult to earn points in the IRR. (There are very few correspondence courses which are still approved for Reserve/Guard points.) You might be able to get points (by volunteering or by finding the funding to pay for your orders) but you might not get enough points within 12 months to receive credit for a good year.

    When you’re in the IRR you’re also competing for promotion with all of the Reserve/Guard members who are still drilling and completing more achievements than you, so IRR promotions are relatively rare. Even if you manage to get leadership schools and brief mobilizations, you’re still competing against drilling Guard members.

    To answer your specific questions:
    (1) I’m not aware of any laws or programs which allow filing for retired awaiting pay and then continuing in the IRR. Some services allow retirees to volunteer for no-cost orders to earn points (not pay), but those opportunities are rare and they’re not considered IRR. If you have a program name or a link then I’ll research it.

    (2) Leadership schools are generally funded by HRC (for service-wide career development) or by individual commands (out of their own operating funds, for their billet needs) or on no-cost orders (at your expense). In general, if you can find the funds (or pay your own expenses) then you can get the school– if they have space available. Again, you’d get points for attending the school, but it doesn’t necessarily lead to a promotion or even a good year.

    (3) I know that many Reserve/Guard members have been promoted for their performance during mobilizations, but I’m sure it depends on the type of duty and the length of the mobilization. I wouldn’t assume that a mobilization would lead to a promotion any more often than for servicemembers who are doing drills and training.

  287. Reply
    Doug Nordman July 18, 2017 at 12:38 PM

    Thanks, Mack, that’s a great feature of 401(k)s.

  288. Reply
    Doug Nordman July 13, 2017 at 10:10 AM

    Jon, we don’t have any recent data on payment times. You might want to e-mail or call every few weeks so that the company doesn’t “forget” about their policy.

  289. Reply
    Doug Nordman July 5, 2017 at 12:37 PM

    Good question, Mark, let me see if we can figure it out. It’s possible that an assumption needs to be clarified… or a bug needs to be fixed.

  290. Reply
    Doug Nordman July 5, 2017 at 12:34 PM

    Kevin, that seems like a brilliant insight! I’m also going to pass your thoughts on to other milbloggers and on social media… as well as back to the BRS staff at DoD.

  291. Reply
    Doug Nordman July 5, 2017 at 7:45 AM

    Thanks, Kevin, great advice!

  292. Reply
    Doug Nordman July 1, 2017 at 6:18 PM

    Excellent question, Ben!

    The amount that you sent from the Roth TSP to the Roth IRA is just a rollover. It’s not a contribution to your IRA because it was contributed to your Roth TSP. (You could still contribute $5500 to the Roth IRA for that year.) The amount of the rollover is indeed a combination of the Roth TSP’s contributions and growth, but it’s still counted as a rollover. (There’s no tax due on the gains.) The TSP will send a 1099-R to the IRS (and a copy to you) classifying the move as a rollover, with no penalties or taxes due.

    After five tax years you can withdraw the amount that you rolled over into that Roth IRA, and that amount is free of penalties & taxes. You can’t give the same treatment to any gains in the Roth IRA which happened during the five tax years, but the rollover amount is free for you. Click through that link to Michael Kitces’ “Nerds Eye View” site for the details of the tax code which allow this great move.

  293. Reply
    Doug Nordman June 27, 2017 at 3:56 PM

    Good question, Rey!

    Overseas, we’ve done well with Booking .com and AirBnb. In America we’ve also used VRBO .com.

  294. Reply
    Doug Nordman June 16, 2017 at 7:31 AM

    Good question, LTC!

    Federal law requires three years’ time in grade above the rank of O-4. The service secretaries can waive that requirement down to two years. ( It’s not clear whether that law requires a Reserve/Guard member to earn good years for their time in grade, but the specific answer seems elusive. Do your best to complete good years for your time in grade, and avoid the IRR if possible (because it’s so hard to get a good year in the IRR).

    Once you’ve served at least two years’ time in grade (ideally two good years) then you could apply for “retired awaiting pay” status. When your retirement request is approved for the higher rank then your longevity will continue to accrue in that rank while you’re in gray area (just as if you were on active duty) until you begin drawing your pension. Even though you could apply for retirement when you’re around 23 years of service, your pension would be calculated from the maximum longevity column of the future pay tables in effect when you start drawing your pension

  295. Reply
    Doug Nordman June 13, 2017 at 5:06 AM

    Sorry to read that, Rachel.

    In the year since this post has been published, the entire insurance industry has been raising their rates:

  296. Reply
    Doug Nordman June 12, 2017 at 4:49 AM

    Sure, Deserat!

    Here’s a basic post from Brandon, the blogger who popularized the term:
    It includes a number of examples, and the potential taxes are based on income-tax brackets (as well as deductions & credits). He even suggests when it might be smart to just pay a penalty.

    Here’s a more detailed post from Justin, who you know from as Fuego:
    It includes his family’s personal plan.

    Here’s a very detailed post (with links to the applicable tax code) from CFP Michael Kitces, cofounder of XY Planning Network and FinCon veteran:
    He addresses the concerns of those who wonder whether this is too good to be true.

    And finally, here’s my post with more military details about the TSP (including the Roth TSP) and those who might opt to use the Qualified Reservist Distribution:

  297. Reply
    Doug Nordman June 11, 2017 at 6:44 AM

    You’re good to go, Will!

    When you reach 20 good years then your service will send you a Notification Of Eligibility indicating that you’ve met the retirement requirements. You should receive that a few months after February 2018, when they finish auditing your record. If you don’t receive it by the summer then track it down.

    Once you have your NOE then you can choose to continue to drill (as long as you find it challenging & fulfilling) or you can apply to retire awaiting pay.

  298. Reply
    Doug Nordman June 10, 2017 at 2:35 PM

    Thanks for your analysis, Peter!

    I think a DoD match in an aggressive TSP asset allocation to the C, S, and I funds stands a very good chance of compounding faster than the High Three pension. I agree that Gordon’s Law predicts lower returns, but I’m not going to predict that returns will be lower for more than the next few years (or the next recession).

    Veterans can tap both their TSP and their IRA accounts after leaving the military and before age 59.5. The law allows the “Roth IRA conversion ladder” to be done free of penalty, and it may even be free of taxes.

  299. Reply
    Doug Nordman June 10, 2017 at 2:28 PM

    I’m sorry to read about your divorce, Melissa.

    Just like the post says, the best way to handle this situation is to work with a lawyer who understands your state law and military compensation. The Uniformed Services Former Spouse Protection Act only tells the states that a military pension can be divided up during a divorce. The actual amount of the division still depends on state law and on how experienced your lawyer is with military compensation.

    In other words, your lawyer can get at least the percentage of the servicemember’s pension that the state would normally agree to award you. You don’t get a share of the VA compensation because that’s no longer part of “disposable retirement pay”, but you could get other assets or payments to make up for that. The lawyer may also be able to get more for Survivor Benefits Program (which is worth your time to pursue), child support, alimony, real estate, and educational benefits.

    If it’s any consolation, your ex-spouse will be challenged to get even the disability rating that they’ve earned– let alone to receive a higher rating. The VA compensation exams have very stringent criteria that are conservatively applied for the bare minimum in benefits.

    Note that DFAS will send your share directly if you meet the requirements of the 10/10 rule and file with them:

  300. Reply
    Doug Nordman June 6, 2017 at 11:56 AM

    Outstanding question, Steve, and an impressive service record! That’s the most points I’ve ever seen.

    I think you’re correct: your Guard pension is a better deal than your active-duty pension. Let’s check a few parameters from your e-mail.

    You’ve used the phrase “final basic pay”. The term “Final Pay” has a specific meaning for those who’ve entered the military before 8 September 1980. Since you also say that you have 40 good years, it would imply that your Date of Initial Entry on Military Service (the date you first received a military ID card) is in the 1970s. If that’s correct then your Reserve/Guard pension is indeed calculated from your final base pay.

    You might have to educate a few pay clerks in NGB and at DFAS. If they’re struggling to calculate your pension then you’d direct their attention to the DoD Financial Management Regulation (DoD 7400.14-R, volume 7B, You’d refer to paragraph 010102.A.1 (Final Pay) and .B (the pay tables in effect immediately before starting the pension).

    Paragraph 030501 entitles you to the most favorable pay formula. This means that the calculation has to be done for both active-duty (regular) and Reserve/Guard (non-regular) retirements, and you’d get the higher amount.

    030501 also means that DFAS might have to do a Tower Amendment verification. I don’t think the Tower Amendment will affect you but I’ll describe it in case someone mentions it. It requires DFAS to check the pay table increases against retiree COLAs for the years after you made E-9. The calculation verifies that (if you’d filed for retirement at the moment you made E-9 on active duty) you’re still getting the highest pension to which you may have been entitled, especially if retiree COLAs were higher than active-duty pay raises.

    Finally, check Table 3-1 Rule 13 on the FMR’s page 3-28. That describes the non-regular retirement formula (including a bunch of footnotes) for your rank and years of service. This is also the table that DFAS will use to check the amount of active-duty pension you might be eligible for, as well as any differences under the Tower Amendment.

    If your Guard pension is based on Final Pay at age 60, then you have another bit of flexibility that I’ve only seen in a few people during the last decade: the base pay at which you start your pension.

    A Final Pay Reserve/Guard pension uses the pay tables in effect when you reach age 60. If you’ve deployed to a combat zone since 28 Jan 2008, or mobilized for some national emergencies, then your pension could start a few months earlier. See paragraph 010208.F of the DoD FMR and read Ryan Guina’s summary here:

    If your pension starts in late 2018 then it’d be based on the 2018 pay tables. However if you elected to delay your pension by a few months then it could start at the pay in effect on the 2019 pay tables. If you’re turning age 60 in November or December 2018 then it might make sense to start your pension in January 2019, when the pay tables are (hopefully) 1%-2% higher. You’d lose a month or two of pension deposit but you’d make it up over the next 50-100 months of your life at a higher pension. The law which lets you do this is reflected in FMR 010801.D

    And if you’re eligible to start your pension in late 2017 (because of mobilizations for an earlier retirement), then you might want to wait until January 2018 when that pay raise kicks in.

    Note that this delay is only worth doing for Final Pay retirees. High Three retirees won’t notice a difference in their 36-month average. Even for Final Pay retirees, this is running up the score after winning the game. You’d need good longevity and a healthy lifestyle to make sure the delay pays off.

    With those possible changes in mind, your Guard Final Pay pension is based on your longevity (40 good years) at your final rank (E-9) as though you’ve been on duty the entire time (which, in your case, you have actually done). The 2017 pay table tops out at E9>38 for $7844.70/month. An estimate of your 2017 pension is:
    11,313 / 360 x 2.5% x $7844.70 = $6165/month.
    Your 2018 pension may be 1%-2% higher, depending on the FY18 budget legislation.

    Regardless of the age that you’re eligible to retire or when you choose to start your pension, your Tricare benefits start at age 60.

    You also need to make a decision about the Survivor Benefit Program. Let me know if you have any questions, but for most Reserve/Guard members at age 60 the premiums are more expensive than the coverage is worth.

  301. Reply
    Doug Nordman June 6, 2017 at 7:07 AM

    Good questions, Elena, and the answers are “Yes” and “Vanguard”.

    During the same calendar year you can maximize the contributions to your Roth TSP ($18K), your spouse’s Roth IRA ($5500), and your Roth IRA ($5500). You can do that as long as he or you (individually or combined) have at least $29K of earned income (military salary W-2 or other W-2s or 1099s).

    DFAS takes out the TSP contributions during the calendar year, so their last payroll deduction for a 2017 contribution would be in December, but the Roth IRA contributions for 2017 could be made as late as 15 April 2018. Those details are in IRS Publications 590-A and 590-B. If any of that reading raises more questions then comment here or e-mail me or consult an Accredited Financial Counselor on the military base or at a Navy-Marine Corps Relief Society office.

    The spousal Roth IRA can be opened with any IRA custodian. It’d be a separate account at Vanguard, or Fidelity, or USAA, or Schwab, or just about any other financial institution. If you already have your spouse’s Roth IRA at Vanguard then it’s easier and more convenient to open yours there too. You’d have one Roth IRA account under his name (and Social Security number) and another Roth IRA account under your name (and SSN). These are both completely separate from your military TSP account.

  302. Reply
    Doug Nordman June 5, 2017 at 4:42 PM

    Great question, Dennis, and I understand why you seem a little frustrated by the lack of information from people who should know how the system works. I’m not an expert on the federal law of the civil service, and if you need an expert legal opinion then you should hire a lawyer for a few hours of advice. However I can get you (and perhaps your lawyer) started with the references.

    I’d suggest you begin with a current copy of the OPM FERS Handbook. Here’s a link to a sample which might be the current chapter, although it’s from 1998. You’d want to make sure you have the latest edition:
    For example, section 22A2.1-2.E on page 8 of that document goes into the detail you seek, and it essentially says that only the active-duty time of your Reserve career counts… but not every period of active duty.
    Way back on page 31 of that PDF, the FERS section says that the CSRS rules in section 22A2 also apply to FERS.

    I realize that you’re trying to convert points into years/months. In the Reserves, every month has 30 days. That comes from the DoD Financial Management Regulation (the FMR) which has detailed procedures for calculating the Reserve/Guard pension. Once you know your total points of active duty then you can divide by 360 and 30 to get the years & months.

    For more general reading on your military service credit deposit, I recommend Ryan Guina’s interview of Eddie Wills:
    Eddie also has an extremely detailed guide to the process of obtaining your military service credit deposit. Since you’ve been at USPS for so long, you may have some interest to pay on your deposit. Eddie’s post on the process can help you walk through the paperwork and decide whether it’s still a good deal:

    If you haven’t already seen the DFAS part of the process for making your payments, here’s their page:

    After you’ve read through these references, if you still have questions then I’d suggest you contact Eddie through Once he’s answered your questions, then you could either take the USPS’ word for their numbers (which you’d help them calculate) or have a lawyer advise you on any details of the federal law.

    I realize that you might not have enough good years to receive a Marine Reserve pension, but federal law has a specific exception to allow you to receive both a civil service (FERS) pension and a Reserve/Guard pension:

    This advice has worked for other veterans with similar questions. Please let me know if you have more questions.

  303. Reply
    Doug Nordman June 5, 2017 at 11:19 AM

    You’re absolutely right, Erin, and we’re asking DoD to release the retirement data on file with the military’s Defense Manpower Data Center. Retirement likelihood varies quite a bit by service and specialty as well as by rank. For example Marine infantry (officer and enlisted) should immediately opt in to the BRS because their retirement rates are very low– reputedly in the single digits for Marine enlisted infantry.

    Of course those statistics are for the demographics and don’t apply to the individuals, which is why I suggest the “challenging and fulfilling” criteria for a military career.

  304. Reply
    Doug Nordman June 5, 2017 at 11:14 AM

    Thanks for the analysis, MilitaryDollar! I’ll pass your link along on my social media, too.

    The USAA calculator is expressly designed for simplicity and a high completion rate. Most calculator nerds find it “too easy”, but it’s a great starting point for people who only want a quicklook.

  305. Reply
    Doug Nordman June 5, 2017 at 10:53 AM

    Good question, Elena, thanks for posting it here!

    Fantastic job on maximizing your TSP contributions. I wish more military families made it a priority. It’s challenging at that income, but your high savings rate will greatly accelerate the compounding.

    Yes, you can absolutely contribute to a Roth IRA in addition to the TSP. In fact you can also contribute his income to your (spousal) Roth IRA as well, even if you do not currently have any earned income in your name. Keep in mind that there are limits at higher incomes and you have to have enough earned income to make the contributions.

    For those under 50 years of age, the contribution limit to a Roth IRA is $5500/year. If you have at least $29K of taxable earned income (W-2 or 1099) then you can maximize your TSP and Roth IRA contributions of $18K + $5500 + $5500.

    You can see all of the TSP contribution limits here (including the $54K limit for deploying to a combat zone):
    and you can see the Roth IRA contribution limits here:
    Note that the $6500 “catch up” limit applies only if the person turns 50 (or older) during that contribution calendar year.

    Vanguard is an outstanding custodian for your IRA accounts… and for saving/investing even more in taxable accounts.

    By the way, feel free to e-mail me at NordsNords at Gmail.

  306. Reply
    Doug Nordman June 3, 2017 at 5:16 AM

    Yep, it helped a lot of people!

    If there’s a drawback to this type of app, it’s needing annual updates from the pay & benefits tables. has now released their own version of a pay app:

    Same information, same data updates. My daughter was just using it the other night to check changes on her housing allowance.

  307. Reply
    Doug Nordman June 3, 2017 at 5:10 AM

    Thanks, Ben! Two years later, I’m still using almost exactly the same checklist…

  308. Reply
    Doug Nordman May 29, 2017 at 8:51 AM

    Thanks, Roger, great numbers!

