User Posts: Doug Nordman
Our Retirement – The Spending Smile Of Financial Independence

Disclosure: This article is part of the Life Uninterrupted campaign sponsored by USAA. The #LifeUninterrupted campaign is designed to help future retirees ...

Good News!  How Our Nords Family Financial Independence Life Will Change In 2019

2018 was quite the turbulent year for the financial independence crowd, and it’s just going to get busier in 2019. Let me cover a few highlights from last ...

USAA And The Final Month To Opt In To The Military Blended Retirement System

Here’s the latest information and tools to make your military Blended Retirement System decision-- and a new way to think about your career and your choices. ...

Dept Of Defense Update On The Military Blended Retirement System

On Wednesday 28 November, the DoD BRS office held a teleconference. The numbers As of Monday 26 November, the unofficial opt-in numbers are: ...

“11 Years Of Service:  How I Chose Legacy High Three Over The Blended Retirement System”

[Nords note:  You have five weeks to decide about opting in to the Blended Retirement System.  Get it done before 31 December 2018.  We've had some strong ...

Your Military Blended Retirement System: It’s Not About The Money.

We're focused on the wrong factors. Our group of military personal-finance bloggers is sending out a #BRSBlitz about the opt-in decision. You may have ...

Attack Pilot To College Sophomore To Fintech Entrepreneur

I joined the military for one reason only -- the G.I. Bill. I hadn’t considered that this decision, and the few years I’d spend in the military, ...

USAA’s Digital MilEx: Hurricane Readiness and Augmented Reality Vehicle Shopping

  The theme was: "Are You Ready?" Oooh, I almost forgot my traditional FTC disclosure: The Federal Trade Commission fears that I've lost my ...

Separating Or Retiring While Overseas (But Not With The Navy!)

A reader writes: I’ve been commissioned from the Navy’s enlisted ranks and have not yet reached eight years of commissioned service. I’m eligible for ...

Maximizing Your Thrift Savings Plan Contributions In A Combat Zone

Quick review: the military’s Blended Retirement System offers matching contributions to your Thrift Savings Plan, and in 2018 you can contribute up to $18,500. ...

CampFI And Camp Mustache Are Worth Your Time (And Money)

It’s that time of year again: people are looking at meetup dates and their travel budgets. They’re wondering why in the world anyone would want to ...

FinCon – The Financial Media Conference – How a Small Investment Can Return Dividends

It’s that time of year again: people are looking at conference dates and their travel budgets. They’re wondering why in the world anyone would want to spend ...

Browsing All Comments By: Doug Nordman
  1. 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. 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. 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. Great point, Gerald– the goals have to be worth the hassle factors.

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

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

  10. 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.

  11. 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.

  12. 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.

  13. 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.

  14. SMH,

    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.

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

  16. 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!

  17. 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.

  18. 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.

  19. 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.

  20. 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.

  21. 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.

  22. 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.

  23. 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:

  24. 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!

  25. 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.

  26. Jan,

    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:

  27. 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.

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

  29. Thanks, Peter. Good points about behavioral finance.

  30. 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.

  31. 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.

  32. Thanks, Dave, I appreciate your comments!

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

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

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

  34. 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:

  35. 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…

  36. 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…

  37. 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.

  38. 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…

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

  40. 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.

  41. 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…

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

  43. 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.

  44. 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.

  45. 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.

  46. 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.

  47. Thanks, Ryan! I’ll keep everyone posted…

  48. 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.

  49. 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).

  50. 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.”

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

  52. 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.

  53. 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.

  54. 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.

  55. Thanks, Peter– great advice!

  56. 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:

  57. Excellent points, Deserat– thanks!

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

  59. 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.

  60. 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.

  61. Stephen,

    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.

  62. 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.

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

  64. 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.

  65. 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.

  66. 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.

  67. 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.

  68. Thanks, Kate!

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

  69. 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…

  70. 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.

  71. 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.

  72. 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!

  73. 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.

  74. 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…

  75. 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.”

  76. Thanks, Mike!

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

  77. 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.

  78. 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.

  79. 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.

  80. 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.

  81. 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.

  82. 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.

  83. 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.

  84. 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.

  85. 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.

  86. 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.

  87. 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.

  88. 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

  89. 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.

  90. @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!

  91. 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”!

  92. Thanks for the trackback, PFBlogWatchDog, and feel free to leave a comment with a different perspective anytime. There are many paths to early retirement…

  93. 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.

  94. 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.

  95. 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.

  96. 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…

  97. Thanks!

    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…

  98. 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!

  99. Jan,

    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…

  100. 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…

  101. Thanks!

    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.

  102. 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…

  103. Thanks, I enjoy Paycheck Chronicles too!

  104. 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 this article covering the Trinity Research.

  105. 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.

  106. Thanks!

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

  107. 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…

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

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

  110. 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.

  111. Guilty. Seems so simple, doesn’t it?

  112. 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.

  113. 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.

  114. 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.

  115. Thanks, Scott, good to know.

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

  116. 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.

  117. Thanks!

    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…

  118. 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.

  119. 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.

  120. 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.

  121. Thanks!

    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.

  122. Thanks!

    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…

  123. Thanks, Janet!

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

  124. 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…

  125. Janette,

    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!

  126. 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.

  127. 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!

  128. 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…

  129. 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!

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

  131. 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.

  132. 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.

  133. 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!

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

  135. 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…

  136. 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.

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

  138. Jerome,

    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.

  139. Good question, Ben!

    Your plan would depend on several moving parts. First, after 20 years of active duty & AGR, you’d be eligible for an active-duty pension. If you left the AGR billet and became a drilling Reservist again then you’d need to clear that with your service. By federal law you’d also waive either the pension or the drill pay, and that might not be in your best financial interests.

    In addition, if you’re not actually retired from active duty, then you might not be eligible for Tricare as a retiree. You’d have to figure that out with Tricare for Prime, Select, or Tricare Reserve Select.

    When you’re in the civil service then you could buy your military service credit deposit with your active-duty time, but again you’d have to give up the active-duty pension. This only makes financial sense if you have a smaller active-duty pension (E-5/6 rank) and a very high civil-service job (GS-14/15). I’m not sure that could all come together within five years.

    Otherwise it might make more sense to retire from AGR whenever you’re ready to receive that pension (and Tricare). You could still obtain some civil-service credit for parts of your active-duty time without having to give up your active-duty pension. This Gubmints post has the details on a military service credit deposit for your OPM Service Computation Date:

  140. Outstanding, Tom, and enjoy the ride!

  141. Thanks for your estate-planning comments, Peter– good points!

    I agree with the weather comment. That’s why I left Pittsburgh for the Navy! Anyone who surfs in 20F weather is the real hardcore surfer, not us Hawaii warm-weather people.

  142. Exactly, Jerry. Fortunately a high savings rate overcomes a lot of “brilliant investor” distractions.

  143. Thanks, Jerry, and let us know how your next Space A flight works out!

  144. Fantastic, David, and that’s great progress!

  145. Thanks for the comment, One Sick Vet!

    Our lawyer pushed us to go deep for contingency trustees. Our son-in-law is one, of course, as is a different relative. Other options are trustworthy friends and even corporate trust companies (which charge a fee). In a situation of just you and your spouse as co-trustees, then maybe you’d choose to add more gatekeepers to the trust with a doctor’s note for dementia (or other disabling symptoms). If you didn’t use a RLT you could also use a springing durable power of attorney.

    And yeah, there’s been a lot of Swedish death cleaning & Marie Kondo around our house too. My spouse recently noted that if she could travel for 57 days with 30 pounds of luggage then perhaps we didn’t need as much of our stuff at home. That blog post is on my “To Write” list.

    I’m pretty sure that kayaks, longboards, and other watercraft are exempt from minimalist philosophies.

    Absolutely you should write a blog post about these topics! I highly recommend the Canon CanoScan LiDE series of flatbed scanners. (We have an old 210 series model.) It can detect the edges of rectangular photos, which means that you can scan multiple photos on one pass and automatically get a separate image file for each photo. But it can still take a long time (even at 20 minutes a day) to get through a multi-generational stack! We also had to take over 250 35mm slides to a scanning service, and I’d never seen most of those images before. Incredible memories.

    Last year when we finally finished scanning in ~82% of it (and organizing and labeling it) we handed out over a dozen flash drives to family & relatives. I even loaded the images on my tablet and went over some of them with an elderly aunt… she was able to zoom and scan on the photo to figure out who all those people were at my mother’s wedding.

    It’s another (much smaller) example of a multi-generational bag job that our daughter and grandkid(s) won’t have to deal with.

  146. You bet, Angela. You can e-mail questions anytime to NordsNords at Gmail.

  147. Good question, Shari, and many people are concerned about it.

    You can file a VA disability claim anytime. However instead of the claim being backdated to the date of his retirement, it’ll be effective as of the date that he files the claim.

    I’d strongly recommend filing the claim with the assistance of a Veteran Service Officer from your local chapter of the Veterans of Foreign Wars, or Disabled American Vets, or the American Legion, or even MOAA. You can learn more about VSOs at the VA’s website:
    and use their directory to search their Regional Benefit Offices:
    Your state government’s Veterans Affairs branch may also be able to help with a claim or refer you to a VSO in your area.
    You should also open an eBenefits account to track the progress of the claim and make it easier for the disability compensation deposits.

    More info is in this series of posts on why you file the claim, not just how:

  148. Thanks, Jes!

    Scott, that phone number goes to the VA’s National Cemetery Administration team:

  149. I get that question a lot, Rick!

    I can assure you (from personal experience) that you’re only compensated back to the date of your filing. Even if it takes the VA months after your filing for them to determine a disability rating, you’ll still be compensated back to the date of your filing.

    You will not be compensated back to your discharge date. However if you don’t file at all then you’ll never get compensation.

    It’s better to file now, and get it on record while you still have the documentation & memories, than to try to file later in life when you might not have everything necessary to validate the claim.

  150. Good question, Scott.

    You’d have to read the fine print in your commitment contract. Being in the IRR is normally satisfactory for longevity. If your E-7 commitment requires you to obtain points for a good year, though, then currently it’s nearly impossible to do that in the IRR.

    In addition, if you’re out of a drill billet for even one day, you’ll lose your eligibility for Tricare Reserve Select health insurance. Be very careful about depending only on the VA for your health insurance (without Tricare) for injuries or medical issues which are not service-related. Going to the IRR may not be the most financially beneficial move if you have to obtain other health insurance after losing TRS.

    The best way to estimate the amount of a future Reserve pension is to assume that it’s being paid today, and in today’s dollars. (You’ll also assume that your longevity in your retirement rank continues to accumulate through 2023, which means that you may be eligible for the maximum longevity pay at that retirement rank.) By estimating your pension in today’s dollars, you can easily compare your pension to your current expenses without having to make a bunch of further assumptions about inflation.