  309. Reply
    Doug Nordman May 22, 2017 at 8:13 AM

    I agree, Dave, if you’ve picked up O-5 then you’ll have up to 28 years to get your 20 good years.

  310. Reply
    Doug Nordman May 22, 2017 at 12:47 AM

    Great question, Ben! It’s all about good years.

    You have at least 10 good years from your Marine service, and you need to confirm that the VA ANG has those records in their database. (Sadly, the services do not always share that data with each other.) You say that you’re working up to your 15th good year in the ANG, and with five more good years you’ll reach the minimum total of 20 qualifying good years. Shortly after that data is logged, the VA ANG will audit your point-count record and eventually issue a Notice Of Eligibility that you can retire. Once you get that letter you’re able to file a retirement request whenever you wish– after 20 good years, or after serving for the time in grade of a senior rank, or after 30-40 years in a very senior rank.

    Your pension is calculated on your points in your retirement rank. It’s also based on the High Three average of the 36 months of your highest pay during the years that you served, including the years that you were in “retired awaiting pay” (gray area) status. When you “retire awaiting pay”, then your High Three average will be calculated from the highest 36 months of all of the pay tables up until you reach age 60, just as though you were on active duty during those gray-area years. (This is how your ANG pension keeps up with inflation before you start drawing it.) This is usually the three years of pay tables in effect when you’re ages 57-58-59.

    You also accumulate longevity in your retirement rank during the gray area years, again just as though you were on active duty. For most ranks, this means that you’ll reach the maximum pay at that rank.

    A few months before your 60th birthday, DFAS will calculate the average of your highest 36 months of pay, including all of the pay tables up to your age 60, at what is essentially the maximum longevity for your retirement rank. That’s your “High Three Pay Base”.

    Then your pension is calculated from:
    (Points / 360 x 2.5%) x High Three Pay Base.

    Here’s the details of that calculation:

    and you may be able to access a calculator for your service:

  311. Reply
    Doug Nordman May 22, 2017 at 12:33 AM

    Mike, I understand what you’re seeking but it happens for very few servicemembers. Most of them have arcane skills like trauma surgeon or dual-status technician (aircraft). A handful more are in full-time active-duty support billets for the Guard/Reserve. It’s extremely unlikely for you to be able to earn an active duty retirement from the Reserve/Guard.

    Your years on active duty (before you affiliate with a Reserve/Guard unit) count toward Reserve/Guard credit at one point per day of active duty. A year of active-duty points is a good year, of course, and any points past that anniversary of your year will count toward credit for the next good year in the Reserve/Guard.

    I’ll build up to your situation. For example, if you’re on active duty for five years and 30 days then you have 5×365 points (plus a leap year point or two) and five good years. 30 days past that anniversary of five years means that you have 30 points toward good year #6, so just a couple drill weekends will take care of bagging that good year.

    We’ll circle back to your 18-year question in a few more paragraphs.

    The way to attain an active-duty retirement from the Reserve/Guard is to go back on active duty. One way is to be selected for Navy “Full Time Support”, where you’re on active duty in a billet that takes care of a district of Reserve units. Another way is to be selected for an Air Force AGR billet doing similar duties. However that means you were in a Reserve/Guard unit, in drill status, and you were selected for a special active-duty program. As you might imagine, it’s very competitive. You’re also on active duty– which means you can be transferred to a new duty station.

    Another way (full of urban legends) is “sanctuary”. (Look up that keyword on the site and read those posts.) Essentially you have to be mobilized from a drill billet, and during that active-duty mobilization you have to cross over 18 years of active-duty points. Then before you’re demobilized you have to file for sanctuary status, which would allow you to continue on active duty in that billet until you reach 20 years. This does not happen by accident, and the services actively track it to avoid putting you in the position to declare it.

    You’re right, drill weekends don’t count. Only active-duty time is part of the 18 year total. (That includes AT, ADSW, mobilization, and a few other categories.) Participation points do not count. I doubt that PIRR, CAP, ALO, or Honor Guard count because those are not active duty. I’m not sure about IMA. It essentially means that you had to have 7000-8000 points (most of which came from years of active duty or mobilization) to accumulate the 18 years of 6575 sanctuary points. And then you’d be in sanctuary status until you reached your 20th anniversary.

    If you left active duty just short of 18 years, then you’d need two more good years to be eligible for a Reserve/Guard pension at age 60. However the services are keenly aware of your proximity to sanctuary. You’d be forced to either waive sanctuary to volunteer for active-duty orders, or you’d never be mobilized and you’d have to finish your 20 good years with drill weekends.

    I know one Air Force officer who left active duty at 14 years. After a few years in the ANG she was selected for a (very competitive) AGR billet. She’ll finish 20 years of active duty for her active-duty retirement. She’s the only one to do this among thousands of readers who I’ve heard from over the last decade. I also know of a trauma surgeon who was able to declare sanctuary during a mobilization (and his service fully supported that). I know of one Marine Reserve officer who reached sanctuary after multiple mobilizations and simply outstanding performance, and that was during the “surge” years of the Iraq War.

    The most reliable path to the goal you seek is to transfer to the FTS or AGR communities (or your service’s equivalent). In that case I recommend that you talk with a Reserve/Guard recruiter and with your active-duty assignment officer.

  312. Reply
    Doug Nordman May 17, 2017 at 10:25 AM

    Good comments, Peter– and I’m keeping an eye on the tech improvements.

  313. Reply
    Doug Nordman May 10, 2017 at 3:14 PM

    It’s just a very Navy-specific question (in the Navy section of federal law) and I didn’t want members of the other services to feel that they had to read it.

    You’d think that the laws would be evenly applied to all services. Sadly this does not seem to be the case.

  314. Reply
    Doug Nordman May 3, 2017 at 10:55 AM

    Thanks, Hoya, that’s great advice!

    A year later I’m still practicing the physical therapy techniques and pushing my balancing skills. (I bought a used stand-up paddling board of very challenging dimensions, and it works me hard.) Losing weight always helps, and I’ve made great progress there too. I hope to go the rest of my life without ACL reconstruction or cartilage repairs– let alone total knee replacements– and I’ll add your info to my checklist.

    Ironically, CRDP would pay for most of the expense of any long-term care I’d need. I sure hope that’s never necessary, either!

  315. Reply
    Doug Nordman April 30, 2017 at 6:18 PM

    Good question, Lloyd!

    The BRS pension (40% at 20 years) is still for life, just like today’s High Three pension.

  316. Reply
    Doug Nordman April 30, 2017 at 6:08 PM

    That’s right, Rod, the answers are both “Yes.” The 30-year mark is just time passing by, and for an enlisted Navy retirement it’s in the Fleet Reserve. Thanks for your question!

  317. Reply
    Doug Nordman April 24, 2017 at 10:26 PM

    Thanks, John, and congratulations on making the most of your retirement!

  318. Reply
    Doug Nordman April 16, 2017 at 11:35 AM

    Great question, Anthony! The answer is “probably”. The law was changed in 2005 and you no longer have to serve in a Reserve unit for the years before you apply for a Reserve retirement.

    More details are at this post:

    The Reserves might have stopped tracking your data after you went on active duty (and never demobilized) so they may have to catch up with the active-duty databases. If you do not already have a Notice Of Eligibility from your Reserve service then obtain that first, and after that good-year and point-count verification you should be able to apply for retired awaiting pay.

  319. Reply
    Doug Nordman April 14, 2017 at 12:06 PM

    Good questions, Voz!

    Under the current High Three retirement, your pension will be 50% of the average of your highest 36 months of pay. Under the Blended Retirement System, your pension will be 40% of the average of your highest 36 months of pay.

    If you contribute at least 5% of your base pay to your Thrift Savings Plan, then DoD will match up to 5% of your base pay. Since you’re entering the military in 2017, if you opt in to the BRS (as early as 1 January 2018) then your 5% DoD match will begin immediately after you convert.

    Your BRS pension will be 10 percentage points lower (a 20% cut from High Three) but you’ll have the additional DoD funds in your TSP. Your TSP is your money whether or not you stay in the military, and you can take it with you when you leave the military. You can leave the money in your TSP account or roll it over to your IRA.

    I realize that you’ll have a service obligation after AMEDD, but 85% of all servicemembers leave the military before earning a pension. You may decide that you’d rather pursue your medical career as a civilian as soon as you’ve served your military obligation. The BRS gives you more money in your TSP than if you’d clenched your jaw and gutted it out to 20. More importantly, even if you do serve until retirement, it’s possible that the DoD matching contributions in your TSP will grow faster (and be worth more) than if you stayed with the High Three pension.

    Because you have only 1 out of 6 odds of staying in the military until retirement, I strongly recommend you opt in to the BRS– and take your military career just one obligation at a time.

  320. Reply
    Doug Nordman April 5, 2017 at 7:48 PM

    Thanks, Ryan, good idea– we’ll add it to the editorial calendar!

    In the meantime you can read the DoD implementation document at this link, including the portions applicable to the Reserves & National Guard:

  321. Reply
    Doug Nordman March 28, 2017 at 10:28 AM

    Thanks, Peter. I’m pretty sure that Generation X and the Baby Boomers had their share of people who behaved that way in their 20s and 30s. The same GenX/Millennial culture produced a crowd of people like author Adam Grant, who wrote “Give And Take”, so perhaps the generational concepts are stereotypes.

    Although I’ve seen the statistics about entrepreneurs in their 40s, they overlook the rise of entrepreneurs (in their 20s and 30s) who have tech and cost advantages that were never available to the older entrepreneurs. As the rise of accelerators and incubators across the nation shows, it’s become easier and cheaper than ever before to start a business. The vast majority of the founders who come through our local accelerators (Blue Startups, XLR8UH, and Energy Excelerator) are in their 20s and 30s.

    I completely agree that the skills learned in the military translate well to being entrepreneurs and startup founders! Creativity, awareness, teamwork, tenacity, and persistence lead to success at all ages…

  322. Reply
    Doug Nordman March 25, 2017 at 12:42 PM

    Thanks, Peter, good points.

  323. Reply
    Doug Nordman March 20, 2017 at 7:37 PM

    Thanks, Vanguard!

    I agree, a more robust calculator would be good for those who want to do the additional data entry. I’ll feed that back to USAA. I’m glad you mentioned it because sometimes I feel as though I’m the only calculator nerd in their conference room.

    The numbers on the latest DoD BRS summary are 14% of active duty and 19% of Reserve/Guard making it to at least 20 years. I’ve found one chart on a 10-year-old RAND study that backs up the 14% number for active duty. I’ve asked the DoD BRS staff (yes, they do have a staff) to share their source for these numbers, because I’ve been seeing similar numbers (without citations) since 2011. They’re working on it and it’s on my followup list. Rumor is that it’s in the Defense Manpower Data Center but it’s definitely not public yet.

    My daughter and son-in-law both commissioned in 2014, and I’m also recommending that they both take the BRS. (They also have a high savings rate, so they’ll probably reach financial independence without a pension.) My daughter has pretty much made her decision to move to the Reserves in 2019, and my son-in-law is still feeling challenged & fulfilled. We’ve had the discussion a number of times, and I suspect we’ll keep talking about it during the next nine months.

  324. Reply
    Doug Nordman March 20, 2017 at 7:27 PM

    Thanks! I’m glad to learn that Darrow and I aren’t the only ones…

    … and let us know how your retirement transition goes!

  325. Reply
    Doug Nordman March 19, 2017 at 12:43 AM

    Thanks, GetteVon, great question!

    Base access is limited by the Status Of Forces Agreement, and U.S. military retirees are able to get a 24-hour pass. Some days are open to the local community for holidays or special events.

    In general, retirees are discouraged from using the base. You have access to the personnel support detachment for ID cards (if necessary) and the passenger terminal (Space A flights). There may also be space-available room in the base lodge, but I don’t know how long you’d be able to stay there. You can rent recreational gear from the MWR center and buy tours or event tickets at the ITT office. You can buy snacks and meals at the various restaurants and fast-food franchises. You might be able to use base services like the legal office, the library, and their computer network.

    I don’t know about hospital or dental access– we never looked into that. The only shopping is limited to the Mini-Mart and other small stores at the exchange. You can’t buy gas at the gas station, although you can buy tools & parts. You aren’t even able to enter the commissary without an active-duty sponsor or escort.

    Frankly, we weren’t looking for much support from the base. We spent far more time exploring Rota and the rest of Andalusia, and you may decide to do the same.

    If you’re living in Spain on a visa or a residency permit then you may have more base access than our 90-day Schengen default.

    If you want to dig into the details of the policies and rules, I recommend joining the Facebook group “Rota Naval Community Q&A” ( You’ll be able to find copies of the SOFA document and find more people to contact for additional info. The Rota area does have a large American expatriate community of U.S. military veterans & families, and some of them may be members of that FB group.

  326. Reply
    Doug Nordman March 17, 2017 at 11:02 AM

    You’re welcome! I think the services lobbied hard to use the continuation pay as a retention program.

    The only consistent correlation with retention is… bonus money.

    The issue of “consecutive” or “concurrent” obligations is also important to me. I watched the submarine force screw this up in the 1980s, and several submariners ended up with nine-year obligations instead of five.

  327. Reply
    Doug Nordman March 17, 2017 at 11:00 AM

    I agree that the calculator doesn’t have many options, John, but that’s by design.

    “Ease of use” and “robust flexibility” tend to be mutually opposing design criteria. I enjoy having a lot of inputs to play with, but USAA has noted that those types of calculators have a very low completion rate with the general public (around 10%). Meanwhile USAA’s “easy to use” retirement calculator (with very limited inputs) has a completion rate of over 90%. It starts people on their financial planning without an intimidating hurdle of data entry, and they can go onto seek professional advice or their own advanced calculators. The BRS calculator follows the same design goal.

    Here’s another complication: the biggest issue with the BRS isn’t about the money. It’s about unrealistic expectations of serving at least 20 years for military retirement, and giving servicemembers a portable retirement account instead of cliff vesting. We shouldn’t distract people with financial comparisons between the two systems when they have completely different customers.

    And yeah, the DoD BRS calculator has more knobs & levers to tweak. It’s also brought to us by the people who brought us the REDUX/CSB calculator, so I’m staying skeptical… starting with the release date which is only two weeks away!

  328. Reply
    Doug Nordman March 16, 2017 at 11:56 AM

    John, if you didn’t sign up your ex-spouse for the SBP then you might never be able to do so. The SBP occasionally allows open enrollments, but that’s only happened a handful of times in the last four decades.

    If you’re unable to comply with the court order (either because of the SBP rules or because of your ex-spouse’s lack of action) then you probably need to discuss your options with a divorce lawyer who’s experienced with the Uniformed Services Former Spouse Protection Act. Depending on the terms of the court order she may be considered eligible for more than you’re paying via your personal check.

  329. Reply
    Doug Nordman March 16, 2017 at 11:50 AM

    Just to make the vocabulary more precise, Jason, I realize that you’ll reach 20 years of points as well as 20 good years, but waiving sanctuary means that you’ll earn a Reserve retirement (at about age 60) instead of an active-duty retirement in a little over a year.

    I’m not familiar with how the RPA program law affects a military pension, but Palace Front & Palace Chase are intended to lead to Reserve retirements:

    On the other hand some AGR billets do lead to an active-duty retirement because the servicemember is allowed to claim sanctuary.

    Whether a pension comes from active duty or from the Reserve/Guard, you have a challenging/fulfilling billet with cheap health insurance and a lifetime inflation-adjusted annuity. The non-regular pension means that your assets have to bridge your expenses to age 60 (or a little sooner in some cases), but you still win the game either way.

  330. Reply
    Doug Nordman March 16, 2017 at 11:32 AM

    Thanks, BK, good questions on two perpetual debates!

    I’m not Rich, but in my family we retirees have rolled our (traditional) TSP accounts over to traditional IRAs and we’re converting them to Roth IRAs. We’ll do that at a lower tax bracket (now) than when we’d have to start RMDs, and of course Roth IRAs don’t have RMDs. When our daughter and our son-in-law leave the military, they’ll leave their assets in their Roth TSPs until five tax years before they’ll need to tap the funds– and then they’ll roll them over to a Roth IRA.

    Mad FIentist does a great job on explaining the Roth conversion ladder.

    “Pay off the mortgage” is more controversial. If you have a stream of income from a military pension or rental properties, then you’re amortizing a fixed payment with steady income that tends to rise with inflation. In addition, you can leave more of your assets invested in real estate (or equities) with returns that may exceed the cost of the loan. My spouse and I are currently refinancing our home & rental property mortgages into a new 30-year mortgage fixed at 3.25%. We’d earn nearly that much from seven-year CDs, let alone the yield on an equity dividend fund. However we’re using our military pension to pay down that mortgage, and I’ll make the final payment when I’m 86 years old.

    I’d be a little more hesitant to carry a mortgage in retirement with only an investment portfolio of equities and no other annuitized income. The success rate is high but there’s still a failure rate. The only way to insure against that failure is with an annuity, even if the annuity is “just” the income from Social Security offsetting the mortgage payment.

    There’s another side to that discussion which is every bit as important: the emotional aspect of behavioral financial psychology. If carrying a mortgage keeps you from sleeping comfortably at night, then the financial logic is not much help. In that case it’s better to pay down the mortgage rather than to continue to grapple with the financial aspects of offsetting liabilities with assets.

  331. Reply
    Doug Nordman March 10, 2017 at 11:26 AM

    C, I think that active duty and a Reserve/Guard career each have their quality-of-life challenges. Neither one is a rose garden.

    However I still hear from many readers (and my personal experiences) that the Reserve/Guard gives you much more control over your life than active duty. It’s more of the things we enjoy about the military with fewer of its hassles.

    I’ll go even further on the civilian employer: if they don’t support your Reserve/Guard career then it’s worth finding an employer who does. Better yet, save as much as you can for financial independence. You’ll gain more flexibility of choice among corporate employers, part-time work, or your own entrepreneurial projects.

  332. Reply
    Doug Nordman March 10, 2017 at 11:19 AM

    As Rich says, it looks like you’re doing fine, Tysan. You’re learning and building skills, and the money will follow as you earn your promotions.

    Maintain your control of your expenses, learn your job and pass those promotion exams. Get your college degree if that interests you or pursue more professional certifications. As you approach the end of your active-duty obligation then consider your next step– continuing your enlisted career, or getting a commission, or leaving active duty for a combination of Reserve/National Guard duty and a bridge career with a real-estate side hustle.

    I agree with the cash-only approach (for now). There’s no reason to take the risk of leverage until you feel more confident in your skills and finding a bargain and managing it.

    If it helps, here’s some numbers on how your savings can grow with each annual pay raise, longevity raise, and promotion.

  333. Reply
    Doug Nordman March 4, 2017 at 3:12 PM

    Thanks, Peter, good advice.

  334. Reply
    Doug Nordman March 4, 2017 at 3:12 PM

    You’re welcome, Deserat! I’m glad we got the offer to host it.

    I remember that when my spouse was at her Reserve drill weekends, she’d walk down the hall to see whether the Reserve dentists & doctors wanted to practice their skills on their teeth exams & flu shots.

    It adds up quickly.

  335. Reply
    Doug Nordman March 4, 2017 at 2:58 PM

    Good catch, thanks for pointing that out!

    If your service doesn’t offer a personalized version then you’d have to enter your own data at:

  336. Reply
    Doug Nordman March 4, 2017 at 2:55 PM

    As Daniel says, John, figure out your insurance needs now– while you’re on active duty and it’s relatively cheap– rather than later when you might be less insurable.

    USAA has lowered rates (starting in 2017) on term policies. The policies also include “guaranteed insurability” riders for life events like starting a family.

  337. Reply
    Doug Nordman February 26, 2017 at 2:18 PM

    Ha! Murrysville, Franklin Regional ’78. And yes, Steeler Nation is all over these islands…

  338. Reply
    Doug Nordman February 24, 2017 at 4:59 PM

    Ryan, if the debts were incurred before active duty then the interest rates could be required to comply with SCRA. But if the accounts are closed (especially if they were closed after payoff, not delinquent or sent to collections) then the companies may have complied with SCRA.

    This is a situation where you may or may not have paid more interest than required by the SCRA, but it could cost you far more in legal fees to obtain a resolution.

  339. Reply
    Doug Nordman February 19, 2017 at 11:37 AM

    I hear that, Vanguard– I’m not writing any insurance books about the finances of reserves. Or maybe 2000 words is as long a book as anyone needs.

    I just did the same homeowners comparison with USAA and Armed Forces Insurance, but their numbers were closer at $270K and $330K. I don’t know whether they use the same databases, although I could tell that USAA was using Google Streetview.

    One big difference is their estimated cost of shipping more lumber & fasteners to Hawaii. Another is their estimate of the expenses required to bring the home up to new building-code standards. And finally, I think the larger companies have more experience with the temporary wage boost that the building contractors have when an entire neighborhood is damaged. That $553K quote may be more accurate than any of us want to believe.

    I only compared the rates of the two companies above, and they were close enough that I went with the company which offered the higher deductibles and lower prices. USAA was very close (and a lot closer than recent years), but AFI still managed to put together a better package.

    The big lesson learned was that I’ll keep doing this comparison every two years– and it’s on my scheduler. AFI had really tracked off with their automated system, and today we’re much more comfortable with higher deductibles than we were five years ago.

  340. Reply
    Doug Nordman February 19, 2017 at 11:27 AM

    Thanks, John, that would be a bit tone-deaf of the exchanges…

    I don’t have a deadline on the book, and I keep getting distracted by shiny objects, I mean, more research. The biggest challenge is breaking the outline into smaller chunks for shorter eBooks. I’ll start putting out draft chapters in a few more months.

    I appreciate your offer, and I’ll add your name to the beta-reader list!

    Anyone else want to help with the next book? Your contribution gives you a vote on which military-friendly charities receive the royalties! Comment here or send me an e-mail.

  341. Reply
    Doug Nordman February 19, 2017 at 11:22 AM

    Thanks, Peter!

    I shoveled my lifetime quota of snow growing up in Pittsburgh, but the surfing is a lot better over here…

  342. Reply
    Doug Nordman February 11, 2017 at 11:12 AM

    Thanks for chiming in, SFC, it’s been a while since we’ve heard from an Army sanctuary servicemember.

    I think all of the services lack proficiency at handling sanctuary. You’re going to have to use personal copies of the Army instructions and the info on the HRC website to show the medical & personnel people how to figure things out. I’d also suggest that you keep in touch with a JAG on the base in case there are more problems with your eventual retirement processing.

  343. Reply
    Doug Nordman February 11, 2017 at 11:08 AM

    Thanks, Daniel!

    I think those other insurers will have to compete on price or else figure out how to give their policies more options & features than USAA. “No underwriting” does have some risk.

  344. Reply
    Doug Nordman February 11, 2017 at 11:06 AM

    Thanks, Peter!

  345. Reply
    Doug Nordman February 11, 2017 at 11:05 AM

    Thanks, John!

    I so want to believe that it’s business checking, but I’m not holding my breath…

  346. Reply
    Doug Nordman February 9, 2017 at 6:00 PM

    That’s right, Nick, DoD currently plans to open opt-in signup for the Blended Retirement System on 1 January 2018. It’s remotely possible that this could be moved to December 2017, but I’m not holding my breath.

    DoD expects that people who wish to immediately opt in will be able to do so early enough in January to get the full match directed to their TSP accounts at the end of January for that month’s pay.

  347. Reply
    Doug Nordman February 5, 2017 at 11:11 AM

    Thanks, Deserat, I’m working on a Tricare chapter these days, and it’s a slog!

    I agree with the comments that Tricare Prime has been deemed financially unsurvivable (after 30 years of experience). The military has to decide whether it’s a retention incentive or an unprofitable drag on funding & readiness. Yet many initiatives over the last decade (Tricare Young Adult, Tricare Reserve Select, Tricare Reserve Retired) are still cheaper than their equivalent programs through health insurance exchanges.

    I’m not sure that Medicare is much better, but recent ACA initiatives affecting Medicare reimbursements have had a significant incentive on hospitals and other care providers. I think the question for Tricare Prime will eventually devolve into a debate over what percentage the annual fee will have to rise to make the program lose less money, or else put everyone back on Tricare Standard.

    You’re right about the Kaderlis, and we’ve emulated their practice every time we’ve traveled to a low-cost country. Paul Terhorst once commented that he was avoiding America as much as possible due to a fear of becoming ill or injured before he was eligible for Medicare.

    And as Peter says, a plan for financial independence has to include healthcare expenses. That plan might turn out to be a high-deductible catastrophic coverage policy that costs twice as much as Tricare Prime. It’d still be less than our household cable TV/Internet bill.

  348. Reply
    Doug Nordman February 5, 2017 at 10:53 AM

    Sorry to read that Marcos, yet in over six years of blogging (and millions of pageviews) it’s only the second time I’ve had that feedback.
    In general, readers who are distracted by the ads use an adblocker.

  349. Reply
    Doug Nordman February 3, 2017 at 3:41 PM

    It’s tempting to abuse even the 20% left over after investing!

    I think the biggest advantage of the career starter loan is using it for important life goals: paying off student debt and getting to the first duty station after commissioning (new uniforms, affordable transportation, deposits for rent, starter furniture). Investing it for gain is always speculative (because the loan has to be paid back in a relatively short time) and requires skills & patience (as well as low living expenses).

    As we’ve seen many times, it’s all too easy to fritter away the money– and that’s one heck of a debt hangover.

  350. Reply
    Doug Nordman February 3, 2017 at 3:27 PM

    Thanks, Marsha, it’s the best resource for gray-area retirees who are tracking down records and retirement info!

  351. Reply
    Doug Nordman February 1, 2017 at 5:10 PM

    “… the admonition to live below your means, save and invest what is left over and think about what is important to you with regard to how you spend the time in your life; that it truly is up to you and not some paternal mechanism.”

    Thanks, Deserat, financial independence really does give us choices and lets us avoid making decisions out of fear!

  352. Reply
    Doug Nordman February 1, 2017 at 5:07 PM

    Thanks, Alex!

    We’re going to have some time with that spreadsheet, because the DoD’s BRS calculator is still in beta and reportedly delayed until March…

    And I’ll say it again, the BRS is best for people who are not staying until retirement. They’ll be able to leave with more money (assuming they invest in the TSP for the match) to compound for retirement on their own instead of trying to cliff vest at 20 years.

  353. Reply
    Doug Nordman January 24, 2017 at 10:19 AM

    I can’t speak for Samuel’s experience, Al, but many of the credit-card companies mentioned in this post have offered SCRA terms for those who obtained the cards after starting their military service.

    Some companies offer the more generous terms as a sort of military discount, while others simply comply with the SCRA. You’ll have to contact your card companies to learn their policies. Before you open a new account, ask them about their military terms.

  354. Reply
    Doug Nordman January 18, 2017 at 9:42 AM


    You’re protected by federal law, but you’re also going to have to request an extension in your status past age 60.

    First, please check your Air National Guard drill records to make sure that you indeed have nine good years. Sometimes mistakes are made at the local or national level, and you want to be absolutely sure that the ANG national database has everything you’ve earned. Good years are not just based on points. Good years also depend on mobilization readiness (dental/medical), being within physical standards (height/weight and the physical fitness test), and perhaps satisfactorily completing annual active duty. Even if you have enough points to qualify for a good year the unit still has to attest to the personnel center that you met the standards to receive a good year. If that unit confirmation doesn’t get into the ANG database then although you may have enough points for a good year, you won’t have the credit for a good year.

    It’s far easier to correct those records now than a decade from now. Keep good records of your drill musters and your active duty and make sure the official database gives you credit for everything you’ve done– and then gives you credit for a good year.

    If you have nine good years in your record today, then you’ll need 11 more good years to qualify for a Reserve/Guard retirement. Since you’re 50 years old with nine good years, that means when you get the 11 more good years you’ll be 61 years old.

    Federal law says that when you reach 18 years of service then you’re entitled (protected) to stay on active duty status (drilling) until you reach 20 years (good years) of service. Here are the sections of federal law for enlisted and officer ranks:

    Although Reserve/Guard pensions normally start at age 60 (or a few months earlier for some mobilizations), you’ll have to stay in a drill status past age 60 to earn the last couple good years. That requires an age waiver for you to stay up through age 62. This could be what you were told in June 2013, but they may have meant that you just made the age deadline to qualify for your pension. Make sure you get that waiver to stay in a drill status past age 60, because it doesn’t happen automatically. Here’s one cautionary tale:

    Next time you’re at the drill weekend or on a military base, I strongly recommend that you talk to a JAG lawyer about your good years, your broken service, your age, and your need for an age waiver. When you submit the waiver, make sure you know who’s approved it and that it’ll be completed on time.

    I’m not sure what you mean by “My LES shows a payday of 070510 with 9 years.” That could be referring to the number of pay months that DFAS has in their records for your longevity on the pay tables. It’s not the same as your ANG record of your number of good years. The LES is not the reference document for retirement eligibility. That can only come from the ANG record of your good years, because that’s what’s used to generate your Notice Of Eligibility letter for your pension.

    I hope this clarifies the rules! Please let me know if that answers your questions or if there are other issues.

  355. Reply
    Doug Nordman January 16, 2017 at 7:04 PM

    Thanks for the advice, Bill! I so want to believe that the industry has priced it correctly this time.

    And, yeah, if the indemnity basis means that the LTC benefits are not considered income then that sounds like a wonderful way for caregivers to worry less about the paperwork.

  356. Reply
    Doug Nordman January 11, 2017 at 7:09 PM

    Good question, Super Dave. Unfortunately the answer is “No”.

    I get that question several times per year from Reserve/Guard members who have missed a good year and then (for whatever reason) run into an obstacle: failure to promote, not permitted to re-enlist, or not able to continue in a drill billet.

    I’ve heard (but have not confirmed) that it’s hypothetically possible to transfer to another service. One example is an O-4 who fails to promote and reaches their service limit at 20 years but has only 16 good years. They could separate from the Navy Reserve and apply to the National Guard in the enlisted ranks, reach 20 good years there, and then file for retired awaiting pay. Because they had more than 10 years of commissioned service they’d be considered eligible (at age 60) for an O-4 Reserve pension.

  357. Reply
    Doug Nordman January 11, 2017 at 7:02 PM

    Thanks, Super Dave, I appreciate that the IRR has an unsavory reputation– and not all of that is deserved.

    One of the biggest issues with the IRR is that the Reserve/Guard member is no longer eligible for Tricare Reserve Select. Even a one-day gap between units (with that time spent administratively in the IRR) means that there’s no health insurance.

    A second issue in the IRR, especially in the Army and Navy, is the difficulty of completing a good year. That’s rendered even more difficult by the new restrictions on correspondence courses. IMA can help if you can get it, but otherwise IRR is very likely to lead to a “no good year” situation.

    If I was a drilling Reservist with a shorter-term time challenge then I’d make every effort to reschedule drills, do quarterly drills (five months apart), or even take a few months of Authorized Absence. Before going into the IRR I’d make darn sure that I had a good year. When I returned to drill status I’d try to quickly score enough AT or ADT (or even ADSW) to obtain another good year before my anniversary date.

  358. Reply
    Doug Nordman January 11, 2017 at 6:53 PM

    Thanks, Brad, that’s a great question!

    You’re absolutely right: a conversion only makes sense when you do it during a lower tax bracket. A conversion also avoids the hassle of RMDs, and that may also mean that your Social Security income is not subject to taxation.

    Military servicemembers are an edge case because so much of military compensation is untaxed. Especially at the junior ranks, it makes much more sense to contribute to the Roth TSP and Roth IRA(s) because you’re in the lowest tax bracket of your life. Pay the tax now and avoid conversion paperwork (and RMDs) later.

    When you retire (at an O-4 or an O-5 pension) you’re going to start right out in the 15% or 25% income-tax bracket. If you minimize all other income (no bridge career, no dividends, no interest) then every year you may be able to convert a little of a traditional IRA (and a traditional TSP) to its Roth equivalent. You’d do that up to the top of the 15% income tax bracket. You’d also have to either live within your military pension or sell some of your investment shares for capital gains. (You’d try to stay within the 15% income-tax bracket to qualify for the 0% capital-gains rate.) That’s a challenge.

    If you retire to an O-4/5 pension *and* start a bridge career, you’ll be in (at least) the 25% income-tax bracket. The only benefit you’d gain from TSP & IRA conversions would be avoiding RMDs.

    There are two times when it makes sense to contribute to a traditional IRA now and convert to a Roth IRA later.

    The first one is reaching financial independence without earning a military pension. A very few servicemembers with extremely high savings rates (or gifts, or inheritances) can do this within 10-15 years. They’d leave active duty and do a little bit of a conversion every year (perhaps up to the top of the 10% income-tax bracket) to avoid having to deal with RMDs later in life. If their expenses are extraordinarily low then they might be able to do conversions at the 0% income-tax bracket: no taxes at all! See this post from my friend Jeremy:
    (Caution: it’s an extremely in-depth tax discussion.)

    The second case includes servicemembers who leave active duty for the Reserves or Guard. They’ll start a pension at age 60 and RMDs at age 70.5, which (along with other dividend/interest income) will probably push them into at least the 25% tax bracket. In their case it makes sense to do conversions before their pension pension starts at age 60. My spouse is facing this exact situation: she’s converting her IRA and her TSP into a Roth IRA at the 15%-25% income-tax brackets to avoid RMDs at the 28% income-tax bracket.

    Side note for dual-military or dual-career couples: if your earned income is too high to contribute to a Roth IRA, then contribute to a traditional IRA (sorry, no tax deduction for you either) and then immediately convert that traditional IRA to a Roth IRA. See: “backdoor Roth IRA conversion”.