    While your deployments may mean that you’re eligible to start your pension at age 59.5, remember that Tricare health insurance will not kick in until age 60. You’ll still need to cover the six months with Tricare Retired Reserve insurance, or some other plan.

  151. I’m sorry to read about that, Mel.

    I’d suggest that you work with a local Veteran Service Officer or your state Veterans Administration office. You can find a VSO through your local chapters of the Disabled American Veterans, the American Legion, the Veterans of Foreign Wars, or even MOAA. Their services are free to you, and so are the services from your state vet’s office.

    They’ll help you gather the documentation for straightening out your family benefits, and then help you recoup the money that you’ve already earned and paid for.

  152. I’ve never heard that response from USAA before, RJ!

    It’s a bad idea to mislead an insurance company (let alone anyone else). You could call them back if you decide to use the loan for commissioning expenses like a security deposit on an apartment, possible deposits with utility companies, more uniforms, and travel expenses at your next command.

    When the money’s deposited in your USAA account, then the only way USAA could tell where you spend it is if you transfer it directly from a USAA account to that payee. Otherwise I don’t think they’d be able to track it.

    Stepping back from that question, here’s two bigger questions:
    1. Are you sure you want to borrow money…
    2. … and are you sure you want to pay off your student loans early?

    I would not rush to pay off a student loan if it was at a very low interest rate (<3%), or if it was eligible for programs like Public Service Loan Forgiveness or the various income-based repayment programs like IBR, ICR, PAYE, or REPAYE.

    I’d also hesitate to borrow money if those payments were higher than your current student loan payments. (By “higher” I mean “more dollars” when the loan is paid back in a shorter length of time.) You’d save interest expenses with a loan at a lower interest rate, but if the shorter amortization means a higher payment then you’d be under financial pressure to keep up the payments.

    You could achieve the same interest savings with your own additional higher payments. If you have unexpected financial issues then you’d still have the flexibility to send in the minimum required payment while you deal with the other financial issues... and then you could resume your self-imposed faster/higher payment schedule.

    When you’re just starting your military career (and a new pay record and new allowances and a new command) then I’d be very cautious about putting yourself under the financial pressure of taking out a career-starter loan. It might make sense to wait for a few months after commissioning (until your pay & allowances are running) before you set yourself up for a payback.

  153. Thanks for sharing the post and digging up that link, Brian!

    Space A is a great benefit for servicemembers who are on terminal leave and still have CAT III status. I hope your stepdad is able to take full advantage of it.

  154. Good question, Leo! When he’s a full-time student then you can claim him for your VA disability compensation eligibility up through age 23. Here’s the requirement from the VA’s website at:
    Children (including biological children, step children, and adopted children) who are unmarried and either:
    – Under the age of 18
    – Between the ages of 18-23 and attending school full-time, or
    – Who were seriously disabled before the age of 18

    I strongly recommend using eBenefits to update your claim info. Here’s an in-depth video on adding your son through eBenefits, including supplying information about the school and his program:

    You could also submit a stack of paper forms or use a local Veteran Service Officer, but eBenefits is generally worth the occasional hassle & frustration.

  155. No worries, Mark, you can buy your additional military service credit deposit without affecting your Reserve pension. That’s the benefit of the federal law waiver allowing you to collect both pensions.

    The reason you’re able to do this is because you’re paying for the credit.

  156. Thanks for sharing that story, Deserat, and you make a great point about doing our duty. We step up.

    I strongly agree with grief counseling. It’s a long process and the impact is different for everyone.

  157. Matt, the VA only says that the additional disability compensation is “to help support your family”.

    Veterans have earned (and paid for) the compensation. I’m not aware of any legal requirements on how a married veteran is expected to use their compensation. Your parents might be able to gain more insight by consulting a Veteran Service Officer in their community from the American Legion, the Veterans of Foreign Wars, the Disabled American Veterans, or MOAA.

  158. Thanks, Frogdancer, the log turned out to be very useful.

  159. Thanks, Janette, I’m glad it’s helping!

    We plan to use POD/TOD beneficiary designations for most of our assets, which is pretty straightforward when we’re dead. In case of our extended disability (coma or dementia) we plan to use a combination of a revocable living trust (real estate), durable powers of attorney (Fidelity accounts), and joint accounts (NFCU checking). All three options have their advantages and drawbacks, and we’ll discuss those.

    The best estate-planning advice is to consult a lawyer for the free hour and then pay an hourly fee for additional advice before drawing up the paperwork for your situation.

  160. Alexander, I’m not sure what “had to leave the Guard” means.

    If you have a Notice Of Eligibility (20-year letter) and filed for “retired awaiting pay” status then you’re eligible for a Reserve pension at age 60. However you could have been medically separated or even elected to be discharged. Those have different benefits before age 60 but still result in a pension at age 60.

    What status did you file for when you left the Guard, and was done with the ID card you had when you left the Guard? Most Guard retirees file for “retired awaiting pay” until their pension starts, and during that time they have a red/pink ID card.

    You could contact the nearest Guard armory and discuss your status with their personnel staff, and then figure out the ID card situation.

  161. It doesn’t look like it, Amber, but you’d want to verify that with your state Veterans Affairs office or your foster agency. The state may offer additional benefits that the federal VA does not.

    The VA’s website says:
    “You can add a dependent if: You have or adopt a child.”
    Foster children aren’t mentioned on this page.

    You could also consult a VSO in your community from a local chapter of the American Legion, the Disabled American Veterans, the VFW, or even MOAA.

  162. Linda, I’m going to assume that you’re talking about an active-duty military pension. Please let me know if I guessed wrong.

    I can’t advise you about your spouse’s qualification to receive a civil service pension. However he receives his military pension while he’s working for the civil service, and that military pension continues when he retires from the civil service to receive his civil-service pension.

    In a few rare cases, it makes sense to waive an active-duty military pension to buy the military service credit deposit in a civil-service pension. In general this works for smaller military pensions (at the E-5 or E-6 rank) and larger civil-service pensions at GS-15 or SES.

    My friend Eddie Wills has also written more details about earning credit for military service with an active-duty pension while you’re working in the federal civil service. Your spouse may have already taken care of these opportunities.

  163. I’m sorry to read about your husband, Helen.

    I don’t know of a good way to solve this problem. It’s possible that you’re considered to have opted into the Reserve Component Survivor Benefit Plan (by default) simply because you never explicitly opted out. However you’ll absolutely want to consult a lawyer about your rights.

    I realize you’ve learned a lot about the SBP in the last year. One of the best resources I’ve found is Kate Horrell’s SBP roundup post:
    You may need to refer your JAG (or civilian lawyer) to these details.

    You might also want to talk with a different VA representative. You can use your state Veterans Affairs representative (especially since you’re already talking with your senator). You could also contact a Veteran Service Officer with a local chapter of the American Legion, the Disabled American Veterans, the VFW, or even MOAA. The VSO’s services are free:

  164. Good point. I never thought of IRRRL in those terms.

  165. Good questions, Mark S.

    You can buy the military service credit deposit for active-duty mobilizations and possibly for ADSW, but not for AT or IDT. See the comment on this post at this link:

    In general, you can’t buy a military service credit deposit for service academy time. You might be able to do so if you were an enlisted admission to the service academy and dropped out before commissioning, but the laws appear to be receiving new scrutiny– especially from the Navy. See the comments at this post:

  166. Thanks for asking us, Vickie!

    It’s a scam. U.S. military servicemembers do not need to pay money to start their retirement paperwork. Especially not when they’re really generals.

  167. No worries, Greg, TERA is a reduced pension yet with the same treatment as a regular military pension.

    Depending on your civil-service seniority, it can make financial sense to waive a military pension in favor of buying your military service credit deposit. (A shipmate is a senior civil servant who retired from the military as an E-6 and opted to waive his military pension for a higher FERS pension.) However you’re entitled (by federal law) to collect your military active-duty pension and your civil-service pension as long as you do not buy your military service credit deposit.

    Eddie Wills has more advice on this at Here’s a post on the details of the military service credit deposit:
    and here’s a post on using the deposit when you’re retired from active duty:

  168. You’re welcome, One Sick Vet, and thanks for the links!

  169. You’re welcome, Spencer! Ask me questions any time.

  170. Thank you very much for your feedback, Joseph!

    I’ve never heard of such bureaucracy from the other services. I’m sorry the Navy is putting you under the microscope, and I’d hope that the other services are less intrusive in their processes.

  171. Wow, One Sick Vet, I’m sorry about your other parent.

    I wonder whether they’d accept an hour or two of “free” consultation with a lawyer, paid for by you? It looks like you’d be paying for it anyway.

    My “death log” was very helpful in a new way– I was just contacted by ANB Bank’s troubleshooter who’s going to research what they did and what they should do. Their understanding of who I spoke to and what they said was very basic and incomplete. I was able to bring up my log file and read dates/summaries of my side of the story.

  172. Good question, Linda, with complicated answers.

    If you have federal student loans and you’re working for a government or not-for-profit organization, then you’re eligible for Public Service Loan Forgiveness. The definition of that type of organization is very broad. Here’s a fact sheet:
    Part of that process might include Income-Based Repayment with forgiveness after 25 years.

    If you’re working in veteran healthcare then there’s a loan repayment program for that education:

    I think the VA also offers its employees a Student Loan Repayment Program. That might require you to actually be employed at the VA.

    Finally I’d encourage you to talk with a Veteran Service Officer (at a VA clinic), a Veterans Affairs rep at your local university, and your state’s Veterans Affairs office.

    VSOs mainly help process disability compensation claims, but they may also have more detailed information on student loans and can refer you to the right people. The veteran’s reps at university campuses are also connected to the right resources to help you review your loans and figure out your options. And finally, your state Veterans Affairs office can help you with individual state, county, city, or other local programs.

  173. Thanks for reaching out, Virginia!

    If your friend is already receiving his military pension, then the most reliable way to change the withholding would be on the Defense Finance and Accounting Service MyPay website. ( A less-reliable way would be to fill out a new W-4 and mail it in to DFAS.

    If your friend’s not yet receiving a pension then he’s not getting any money from DoD and has no military income for DFAS to withhold. He might be receiving VA disability compensation, and that flows through the DFAS MyPay website, but VA compensation is not taxable. I’m not sure whether he’d have a MyPay link to change withholding. Any changes to tax withholding would have to come from somewhere else (a civilian employer’s income?) or he’d have to pay estimated taxes.

    He can always pay estimated taxes on his own, and for that I greatly prefer the Electronic Federal TaxPayer Service ( ).

  174. Thanks for the feedback, Mike– I think.

    CFP Forrest Baumhover wrote this post exactly for this type of opinion. Too many servicemembers (and families) address the SBP and life-insurance decisions as “either or”. The actual choice is SBP, life insurance, both, or neither.

    It makes complete sense for an uninsurable servicemember to convert their SGLI to VGLI. The higher cost of VGLI (compared to typical term insurance) means that veterans only buy it for as long as they need it.

    SBP could also be the right decision for a spouse (especially if the servicemember’s longevity may be short) but it’s not the right choice for all spouses. Some might have their own assets and would prefer to avoid paying SBP premiums for an annuity that they don’t need or want. The money not spent on SBP could be spent on the servicemember’s care or just to enjoy life together.

    This post was written to address one part of a controversial topic. The book covers all of the options of SBP and life insurance. The rest of this site also covers other SBP and life insurance options. One example of that is Forrest’s other post:

    As always, veterans like you are welcome to write a guest post describing their military transition experiences and how they made their financial choices.

  175. Thank you, NCBill, that’s good advice!

    You have to trust the co-trustee even more than a successor trustee, but when a grantor/co-trustee is disabled then having you as another co-trustee certainly cuts down on the gatekeepers and the bureaucracy.

    Among all the issues with my father’s lack of financial planning and estate planning, his residence and vehicle were the least of our problems. Dad had sold his home long ago and lived in a series of 2BR apartments before having to move into a care facility. When he moved to the care facility, he agreed to sell his SUV to my brother (for $1). That helped a tremendous amount when Dad needed transportation for a medical appointment or just wanted to go for a drive and a Sunday brunch.

    We’re taking a similar estate-planning approach in our family, and I’ll write about that in a future post.

  176. Good questions, Joshua. I’d seek the opinion of a second VSO, and you might even want to consider paying a lawyer who has experience in dealing with VA appeals.

    If you haven’t already done so, the first step is getting a copy of your C-file. I realize that your claim was denied, but your appeal (and your updated claim) will include everything that the VA omitted (or got wrong) in your original claim. Your VSO should ideally have already started that process.

  177. No worries, One Sick Vet, we all get to judge our own value of our spending!

    I wrote this post for analyzing financial independence without a military pension. The numbers, ratios, and graphs are our actual spending (from our years of Quicken and Personal Capital data) and include the principal & interest payments on our home’s mortgage.

    The post also assumes that we only have our investment portfolio to support that spending– no home equity, no rental income, no pensions.

    This was the scenario we faced in 1999 when my spreadsheet showed that we had the investments to support the 4% SWR, yet we did not have my pension.

    Today’s reality is that we’re spending my pension checks *and* withdrawing from our investments. Life is good.

    When I was crunching the spreadsheet numbers, I also noticed the interesting drop in our non-discretionary spending.

  178. Thanks, Nathan, good point!

  179. That’s a very good question, Heatherann. I don’t know the answer, let alone whether DFAS is doing it right. If you’ve just reached that 30-year mark, then the adjustment to your pension might happen on the next deposit (a month in arrears).

    I’d file a request with DFAS to make sure they haven’t overlooked it.

    The legal references are Title 10 U.S. Code, with different sections for each of the services:
    Army: 10 U.S.C. § 7344
    Navy/Marines: 10 U.S.C. § 8334
    Air Force: 10 U.S.C. § 9344

    The Financial Management Regulation (DoD 7000.14-R), Volume 7B Chapter 9, describes the procedure which DFAS follows:
    It goes into great detail on the computation, but it doesn’t mandate that you request it.

    I’d contact DFAS through this link:
    or submit a ticket through their online customer service site:

  180. Tom, I’m a little confused by your chronology. Let me back up and try to understand the numbers.

    When you reach 20 good years among the services, then you’ll receive a Notice Of Eligibility confirming your good years and listing your points. However it’s quite common for the various service databases to not communicate with each other, so you’d want to make sure that the Army National Guard has all of your Air Force records and point counts (both active duty and Reserves).

    You can keep serving as long as you can get a billet (in any of the services), and if your performance is satisfactory then you can certainly go past 20 good years. You can also continue to apply to your federal civil service HR staff to buy your military service credit deposit.

    I’m not sure what you mean by “continuation of earning points” or “challenge lost points”. If there are errors or omissions from your point count then you’d have to submit copies of orders and DD-214s to your National Guard unit to correct the records.

    In the last few years it’s become very difficult to obtain points in the IRR. If you’ve submitted records for correspondence courses or funeral services then you’d have to follow up with your unit to make sure that those accomplishments were still good for points and credit toward a good year.

    We can continue the discussion on this post’s comments thread, of course, but you can also e-mail more details and questions to NordsNords at Gmail.

  181. Thanks, LT! Yep, the numbers are showing that the 4% Safe Withdrawal Rate is working the way it’s supposed to work, and that the numbers are following the “high success rate” probability.

    If there was going to be a failure of this portfolio, it would’ve happened during the first decade. Instead it’s growing faster than inflation, and at the long-term rates. Now that the SWR has dropped below 3%, it’s indefinitely sustainable.

  182. I’m glad it’s helping, Derek, and I think you’ll enjoy your retirement!

  183. Thanks, Peter. I agree that emotions (behavioral financial economics) can derail the logic & math of our financial plans.

    The good news is that a high savings rate can go a long way toward overcoming those money attitudes too.

  184. Great question, Francis!

    You can stay past 20 good years in the Reserves/Guard as long as they let you stay.

    However to be eligible for Tricare Reserve Select, you have to be in a drilling status (pay billet). If you go into the IRR for even one day then you technically lose your TRS insurance.

    Here’s the requirement list from the Tricare site at:
    “Members of the Selected Reserve (and their families) who meet the following qualifications:
    Not on active duty orders
    Not covered under the Transitional Assistance Management Program
    Not eligible for or enrolled in the Federal Employees Health Benefits (FEHB) program
    Note: Those members in the Individual Ready Reserve including Navy Reserve Voluntary Training Units do not qualify to purchase TRICARE Reserve Select.”

  185. Good question, Shane, you made me think!

    For personal-finance fiction, I highly recommend MK Williams’ “Enemies Of Peace”.
    We enjoy nerding out together about writing, and I need to make the time to read the rest of her books.

    Otherwise there’s minimal value and maximum escapism in my fiction reading. I’ve been a science-fiction reader since the 1960s, and today it continues with trashy military science fiction and action-adventure novels. Those authors currently include John Scalzi, Jim Butcher, Richard Fox, Stephen Konkoly, D.J. Molles, Kacey Ezell, Larry Correia, and John Ringo. I still use the library but Amazon makes it all too easy to follow my favorite authors and to click the Kindle buy button for immediate gratification.

  186. Great question, Dan, and you’ll want to discuss it with a JAG.

    You’ve probably served satisfactorily as a National Guard E-7, and there’s no minimum time in grade at that rank. No issues there. By the Reserve pension calculation procedures, your pension would also be calculated at the E-7 rank.

    However your new Army Reserve enlistment agreement might have a clause in it which waives your E-7 rank for a re-enlistment rank of E-6. I don’t know enough about those contracts to know whether it affects your retirement rank.

    I recommend that you discuss this with a JAG who’s familiar with the federal law of Title 10 U.S. Code section 1407 for calculating a pension.
    They’ll be able to review your re-enlistment contract (and its references to the federal laws) to determine whether that somehow resets your retirement eligibility to your current rank.

    There’s also a section of federal law (the Army version is Title 10 U.S. Code section 7344 ) regarding your highest rank held. When you’ve reached a combination of 30 years of active service and years on the retired list, you’re eligible to be advanced to the highest grade that you held held satisfactorily. It has limited applicability to the Reserves and National Guard but your pension would eventually be adjusted to reflect your E-7 rank.

  187. Jesse, the simplest method would be logging in to your eBenefits account and adding your family members.

    Since you may be eligible for back pay, you might want to visit your local Veteran Service Officer and figure out how far back the VA will go. They can also add your family members, and they may want to see marriage certificates & birth certificates.

  188. That’s a good insurance question, Charlene, but without knowing all the details I’d suggest that you talk with your Tricare Regional Office ( ). They can help determine what coverage (if any) would be related to the car accident.

    You might want to choose a new primary care manager as well. You want someone who’ll help educate and reassure you, not someone who’s rude. If you’re not able to find a better primary doctor through Tricare Prime then I’d look into Tricare Standard when you have a qualifying life event or your next opportunity to change your enrollment.

  189. Thanks for the great news, Tamra!

    You’ve highlighted the importance of contacting each company to ask them individually, whether or not that company seems to have honored he requests of other military families.

  190. Morris, I’m a little confused by the term “discharged”.

    If you’ve served at least 20 good years in the Air National Guard and have your Notice Of Eligibility for retirement, then a Medical Evaluation Board would consider you for transfer to the Temporary Disability Retired List or a medical (disability) retirement.

    In any case your retirement rank would be subject to federal law Title 10 U.S. Code section 1372, which generally entitles you to the highest rank in which you satisfactorily served. I’m not aware of any minimum time-in-grade requirement for the E-8 rank.

    Your E-8 pension would be calculated using the pay tables in effect during the year when you reach the age to start your pension (generally age 60) and at the longevity for your E-8 rank as though you’d been on active duty the entire time you were “retired awaiting pay”.

    In case I’ve misunderstood any state rules about your state’s Air National Guard billet, you should seek the advice of a JAG who’s familiar with your unit.

  191. Great question, Adam!

    By Tricare’s rules, it’s immediate:
    “Your coverage automatically ends if you leave the Selected Reserve or lose eligibility for any other reason. You may purchase TRICARE Reserve Select again if you re-qualify.”
    It may take Tricare a few weeks to process a claim, but they’ll eventually check a servicemember’s drill status and deny the claim if they were in the IRR on the date that they used TRS.

    Full info on ending TRS coverage is at this Tricare link:

  192. Thanks, Deserat, you and I went through many of the same experiences during those years!

  193. Thank you, Jackie! This post is built from that original one-page (two-sided) handout of bullet points and these photos. It’s all here, although this post goes into more detail than the handout.

    I usually only talk for 25-30 minutes and fill the rest of the time with audience questions. I include more info in the handout than I cover in the presentation, so that people can follow up with me later about other questions instead of asking about a PowerPoint.

    As you know, when a speaker stands up in front of a military audience and reaches for a remote control, everyone groans inside. (Or checks out, or goes to sleep.) When I stand up in front of a military audience and announce that I’m not using PowerPoint, people actually pay attention and start reading the handout. Since I had to use PPT for eight years of instructor duty, ditching it for my own talks gives me a little thrill of being a rule-breaking rebel.