  359. Reply
    Doug Nordman December 31, 2016 at 11:26 PM

    Thanks, Donna, I’m looking forward to it!

  360. Reply
    Doug Nordman December 27, 2016 at 7:40 PM

    Thanks, Peter, good comments.

    Servicemembers (and especially spouses) really need to read the SBP case studies before they make their choice– no matter what situation their finances may be.

  361. Reply
    Doug Nordman December 27, 2016 at 7:38 PM

    You’re welcome, Donna, it’s a great book and a big help to people dealing with more debt than income.

  362. Reply
    Doug Nordman December 6, 2016 at 10:25 AM

    Thanks, Erin, NMCRS does good work these days!

  363. Reply
    Doug Nordman December 6, 2016 at 10:23 AM

    Thanks, Deserat, I appreciate the gratitude but I can’t think of this as “work”– there are no department meetings or mandatory training presentations!

    I think the Reserve and National Guard models of working and serving produce a much more balanced (and beneficial) life than two decades of active duty followed by a bridge career.

  364. Reply
    Doug Nordman December 6, 2016 at 10:20 AM

    Thanks, Deserat!

    You’re absolutely right about the “brain drain” if people can take a little extra with them before 20 instead of sticking around for cliff vesting at 20.

    The #1 regret of my readers in their 50s (and older) is that they didn’t stick around for that 20. In retrospect, the issues that kept them from serving until retirement eligibility weren’t as bad as they seemed.

  365. Reply
    Doug Nordman December 6, 2016 at 10:17 AM

    I hear you on young adults, Peter, yet I think that the educational efforts for the new retirement system (and military financial tools in general) are the best they’ve ever been.

    The real challenge is getting people to pay attention to the resources. I haven’t figured that one out yet.

  366. Reply
    Doug Nordman December 3, 2016 at 12:11 PM

    Well, Logan, your last phrase is an important point. Nobody should plan on doing 20.

    83% of the people who join the military end up leaving the service (for whatever reason) before they’re eligible for a pension. My daughter and her spouse are planning to take it one obligation at a time, and they’re also focused on reaching financial independence via a high savings rate. That way they have more flexibility at deciding whether they’ll be among the 1 out of 6 servicemembers who beat the odds, and by taking the matching feature of the BRS they’ll have more in their TSP accounts if they don’t stay for 20.

    As part of their high savings rate, they’re maximizing their TSP and IRA contributions (as well as saving even more in taxable accounts). When they convert to the BRS then they’ll maximize the DoD matching contributions as well. If they go for 20 under the BRS, it’s possible that the matching funds in their TSPs will compound faster than the larger High Three pension would have yielded. That’s what I hope we can analyze with DoD’s BRS calculator, which is expected to be released next month.

    However the most important factor is that nobody should plan on doing 20. Not even aviators who obligate for 10+ years upon commissioning.

  367. Reply
    Doug Nordman December 2, 2016 at 12:28 AM

    Val, while you’d technically qualify for TERA, and although it’s in effect through 2018, the program is not generally offered by the services.

    If you end up facing separation at 17 years then you should apply for TERA and let the Guard decide. You may also be allowed to extend to get to at least 18 (good) years of service, which (under federal law) would enable you to be continued to 20 good years.

  368. Reply
    Doug Nordman November 24, 2016 at 9:32 AM

    Thanks, Peter, good points!

  369. Reply
    Doug Nordman November 14, 2016 at 11:12 PM

    Thanks, Charles, good point! I’ve edited the post to fix my error.

  370. Reply
    Doug Nordman November 3, 2016 at 5:29 PM

    I’m not implying that at all, Chris. The post is about the sizes of those pensions and how a military pension is affected by taking the FERS military service credit deposit.

    The military service credit deposit is a bad deal for active-duty military retirees (although they should still take the adjustment to their federal Service Computation Date). I don’t know any active-duty military retirees who have applied for the military service credit deposit because it would halt their active-duty pension while they were in the federal civil service. Instead, active-duty military retirees should choose to continue to receive their active-duty pension and should not buy into the military service credit deposit. The result is that their FERS pension is based only upon their years of federal civil service. Review bullet #2 in the post.

    The FERS military service credit deposit is a great deal for Reserve and National Guard retirees. The reason that FERS retirees should still buy their Reserve/Guard military service credit deposit is because there’s a specific exemption in the FERS regulations allowing them to do so while still receiving their full Reserve/Guard pension. As a result they still receive their Reserve/Guard pension (beginning at age 60 or perhaps a little earlier) and they receive a larger FERS pension. Review bullet #3 above.

  371. Reply
    Doug Nordman November 3, 2016 at 5:06 PM

    Great question, Hector!
    If you’re near a military base (of any service) you could contact their Retiree Activities Office. They’ll put you in touch with the Army’s regional support command.

    If you’re not near a military base then contact the Army’s Retirement Services Officer through this site:

  372. Reply
    Doug Nordman October 26, 2016 at 7:09 AM

    That’s a tough question, Arthur! You’re going to have to contact the Defense Finance and Accounting Service directly on this one:

    You can apply from overseas, and you will need a bank account for electronic deposit of your pension. Take a look at this DFAS link for international direct deposit:

  373. Reply
    Doug Nordman October 23, 2016 at 6:12 PM

    Thanks, Jordan, I’ve added your comment to the list.

    You know there’ll probably be some issues with the soft dollars that replace the commissions.

  374. Reply
    Doug Nordman October 19, 2016 at 12:36 AM

    I appreciate the sentiments, Mike, but I doubt that type of Reserve retirement reform is on any legislative agenda… especially in a drawdown.

  375. Reply
    Doug Nordman October 16, 2016 at 12:05 AM

    Thanks, TFR, it worked with our daughter too.

    She’s over three years older since I wrote this post, and last month she reminded me that she’s keenly focused on financial independence. She remembers me being available for her when she was a teen, and she wants to repeat the favor with her progeny.

  376. Reply
    Doug Nordman October 1, 2016 at 11:48 PM

    Thanks, Ms. M, sounds like you’ll have the best of both worlds: working for fulfillment and fun, and not having to work for money.

  377. Reply
    Doug Nordman October 1, 2016 at 11:46 PM

    I agree that Congress and DoD are acting largely out of self-interest, and less out of the benefit to servicemembers. However there’s still a way for military families to win.

    Fewer than half of today’s servicemembers even have a TSP account, let alone contribute to it. The blended retirement system comes with mandatory enrollment in the TSP, along with a default 1% contribution to the L2050 fund. The federal government already has this system in place for its civil-service employees, resulting in over 90% participation rates and nearly 90% of those people contributing every month.

    Military families can win with the BRS by contributing to the TSP up at least to DoD’s match, and can go even further to maximize their annual contributions. When 83% of the servicemembers leave the military before being eligible for a pension, they’ll at least have extra money in the TSP. When the other 17% retire to the new system’s smaller pension, they’ll hopefully have contributed enough to their TSP accounts to allow their growth (and nearly two decades of compounding) to win out over the old pension system.

    But if they don’t contribute to their TSP accounts for at least the DoD match then you’re absolutely right: they’ll lose.

  378. Reply
    Doug Nordman September 29, 2016 at 11:54 PM

    I’m not aware of any limits. You could drill in the National Guard or Reserves for up to 40 years (depending on making rank) and could even get an age waiver as old as 62 years.

    If you reach over 18 years of active-duty points (AT, ADSW) while mobilized on active-duty orders of at least 30 days, then you could reach sanctuary and be eligible for an active-duty pension at 20 years of service. That would hypothetically cap your point count at about 7300 points because you’d retire and immediately start an active-duty pension. The reality is that most Guard/Reserve servicemembers never reach sanctuary and continue to earn points.

  379. Reply
    Doug Nordman September 22, 2016 at 6:27 AM

    Chris, take a look at the 19 July comment above where Ford cites Comptroller General opinion, B-195448(4/3/80). That may be all the research you need.

    Since you hold a commission, you would hope that the Navy would be able to find your record of attending OCS under a course number or class number.

  380. Reply
    Doug Nordman September 21, 2016 at 1:41 PM

    Those are all good points, Deserat. I think USAA is focusing on the demographics (especially active-duty military) who generate the most lifetime revenue.

  381. Reply
    Doug Nordman September 21, 2016 at 1:36 PM

    You’re welcome, Brenda, glad to help!

    Let us know if you have any questions about the decision…

  382. Reply
    Doug Nordman September 18, 2016 at 7:21 AM

    Good point, Kim. I don’t think any of the CFP offices are set up to see clients in person, and USAA is planning to provide only online support.

  383. Reply
    Doug Nordman September 18, 2016 at 7:18 AM

    I’ll ask about this next month. I wonder if there are so few walk-in customers that the charge would have to be prohibitively high to pay for the fixed expenses of a branch & employees.

  384. Reply
    Doug Nordman September 13, 2016 at 3:14 PM

    Great point, Chico, thanks!

    We’ve seen the pendulum swing both ways over the last 30 years. Even in gray area under today’s rules as of Sep 2016, you could be escorted on the base by a sponsor or during one of the few annual holidays when the base is open to all ID card holders.

    I agree that NS Rota makes it a lot harder than it should be, but the Status Of Forces Agreement was written to “encourage” retirees to spend their money on the local Spanish economy instead of on the base.

  385. Reply
    Doug Nordman September 10, 2016 at 3:21 AM

    Thanks, Peter, you’re right that we have to have something to retire TO, not just retiring FROM.

  386. Reply
    Doug Nordman September 10, 2016 at 3:19 AM

    Great comment, Big Dawg!

    You’ll find the type of retirement life that works for you… and 20-30 hours per week is just fine when you get to choose which hours.

  387. Reply
    Doug Nordman September 10, 2016 at 3:18 AM

    Thanks, Bill, I hear those comments a lot.

    Your comments about the TSP have been verified by DFAS and several military media publications… 2018’s mandatory enrollment in the L2050 fund should fix that issue.

  388. Reply
    Doug Nordman August 30, 2016 at 6:20 AM

    Thanks, Pat & Deserat– I enjoyed reading the books and writing the list!

  389. Reply
    Doug Nordman August 30, 2016 at 6:19 AM

    Derrick, the best approach is contacting the Army’s HRC headquarters or the armory nearest you.

    The Army should have a full record of your service as well as your retirement eligibility. However you should be ready to provide all of your DD-214s and anything else that will document your point count and good years. It’s possible that records weren’t correctly shared between the NG and the Reserves.

    Here are two links to get you started:

  390. Reply
    Doug Nordman August 28, 2016 at 1:14 PM

    Thanks, Tony, and you’ve asked a good question.

    I’m not clear on the RET1 and RET2 acronyms, but let me answer the rest. Your pension amount at age 60 will be based on your total points and on High-Three average of the pay tables in effect when you’re 60 years old.

    Reserve and Guard members have to get at least 20 good years to receive a Notice Of Eligibility letter certifying that they’re qualified to retire, but the extra years just give you an opportunity to rack up more points (and more promotions). Unlike the active-duty retirement formula, the extra Reserve/Guard years themselves are not part of the calculation. The multiplier is fixed and is only applied to your total points.

    Because you’ll be using the newest set of pay tables at age 60, you’ll still benefit from the pay increases between now and your 60th birthday– as well as any possible longevity increases in the O-3E row. Right now you’ve maxed out that longevity, but it’s remotely possible that DoD could change the pay tables as they did in 2007.

    For now, I’d calculate your pension based on your total points and today’s pay tables. I’d assume that your pension (if you started it today) will keep pace with inflation until age 60. That assumption is unpredictable (and imprecise) but it’s a reasonable approximation.

  391. Reply
    Doug Nordman August 17, 2016 at 4:19 AM

    Great question, Jack, thanks for asking it!

    You don’t mention whether you’re in the Air National Guard or the Army National Guard.

    My first suggestion would be to contact their personnel centers through their website, either through e-mail or a “Contact us” box. You might also be able to get through by phone. Here’s the URLs for their sites:

    If you’re near an armory or a base, you could also try to reach the unit closest to you.

    Finally, you could contact the nearest military recruiting office and ask them to help you reach your service’s retirement personnel center.

  392. Reply
    Doug Nordman August 10, 2016 at 8:48 AM

    Great question, Lonnie!

    First, contact your local Air Force Reserve center to make sure that they have a record of your Army Reserve points as well as your AF Reserve points. (Other readers report that this has been a problem.) Next you’ll want to check how many good years they have on your record. For example, you may have been short of 50 drill points during a year but your 15 participation points may have put you over the 50-point threshold for a good year.

    Once you reach 20 good years, request your Notice Of Eligibility from the Reserve center. They may need a few months to audit your record(s) and confirm the 20 good years. Once you’re sure that you have 20 good years then you could reschedule drills or even take an authorized absence from drills until your retirement date. You’ll want to wait until you have the NOE letter before you apply for retirement.

    Keep in mind that once you leave drill status (even for one day in the IRR) you’ll lose your eligibility for Tricare Reserve Select health insurance.

  393. Reply
    Doug Nordman August 7, 2016 at 2:24 AM

    Harold, I’m a little unclear on some of the jargon like “inactive duty”, “hip pocket orders”, and “duffel bag”. However if you were issued written orders for this duty then you could have been eligible to receive points which would be added to your total point count. That would raise your pension. The question is whether your duty status was actually earning you points or whether it was just putting you in a position to be quickly mobilized if necessary (no points until mobilized).

    I’d suggest that you contact an Army Reserve center (phone or e-mail), give them a copy of your orders and your personal info (so that they can research your records), and see what they know.

  394. Reply
    Doug Nordman August 6, 2016 at 3:10 AM

    Great question, Mark, and we won’t know the answer until 2018!

    I suspect that you could always take the continuation bonus and tack four more years onto your current obligation. The big question is whether the four-year obligation could be concurrent/overlapping with your existing obligation.

    I suspect that the assignment officers will make that “concurrent” retention decision for each community and specialty. You’ll have all of 2018 to assess the options and make your choice.

    The key is to keep saving & investing as much as you can so that you have the financial flexibility to make the retention choice based on your career goals and quality of life– not based on getting out of debt or living paycheck-to-paycheck.

  395. Reply
    Doug Nordman July 31, 2016 at 4:25 AM

    Sorry to read about this, Joe. A lot of FLTCIP clients are making difficult decisions right now, and there are no happy answers.

  396. Reply
    Doug Nordman July 22, 2016 at 11:39 PM

    Thanks, Trish– looks like all the services are cutting back on correspondence courses. IRR may now be a very difficult place to get a good year.

  397. Reply
    Doug Nordman July 21, 2016 at 10:46 PM

    Thanks, Mel, outstanding feedback!

    I’m sorry that I’m missing the surf, but slow travel is great so far. Barcelona was wonderful and we’ve just started a Med cruise around Italy.

    I’ll make up for the surfing in San Diego about six weeks from now…

  398. Reply
    Doug Nordman July 21, 2016 at 10:17 PM

    You’re welcome, Alexander, I’m glad it’s helping!

    DoD is currently authorized by law to match TSP contributions, but none of the services are doing so. The military’s new blended retirement system will be the first time that servicemembers can enjoy matching TSP contributions.

    However you can still maximize your TSP contributions and compound those funds for your financial independence, even if you don’t stay in uniform long enough for a military pension.

    I’d recommend taking active duty one obligation at a time. Keep going as long as it’s challenging & fulfilling. However, when the fun stops then don’t grimly clench your jaw and try to hang on for the 20-year active-duty pension. Instead you could leave active duty for the Reserves or National Guard and still qualify for an inflation-adjusted annuity by age 60. You’ll enjoy all the benefits of the pension (and cheap healthcare) without the physical, mental, and emotional stress of staying on active duty. (Your family will be happier too.) In addition, your Roth TSP (and Roth IRA) contributions (along with savings/investments in taxable accounts) can bridge the gap between leaving active duty and your Reserve/Guard pension

    You’ll have to use calculators & spreadsheets to decide whether the current pension is better than the new blended retirement system. You’ll have all of 2018 to analyze that choice. In the meantime, keep saving as much as you can for financial independence so that you have more options.

  399. Reply
    Doug Nordman July 20, 2016 at 1:50 AM

    Fantastic, Ford. Thanks for taking the time to dig up that reference!

  400. Reply
    Doug Nordman July 17, 2016 at 3:18 AM

    Good point, Cherie, thanks– everyone has to do the math for their situation (and comfort level).

    As you show, we might have to do it more than once…

  401. Reply
    Doug Nordman July 11, 2016 at 4:19 PM

    Ouch! Thanks for your comment, Gary. It’s another new lesson from Tricare that I wish nobody had to learn…

  402. Reply
    Doug Nordman July 4, 2016 at 10:33 PM

    Thanks, Peter, I’ll add your comments to the draft!

  403. Reply
    Doug Nordman July 2, 2016 at 6:58 AM

    Thanks, Peter, good points.

  404. Reply
    Doug Nordman June 30, 2016 at 12:54 AM

    Thank you, this is fantastic! I see you posted it over on Bogleheads, and I’ll try to direct more beta testers your way.