  194. It’s a tough conversation, One Sick Vet, and I appreciate you stepping up to get it going!

    And yeah, I’m keenly aware of the parallels between good financial decisions and good lifestyle decisions. I’m also finally thankful for all of that military experience at motivation, planning, and persistence…

  195. Thanks, Dan, sometimes we make this financial independence process a lot harder than it needs to be!

  196. Good question, Mitch. You’d want to check the results of your Medical Evaluation Board and your retirement (discharge?) orders.

    If you served a total of at least 20 good years in the Guard (made up of active duty, drilling, and AGR) then you would have received a Notice Of Eligibility for a pension. The MEB would have awarded you the higher value of their disability rating (as low as 30% to the federal law’s maximum of 75%) or of your pension amount. Again you’d have seen these findings in your MEB package and your retirement orders.

    The MEB disability percentage and your pension are completely separate sections of federal law from your VA disability rating. If you were eligible for a National Guard pension (or if you were awarded a disability pension by the MEB) then it starts at age 60 and in addition to your VA disability compensation. You’ll get the military pension and you’ll continue to get the VA disability compensation.

    If you served in a combat zone (like Iraq) after 28 January 2008 then you’d be eligible to start your pension three months earlier for every 90 days (of the fiscal year) in the combat zone.

    The best way to verify this information is to review your MEB package (and your retirement orders) with a JAG or with your unit’s personnel center.

  197. I’m not sure that I fully understand the question, Armida, but when you retire from the military then the only spouse signature that I can think of is their agreement on the amount you’ll choose for the Survivor Benefit Plan. Even then, if they don’t sign then the SBP defaults to the full amount of coverage.

    Please tell me more about what you mean by “a retirement certificate obtained by Army attendee”, but you’ll get a retiree ID card. A retirement certificate is usually provided to you by the Army as part of the retirement process.

    At any time, in war or in peace, the military can invoke a stop loss on servicemember separations and retirements. Your pay and benefits (and the rest of your career) will continue during the stop-loss extension, of course, but you can only leave the military with your service’s approval (and the set of orders).

    Please let me know if this doesn’t answer your entire question. You can post a comment here or you could also e-mail me at NordsNords at Gmail.

  198. Alberto, my first recommendation is getting healthy. Regardless of how you do with the VA, you should consult with your doctor to do as much as you can to stabilize your back and hopefully heal more.

    Separately, talk with a Veteran Service Officer about the possibility of other records of your visit to the corpsman. (There may be something in a Marine archive.) If there was never an official record of your visit to the corpsman then you might also try “buddy letter” statements from fellow recruits or drill instructors who could have witnessed your injury.

    VSO services are free. You can find a Veteran Service Officer from your local chapter of the Disabled American Veterans, the American Legion, the VFW, your local VA clinic, or even MOAA. They’ll go through your medical & service records to help you find as much info as possible for your claim.

  199. Great question, Kristina!

    First, if you haven’t already done so, I’d recommend reviewing your medical records (civilian and military) and service records with a Veteran Service Officer. They can help you document the service connection between the military and your discs. You can find VSOs at your local chapters of the Disabled American Veterans, the American Legion, the VFW, and even MOAA.

    Next, it’s possible for you to be medically retired due to your length of service. The rules for a disability retirement are complicated and the process is lengthy, but you essentially get the higher pension amount of your disability rating or your equivalent years of service (active duty plus Reserve points).

    I’d recommend joining and posting specific details about your symptoms and your length of service (point count). The site was founded by a JAG and has hundreds of members who’ve been through similar situations.

  200. Great question, AF Guy. The default is indeed “retired awaiting pay” but you’re smart to make sure it’s not inadvertently set to “separated” or “discharged”.

    Each service has a different retirement procedure. You’ll want to talk with your unit’s chain of command or confirm “retired awaiting pay” with the local Reserve center or your service’s Reserve personnel HQ.

  201. Terence, after a 13-year break in service you’ll want to start with the military recruiter for your chosen service. (That could include National Guard as well as the other active-duty and Reserve services.) IRR is certainly one of the options but each service has their own policies.

    These days it’s also considered very difficult to earn points toward a good year in the IRR because many of the military correspondence courses are no longer eligible for points.

  202. You’re welcome, Chad, I enjoyed reading it! You (and the other BiggerPockets authors) have shown a lot of people how to reach their financial freedom.

    And yeah… come on over to Hawaii someday, and you’ll paddle out to see what we’re all so happy about.

  203. Brian, IMAs are “Individual Mobilization Augmentees”. They’re service-specific programs where you work with active-duty commands instead of being attached to a Reserve unit. Here’s one example for the Army Reserve:

  204. Great question, Ben!

    When you start your pension at age 60, you have to get a new ID card from your local RAPIDs facility. Your ID card changes to the blue retiree version and the issuer updates the DEERS database.

    In addition to your pension, DFAS updates your Survivor Benefit Plan status (if you opted for SBP). The transition to your retiree ID also turns on your eligibility for Tricare (Prime or Select health insurance) and the Veterans Administration (in case your military pension is offset by any VA disability compensation). You’re eligible to fly military Space A worldwide (not just the U.S. and some territories). And finally, it continues to give you base access because many military base security guards will now confiscate an expired ID.

    The amount of your pension depends on which retirement option you chose in 2006. 99.99% of Reserve/Guard servicemembers opt for “retired awaiting pay”. By federal law for that option, your pension is calculated from the pay tables and longevity for your rank as though you’d been on active duty all the way up to the start of your pension. You’d get all the pay and longevity increases since 2006.

    The reason that “retired awaiting pay” includes all the pay and longevity increases is because gray-area retirees are also subject to recall to active duty for a total mobilization. That last occurred during WWII.

    Because of that very small risk, a few Reserve/Guard retirees opt for “separation” or “discharge” when they file for retirement. That prevents being mobilized before their pension starts at age 60, but it also freezes their pension at the pay tables and longevity which were in effect when they made that choice.

    You probably chose “retired awaiting pay” and you’ll get the increases.

    By the way, your new blue retiree ID should expire on the day before you turn age 65. That’s to make sure you sign up for Medicare by age 65, which you’ll have to do in order to get a new retiree ID with eligibility for Tricare For Life insurance. That’s supplemental Medicare insurance which covers the Medicare copay.

  205. Good question, Jason!

    It depends on the nature of the orders (training versus active duty). You might also have been required to sign a waiver of sanctuary as part of receiving the orders for which you’ve volunteered.

    It’s highly unlikely that the AFR is sending you to a training program that would result in an active-duty pension at 20 years.

  206. You’re welcome, Avee, I’m glad it’s helping!

  207. 3.1 versus 3.7 years seems pretty close for compounding math. How does 9.3 years look for your work/life balance?

  208. Kerry, I think we’re mixing numbers here. The SWR was set at 2% because Grunhead wanted to be extra (perhaps excessively) conservative.

    In a separate calculation, he reduced his spending from 0.4 to 0.2. That should boost the savings rate from 60% to 80% because it all adds up to 100%. Whatever is not spent is now being saved.

  209. Each service does it differently, Whitney, and I’m not sure of their specific processes.

    Talk with your chain of command, and that’ll also help you get an estimate of when you’d be able to stop showing up for drill weekends.

  210. That’s never an easy answer, Eric. It’s possible that your service could offer an early-discharge program, but those are scarce now that the drawdown has ended. If you took a bonus payment for that commitment then you’d almost certainly be expected to pay it back.

    Severe medical or physical issues would be assessed through the medical evaluation board process, and you’d talk with a medic or doctor about that.

    If you’d rather dig into the details outside of the blog comments, then I’m at NordsNords at Gmail.

  211. Thanks for the feedback from the other side of the fence, Dan, and I hear you on optempo.

  212. You bet. If I can help with more questions, please let me know where to find that wrong manual.

  213. You’re welcome, Life2.0, and I’m glad it’s helping!

    Congratulations to both of you on your retirement!!

  214. Tim, your finances will depend on how much you’ve managed to save and invest during your time in uniform– that includes contributing at least 5% of your base pay to the Thrift Savings Plan in order to get the full DoD BRS match.

    There’s no pension with just five years of service, but there may be transition benefits (healthcare and job search assistance) as well as the GI Bill, the VA’s vocational rehabilitation training, and VA disability compensation. Here’s a short summary in federal law:

    It’s quite possible to leave the military short of the pension eligibility. However federal law protects servicemembers who have at least 18 years of service to be able to serve until they reach military retirement eligibility.

  215. Bill, the first thing you should do is talk with your doctor and your physical therapist to get as healthy as you can.

    From reading those posts, you already know that you have to show a service connection in your military medical record (and service record) to document the injuries leading to your disability. You also have to show that you need continuing treatment, because if you don’t continue to seek treatment then the VA decides that you’re “cured”.

    If you haven’t already done so, please talk with a Veteran Service Officer. They’ll guide you through the process and keep you updated on the VA’s status of your claim.

  216. Ryan, you could absolutely move to the IRR to do your voc rehab. You’d also free up your current billet for someone else, although your unit might still have your name in their database for tracking your IRR status.

    The issue is whether you’d be able to return to drill status and finish your 20 good years. These days it’s nearly impossible to earn a good year in the IRR because so few correspondence courses are given point-count credit. You also can’t predict the personnel & funding situation that will exist when you want to return to drill status– you’d hate to be forcibly discharged after just two years due to some “inactive status” policy change.

    Keep in mind that you have to be in a drill billet for Tricare Reserve Select insurance. If you go to the IRR then you’ll have to figure out your own health insurance, and again it might be a struggle getting back into that drill billet.

    Before you take the IRR step it’s worth asking your chain of command about options like IMA, rescheduling drills, quarterly drills, or being cross-assigned to another unit close to your voc rehab location. There might be other opportunities for unpaid duty (yet still points) to get you through those good years. You might even be able to get a one-time “authorized absence” for six months, although not all services offer that option.

  217. Sorry to read about this, Rhode. You’d definitely want to have a new C&P doctor if you had any choice in the matter.

    I think your VSO is giving you good advice. I’m not aware of any way to correct a C&P exam before it’s reviewed by the VA’s rater, although this exam might have so many problems that the VA asks for another one. The VA already has a copy of your records, and hopefully the rater will note the exam’s errors.

    Either way you’ll hear from the VA, and if they don’t give you the appropriate rating then you’ll obtain your claim file and put in an appeal. (That’s the process which the VSO knows very well.) The updated rating will be delayed, but the appeal means that it’ll be paid back to the original date of your new VA disability claim.

  218. Like Brad’s comment above, Paolo, you’ll make the decision each year based on your expected income.

    Junior enlisted and junior officers are in one of the lowest income-tax brackets you might ever see. In addition, when you’re eligible for the Earned Income Tax Credit (and possibly for childcare credits), your effective income-tax rate is even lower. This point in your life is a clear winner for the Roth TSP, a Roth 401(k), and Roth IRAs.

    As your income rises, you’ll compare your new income-tax brackets (and any tax credits) to your future tax brackets (with perhaps no future tax credits). You’d have to forecast the impact of Required Minimum Distributions from traditional retirement accounts (at age 70.5) on the taxation of your Social Security and possibly higher Medicare premiums (IRMAA). Even though your income is rising, you might decide that a Roth TSP, a Roth 401(k), and Roth IRAs are still better for paying the income taxes now and never having RMDs again. Even if your income rises too high to contribute to a Roth IRA (a good problem to have!) you’d still be able to make non-deductible contributions to a traditional IRA and then immediately convert it to a Roth IRA.

    Somewhere in your 40s or 50s, depending on your FI date and your spouse’s career, you might encounter a few years when you have very low earned income. That depends on whether you have an active-duty military pension in your 40s, your own bridge career, a Reserve pension at age 60, or no pension at all. (It also depends on your spouse’s earnings.) If you predict a period of very low earned income then it’s a great time to convert traditional retirement accounts to Roth accounts. The problem is accurately predicting your FI plans and your spouse’s career timing.

    Keep in mind that deployments to combat zones usually mean that you’ll earn combat-zone tax-exempt pay. (This also applies to some overseas duty stations in combat support areas.) That period of low taxable income is another opportunity to contribute to the Roth TSP, your spouse’s Roth 401(k), and your Roth IRAs. You might even decide to partially convert any traditional IRAs to Roth IRAs.

    Finally, you might choose to contribute to a Roth IRA just for the flexibility of being able to withdraw the contributions at any time for any reason with no taxes or penalties. That’s a valuable move during the years after you leave the military and before reaching the age 59.5 eligibility for qualified withdrawals. You could tap your taxable accounts anytime, of course, or tap a Roth IRA earlier through a Roth IRA conversion ladder. However the Roth IRA contributions are even easier to use for post-FI living expenses.

  219. Hector, I’d start by visiting a Veteran Service Officer for a review of what’s been done and what needs to be done. You could start with a copy of your VA claim file (if you have your C-file) and your DD-214 discharge paper, and later add your service & medical records.

    You can find a VSO at a local VA clinic or local chapters of the American Legion, the DAV, the VFW, or even MOAA. You might also be able to get help from your state’s veterans benefits agency– state benefits as well as the VA’s federal benefits.

    The “Related Content” links up in that post have more information about submitting a claim and updating it.

  220. Zach, I’m pretty sure that does not count. It’s only for mobilizations to combat zones and (much later) national emergencies. It’s actually three months of earlier retirement for every 90 days deployed in those situations, and in most cases the 90-day period had to be within a fiscal year.

    You can read the full discussion of the qualifying criteria at this post from my friend (and National Guard servicemember) Ryan Guina:

  221. You’re right, Phil, when you “retire awaiting pay” with at least the minimum time in W-5 rank then your pension will be based on the W-5 pay tables.

    The formula will use the average of the highest 36 months in the future W-5 pay tables in effect when you’re ages 59, 58, and 57, and at the longevity in your W-5 rank as if you’ve been on active duty up to age 60.

    You’ll also be eligible to receive your pension three months earlier for every 90 days (in a fiscal year for most cases) which you’re mobilized to a combat zone (or a national emergency for some cases) after 28 January 2008.

  222. Greg, I’m sorry to say that a lump-sum payment is not available under the Final Pay or High Three pension systems.

    There is a lump-sum provision in the new Blended Retirement System, but it’s a terrible financial deal. It’s only available to those who’ve opted in to the BRS or joined the military after 1 January 2018.

    If you’re referring to your Thrift Savings Plan account, then once you’ve separated or retired from the Guard then you can transfer that to an IRA or another 401(k) plan.

  223. Thanks for your support, Brandon, and I’m glad the info is helping!

  224. That’s a tough question, Tom, and I can’t find a straightforward answer. You’ll need to consult a Veteran Service Officer, a JAG, or a lawyer who’s familiar with veteran’s benefits.

    Your parent is a dependent when you’re supporting them, but the financial qualifications for additional disability compensation are based on both income and assets. In addition, there’s a separate program of Dependents and Indemnity Compensation for the parents of a deceased veteran. Both are mentioned in the Code of Federal Regulations for Title 38 of U.S. Code:
    but it’s hard to tell which sections apply to veteran’s disability compensation (with dependent parents) or the surviving parents’ DIC of a deceased veteran.

    The basic definition is on the VA’s website:
    “Parents, who are in your direct care and whose income and net worth are below the limit set by law.”

    A parent’s application is not handled by eBenefits but rather has to be filed with VA Form 21P-509.
    Before you spend the time filling out the form, it’s possible that a VSO (or the lawyers) will have the latest guidelines on accounting for the parent’s income & assets.

  225. All that’s correct, David, but keep in mind that active-duty and Reserve retirements start on the first of the month. (Disability retirement dates are set by a different process.) In addition, the pay base of a High Three pension is the average of the highest 36 months of pay, and a military pay raise during the last year of service does not have a significant effect on that average. Finally, the amount of pay & allowances earned during the final year is a far greater effect on the size of the pension than the COLA in the following year.

    In other words, the COLA is one of the least significant issues in the timing of a military retirement. However the system is confusing, and this post helps military families predict their pension income for the years after retirement.

  226. Jorge, what 2018 chart are you comparing the rates to? The rates on this post’s 2019 tables are at least 2.8% higher than the 2018 rates.

    In 2018 my VA disability compensation (30% rating, no kids) was $466.15. In 2019 it’s going up to $479.83.

    What disability rate are you searching for? How much was your last compensation deposit?

  227. I don’t have an answer for that question, Tiffany. The VA only issues a paper check for situations when direct deposit is not available, and these days a paper check is relatively rare.

    It could take several months once the disability rating is calculated and the award letter is issued.

    The best way to answer your question is to check the status of your claim in eBenefits. (Make sure eBenefits has your banking deposit information as well as the info for your family members.) If eBenefits doesn’t have the estimate of when your retroactive payment should be deposited then I’d check with a Veteran Service Officer in your area.

  228. Mike, those are great questions, and I’m pretty sure that federal law (Title 10 U.S. Code section 1370) takes precedence over AR 135-180. However it looks like the Retirement Services section misread Table 4-2 on page 10 of AR 135-180. You can confirm that with a JAG or with a civilian lawyer who has military experience.

    The relevant part of federal law is 1370(d)(3)(A):
    “(A) In order to be credited with satisfactory service in an officer grade above major or lieutenant commander, a person covered by paragraph (1) must have served satisfactorily in that grade (as determined by the Secretary of the military department concerned) as a reserve commissioned officer in an active status, or in a retired status on active duty, for not less than three years.”

    Paragraphs (B) through (F) cover some exceptions to that three years which apply to very few people. They’re essentially for situations beyond your control which prevent you from serving three years, or when you’re an O-5 select (still awaiting Congress’ approval for promotion) serving in an O-5 billet.

    The part which I’m frequently asked about is paragraph 1370(d)(5)(A). It authorizes the Guard to waive that three-year requirement to two years:
    “(A) The Secretary of Defense may authorize the Secretary of a military department to reduce the 3-year period required by paragraph (3)(A) to a period not less than two years.”
    You have to request the waiver, they have to approve it, and two years is a hard minimum. Two years is usually approved during drawdowns when someone’s already available to take your billet.

    Table 4-2 of AR 135-180 appears to match federal law with the “Voluntary separation” column for the “Officer: O5 and above” row requiring three years. The six months would only apply if you were being involuntarily retired (1370(d)(3)(B) through (F)).

    From the vocabulary used during your conversation with the Retirement Services section, it’s possible that they misunderstood your question. “High Three” is a pension calculation, not a time in grade. If your Date of Initial Entry into Military Service (the date you received your very first military ID) is before 8 September 1980 then your pension is calculated using the Final Pay system. That’s pretty rare these days, and us remaining Final Pay dinosaurs who are still in uniform are either admirals/generals or Reserve/Guard members with very long breaks in service. Let me know if you have a DIEMS before that date, even for the Delayed Entry Program or by attending a service academy.

    Otherwise if your DIEMS is after 7 September 1980 then your pension is High Three, calculated from the average of the highest 36 months of pay received during your career. (That’s completely separate requirement from three years’ time in grade.) For a Reserve pension you’d retire as an O-5 if you met the Title 10 U.S. Code section 1370 requirements, and then the High Three calculation would determine the pay factor in your pension. If you did not meet those time-in-grade requirements (or at least get a waiver to two years) then you’d be retired as an O-4.

    Those DIEMS dates and High Three calculations are in paragraph 4-6 of AR 135-180 and also in federal law.

    I’ve been crunching pension numbers for nearly 20 years, and I have no idea where that point-value system came from. (It’s certainly not in federal law or on DoD’s website.) Every time I get that question it causes confusion– even if the Guard tables are up to date. I find it far easier to manually calculate the High Three average.

    As mentioned in the post above, once you have your Notice Of Eligibility letter then there are two ways to receive a pension from the Reserves or Guard. One way is “retired awaiting pay”, which almost everyone chooses. (The other option is “discharge” or “separation”, which I’ve only seen twice.) When you apply for “retired awaiting pay” then your High Three pension is calculated from the pay tables in effect at the time you start your pension. (That’s usually age 60, or possibly three months earlier for every 90 days mobilized to a combat zone or for a national emergency.) That’s because during the grey-area years of “retired awaiting pay” you’re technically subject to activation for a total force mobilization (which last happened in WWII) and you’re considered to be serving (for the longevity column in the pay tables) as though you were on active duty right up to the day your pension starts.

    This means that you have to serve three years’ time in grade to retire at the rank of O-5 (waiverable down to two years) but you do not have to worry about MRD. You’re simply continued in your “retired awaiting pay” status until you reach age 60. You’re given all of the increases in the pay tables because your pension will be calculated from the pay tables in effect in 2034– and at the O-5 longevity as if you’ve been on active duty the entire time.

  229. Thanks, Dan, and I appreciate your help in spreading the word!

  230. My condolences on your father’s death, Roger.

    I agree with you about the choices. The “worst” part about the FLTCIP is their ability to raise the premiums (or cut benefits). People drop their insurance policies when rates are increased, which artificially raises the lapse rate of that cohort and helps the policies avoid further losses. Many state insurance commissioners have laws against raising premiums on a LTC policy cohort, but FLTCIP is a federal program.