  405. Reply
    Doug Nordman June 29, 2016 at 12:33 PM

    Thanks, David, I’m glad it’s helping!

  406. Reply
    Doug Nordman June 29, 2016 at 11:34 AM

    Good question, Barbara. I’m afraid that you’ll learn there’s nothing, but let me give you some references and contacts.

    The first requirement of the Uniformed Services Former Spouse Protection Act is known as the 20/20/20 rule– not only did you have to be married at least 20 years and your ex-spouse in the military for at least 20 years, but those periods had to overlap by at least 20 years. If that’s the case then you’re eligible for Tricare and for access to military bases (commissary and exchange privileges).

    If your marriage and military career overlapped by at least 15 years (but less than 20) then those benefits are only available for a transition period of a year.

    It seems unlikely that you’re a beneficiary of your ex-spouse’s Survivor Benefit Plan, because I’d hope that the Defense Finance and Accounting Service would have notified you by now. However you may want to check on that by contacting their office (800-321-1080) to see if you’re listed. Here’s a link with more information:

    I’m not an expert on Social Security, but you should contact a local office to see whether (as an ex-spouse) you’ll be able to draw your benefits based on his earnings record.

    Finally, if your ex-spouse died of a service-related condition, it’s possible that you’re eligible for Dependents Indemnity Compensation. That’s also paid by Social Security, so check with their office when you ask about drawing SS on his earnings record.

  407. Reply
    Doug Nordman June 25, 2016 at 10:15 AM

    Thanks, Ryan! I’m just glad to get it done. My spouse & daughter are also relieved that they’re no longer going to get bagged with handling my claim, either.

    Oahu has a fairly large population of military veterans, or perhaps the fully-developed claims process cuts out a lot of the research. I’ve already agreed that I’ve supplied all of the information that the VA would need to make a decision, so they’re not going to look for additional records.

    I wish there was an easier way to analyze and speed up the process for each veteran, but that’s the whole point: the VA claims process is way too complicated, and for some disabilities it’s impossible to expect the veteran to navigate it on their own. It’s essential for vets to seek the advice & help of a VSO instead of simply uploading a bunch of documents to eBenefits.

  408. Reply
    Doug Nordman June 24, 2016 at 1:30 AM

    You’re welcome, Crew Dog, you wrote a great post!

    Great point on MST. Sometimes we’re too focused on proving that the condition exists when instead we should be treating the symptoms.

  409. Reply
    Doug Nordman June 24, 2016 at 1:28 AM

    Thanks for the comment, Mel!
    1. Yes, very fast. The VSO helped me prune the options to the most realistic claims, and the VA’s doctors confirmed most of that. It also helps to study the disability benefits questionnaires for the claimed conditions so that the C&P exam has all the evidence it needs. I claimed only the issues that were clearly causing problems, and I didn’t claim anything that was too speculative to link to a service-related cause.

    2. The benefits are only retroactive to the date that the claim is initiated– in this case 8 February 2016 (three months before it was approved). I would’ve filed amended tax returns (which are easier than they seem) but since this all happened in 2016 I can just file my usual return next year. Hopefully DFAS and the VA generate the correct 1099-R at the end of this year, but the math is easy to check.

    3. Dude. It was awesomely epic, and I’m goin’ back for more in about 10 hours!

  410. Reply
    Doug Nordman June 14, 2016 at 11:12 AM

    Thanks, C Harley, I appreciate having another reference!

  411. Reply
    Doug Nordman June 14, 2016 at 1:08 AM

    I agree, Gerald! We don’t carry collision or comprehensive insurance (which is also expensive), although we do carry a high liability limit (which is relatively cheap). We’re retired so we only drive a few thousand miles per year. My speeding ticket notwithstanding, we also have good-driver discounts.

    I remember that a decade or two ago the legislature debated paying for insurance “at the pump”– per mile driven. I don’t think that bill was passed.

  412. Reply
    Doug Nordman June 7, 2016 at 3:01 PM

    Great question, Les.

    The good news is that you’ll have 18+ years by the time you reach age 60, and federal law does not allow separating servicemembers with more than 18 years of service. The intent of that law is to allow serving until vested in the pension.

    The “other” news is that TERA is not currently being offered by the services, but it’s still an option at their discretion through 2018. If your 22-month age waiver is not approved then you should apply for TERA. You’d still have over 85% of the Reserve/Guard pension that you’d normally receive at 20 years of service. Better yet, your retirement will have an inflation-fighting cost of living adjustment plus Tricare.

    Your sustained superior performance will probably be critical to the approval of the age waiver.

  413. Reply
    Doug Nordman June 4, 2016 at 11:18 AM

    I understand what you’re asking, and I realize that it looks too good to be true. But this is one of those rare times when you get both benefits. Your question has been asked before, and it’s not easy to find the answer, but the answer is that you get both your full civil-service pension and your full Guard pension.

    The reason you get both is because you paid a lot of money to the civil-service system to buy additional retirement credit. Because you spent your own money for that, you still retain your military retirement credit. You still have 20 good years of National Guard service, and your Notice of Eligibility letter (your 20 year letter) is still valid. If you haven’t already, you can still apply for “retired awaiting pay” for your Guard pension.

    The civil-service pension buyback rules are different for military active-duty retirements and Guard/Reserve retirements. If you had retired from active duty (not the Guard) and then bought back your military service credit toward your USPS pension, then you would have been required to give up your active duty pension. (This is generally a bad deal.) However you’re qualified for a Guard pension, and when you buy your military service credit the civil-service rules do not require you to give up your Guard pension.

    Your Guard retirement is under Chapter 1223 of federal law (10 U.S.C. 12731). The specific rule from the civil-service handbook (that link in my last response) is section 22A4.1-1 (Receipt of Military Retired Pay) in the text set off by the carats: “In determining eligibility for CSRS retirement or in estimating the amount of annuity for an employee (special rules for survivors of employees who die in service are covered in Chapter 70), who receives military retired or retainer pay, do not give credit for any military service at the date of separation for civilian retirement unless one of the following is true.
    2. The employee is receiving military retired pay that was awarded:
    • On account of a service-connected disability incurred in combat with an enemy of the United States; or
    • On account of a service-connected disability caused by an instrumentality of war and incurred in the line of duty during a period of war; or
    > • Under the provisions of 10 U.S.C. 12731-12739 (Chapter 1223) which grants retired pay to members of reserve components of the armed forces on the basis of age and service (active and reserve). <"

  414. Reply
    Doug Nordman June 3, 2016 at 4:10 PM

    Great question, Vicki– the good news is that you’ll receive your full National Guard pension at age 60.

    You’ve paid for your military service credit deposit for your years of active duty. The law which allows you to do that also makes an exception for Reserve/Guard retirements, because you’ve earned that on your own and haven’t bought it as a credit. The details are in Chapter 22 of the FERS Handbook:

  415. Reply
    Doug Nordman June 3, 2016 at 3:25 PM

    Thanks, Peter, good points.

  416. Reply
    Doug Nordman June 3, 2016 at 3:23 PM

    Thanks, Deserat! I wish we had a better financial independence calculator for variable spending plans. Bob Clyatt’s system works great.

    After 14 years of financial independence, we’ve also loosened up on our spending.

  417. Reply
    Doug Nordman June 3, 2016 at 3:22 PM

    Thanks for the heads up, Gerald!

    I just worked through the JKO training at this link:

    I’d also caution readers to watch out for the blended retirement system’s huge flaws:

  418. Reply
    Doug Nordman June 2, 2016 at 10:57 AM

    Good to know, Marta, thanks for passing this on!

  419. Reply
    Doug Nordman June 2, 2016 at 10:54 AM

    You’re welcome, Marta! It’s a very confusing aspect of military retirement.

    I don’t always hear back from readers, but the second reader (who retired from the Army) has succeeded in obtaining the officer pension that he rightfully earned. It took several years of legal appeals.

    If you have at least 10 years of commissioned service (which is waiverable to eight years during the drawdown, at least until 2018) then you’re eligible to retire as an officer. If that rank is O-5 or higher then you’ll need three years’ time in grade (waiverable to two years) in order to have that rank on your retirement certificate. (An active-duty High Three pension is based on the highest 36 months of pay, so time in grade is not as critical in setting the amount of the pension.) If you opt for a Reserve pension then that retirement rank also determines which row of the pay tables is used for calculating your pension, so you want to be absolutely sure that you have at least three years (and three good years) of time in grade at that rank before applying for retired awaiting pay status. You might be able to get that Reserve time in grade waived down to two years.

    The services may be reluctant to enlist an officer of your rank and experience, but that’s a policy decision which doesn’t have anything to do with the pension or federal law. Another possibility that you may have already considered would be transferring to your current AFSC (and rank) in the Army or Navy.

  420. Reply
    Doug Nordman June 1, 2016 at 5:43 PM

    Leslie, I’m not sure which fee you’re referring to. Here’s a link to USAA’s fee schedule: . The only $50 fee on that schedule is for the personal assistance of a broker in making a stock trade, and USAA’s website lets you do that on your own (without a broker) at a much lower cost.

    Take a look at the fees from that link and let me know if you have more questions!

  421. Reply
    Doug Nordman May 31, 2016 at 11:25 PM

    Thanks, Neecy, great points about changing the match on young enlistees!

  422. Reply
    Doug Nordman May 31, 2016 at 9:20 AM

    Good points, Tom– thanks for the update!

  423. Reply
    Doug Nordman May 27, 2016 at 10:24 AM

    Thanks, Peter, I agree that this is a giant bet on retention.

    DoD also cuts their long-term pension costs in the hopes of persuading servicemembers with shorter-term incentives like the TSP match and re-enlistment bonuses.

    From the corporate perspective, it’s always cheaper to hand out a bonus if they can avoid a lifetime pension payment.

  424. Reply
    Doug Nordman May 27, 2016 at 10:21 AM

    Good quote, Mel, that’s exactly right!

    I agree with your skepticism on re-enlistment incentives, too.

    The really painful issue for those CSB/REDUX soldiers was losing all those years of COLAs. The new lump-sum proposal is very similar– people will give up decades of pension benefits for the sake of a little money now. It’s almost as bad as a payday loan…

  425. Reply
    Doug Nordman May 27, 2016 at 10:17 AM

    Exactly, Forrest, implementing the new system is hard enough without a bunch of last-minute modifications.

    The best news about this is “mandatory TSP enrollment”. However servicemembers will still be responsible for contributing enough to earn the match…

  426. Reply
    Doug Nordman May 27, 2016 at 10:15 AM

    Good points, Rob. I just hope that Congress ignores this DoD change request and we can all get on with analyzing the finances of the original legislation.

    And, yeah, there will be pay problems.

  427. Reply
    Doug Nordman May 27, 2016 at 10:12 AM

    Great comments, Deserat, glad this is helping!

    Here’s an interesting history point: the TSP was only available for the final six months of my career. It’ll be great if everyone can maximize their TSP match under the new blended retirement system, but first the other half of the military will have to sign up for a TSP account!

  428. Reply
    Doug Nordman May 25, 2016 at 5:16 PM

    S, I’m afraid that all of the services have been reducing the ability to get points for correspondence courses.

    At this point the best options seem to be funeral detail, IMA points for certain activities or drills with your unit, or (for a very few in the IRR) serving as a recruiting officer for a military academy.

  429. Reply
    Doug Nordman May 25, 2016 at 4:52 PM

    Thanks, Ryan, that’s all great advice!

  430. Reply
    Doug Nordman May 21, 2016 at 11:37 AM

    Thanks, Peter, good points.

  431. Reply
    Doug Nordman May 21, 2016 at 11:34 AM

    Thanks, Deserat, you’re a textbook example of how to save & invest for financial independence!

  432. Reply
    Doug Nordman May 18, 2016 at 3:05 PM

    Thanks, Gerald, I agree on the timing!

    I hope the new blended retirement system follows through on its promise of mandatory TSP enrollment (like the federal civil service system) and then also makes the default contributions go to the L2050 fund instead of the G fund.

  433. Reply
    Doug Nordman May 17, 2016 at 3:01 PM

    I’m sorry to read about this, Jessica, and I hope the new doctor can help. Ideally they’d do a fresh examination without depending on the other doctor’s records.

    You need to consult a lawyer, either a military lawyer or one with experience at filing suit for military medical malpractice.

  434. Reply
    Doug Nordman May 15, 2016 at 11:46 AM

    Thanks, Peter, that’s exactly right: investing expenses do matter.

  435. Reply
    Doug Nordman May 11, 2016 at 10:11 PM

    Sure, Chu, great question!

    It’s in DoD 7000.14-R, Financial Management Regulation volume 7B, paragraph 010202.B on page 1-8.
    “010202. Service Creditable for Regular Voluntary Retirement – Enlisted Members (Table 1-1)
    The following is service creditable for regular voluntary retirement for enlisted members:
    A. All active service in the Uniformed Services; and
    B. Service as a cadet or midshipman at Service academy.”

    It’s online at

  436. Reply
    Doug Nordman May 11, 2016 at 12:24 PM

    Thanks, Forrest, I appreciate passing on what I’ve learned so that others can avoid repeating the mistakes…

  437. Reply
    Doug Nordman May 4, 2016 at 10:31 AM

    James, in general a servicemember has to reach 20 years to be eligible for a pension. The services have occasionally offered a Temporary Early Retirement Authority program for as little as 15 years, but not to Reserve/Guard members. There are also medical retirements, but that’s a different program for permanent disability.

  438. Reply
    Doug Nordman May 3, 2016 at 11:48 AM

    Thanks, Peter, good advice!

  439. Reply
    Doug Nordman April 30, 2016 at 10:31 AM

    Thanks, Deserat, it’s an important conversation that nobody wants to have.

  440. Reply
    Doug Nordman April 30, 2016 at 10:30 AM

    It didn’t work very well in the submarine force, and the surf lineup is not impressed either!

  441. Reply
    Doug Nordman April 24, 2016 at 4:31 PM

    Thanks, Ryan!

    I just got the word that the VA has all the info they need, and the claim is with their rater for adding up the math. The decision should be made before August.

  442. Reply
    Doug Nordman April 24, 2016 at 4:29 PM

    Thanks, John!

    Your best option is to talk with a VSO. Find one in your area from the VA’s website, or contact your local American Legion, Disabled American Veterans, or MOAA chapter. They’ll start with your big-picture questions and move into a review of your medical records. Their advice about what works (and what doesn’t) will save you a lot of what another reader calls “discovery learning”…

  443. Reply
    Doug Nordman April 24, 2016 at 7:25 AM

    Thanks for asking, George! I think we need a nasty bear market before we gain enough data for a good followup post.

    My biggest concern about P2P lending is that we still can’t tell whether investors are being adequately compensated for their risk. If anything, the large corporate lenders are encouraging more risk by snapping up loans and encouraging lower interest rates.

    Small P2P lenders still haven’t loaned enough money to tell whether their lending criteria are better than random chance. It takes thousands of loans (and hundreds of thousands of dollars) to distinguish skill from luck.

    We haven’t had a bear market in the last three years, so we don’t know how borrowers will behave when they lack the money to pay an unsecured loan.

    The only “evolution” has been in the growth of the lending platforms. I haven’t plowed through any Lending Club or Prosper 10Ks or 10Qs lately, but I bet they’ve added more knobs & levers to allow investors to “analyze” borrowers. I also suspect they’ve made it even easier for lenders to give money to borrowers, despite the trend of large corporate lenders to snatch up the loans faster than the smaller investors. I’m sure that their future growth rests more in creating more loans rather than in creating “better” loans.

    I also suspect that the large corporate lenders have the experience (or at least the loss reserves) to survive the next bear market (and P2P lending defaults) better than the smaller lenders.

    I think borrowers would only do better with a P2P loan if they possess the assets to pay off the debt in such a short term. I think it’s better to use debt counseling and consolidation services (and changing their money behavior) rather than paying high funding costs for what is probably going to be a subprime loan rate.

    I think the average investor is still much better off in a classic passively-managed index fund with low expense ratios. P2P lending could be 5%-10% of their asset allocation for “shoot the moon” investments (or at least a testosterone-poisoned outlet) but I think a healthy degree of skepticism is still appropriate. Until an investor’s 10% asset allocation grows to fund thousands of loans with a six-figure dollar commitment, they’re simply speculating.

  444. Reply
    Doug Nordman April 21, 2016 at 11:30 PM

    Tim, the recruiter is the first stop in the screening process. Unless you’ve been personally contacted by your service’s personnel branch, the recruiter has to figure out whether there’s a mobilization billet for your skills. The next step would be determining whether you’re medically and physically qualified, perhaps including an overseas duty screening. After that there’s the actual mobilization process.

    It’s a highly individual situation, and it depends more on the needs of the service than on your interest in serving. The best way to figure out your next step is to contact the recruiter.

  445. Reply
    Doug Nordman April 21, 2016 at 11:03 AM

    Thanks, Vanguard!