    I agree with the crap-shoot aspect of the hybrid life-insurance/LTC policies. However they seem to be a better way for the insurers to make money, which might be the only way the industry can survive. Insurers charge higher (whole-life) premiums for the life insurance and hope that you either never need the LTC (the “die early” option) or else die quickly once you’re in a care facility. Of course the only people who buy these policies are people who suspect that they’re going to need LTC. The insurers understand that now, which is why the policies are so complex and varied.

    The best resources for the latest info seem to be the Bogleheads forum and I’ve been a member of both for 10 and 15 years, and the discussion will lead you to people in your state who’ve done their research. From there you can get referrals to fee-only CFPs and insurance brokers. You could also check their quotes against USAA, although USAA might not have the best policy benefits. USAA has great member service but they frequently contract out their LTC policies to Metlife or John Hancock.

    The only change in the last four years (besides further consolidation in the LTC insurance industry) has been the adoption of principle-based reserves for life insurance.
    That might lower the premiums a little on a hybrid policy. Even so I’d still check with your state regulators to see an insurance company’s complaint record. You want to have a fair experience when you file a claim.

    The bell curve of Alzheimer’s survival extends out to 20 years, but its median seems to be about 3-4 years. My father’s 6.5 years of care cost a grand total of $625K, which included Medicare supplemental insurance premiums and prescription copays and (later) a memory care facility. Dad’s LTC insurance policy covered about half of that expense.

    Because of the stress of LTC insurance claims on caregivers, my spouse and I are self-insuring for our LTC. Our military pensions (and our Social Security benefits at age 70) will defray most of the expenses of a care facility. That should give us a long time in a private-pay facility before needing to file for Medicaid.

  231. You’re welcome! I’m glad it’s helping.

  232. You make a good point, Brian! The answer is “only a handful, unless they do more orders”.

    Even an E-9>38 earning $8242/month in 2019, and reaching 78 points (48 drills, 15 days of AT, 15 participation points, not considering any limits on annual points) would only have base-pay earnings of $21,429.20. They might have specialty pays or bonus pay as well.

    However the TSP contribution limits ($19,000 in 2019) are set by federal law for 401(k)s and not by DoD. A Reservist who wanted to hit those contribution limits from their drill pay would have to do some extra orders or mobilize.

    Keep in mind that those contribution limits are tracked by Social Security Number, so a Reservist with a civilian career would have that $19K limit apply to the total of their contributions to their civilian 401(k) as well as their TSP. That’s in a footnote to the contributions table on the TSP website:

  233. Brian, the Reserve point-count system stays the same under the BRS. The only change to the BRS pension formula is a multiplier of 2.0% instead of 2.5%. That’s why the BRS pension is 20% smaller than the Reserve legacy High Three pension.

    However Reservists also keep their own TSP contributions and the DoD’s BRS agency/matching contributions. If that 11-year TSGT with 3000 points opts in to the BRS, then when they contribute at least 5% of their base pay to the TSP then they’ll receive the full 5% agency/matching contributions from DoD.

    If they never get another point or promotion and retire awaiting pay at 20 good years as an E-6, then their pension is calculated from the pay tables in effect when they’re 60 years old– and at the pay longevity as if they’d been on active duty the entire time.

    You could estimate that pension with the latest pay tables. E-6 pay tops out at $4047/month in 2019, in 2018 it was $3944.10/month, and in 2016 it was $3772.50/month. The High Three average (2018, 2017, and 2016) is $3921.20. The estimated pension would be
    (3000 / 360) x 2.0% x $3921.20 = $653/month in 2019 dollars.
    (That amount would be higher at age 60 in future dollars.)
    Of course this Reservist would certainly accumulate at least 500 more points during their career and perhaps a promotion or two.

    In addition to the pension, the Reserve retiree would have all of their own TSP contributions over the years (at least 5% of their base pay) plus the BRS 5% agency/matching contributions.

  234. You’re absolutely right, Kate, and the BRS office has specifically avoided talking about these financial planning and estate planning topics.

  235. Good question, Andrew, and the answer needs some math. I don’t use point valuation factors because they’re frequently approximated or even outdated. They also neglect additional expenses like health insurance.

    Instead I estimate the pensions at the different retirement dates and ranks.

    From the information you’ve mentioned, it looks like you’ll turn 60 years of age in March 2021. (Please correct me if I’m wrong on that.) No matter when your pension may start, age 60 is when you’ll also be eligible for Tricare Prime or Select as a Guard retiree. That part is in federal law.

    If you leave your drill billet before March 2021 then you’ll lose Tricare Reserve Select ($43/month or $218/month for member or family in 2019) and have to spend additional money for Tricare Retired Reserve ($452/month or $1083/month in 2019). You might find a cheaper health plan from a civilian employer or on the federal/state ACA exchanges but Tricare may have better copays, deductibles, and caps.

    It also looks like you’re eligible to start your pension in November 2019. You’ll have to make sure that your 90-day periods are all done in the same fiscal year (up through September 2014) for deployments to combat zones. More details on those requirements are at Ryan Guina’s post:
    More importantly, you’ll have to make sure that HRC agrees with your 90-day accounting and will start your pension in November 2019.

    If you retire in the next few months then you’ll pay for your own health insurance for about 24 months. If you continue to drill until age 60 then you’ll receive drill pay (at the E-7 or E-8 rank) and you’ll keep Tricare Reserve Select. You’ll want to do the math for those incomes and expenses as well as your pension calculations.

    You’re under a High Three pension plan, and your pension will be calculated from the average of the highest 36 months of pay. Those 36 months will probably be the ones just before your pension starts, and at the pay tables in effect when your pension starts. We already know the pay tables for 2019:
    but we don’t know the pay tables for 2020 or 2021. You can estimate those future pay tables by hoping that military pay goes up 1.5% per year.

    You’ll want to run three estimates, perhaps updated for your actual point counts:
    1. Retire in March 2019 as an E-7>34 with 4046 points and start your pension in November 2019. You have to pay for health insurance through March 2021.
    2. Retire in March 2021 as an E-7>36 with 4146 points (50 points per year) and start your pension immediately. You have two more years of E-7 drill pay and two more years of TRS health insurance.
    3. Retire in March 2021 as an E-8>36 with 4146 points and start your pension immediately. You have two more years of E-8 drill pay and two more years of TRS health insurance.

    E-7>34 or >36 pay in 2019 will be ~$5430/month, in 2018 is $5291.40/month, in 2017 was $5167.50/mo, and in 2016 was $5061.30. E-8>34 or >36 pay in 2019 will be ~$6197/month.

    You could estimate that E-7 pay in 2020 tops out at $5511/month and in 2021 at $5594/month.

    You could estimate that E-8 pay in 2020 tops out at $6290/month and in 2021 at $6384/month.

    Now let’s calculate the pensions:
    1. March 2019’s High Three E-7 average has nine months in 2016, 12 months in 2017 and 2018, and three months in 2019.
    That’s [(9x$5061.30)+(12x$5167.50)+(12x$5291.40)+(3x$5430)]/36 = $5204.13
    The pension is (4046/360) x 2.5% x $5204.13 = $1462/month.

    2. March 2021’s High Three E-7 average has nine months in 2018, 12 months in 2019 and 2020, and three months in 2021.
    That’s [(9x$5291.40)+(12x$5430)+(12x$5511)+(3x$5594)]/36 =$5436.02
    The pension is (4146/360) x 2.5% x $5436.02 = $1565/month.

    3. March 2021’s High Three E-8 average has nine months in 2018 as an E-7, three months in 2019 as an E-7, 9 months in 2019 as an E-8, 12 months in 2020, and three months in 2021.
    That’s [(9x$5291.40)+(3x$5430)+(9x$6197)+(12x$6290)+(3x$6384)]/36 = $5953.27
    The pension is (4146/360) x 2.5% x $5953.27 = $1714/month.

    You can tinker with these formulas if you change the dates or the ranks. I hope this helps you figure out the best approach for your other considerations!

  236. As I say in the post, BossyDude, $3000/month is “a relatively large pension”. Now that you’ve seen three different ways to put a value on a military pension, you can use numbers which you feel are more reasonable.

    I’m not sure where you’re getting your base pay from, but you’d want to use the >20 column at a minimum.

  237. You’re welcome, Phil!

    There’s one more round coming in December…

  238. I agree that it seems high, Michael. We’re waiting on a more detailed breakdown but (at a minimum) it includes both eligible active-duty and eligible Reserve/Guard servicemembers.

    The BRS office might also have been speaking for the Coast Guard, NOAA, and the USPHS as well as all the people who’ve joined the uniformed services in 2018.

  239. Well said, Steve– I appreciate the confirmation of the tactic and the psychology behind it..

  240. Good questions, Harry.

    DFAS calculates a pension using the DoD Financial Management Regulation (DoD 7000.14-R) volume 7B chapter 3.
    You’d follow along in paragraphs 030201, 030203, 030205, and 030208, and 030209. Maybe you’re also covered under 030204.

    First, you’d want to make sure that you’re indeed eligible for Final Pay (a Date of Initial Entry on Military Service on or before 8 September 1980). 33 years implies that you joined in 1984 (High Three) but you may have joined earlier and had some interrupted service. More importantly, you want to make sure that DFAS also has that information in your record, or else they’ll default to High Three.

    Next, verify that you and DFAS are using the same point count (3837 points?). If they’re using a different number then you’d have to correct that with your drill records and your DD-214s.

    Third, what year did you start your retirement? For the vast majority of Reserve & Guard retirees eligible for Final Pay, it’s your 60th birthday year. If your Reserve pension starts at age 60 and your 60th birthday was in 2017, then you base your pension on the 2017 pay tables. If your 60th birthday is in 2018 then you start with the 2018 pay tables. (A few Reserve/Guard members deployed for at least 90 days in a fiscal year to a combat zone or for a national emergency, and they’d start their pension at least three months sooner. More info on that is at: ) You’re also right that you start with the years of longevity as though you’d been on active duty all the way up to the start of your pension. At the E-7 paygrade, that tops out at E-7>26.

    Finally, the Final Pay formula is
    (Points / 360) x 2.5% x base pay = $/month
    According to the rules in the FMR, the first division is carried to three places and rounded to two. The formula’s resulting dollar figure is rounded down.

    If you started your pension (60th birthday) in 2017 then your deposit would be
    (3837 / 360) x .025 x $5167.50 = 10.66 x .025 x $5167.50 = $1377/month.

    If you started your pension in 2018 then your deposit would be
    (3837 / 360) x .025 x $5291.40 = 10.66 x .025 x $5291.40 = $1410/month.

    Let me know if I’ve made any incorrect assumptions.

  241. Good questions, Cyd, and the answers can be hard to find.

    Military records eventually end up at the National Archives:
    but that’s just a storage location. That link explains how to file the forms with your military service to have your records corrected. The updates will eventually be included with your existing record.

    Here’s more information about replacing lost service records from Ryan Guina at TheMilitaryWallet:

    Finally, here’s more information on the types of military discharges and researching the discharge (separation) codes:

    A Veteran Service Officer is the best way to have more personal help with your records, not just your VA disability claim. You can find one in your local community through a VA clinic, the American Legion, the Disabled American Veterans, the Veterans of Foreign Wars, and even MOAA.

  242. Good question, Jonathan. You should be covered under federal law by going over 30 years of combined Guard service and “retired awaiting pay” status.

    The “10 years of commissioned service” rule is in federal law. The Army version is here:

    Also by federal law (Title 10 U.S. Code section 1407(e)), DFAS will use the highest enlisted rank to determine the high-three pay at the time you file for retired awaiting pay:

    However after a combination of 30 years of active duty and retired time, retirees are eligible to be advanced on the retired list to the highest grade they served on active duty.
    I realize you’re Guard, not active duty, but stick with this for a few more paragraphs.

    When a Reservist “retires awaiting pay” (not just “discharged” or “separated”) then they’re hypothetically available for recall. (This last happened during the country’s total mobilization of WWII.) As an incentive for this status, their pension is calculated from the pay tables in effect when they start the pension (usually at age 60) and… at the longevity in their retirement rank as though they’ve been on active duty the entire time.

    You retired awaiting pay in 2011 with 21 good years as an E-5>20.

    At age 60 you’ll start your Reserve pension. You might start the pension sooner if you deployed at least 90 days in a fiscal year to a combat zone or a national emergency, per the NDAA 2008 legislation and its 2015 amendment. Military blogger Ryan Guina covers that topic with this post:

    Nine years after retiring awaiting pay, you’ll reach E-5>30 longevity. However by that federal law section 3964 you’ve also reached eligibility to be advanced to the highest rank you satisfactorily held. That means you’re an O-2>30.

    Please let me know if you have more questions!

  243. Thanks for the compliment, Warner! If you’re baffled by the strong opinions of someone you appreciate, then maybe they have an insight. You know I’ve done the reading & analysis, and we milbloggers have shared everything that we’ve learned from our work with the DoD BRS office. We’ve even extended their analysis to areas they won’t address, and we’ve let them know our thoughts.

    I’d very much like to see your evidence for “Repeatedly stating that everyone has a 15% chance of making it to 20 years, even if they’ve already done 10, is provably untrue.” You could be conflating cohorts with individuals, and you might be assuming that future probabilities depend on the results of previous trials.

    Here’s the probability logic. The historical odds of any one individual making it to 20 years are 1 out of 6 (15%). Simply making it for 10 years in no way awards any individual a higher likelihood that they’ll make it to 20. It just reflects the survivor bias of the people who were still in after 10 years. (Hence my blindfold & earplugs analogy.) Having four of the six drop out by 10 does not mean that you’re more likely to make it to 20. It just means that you (and one other servicemember) stayed for 10. Unfortunately with High Three there’s zero reward for making it to 10. You have to keep putting on the blindfold & earplugs and running across that freeway.

    As you and I have discussed on other posts, we’ve seen a few studies suggesting that the members of a cohort with 10 years of service have roughly a 50% chance of making it to 20 (both officer & enlisted ranks). I’d love to see the DMDC break that down by rank & service. In any case, I’ll also point out that the next 10 years of every military career is very much different from the first 10 years– both in the occupation and in the family priorities.

    Surviving a career for 10 years does not predict anybody’s probability for surviving the next 10 years. It’s just the broad experience of a cohort.

    Which leads me to the point of a post which is not about the money. I think people take a huge risk to attempt to cliff-vest a pension at 20 years with zero matching 401(k) contributions. The downside is far harsher than the upside. Meanwhile BRS offers more career flexibility and an opportunity for a better quality of life. If you leave before 20, there’s no downside– the BRS matching contributions are an upside. If you retire at 20 then there’s still no downside– the smaller BRS pension is revenue-neutral when TSP matching contributions and the CP bonus are included.

    For a downside example, you have a very optimistic view of the medical/physical disability screening process. I get several e-mails per month from servicemembers who are in no way “financially cared for through medical retirement” but are rather discharged to pursue a VA disability rating. Search for the VA disability posts on this site, read their comments, and consider whether you’d prefer to be in the High Three legacy pension plan or the BRS. Those are just the public comments– the e-mails and the experiences of my relatives & friends are heartbreaking. “Disability retirement” is not the panacea it seems.

    People who pass up BRS have either not analyzed it, or have focused on the pension/TSP numbers instead of on the quality of life. They’ve fallen into the logic trap of assuming that they’ll make it to 20 years of service, and then they start counting their unhatched chickens while ignoring the reality that only 1 out of 6 makes it to 20.

    You say “… taking that option involves giving up hundreds of thousands of dollars that I might have had under the legacy system using my more conservative assumptions and as noted in your analysis for a young O-4.”

    I say that it’s not about the money. That young O-4 should stay on active duty as long as they’re feeling challenged & fulfilled. But when the fun stops, then that young O-4 is taking a significant physical, emotional, and even mental risk by gutting it out to 20. Instead of the scarcity mindset of giving up hundreds of thousands of dollars, they should consider the opportunity mindset of a better quality of life… and incidentally unlocking their human capital of many more hundreds of thousands of dollars.

    Here’s some cognitive dissonance for you. A servicemember who’s as analytical, articulate, and passionate as you might do well to consider that you could leave the military before 20 and earn far more lifetime income & benefits in a civilian career than the military pension is worth. It’s hard to look forward 10 years and see that, but I can attest that it’s certainly a lot easier to see it in hindsight. You have far more human capital than you may appreciate. In addition to my opinion, you might want to consider the thoughts of the 200+ military veterans who’ve been interviewed on Justin Nassiri’s “Beyond The Uniform” podcast.

    So yes, to answer your question down below to Airmen Mildollar, I would’ve opted in to BRS at 11 years of service. I would’ve continued maximizing my TSP contributions (as well as the DoD BRS match). I would have only signed up for Continuation Pay if I’d felt challenged & fulfilled and was willing to stay four more years. In my career at the time, though, that wasn’t happening at my 11 years of service. Within another year I would’ve opted to leave active duty for the Reserves. I would’ve been encouraged to make my leap knowing that I already had BRS matching funds in my TSP and would still have more money than legacy High Three.

  244. I think you’re doing everything right, Jeremy, but you’re always welcome to e-mail me at

    It’s possible that the TSP computers have ignored the combat zone deployment because you didn’t exceed the $18,500 elective deferral limit during the deployment. One way to test that would be to try to contribute to your Roth TSP (and get up to $18,500 in just the Roth TSP). That seems to be possible from the contribution example obtained from the FRTIB and the spreadsheet that I built from it, although that spreadsheet example exceeds the traditional TSP’s EDL during the deployment.

    Another option would be to have your finance office request that the TSP restore your ability to contribute to the Roth TSP. I’m not sure whether that’d take effect in time for more than the December TSP contribution. That contribution would be deducted from your pay at the end of December and sent to your TSP account during the first week of January.

    My contact at the TSP has been reading this post (and a Facebook group discussion of the same topic). She’s committed to improving the public availability of the training materials about the contribution limits. I’ve also sent an update of the entire discussion to the DoD BRS office. They’re focused on the BRS program, but the TSP policy affects both BRS and High Three contributors.

  245. Good questions, Peter, and your retired rank is indeed based on your highest grade earned. Here’s the federal law:
    Keep in mind that the NC Army NG and Army HRC have to have your Navy records on file. You already have your Notice Of Eligibility and your approval for retired awaiting pay, but you should verify with Army HRC that they also have your record of satisfactory service as an E-7.

    My apologies if you already know this, but hang on to your records until your pension starts. You may have to “prove” it to HRC one more time when they contact you (around age 59.5) to do the final paperwork for your pension.

    You retired awaiting pay in 2007 as a NG E-7 with 21 years of service, and your longevity advances (until your pension starts) just as if you were on active duty the entire time. By 2018 you’re an E-7>32 years whose base pay is $5291.40. Pay raises are typically 1.5%-2% per year, so a conservative High Three average of the three years of pay tables in effect when you turn age 60 would be about 96% of the latest base pay.

    In today’s dollars your pension would be roughly:
    (5100 points / 360) x 2.5%/year x ($5291.40/month x 96%) = $1800/month.

  246. I get that question a lot, Hank. I guess I should highlight the irony that the very first comment on a post titled “It’s Not About The Money” is… about the money.

    Speaking of DoD’s calculator: several of us bloggers (members of the DoD BRS Roundtable) extensively beta-tested it before release. It doesn’t include the effect of your own personal TSP contributions (a hotly-debated topic at the BRS office). It doesn’t account for financial planning (income taxes) or estate planning (SBP and passing on the TSP account). You’ll have to correct for those omissions in your own spreadsheet.

    Of course that spreadsheet should also include other omissions from the DoD calculator: career flexibility and quality of life.

    If we’re going to discuss (once again) the numbers, then we have to do probabilities & statistics as well as compounding math. Let me point out the flaw in your logic: you’re unlikely to reach military retirement. Only 15% of the people who join the military make it to 20 (1 out of 6).

    In other words, you’re proposing to make a High Three bet which pays off only 1 time out of 6. Even worse, 5 out of 6 times you receive nothing… not just the dollar difference between the High Three and BRS but literally zero pension.

    Meanwhile with BRS you know that 6 out of 6 times you’ll leave the military with DoD’s agency/matching contributions in your TSP.

    Let’s go back to High Three cliff-vesting at 20. If you happen to be the 1 out of 6 who survives the career events beyond your control (medical issues, training accidents, operational mishaps, combat, downsizing, lack of promotions, family crises, quality-of-life burnout) then the question is whether the additional payoff is worth the risk.

    Another blogger has done multiple runs of the BRS calculator without accounting for Continuation Pay.
    Let’s say that the biggest difference between High Three and BRS at retirement is $440K, the case of the O-4 at 11.5 years. (It’s reasonably close to your $500K figure.) Maybe the O-4 takes the CP bonus ($21K) and also compounds it for another 26 years at 7% (like the rest of their TSP) for another $122K. Now the High Three calculation of that post yields roughly $320K more at age 59 over the BRS.

    That retiree is likely to live another 20 years, which yields roughly $16K/year out of locking themselves into a bet which only has a 1 out of 6 payoff. Five out of six times it’s zero, and the sixth time it’s a lottery win of $16K/year. The expected payoff is $2667/year.