    “Discovery learning with the VA bureaucracy”… that sums up the problem quite nicely, doesn’t it? I just got the word from the VSO’s office that my C&P exams are finished and the VA is now rating the claim. I sure hope I’m not waiting for 15 more months, but I’ve already waited 14 years.

    Thanks for the “reconsideration” tip– I’ll keep that in mind. And of course as soon as the claim is back I’ll request a copy of the file.

    Good point about the dental work and the DD-214!

  446. Reply
    Doug Nordman April 17, 2016 at 11:49 AM

    Good question, Thomas, and we get it a lot! You can calculate your pension right here using one of the blog’s most popular posts:
    If you want a second check then feel free to e-mail me your inputs.

    The online calculators have generally moved behind the service’s firewalls, requiring a CAC login or a DoD account. I think the reason for the move is so that they can access your point count records directly to make sure you have at least 20 good years. However it makes access difficult for IRR servicemembers and gray area retirees.

    The best place to start with a service verification is the state adjutant:
    You might also find a better e-mail address or phone number through a unit website:

  447. Reply
    Doug Nordman April 16, 2016 at 12:21 PM

    Good question, Chad, because it can seem a little too amazing to be true.

    The SCRA law applies only to debts (and accounts) incurred before starting active duty. (This includes Reserve/Guard mobilizations as well as joining the military.) However the card companies in this post have been going above and beyond the SCRA requirements.

    When you contact them and explain your duty status (including the applicable dates) they may still decide to voluntarily comply with the SCRA requirements– even though the law might not apply to your particular account situation.

    There’s no deceit or manipulation. It’s just the financial companies doing a good thing for servicemembers & families.

  448. Reply
    Doug Nordman April 13, 2016 at 11:26 AM

    Thanks for the tips, Sean! Not having to tell your employer about being a military spouse skips over the whole issue, and perhaps they don’t even care as long as they can get someone of your skills.

    You make a good point about the employment companies. If you’re comfortable with sharing the name by e-mail or our Facebook group then I’ll revise the post.

  449. Reply
    Doug Nordman April 10, 2016 at 11:06 AM

    Tom, it’s possible that this could be a malpractice claim, but you really need to talk to a military lawyer or consult with a civilian malpractice lawyer who’s familiar with the military’s Feres Doctrine.

  450. Reply
    Doug Nordman April 8, 2016 at 12:21 AM

    Thanks, Rick, I get that comment from a lot of my “more experienced” readers!

  451. Reply
    Doug Nordman April 5, 2016 at 10:20 AM

    Thanks, Peter!

  452. Reply
    Doug Nordman April 4, 2016 at 1:24 PM

    It’s possible, Dan, but the recruiter will have a doctor do a full evaluation during the entry physical as part of granting the waiver.

    After that it depends on what specific skills the military is seeking and what you’re willing to sign up for. The best way to sort out the options is to visit the recruiter and start the conversation.

  453. Reply
    Doug Nordman April 3, 2016 at 11:48 AM

    Good points, James!

    Sometimes it’s blissful ignorance. In one unit a number of the senior members were waiting until they’d crossed the next big pay raise for their years of service (>22, >24, >26) without understanding that they would receive the credit anyway. Once they’d been trained on how “retired awaiting pay” and the pension are calculated, over a third of those members immediately applied for retirement.

    You’re right about the rest– they’re still feeling challenged & fulfilled, or collecting pay, or working on a promotion… perhaps all of the above. It’s not necessarily about the drills, either– if you can score orders to an overseas exercise for a few weeks (perhaps tacking on additional vacation time around it) that might help you meet all of those objectives.

  454. Reply
    Doug Nordman April 2, 2016 at 12:25 PM

    Jeffery, it’s true that federal law requires military servicemembers to retire at age 60 (unless Congress grants an extension). However most services will only grant age waivers up to the late 30s, and they may be reluctant to grant both an age and a disability waiver. Trauma surgeons and linguists may be in demand, but unless you have a critical skill then the military will be more interested in younger and healthier vets.

    The path is indeed difficult, but it still starts with the recruiter. You may have better luck with a Reserve or National Guard recruiter, but keep searching until you find one who’s willing to work with you.

  455. Reply
    Doug Nordman March 24, 2016 at 5:17 PM

    Congratulations on your retirement, Ruth!

    A frequent cause of this problem could be that the Army Reserve is not aware of your National Guard pension eligibility. The Guard may have transferred all of their responsibilities for your pay record over to the Reserve HQ, who may not realize that you’re ready to start your pension.

    Start by forwarding your Guard “Notice of Eligibility” (20-year letter) to Reserve HRC headquarters. ( Use that website’s mailing address and phone number to make sure they have your current address and bank info to do the paperwork and start the deposits.

  456. Reply
    Doug Nordman March 24, 2016 at 5:10 PM

    I’m sorry to hear about your son’s marriage problems, Sandra.

    Everything he wants to do with his bank and his pay deposit should be started by talking with his sergeant at jump school. One option would be establishing a new checking account and arranging for his future paychecks to be deposited there. While he’s working out the issues with his spouse, he’d also have to set up an automatic transfer of the correct amount of money in spouse/child support to his original bank (for her to use her bank card). Much of this can be done online (after banking hours) instead of losing training time.

    He should also consult with a military lawyer to make sure that he and his spouse understand their options. Part of the sergeant’s or lawyer’s recommendations might include financial advice through the base’s family support services or Army Emergency Relief.

  457. Reply
    Doug Nordman March 22, 2016 at 4:12 AM

    Thanks, Peter, good advice!

  458. Reply
    Doug Nordman March 17, 2016 at 5:44 AM

    Thanks, Deserat!

    I was thinking of your example when I wrote about remote work and taking care of distant customers…

  459. Reply
    Doug Nordman March 14, 2016 at 9:40 AM

    I’m sorry to hear about the surgery, Crystal. Please start by seeing a different doctor at your medical clinic to document the problems and decide how you want them to be fixed.

    I still recommend seeing a lawyer to start the legal inquiry process. If there was negligence (or even misconduct) then the JAG can help protect your rights and make sure the process is followed.

  460. Reply
    Doug Nordman March 14, 2016 at 9:33 AM

    Thanks, Peter! It’s a highly individual decision, and it can change over time & circumstances.

  461. Reply
    Doug Nordman February 23, 2016 at 7:32 PM

    Brandon, I can’t tell whether you’re saying that you have a total of 19 good years or a total of 25 good years (“six years of active duty plus 19 good years of Guard/Reserve time”).

    If you have a total of at least 20 good years then you can apply to retire, and when you retire then the years of commissioned service can be waived down to eight years. You’d be able to retire as an O-3.

    If you have a total of 19 good years and you stayed until 10 years of commissioned service, or stayed until you reached 20 good years, then you’d be able to retire as an O-3. Again, when you retire you can apply for a waiver to retire as an officer with as little as eight years of commissioned service.

    If you have 19 good years now and resign your commission before reaching retirement (20 good years) then your next rank is decided by the policies of your new service.

    It’s possible that I’m mis-interpreting your questions, so if this doesn’t answer them then feel free to add another comment or send me an e-mail.

  462. Reply
    Doug Nordman December 9, 2015 at 4:54 AM

    Thanks, Michael, good question!

    This is only for combat deployments as a Reserve or Guard member, and some Guard mobilizations for domestic responses such as natural disasters. The legislation also started on 28 January 2008. If you never did this as a Reservist, or did it before that date, then you’re not eligible for the earlier pension.

  463. Reply
    Doug Nordman December 9, 2015 at 3:19 AM

    Thanks, Mike!

    Those savings really compound, and after a few promotions the extra pay tremendously boosts a savings rate.

  464. Reply
    Doug Nordman December 5, 2015 at 8:18 PM

    Steve, if your buddy has retired then he has a retiree ID card and a retiree record in the ANG system. He can obtain his latest DD214 from the archives ( He might also be able to get a copy from his last ANG unit or the ANG personnel HQ.

    He can also get much more help with the VA by contacting a Veteran Services Officer with a local vets group like the DAV, MOAA, American Legion, VFW, or IAVA.

  465. Reply
    Doug Nordman November 28, 2015 at 5:03 AM

    Great questions, Kelly!

    First I’d suggest finding a career field that interests you and signing up for one obligation. When you approach the end of your first active-duty obligation, that’s a much better time to decide whether you want to stay on active duty for 20 years. Your experience will help you decide whether to shift to the Reserves or the ANG.

    I would not make a career choice based on the pension options. Join the military for the personal challenge, to achieve your potential, to be a part of something bigger than yourself, and to work with incredible people. If you’re having fun and feeling fulfilled then you’ll reach 20 years and a pension as the icing on a well-earned cake. But if you join the military to spend 20 years earning the pension and realize that you don’t enjoy the daily experience, then you’re holding yourself to an unreasonable commitment which will affect your physical, mental, and emotional health.

    It’s possible to earn both a federal civil-service pension and a Reserve/Guard pension. I’m not familiar with the details of the dual status technician career, but it’s a very small program compared to all of the other ways to earn those pensions. You may find yourself competing for limited opportunities with very few options in location or type of work. However many military retirees find bridge careers with federal or state civil service (while collecting a military pension) and even more go on to do the same in civilian careers (when the corporation has a pension plan). Again, find careers that fulfill and interest you. Don’t make yourself a hostage to a pension plan– you can save enough assets to fund your own financial independence.

    Don’t base your choices on the downsizing, either. The media focuses on the 10%-15% of servicemembers who are leaving (or who are asked to leave) but the other 85%-90% are still on the job. The best way to stay in a military career is to find a challenging field that interests you and has room for you. Learn all you can and do the best job you can do. The military will always need people who are good at their jobs, good with a team, and good at leading teams. You’ll practice those skills every day when you’re enjoying the work.

    The real value of a federal pension is in its inflation-fighting COLA and cheap healthcare. But instead of depending on a federal pension to fund your retirement, make it part of a diversified plan. In addition to the COLA and longevity insurance offered by a federal pension, you can also reach a high savings rate. Build your own investments in passively-managed equity index funds (in your Roth TSP, your Roth IRA, and taxable accounts). When you can maintain a savings rate of 40% for about 16-20 years, then you’ll reach financial independence even without a federal pension.

  466. Reply
    Doug Nordman November 20, 2015 at 9:11 PM

    Thanks, Deserat, and I don’t miss it a bit!

    If it’s any consolation, I thought of your medical engineering every time an IV stand beeped at me for no good reason.

    And I think you buried the lede:
    Congratulations on your retirement! I know you’ve already figured out what you’ll do all day…

  467. Reply
    Doug Nordman November 7, 2015 at 7:09 PM

    Thanks, Judy!

    I lifted that word straight out of the biopsy report. I had to look it up first, and I hope I never have to use it again!

  468. Reply
    Doug Nordman November 7, 2015 at 4:55 AM

    Thanks, Jason!

    Three hours… yikes. Let me get started.

  469. Reply
    Doug Nordman November 5, 2015 at 8:56 AM

    Many of the Navy’s entrance (or re-entrance) requirements can be waived, but I don’t know whether the Navy would be willing to waive your age or your break in service. It depends on how undermanned the service is for the skills you have, and also on what other undermanned specialties you’d be willing to serve in. I’ve served with a submariner who had a 16-year break in service, but he was willing to convert to a new rate and re-enter at a lower rank.

    If you haven’t done so already, I’d recommend visiting your local Navy recruiter in person, and ask them about drilling in a Reserve unit as well.

  470. Reply
    Doug Nordman November 5, 2015 at 8:45 AM

    Thanks, Andrew, that topic causes a lot of confusion!

    You can read more at these two posts:
    and use their links to contact Eddie Wills at

  471. Reply
    Doug Nordman November 5, 2015 at 8:28 AM

    Thanks for asking about an update, Michael!

    This is not about me– this guest post was brought to the readers by an Air Force officer who indeed picked up O-5 in late 2013. You can read more about her (and perhaps contact her through a private message) at Here are two of the posts:

    Since you’re approaching 20 good years for a Reserve retirement eligibility, you should contact your Reserve personnel staff for a Notice of Eligibility letter to confirm your good years (and your point count). This post has more info:

  472. Reply
    Doug Nordman October 30, 2015 at 7:39 PM

    Good advice from Bogle, Mel, thanks!

    I keenly remember JDSU and Sun– as well as Nortel. I’m done picking stocks.

    I’ve never attended a Berkshire meeting (the crowds on Omaha’s infrastructure are ridiculous) but I read all of BRK’s reports and I follow the meetings on social media. I’ve also read all the Buffett & Munger biographies and other books (a very worthwhile project). I have no succession concerns, especially after following names like Abel and Rose over the years. Buffett has also surrounded himself with the next generation: Weschler, Combs, Howard Buffett (and perhaps someday his son), Cool, and board member Bill Gates. However I think Berkshire will spend the rest of my life trying to beat the S&P500 without racking up any more 25% annual returns.

    The best part about having BRK in a portfolio is the investor education that comes with the purchase research plus the tracking responsibility of ownership. It’s immunized me against a bunch of mistakes that would’ve seemed like good ideas at the time…

  473. Reply
    Doug Nordman October 28, 2015 at 4:37 AM

    Thanks, Deserat!

    I’m going to get my water aerobics with a longboard… or, maybe this winter, with a stand-up paddleboard.

  474. Reply
    Doug Nordman October 27, 2015 at 7:25 PM

    Shelly, I’m sorry to hear that your son’s injuries haven’t received the proper help. There’s still a possibility of recourse but you’re going to need a civilian lawyer who has dealt with this sort of military malpractice. They’ll probably want to do additional exams or scans to compare their diagnosis to the original exam, and then proceed with a lawsuit.

    Depending on the characterization of your son’s discharge, he may also be eligible for disability benefits from the Veterans Administration. You could start that process either with the same lawyer or with a local chapter of a veteran’s support organization like the American Legion or the Disable American Veterans.

    Finally, you could try sharing this on the It’s intended for servicemembers who are facing a Physical Examination Board to stay on active duty, but it was founded by a lawyer and it has many members who are experts at navigating the legal and medical aspects of the disability system.

  475. Reply
    Doug Nordman October 24, 2015 at 1:50 AM

    Exactly– a lifetime of fitness, and now this?!?

    I’m sorry that it’s happening to us, but I bet we’re each relieved to learn that we’re not the only ones…

  476. Reply
    Doug Nordman October 20, 2015 at 4:45 PM

    Great comment, Glen, and thanks for the compliment! I really wish that I’d had the time or the personal bandwidth to learn this info when I was in uniform.

    Yes, you can transfer to the IRR and obtain your final four good years through correspondence courses and other duties. However the majority of the servicemembers who make that choice eventually fail to reach their goals for a number of personal and bureaucratic reasons.

    I’m not sure whether drilling or IRR would be better for your situation, but there are two issues with going to the IRR: the IRR grass looks greener when you’re drilling, and once you go IRR it’s very difficult (especially in a drawdown) to get approval to return to drill status. Many Reservists and Guard members in the IRR tell me that they find themselves challenged to get the points for a good year. Before you make the leap I strongly recommend that you network with as many of your local Guard IRR members that you can track down, and ask them how they’re doing on IRR points.

    First there’s the logistics of the correspondence courses. Can you find enough courses (approved for Guard IRR credit) in the current catalog to total up 4 x 35 points? Will you have the access (CAC card or secure login) to reach the website? Will you have to do the courses on a secure network at your local armory or even revert to paper? The Navy in particular has cut way back on the approved correspondence courses for IRR points, and they’ve largely removed CACs from their Reservists. The Guard may have other unexpected obstacles.

    Will you need to explore other point options besides correspondence courses, such as funeral honors or service as a USNA Blue & Gold Officer? Does the Guard offer other IRR programs for points?

    Next there’s time management. Will all the other demands of your life derail your best of intentions with your correspondence courses? Will you be able to make the time to plug through the courses every week and finish 1-2 per month, or will you find yourself frantically cramming them in during the last two months before your anniversary date? Will all of the online courses take fewer hours per point than a drill weekend, or will some take more?

    Are the demands on your time all year round, or do they peak in certain months? Instead of going to the IRR, would you be able to take authorized absences from 2-3 drill weekends per year? (You’d still earn at least 36 points.) If money’s not an issue then would your command let you waive your AT (or other training duty) and still qualify for a good year?

    Finally there’s the business side. I spend time with entrepreneurs and startup founders and I appreciate the challenges. If your business is booming, can you delegate or outsource or partner with someone who can get you through the busiest times of the year (or the next four years)? Should the Guard be your higher priority? Can you compare your business’ current opportunity cost to the present value of a lifetime O-5 Guard pension (with Tricare and Tricare For Life) starting at age 60?

    In order to retire with your O-5 rank on your retirement certificate, you’ll need to serve at least three years in that grade. (Under federal law, the service secretaries frequently waive this to two years during drawdowns.) However your High Three pension is based only on the highest 36 months of pay during your career. You’ll complete (at least) 2-3 years of O-5 time in grade to reach 20 good years and then you’ll “retire awaiting pay” at O-5 rank. While you’re in gray area you’ll continue to accrue years of service at the O-5 rank as though you’ve been on duty up through age 60. In other words, your High Three calculation will include the pay tables in effect when you’re ages 57, 58, and 59. It’ll also include your longevity up through age 60, so your O-5 longevity column on the pay tables will be at the years of service when you’re those ages. For most Reserve/Guard members, that will be the maximum pay for your rank.

    We don’t have the pay tables for the 36 months before you turn age 60, but the best way to estimate your pension in today’s dollars would be to use your total point count at retirement (including your four years in the IRR) and the maximum pay column in the O-5 row of the 2016 pay tables.

    Please let us know how it goes. I’ve heard the joke many times: you know that you’ve reached work/life balance when your personal business, your Guard unit, and your family are all equally annoyed with you. I’d love to share some IRR success stories with the readers.

  477. Reply
    Doug Nordman October 7, 2015 at 9:47 PM

    Thanks for your comment, Mandy!

    The military only pays a very few student loans directly, and that’s mostly for doctors. However military service qualifies for a number of other programs that help reduce the payments or even forgive the loan itself. The requirements are tedious, bureaucratic, and maybe even a little treacherous. The details (and the links) are in this post:

  478. Reply
    Doug Nordman October 4, 2015 at 8:38 AM

    Good question, Rebel, and you didn’t miss it!

    The USFSPA is a federal law that allows the states to treat military benefits as property to be divided during a divorce proceeding. That’s all it does, and it leaves everything else up to the state laws. Any minimum marriage time would be part of your state’s law and the divorce negotiations.

    There are two other time limits to be aware of. One is the 10/10 rule, which means that DFAS will comply with a court order to send the ex-spouse’s share of the military pension to them directly.
    The other is the 20/20/20 rule, which entitles the divorced spouse to Tricare benefits. This rule is explained in more detail (along with many other military divorce issues) at this link:

  479. Reply
    Doug Nordman September 11, 2015 at 2:02 AM


    This is a controversial section of federal law, and you need a military lawyer.

    The issue is that a few lawsuits have been filed over requiring a servicemember to waive their sanctuary rights. Plaintiffs have claimed that they cannot be required to waive these rights and should be awarded an active-duty requirement. As far as I know, however, this claim has not been upheld. It may not be ethically just to require ANG members to sign sanctuary waivers, but (so far) it appears to be legal.

  480. Reply
    Doug Nordman September 11, 2015 at 1:28 AM

    Another good question, John, but I’m not sure about the answer. I’m familiar with today’s Reserve retirement rules, but not the changes from earlier years. As far as I know, every point earned at drills or on orders or even through the IRR counts toward a pension. Even if a Reservist didn’t make enough points to earn a good year, those point would still count for pension credit.

    If you have a point-count summary that lists a reason or reference for points that don’t “count” then I could try to research it. Another option would be contacting DFAS to make sure they’re using the correct point count total.

    One recent change has been removing points earned through midshipman summer training. After a legal review of legislation, DFAS is actually recalculating pensions and planning to recoup overpayments. SECNAV has asked that the recoupment be waived for amounts under $10K.

  481. Reply
    Doug Nordman September 4, 2015 at 1:44 PM

    Good question, John, and one of the most confusing issues in the Reserves and Guard.

    Since you joined the service before 8 Sep 1980, you’re eligible for the DFAS Final Pay formula:
    Monthly Pension = Points / 360 x 2.5% x Base Pay.

    However the “base pay” part is where most of the confusion comes from.

    The pay table is the one in effect when your pension starts. If you began receiving your Reserve pension in 2015, then you’re using the 2015 pay tables.

    The rank is the rank you retired at, but there’s a catch. When you “retire awaiting pay” instead of discharge or separation, then the longevity column is the years of service that you’d reach as if you’ve been on active duty the entire time up until your pension starts. For the vast majority of Reserve retirements, this is the maximum pay at your retirement rank (usually the >30 column).

    Your “point value for rank and years” number is simply a calculation used by the services to determine roughly how much money a point is worth. It has nothing to do with the actual calculation of your retirement pay. The DFAS number is different from your number because they’re using the proper formula.

    If you want to dig into the nitty-gritty of the calculation then it’s in Chapter 3 of Volume 7b of the DoD Financial Management Regulation:
    starting with paragraph 030205 at the bottom of page 3-9.

  482. Reply
    Doug Nordman August 27, 2015 at 3:43 PM

    Ha! 13 years of retirement and I’m still figuring that out…

  483. Reply
    Doug Nordman August 26, 2015 at 3:47 PM

    Bill, according to this FAQ page at the NPC (BUPERS) site, you might be able to appeal the letters.

  484. Reply
    Doug Nordman August 19, 2015 at 5:20 AM

    Sorry about that comments glitch, Jim. While I’m looking into that, here’s a link to another post on the same subject:

    In your case, the key is making sure that your current service has a complete record of your officer service. As a pre-1980 servicemember with greater than 10 years of commissioned service, you’re still eligible for a “Final Pay” pension at the highest rank achieved.

  485. Reply
    Doug Nordman August 18, 2015 at 7:31 AM

    Thanks for your comment, Kelli. I’m a little confused about your military status– and that might be a problem.

    If you were discharged from the Air National Guard before reaching retirement eligibility then you’re a military veteran, but without commissary or BX privileges. Congress has proposed awarding commissary and exchange privileges to veterans, but no laws have been passed.

    If you completed 20 good years with the ANG and have a Notice Of Eligibility letter that you’re eligible for retirement, then you may have retired from the ANG. However there are two types of Reserve/Guard retirements: retired awaiting pay (also known as “gray area”), and resigned (or separated or discharged).

    If you’re retired awaiting pay then you could talk to your local ANG unit or to the personnel office at your nearest military base. With your retirement orders and your DD-214, they should be able to issue you an ID card for base access (and commissary/BX access).

    If you were retired by being discharged then you will not be eligible for commissary/BX access until your pension starts, which for most Guard retirees is age 60.

  486. Reply
    Doug Nordman August 16, 2015 at 8:08 AM

    Thanks for your questions, Ralph! Everybody wonders about this.

    Military pensions (like military salaries) are paid in arrears. You’ll receive your first pension deposit on the 1st of the next month after your 60th birthday. As you suspect, it’ll be pro-rated. Subsequent pension payments will be deposited to your account on the 1st of the month. The reason that some of these deposits show up at the end of the previous month is because some financial institutions will credit your account a day or even two days sooner.

    Some Reserve/Guard servicemembers deployed to a combat zone after 28 January 2008 (or, in the Guard, for certain national emergencies). Their pension starts three months sooner for every 90 days in the combat zone during a fiscal year, and it’s paid under the same terms. However Tricare coverage still starts at age 60.

    Direct deposit information goes to the Defense Finance and Accounting Service through either your myPay account or by mailing in a form:

  487. Reply
    Doug Nordman August 14, 2015 at 7:48 PM

    Excellent, thanks.

    It’s not what the reader wanted to learn, but at least we seem to have covered the available options.

  488. Reply
    Doug Nordman August 9, 2015 at 8:47 AM

    Rodney, you’ve certainly researched the issue (thank you!). I see you’ve also found the other posts which discuss the parameters.

    It’s difficult to speculate on the reasons for non-promote. It could be age or errors/omissions in a record. It could also have little to do with you and everything to do with downsizing issues and end strength requirements.

    If you haven’t already done so, your first step should be to sit down with a JAG to discuss the federal law (with these blog comments) and whether you have any other options. You and the JAG could craft a waiver request to permit you to continue on active duty to reach eight years’ commissioned service due to the critical skills you’re providing in your billet. The point of the request is to force HRC to issue a formal letter response to your waiver request, not to let them discourage you from submitting the request. You want a written response, not just a verbal “We can’t do that”.

    You could also contact your elected representatives, because several senators were involved with last year’s OSBs. That tactic might not be popular with HRC or your chain of command, but again you have nothing to lose from starting a Congressional inquiry. Regardless of when or why the “10 years commissioned service” law was passed, only Congress can change it.

    I’m not going to hold out false hope. Even if your commission could somehow be backdated to your initial AECP acceptance, you’d still have less than 10 years of commissioned service. Perhaps the best you could hope for would be that your situation calls attention to the need to change the law.

    Even if you’re forced into retirement at an enlisted rank, the military may feel that you’ll eventually be “made whole” at the 30-year point. You and the JAG should take a look at 10 U.S. Code § 3964. Here’s the text:
    Higher grade after 30 years of service: warrant officers and enlisted members
    (a) Each retired member of the Army covered by subsection (b) who is retired with less than 30 years of active service is entitled, when his active service plus his service on the retired list totals 30 years, to be advanced on the retired list to the highest grade in which he served on active duty satisfactorily (or, in the case of a member of the National Guard, in which he served on full-time duty satisfactorily), as determined by the Secretary of the Army.

    I’m not a lawyer, and I don’t understand whether Section 3964 means that your retirement pay is also recomputed. Your JAG may be able to find the applicable rule in the DoD Financial Management Regulation manual for military retirements:
    Table 1-2 on page 1-33 lists the rules for mandatory retirements, and Rule 6 probably applies to your situation. It doesn’t advise whether your retirement pay is also recomputed when you reach the 30-year point. However section 090401 on page 9-5 says:
    Reduction In Pay Due To Advancement
    There is no absolute requirement that a member of the Armed Forces be advanced on the
    retired list. If advancement and recomputation results in a reduction of retired pay for the member
    and is based solely on administrative determination, then, prior to the advancement, the member
    should be consulted by the military service and advised that the member’s retired pay would be
    reduced if advanced.
    A. Enlisted Member. If an enlisted member is, in fact, advanced on the retired
    list, then retired pay must be recomputed, even though a reduction of retired pay would result.

    To my unqualified interpretation of the FMR, it seems pretty clear that at the 30-year point you could apply to be advanced to O-2 on the retired list– and then you could apply to have your pension recalculated at the O-2 pay scale instead of the E-6 pay scale.

    Your former High-Three pay base derived from E-6>22 ($3,724.20) would be switched for a High-Three pay base of O-2E>2 ($5,418.00). Keep in mind that those columns are just the starting points and not the actual dollar amounts. You’d have to calculate the average of the highest 36 months of pay at those ranks. DFAS can help you with the calculation.

    Finally, Section 090302 on page 9-4 says you’ll also need an Army determination that you served satisfactorily in your O-2 paygrade. That appears to be handled by an Army Grade Determination Review Board, and it’s up to you and the JAG to ensure that happens during the next few months. You definitely want to get this done while you’re on active duty, because it’ll take months to make it happen after you’re retired.

    I know this doesn’t make the situation right, but I hope it helps. Please let me know how it turns out.

  489. Reply
    Doug Nordman August 9, 2015 at 8:45 AM

    Rodney, you’ve certainly researched the issue (thank you!). I see you’ve also found the other posts which discuss the parameters.

    It’s difficult to speculate on the reasons for non-promote. It could be age or errors/omissions in a record. It could also have little to do with you and everything to do with downsizing issues and end strength requirements.

    If you haven’t already done so, your first step should be to sit down with a JAG to discuss the federal law (with these blog comments) and whether you have any other options. You and the JAG could craft a waiver request to permit you to continue on active duty to reach eight years’ commissioned service due to the critical skills you’re providing in your billet. The point of the request is to force HRC to issue a formal letter response to your waiver request, not to let them discourage you from submitting the request. You want a written response, not just a verbal “We can’t do that”.

    You could also contact your elected representatives, because several senators were involved with last year’s OSBs. That tactic might not be popular with HRC or your chain of command, but again you have nothing to lose from starting a Congressional inquiry. Regardless of when or why the “10 years commissioned service” law was passed, only Congress can change it.

    I’m not going to hold out false hope. Even if your commission could somehow be backdated to your initial AECP acceptance, you’d still have less than 10 years of commissioned service. Perhaps the best you could hope for would be that your situation calls attention to the need to change the law.

    Even if you’re forced into retirement at an enlisted rank, the military may feel that you’ll eventually be “made whole” at the 30-year point. You and the JAG should take a look at 10 U.S. Code § 3964. Here’s the text:
    Higher grade after 30 years of service: warrant officers and enlisted members
    (a) Each retired member of the Army covered by subsection (b) who is retired with less than 30 years of active service is entitled, when his active service plus his service on the retired list totals 30 years, to be advanced on the retired list to the highest grade in which he served on active duty satisfactorily (or, in the case of a member of the National Guard, in which he served on full-time duty satisfactorily), as determined by the Secretary of the Army.

    I’m not a lawyer, and I don’t understand whether Section 3964 means that your retirement pay is also recomputed. Your JAG may be able to find the applicable rule in the DoD Financial Management Regulation manual for military retirements:
    Table 1-2 on page 1-33 lists the rules for mandatory retirements, and Rule 6 probably applies to your situation. It doesn’t advise whether your retirement pay is also recomputed when you reach the 30-year point. However section 090401 on page 9-5 says:
    Reduction In Pay Due To Advancement
    There is no absolute requirement that a member of the Armed Forces be advanced on the
    retired list. If advancement and recomputation results in a reduction of retired pay for the member
    and is based solely on administrative determination, then, prior to the advancement, the member
    should be consulted by the military service and advised that the member’s retired pay would be
    reduced if advanced.
    A. Enlisted Member. If an enlisted member is, in fact, advanced on the retired
    list, then retired pay must be recomputed, even though a reduction of retired pay would result.

    To my unqualified interpretation of the FMR, it seems pretty clear that at the 30-year point you could apply to be advanced to O-2 on the retired list– and then you could apply to have your pension recalculated at the O-2 pay scale instead of the E-6 pay scale.

    Your former High-Three pay base derived from E-6>22 ($3,724.20) would be switched for a High-Three pay base of O-2E>2 ($5,418.00). Keep in mind that those columns are just the starting points and not the actual dollar amounts. You’d have to calculate the average of the highest 36 months of pay at those ranks. DFAS can help you with the calculation.

    Finally, Section 090302 on page 9-4 says you’ll also need an Army determination that you served satisfactorily in your O-2 paygrade. That appears to be handled by an Army Grade Determination Review Board, and it’s up to you and the JAG to ensure that happens during the next few months. You definitely want to get this done while you’re on active duty, because it’ll take months to make it happen after you’re retired.

    I know this doesn’t make the situation right, but I hope it helps. Please let me know how it turns out.

  490. Reply
    Doug Nordman August 8, 2015 at 9:41 AM

    Great points, VG23! You’re right about rolling over the Roth TSP directly. Very convenient.

    I was surprised at how quickly our conversion time “ran out”. In your case you may be facing the 28% tax bracket sooner than you expected, especially if political risk boosts the tax rates for high earners. I think it’s also smart to do the partial withdrawal now and do a full withdrawal when that conversion is finished.

    As for those financial “reigns”… in retirement, everything can be re-negotiated!

  491. Reply
    Doug Nordman August 8, 2015 at 9:35 AM

    Thanks, Deserat, it’s a lot more complicated in the Reserves/Guard than I appreciated…

    And, yes, it’s best to consult a CFP or a CPA whenever there are multiple tax-deferred retirement accounts. Good problems to have.

  492. Reply
    Doug Nordman August 8, 2015 at 9:33 AM

    Thanks, Deserat, and that’s a very good point about the Reserves!

  493. Reply
    Doug Nordman August 5, 2015 at 7:40 AM

    Thanks, Deena, great question!

    I’m not familiar with the age-limit rules for each service, but you’ll probably need a waiver from your service to do any drills or other point-earning activities after you turn age 60.

    A better option would be for you to complete all of your drills and AT before you turn 60 so that you qualify for a good year in 2023, even though the good year would not be awarded until after February 2024.

    You’d receive your Notice of Eligibility after February 2024 and immediately file for retirement. You’ll almost certainly have to work closely with your Reserve chain of command to make sure that there are no delays in determining your retirement eligibility and executing the process.

  494. Reply
    Doug Nordman August 5, 2015 at 7:34 AM

    Thanks, John, good to know! I didn’t realize the call-in feature had limited locations.

    I’d love to have a retiree CAC, let alone access to the long-range schedule, but I don’t have either. That link was passed to me by an active-duty servicemember who does a lot of Space-A flights with his family.

  495. Reply
    Doug Nordman July 31, 2015 at 7:29 AM


    The first place you could try is the personnel branch at your old Reserve/Guard unit. They’ll be able to look you up in the system and track the status.

    If you’re not near a military base (or a Reserve/Guard drill site) then you could e-mail or phone your service’s personnel HQ. You may need to send them a copy of your 20-year letter or your retirement application.

    Another option would be to contact the Defense Finance and Accounting Service. If your branch of the Reserve/Guard has already processed the paperwork correctly then DFAS will be able to check on your start date. The easiest way to check that (or to contact DFAS) is through a myPay account. If you don’t have a myPay account (or it won’t let you log in) then try contacting DFAS through these phone numbers:

  496. Reply
    Doug Nordman July 31, 2015 at 6:26 AM

    Welcome home, Mel, and congratulations to your spouse on her retirement! Let me know if you have lessons learned (or new surprises) to share.

    Space A: most of the passenger terminals and their 72-hour departures are on Facebook, and they accept signup by e-mail. For $8 you can automate much of the process (and consolidate all the contact info) from the “Take-A-Hop MilSpace-A” app. It’s the first app I’ve ever paid for, but it’s worth it.

    Thanks for the melatonin tip– we’ll give it a try during our next trip.

    I asked our mail carrier about the 30-day hold, and he said he’d take care of us. (I doubt he bothered to mention this to his supervisor.) Apparently past 30 days we’re supposed to rent a P.O. box or use a forwarding service as a “virtual mail box”.

    It took me 13 years of retirement to decide to try a Quicken break– no need rush into this! So far so good. However some items on my Quicken calendar (estimated federal taxes, property taxes) are going to have to be even more automated with EFTPS and the state or moved to Google Calendar.

  497. Reply
    Doug Nordman July 24, 2015 at 7:32 PM

    Elizabeth, if you’re looking for the DFAS direct deposit form, it’s at
    The link to that SF-1199A is at the DFAS pay & benefits forms page:
    The information that your bank or credit union provides to DFAS is also on your paper checks. The instructions for the form show where the account and routing transaction numbers are printed on your check.

  498. Reply
    Doug Nordman July 24, 2015 at 7:24 PM

    Good points, Peter, thanks!

  499. Reply
    Doug Nordman July 20, 2015 at 5:31 AM

    Thanks for your question, Michael!

    There shouldn’t be any changes to your Tricare insurance coverage.

    When you reach age 60, you’ll continue on your Chapter 61 medical coverage. You’d have the option to switch to Tricare (Prime or Standard) but you’ll want to keep your current Tricare insurance. When you turn age 65 then you’ll sign up for Medicare and Tricare For Life.

    Tricare Reserve Select is intended for drilling Reservists who have no other access to health insurance, although the ACA has put more competition into the healthcare market than COBRA.

    Tricare Reserve Retired is intended for Reservists in the “gray area” (retired awaiting pay) who would otherwise be paying higher rates for health insurance. But again the ACA has hopefully reduced the price of buying insurance on the exchange marketplace.

  500. Reply
    Doug Nordman July 20, 2015 at 5:26 AM

    Thanks, Miguel, I appreciate why you feel homesick!

    Almeria’s on our list for this fall. And next time you’re in Granada, I highly recommend contacting Jed at for a beverage at the neighborhood bar.

  501. Reply
    Doug Nordman July 20, 2015 at 5:24 AM

    Great poster name, Drillbit!

    I share your concern about selection– when I was on active duty, I was passed over twice and continued until 20 years.

    First, you should ask your personnel branch for the latest policy by your service secretary and chief of staff. (You’ll be working with personnel anyway to make sure your service record is complete and up-to-date.) I’m not familiar with every individual service change, especially those affecting the Reserves during the drawdown. There may already be a letter or instruction for the promotion board with guidance regarding those who fail to select.

    Second, if you’re not happy with the answers from your personnel branch, then consult a JAG for a review of federal law and Army policies.

    However I think you can depend on the Army to do the right thing and let you get to 20 for your Notice Of Eligibility… after a record review and possibly a continuation board.

    When the enlisted ranks reach 18 good years, they’re protected from discharge until reaching 20 years. ( Active-duty officers are also protected by federal law. ( Until at least 2018, all of the services have the authority to use TERA to retire their active-duty members after 15 years.

    If you fail to promote for the second time then it’s likely that the Army will continue you to 20 good years, as long as you meet all of your unit’s drill and other performance requirements. It’s possible that you might be required to vacate your drill billet and transfer to the Individual Ready Reserve, but in the IRR you could continue with correspondence courses and other events to obtain enough points for a good year. To be safe, though, after the anniversary date for the end of your 19th year you should try to get your next batch of points as quickly as possible at the start of your 20th year.

    Please let us know what other instructions and policy you hear about!

  502. Reply
    Doug Nordman July 17, 2015 at 9:21 AM


    When you reached 20 good years and retired awaiting pay, your service longevity continues to accrue on the pay tables as if you’ve been on active duty until your pension starts.

    This means that your retired pay will be calculated using the pay tables in effect when you reach the starting age for your Reserve/Guard pension (typically age 60) and at the service longevity as if you’d been on active duty up through that age.

    In your case, in 2015 you’re already considered to be over 25 years of service for pay purposes and you’ll go over 26 years of service next year. If your pension starts in 2017 and your retired rank is SFC, then DFAS will calculate your High Three pension’s pay base from the 2017 pay tables for the rank of E-7>26. That High Three average will be the average of the highest 36 months of pay for the pay tables of E-7>26 in 2017, E-7>26 in 2016, E-7>24 in 2015, and E-7>24 in 2014.

    Then your pension will be calculated from the formula:
    [High Three base pay average] x [# points] / 360 x 2.5%.

  503. Reply
    Doug Nordman July 9, 2015 at 5:39 AM

    I’m sorry to hear about the surgery, Nicole. The first step of a malpractice suit is contacting a lawyer. I’d start with the JAG on your base, review all of your medical records with them, and then decide the best way to proceed.

  504. Reply
    Doug Nordman July 4, 2015 at 8:23 AM

    You’re absolutely right, Mark, and it’s an important point. You not only have to have the ID card during those years in the IRR and ANG, but you also have to get the minimum number of points for a good year and meet all of your service’s other requirements (like physical fitness and deployment readiness).

    Your record of service (including point count and good years) is online but you might not have the account access yet. If you have contacts with a local Reserve/Guard unit for your service then I’d start there. Ask them if they can look up your record, or find out who to call at your personnel branch HQ. If that doesn’t pan out then visit your local recruiter and explain the situation. They’ll have to look up your record anyway, and you can verify the numbers against your DD-214s.

    Almost every veteran I’ve known in their 50s (or older) tells me that they wish they’d made the effort to get to 20 years of service. It’s going to be difficult to rejoin during a drawdown, and you may have a tough time getting enough drills/duty to qualify for a good year, but if you have the opportunity then it’s worth the effort.

  505. Reply
    Doug Nordman July 4, 2015 at 8:15 AM

    Excellent guidance, Deserat– thanks for the details!

  506. Reply
    Doug Nordman July 2, 2015 at 9:05 AM

    Great question, Ann. I’m pretty sure the answer will be “officer”.

    The last board allowed most officers to extend until they reached eight years’ commissioned service. A few officers were given waivers by the Secretary to retire as officers. Those special cases didn’t get a followup by the media, but I also didn’t get any unhappy e-mails.

    My impression is that HRC has learned that it’s less hassle to do the right thing and enable you the opportunity to reach eight years’ commissioned service. (It’s certainly better than dealing with my blog posts, the New York Times investigative journalists, and Congressional inquiries plus legislative initiatives.) If HRC thinks an extension is too long to reach the eight years then you’ll probably get a waiver to retire as an officer.

    I’d suggest that you make it easy for the Army to help you get to eight years’ commissioned service. Review your service record with someone who’s seen them at promotion boards. Find an assignment officer at HRC who will review your official record (not a local copy) for any gaps or issues. Make sure your official photo is professional and flawless, because the Army humans on the board will respond to impressive recruiting-poster images of other Army humans. Send in the corrections now (e-mailed or faxed and perhaps by overnight mail), and make sure the corrections get added to your record before the board reviews it.

    If you’re worried about being forced to retire, then worry constructively. Attend your service’s transition seminar and think through what you want to do after you retire from the military. Whether you do it on the Army’s schedule or on your schedule, you will eventually retire. It’s always worth investing a little preparation time now, even if you end up staying on active duty for a few more years.

  507. Reply
    Doug Nordman June 14, 2015 at 5:54 AM

    Great question, Minnie!

    You’re in the window to hear from your service. Forgive me for preaching to the choir about this, but ideally you’ve already received your Notice of Eligibility and filed for retired awaiting pay (gray area) status.

    If you have an online account then log in to check for any notifications. (Not many gray-area retirees have an account.) If you’re near a Reserve or National Guard center then I’d e-mail, call, or visit them to show your ID and check your status. (While you’re there, they may be able to do any additional admin online.) If you’re not near a military site then contact your service’s Reserve/Guard personnel command directly and ask them to update your file.

    At some point you’ll be asked to log in to your MyPay account and verify your contact information. DoD requires that your pension be deposited directly in your financial account, so you’ll also need to check that they enter your account numbers correctly. If the pension payment doesn’t start on the date you were promised then contact DFAS directly about your Retiree Account Statement at

  508. Reply
    Doug Nordman June 12, 2015 at 3:50 AM

    Thanks, Peter!

  509. Reply
    Doug Nordman June 9, 2015 at 5:48 AM

    Good points, Alistair, thanks!

    The credit-reporting agencies continue to expand their collection and reporting, and the GTCC is certainly a two-edged sword.

  510. Reply
    Doug Nordman June 5, 2015 at 11:18 AM

    I’m sorry to hear about your injury, Carol. You definitely should talk with a lawyer who has experience in medical malpractice and who understands military benefits. A civilian lawyer should give you a free consultation and an assessment of whether, after the few years, you still have a claim.

  511. Reply
    Doug Nordman June 1, 2015 at 8:06 PM

    Heh– thanks, Charlie.

    That question is identical to a post I did in 2012, too, but I think the Clash’s “Should I Stay Or Should I Go” has been immortalized by a generation of radio listeners…

  512. Reply
    Doug Nordman May 31, 2015 at 5:44 PM

    Pat, after 20+ years I think that your best bet is forwarding copies of the documentation to your service’s Reserve/Guard personnel HQ. (They may have your record online, but it may not be complete.) Your goal is to verify that you not only have 20+ years of service, but 20 “good years” eligible for retirement.

    The confirmation of that will be a Notice of Eligibility letter (and their copy of your records) followed by your retirement request.

    If you’re near a Reserve/Guard center for your service, you could contact them for more in-person advice. That would at least get you a solid e-mail address and phone number for the personnel HQ.

  513. Reply
    Doug Nordman May 29, 2015 at 10:45 AM

    Thanks, Jennyth, glad it’s helping!

    Ideally the “decision to retire” part would follow after the “seek promotion” part has played out. But when the fun stops, it’s time to leave active duty.

  514. Reply
    Doug Nordman May 28, 2015 at 2:47 PM

    First, I hope he’s seeing a VA doctor or his primary care doc (through his civilian employer’s health insurance). A few servicemembers try to downplay (or even hide) the severity of their injury, and any delays in exams/treatments usually make things that much worse. Get healthy before you start working on the career questions.

    Once he’s updated his diagnosis and treatment plan, he should re-apply to the VA for an update on his disability. This may not only raise his disability rating but may also open the prospect of a Physical Evaluation Board. The board decides among three main options:
    – continue in the ARNG (active, drilling, or IRR) with treatment and eventually a Reserve/Guard retirement, or
    – disability retirement (Chapter 61) instead of a Reserve/Guard retirement, which would start his pension payments now instead of “retired awaiting pay”, or
    – Temporary Disability Retired List (TDRL) with periodic reassessments for either retirement or a return to duty.
    Here’s a summary of the PEB choices:

    Even when your spouse ends up with a Reserve/Guard pension (not a disability retirement), if the back injury is related to combat (or training for combat) then he may also be eligible for Concurrent Retirement Disability Pay. However the Reserve/Guard pension and the CRDP will not start until he reaches his eligibility age for the pension, which is age 60 for most Reserve/Guard retirees.

    He can read much more about his VA and disability retirement options at

  515. Reply
    Doug Nordman May 24, 2015 at 6:37 PM

    Good question, Chad, and I’m still seeking a good answer.

    The VA administers the GI Bill program, of course, but DoD approves the benefits transfer. Everything I read about the eligibility for a benefits transfer requires being on active duty or in the Selected Reserve. For example, here’s the VA page:
    the DoD fact sheet (a Word document):

    It looks like your only option would be to stay in the TR or to find an IMA billet. If I understand the AF Reserve organizational charts correctly, Cat E billets are considered part of the IRR or the PIRR.

    ALO duty seems to be Cat E or Cat B, and if you can find an ALO Cat B billet then you’d be in the IMA and still eligible to complete your GI Bill Benefits transfer. Here’s a Word document (including an organizational chart) from Chapter 12 of the handbook on the USAFA ALO site:
    And you’ve already seen this simpler graphic at the top of this post:

    Finally, this PDF from the Air University website says “Nearly all Civil Air Patrol Reserve Assistance Programs positions are Category E”:

    I’ve checked with several other Reservists, but this situation does not seem to come up very often. I’m going to write this up as an “Ask The Readers” post and see if anyone else has more experience (or at least a link).

    In the meantime, it appears that IMA is the safest alternative to drills.

  516. Reply
    Doug Nordman May 23, 2015 at 12:52 PM

    Good question, Alex, and I get it a lot!

    No, his retirement is safe. However he may be retired with a disability pension, and it may happen sooner than 20 years.

    Federal law says that once you reach 18 years of service, you can only be retired– not separated. That includes 18 “good years” as well as 18 years of active duty.

    If his injury results in a permanent disability then he could be retired now. The medical board could recommend an early retirement (based on his point count) or a disability retirement (based on the disability rating percentage). A military disability retirement is also known as a Chapter 61 retirement for the governing section of federal law. His pension would be based on the calculation that produces the higher amount.

    Of course the medical board may also recommend that he stay on duty, continue treatment, and continue as a drilling Reservist.

    He needs to make sure his diagnosis and treatment are thoroughly documented. Even if he recovers, the injury could be considered a lifetime disability (especially if it could get worse as he gets older). He should talk to a VA Veteran Services Officer to get started on a VA disability claim. He won’t need to file a claim now, but they’ll make sure that he knows what to document and how to file a claim when he does retire. Ideally he’d process the VA claim at the same time as retiring from the service, and that way he’ll maximize his VA benefits.

    If the injury was related to combat, or to training for combat, then he may also be eligible for Combat Related Special Compensation.

    As he works through the recovery from the injury, he may also want to read the PEBForum website for more advice from vets who’ve dealt with similar issues.

    Please follow the blog on Facebook or Twitter– in a couple weeks I’ll have another post on this subject from another reader’s similar question.

  517. Reply
    Doug Nordman May 23, 2015 at 11:44 AM

    Thanks, Peter, good advice!

  518. Reply
    Doug Nordman May 17, 2015 at 8:17 PM

    I get a lot of spreadsheets from readers. They’re very detailed with great formatting, and most of the readers have better spreadsheet skills than me, but here’s the thing: they’re poorly documented. It’s very hard to dig out a list of assumptions and to follow the programmer’s logic chain.

    First, I recommend that you crowdsource your feedback by posting that Dropbox spreadsheet to or It’ll attract a larger crowd there than as a comment on this blog post.

    Next, help your readers understand your assumptions. For example, how’d you determine the value of cell H39? Are you starting with $24K (after DFAS withholds 20% of the CSB for taxes) and compounding that at 10% for five years? As another example, it’s difficult to tell whether the factor “Estimated average interest rate on investment” in J18 is 7% before inflation, or 7% after inflation. The funds are probably in a Roth IRA or a Roth TSP so taxes might not be an issue, as long as that 20% withholding is enough to pay the taxes. Maybe it should be 25% withholding. Or maybe only part of the CSB could be contributed to the Roth accounts.

    We could endlessly debate the projections of the TSP C fund’s future returns or military pay growth or inflation. 10% APY compounding is not as credible as annual historical returns or Monte Carlo. The key, however, is to apply the same projections to all three factors: the CSB after-tax lump sum, its smaller REDUX pension, and the High-Three pension.

    When I used my assumptions to create this graph: from this post:
    I varied the parameters to see what combinations of returns, inflation, or military pay would make a significant difference. In nearly every case, the larger High-Three pension and its higher COLA overtook the CSB’s head start in less than a couple of decades. In almost all cases, REDUX just can’t keep up.

    Let me emphasize that point: the CSB doesn’t grow fast enough to stay ahead of the annual percentage point reduction in the pension COLA.

    Let me know what part of that PDF graph you feel may be a strawman.

    That post was written before the Roth TSP existed, though, so perhaps the Roth TSP affords an edge. However if a servicemember had the room to put their entire CSB into a Roth TSP and Roth IRA(s), that assumes they had been putting very little income into those accounts. It’s probably more realistic to assume that the servicemember (and possibly a spouse) had to put most of the CSB into taxable accounts because they’d already been contributing to their Roths.

    The one time that CSB/REDUX was a better deal was for the E-9 who served for 30 years. I’ll let the readers decide who’s confident at 15 years of service that they’ll make E-9 and stay for 30. I wouldn’t hoist that burden, let alone suggest that anyone else tackle it.