    But this is not a poker game where you can play 40 hands a night. This is a military career that you can only do once, and the High Three poker table requires you to gut it out to 20 years. With the BRS you could quit after any hand and walk away with some house money.

    Let’s go back to the DoD calculator. The BRS office did not add financial planning or estate planning to the BRS calculator. Your High Three pension has a few issues:
    – It’s taxed every year, while the Roth TSP pays lower taxes and the traditional TSP can be gradually converted to a Roth IRA at a lower income-tax bracket– and that income-tax bracket is largely under your control.
    – The pension dies when you do, unlike the TSP account which can be passed on to your heirs.
    – The High Three SBP premiums are 20% higher, while with BRS (and an inherited TSP) you might not even want SBP.

    Finally, if we’re going to assume that you’re the 1 out of 6 who earns a High Three pension, I think it’s fair to assume that many servicemembers would be lucky enough to score a Continuation Pay bonus contract multiple of more than 2.5 months of base pay. That’s also a four-year commitment, which is a lot easier than gutting it out to 20.

    Back to the point of the post’s title: are you really willing to bet your career on a pension which forces you to cliff-vest at 20 for a speculatively higher amount of money? Or would you rather take the sure bet of career flexibility, quality of life, and more money in your TSP?

  247. I get that question a lot, Hank. I guess I should highlight the irony that the very first comment on a post titled “It’s Not About The Money” is… about the money.

    Speaking of DoD’s calculator: several of us bloggers (members of the DoD BRS Roundtable) extensively beta-tested it before release. It doesn’t include the effect of your own personal TSP contributions (a hotly-debated topic at the BRS office). It doesn’t account for financial planning (income taxes) or estate planning (SBP and passing on the TSP account). You’ll have to correct for those omissions in your own spreadsheet.

    Of course that spreadsheet should also include other omissions from the DoD calculator: career flexibility and quality of life.

    If we’re going to discuss (once again) the numbers, then we have to do probabilities & statistics as well as compounding math. Let me point out the flaw in your logic: you’re unlikely to reach military retirement. Only 15% of the people who join the military make it to 20 (1 out of 6).

    In other words, you’re proposing to make a High Three bet which pays off only 1 time out of 6. Even worse, 5 out of 6 times you receive nothing… not just the dollar difference between the High Three and BRS but literally zero pension.

    Meanwhile with BRS you know that 6 out of 6 times you’ll leave the military with DoD’s agency/matching contributions in your TSP.

    Let’s go back to High Three cliff-vesting at 20. If you happen to be the 1 out of 6 who survives the career events beyond your control (medical issues, training accidents, operational mishaps, combat, downsizing, lack of promotions, family crises, quality-of-life burnout) then the question is whether the additional payoff is worth the risk.

    Another blogger has done multiple runs of the BRS calculator without accounting for Continuation Pay.
    Let’s say that the biggest difference between High Three and BRS at retirement is $440K, the case of the O-4 at 11.5 years. (It’s reasonably close to your $500K figure.) Maybe the O-4 takes the CP bonus ($21K) and also compounds it for another 26 years at 7% (like the rest of their TSP) for another $122K. Now the High Three calculation of that post yields roughly $320K more at age 59 over the BRS.

    That retiree is likely to live another 20 years, which yields roughly $16K/year out of locking themselves into a bet which only has a 1 out of 6 payoff. Five out of six times it’s zero, and the sixth time it’s a lottery win of $16K/year. The expected payoff is $2667/year.

    But this is not a poker game where you can play 40 hands a night. This is a military career that you can only do once, and the High Three poker table requires you to gut it out to 20 years. With the BRS you could quit after any hand and walk away with some house money.

    Let’s go back to the DoD calculator. The BRS office did not add financial planning or estate planning to the BRS calculator. Your High Three pension has a few issues:
    – It’s taxed every year, while the Roth TSP pays lower taxes and the traditional TSP can be gradually converted to a Roth IRA at a lower income-tax bracket– and that income-tax bracket is largely under your control.
    – The pension dies when you do, unlike the TSP account which can be passed on to your heirs.
    – The High Three SBP premiums are 20% higher, while with BRS (and an inherited TSP) you might not even want SBP.

    Finally, if we’re going to assume that you’re the 1 out of 6 who earns a High Three pension, I think it’s fair to assume that many servicemembers would be lucky enough to score a Continuation Pay bonus contract multiple of more than 2.5 months of base pay. That’s also a four-year commitment, which is a lot easier than gutting it out to 20.

    Back to the point of the post’s title: are you really willing to bet your career on a pension which forces you to cliff-vest at 20 for a speculatively higher amount of money? Or would you rather take the sure bet of career flexibility, quality of life, and more money in your TSP?

  248. Dan, you’ve asked a very pertinent BRS question, and I just received the TSP’s response.

    If you’re still in the combat zone at the end of 2018, then you can contribute to the Roth TSP just short of $18,500 (as specified on the TSP’s 2018 contribution limits page) and to the traditional TSP for the rest of 2018’s $55K annual additions limit. (That would be another $36,500.) Note that you’ll have to leave room in the traditional TSP for the DoD’s BRS agency/matching contributions, so your personal contributions will be short of that $55K total. Put your own numbers in the spreadsheet which is linked to this post.

    In 2019 you’ll still have to keep your Roth TSP below the 2019 limit of $19K. You can stuff as much as you’re allowed into your traditional TSP– up to the 2019 AAL of $56K, which still includes DoD BRS agency/matching contributions. As soon as you return home, however, the TSP interprets the 401(k) law to mean that your traditional TSP account limit also reverts to the elective deferral limit ($19K for 2019). That means anything above $19K in your traditional TSP when you come home would lock you out of the traditional TSP for the rest of 2019.

    The 2019 solution is to leave room in your Roth TSP for 5% base pay contributions for all 12 months of 2019. Then contribute to the traditional TSP until you’re home. If you’ve contributed >$19K to the traditional TSP by the time you return home, then you’ll be locked out of more contributions to your traditional TSP.

    However you’ll still have room in your Roth TSP for the rest of the year’s 5% base-pay contributions, which will enable the DoD BRS matching contributions to be added to your traditional TSP.

    In short, follow the example spreadsheet (with your own numbers) which is linked to this post– note that all 12 months of the BRS 5% base-pay contributions are all in the Roth TSP.

  249. Jeremy, I’m on your side in this analysis. Your comment is the latest of a series of reader questions which I’ve pursued with the TSP.

    I’ve quoted the TSP’s response above and edited the post to clarify what limits apply to which situations. They interpret the tax code to mean that contributions from taxable pay are bound by the elective deferral limit ($18,500) when you’re back home from the deployment– in the traditional TSP account as well as the Roth TSP account.

    This would mean that the only way to ensure all 12 months of DoD’s BRS match would be to leave room in the Roth TSP. (That’s part of the spreadsheet provided by the TSP.) During the deployment, the priority for combat zone tax-exempt pay would be contributing to the traditional TSP (even though the Roth TSP is easier to handle after leaving the military). After returning home the priority would revert back to the Roth TSP since the DoD BRS match could continue to be added to the traditional TSP (up to the annual additions limit).

    In your situation, it appears that the best you could do would be to leave the traditional TSP at $18,500 and finish up the Roth TSP to $18,500. The rest of the post has a section about spreadsheeting contributions for 2019 to leave enough room in the Roth TSP for all 12 months of DoD’s BRS match.

  250. Thanks for your question, Bee– that was an epic research project with the TSP. I’ve quoted their response above and edited the post to clarify what limits apply to which situations.

  251. Angie, the best way to transfer into the IRR is to submit the request through your chain of command. Some ANG units do it by paper while others use an online form.

    Just to be clear, this post points out all the advantages of staying in a drill billet for retirement credit, for the health insurance, and (eventually) for the pension.

    Once you transfer to the IRR then you lose your eligibility for Tricare Reserve Select health insurance. It’s also become nearly impossible to earn enough points for a good year in the IRR.

  252. Great question, Ann. The VA will assign an effective date to your claim, which is typically the first day that you’re no longer on active duty. If you file your claim after leaving active duty then the effective date is generally the date you submitted the claim.

    The payments start when the VA has processed the rater’s decision and has your banking info for an electronic payment. (If applicable, they’ll also need your family information.) Ideally you entered your banking info (and your family info) into your eBenefits account when you submitted your claim. If that info is correctly processed from your eBenefits account then your payments should start a month or two after you receive your decision letter.

    The amount of the claim will be paid (in arrears) all the way back to the effective date of the claim.

  253. Thanks, Randall, and good advice on the VA disability rating system.

  254. Christian, if you already have 19 good years (not just 19 years of service but 19 actual good years) then federal law protects you from being separated:

    If you’re going to a Medical Evaluation Board then the most likely results are either a disability pension or continuation to a National Guard pension. (Assuming that you can complete 20 good years to receive a Notice Of Eligiblity for your pension.) It’s possible that you’d reach 20 good years before the MEB process was finished.

    Again, posting the details of your situation to can help you figure out what’s more likely.

  255. Isabel, a disability pension is one of the options of a medical evaluation board.
    I’m not sure why you weren’t offered one when you were applying for a drill billet. It might have depended on your length of service or the severity of the injuries & respiratory issues.

    One starting point could be posting the details of your situation to the It’s founded by a JAG and includes hundreds of members who’ve been through MEBs and PEBs. They know all of the timelines and processes and can help you figure out the details of your situation. Based on what you learn there, you may be able to apply to the Board for the Correction of Navy Records. That’s a situation which would require the help of a Veteran Service Officer or even a lawyer.

  256. Danielle, if you already have a Notice Of Eligibility for retirement with at least 20 good years, then the most likely option is that you’ll be offered a disability retirement.

    That’ll give you the option of retiring under whichever National Guard pension calculation gives you the most money– your point count or the MEB’s disability rating.

    In both cases when you retire awaiting pay then you’ll continue to receive your VA disability income until you reach age 60. (You might start your pension a few months earlier if you deployed to a combat zone or were mobilized for national emergencies after 28 January 2008.) At age 60 you’ll start your pension.

    If you have more questions about the MEB then I strongly recommend posting the details to It’s founded by a JAG and includes hundreds of members who’ve been through MEBs and PEBs. They know all of the timelines and processes and can help you figure out the details of your pay & benefits options, not just the decisions.

  257. You’re welcome, Ed, and I’m glad it’s helping.

  258. Jim, I’d suggest talking with your Reserve unit’s personnel staff or with ARPC. Each service can have its own policies (exceeding the minimums of federal law) for satisfactory time in grade to retire at that rank. Two years may be the Air Force’s rule, not the federal law.

    A High Three pension system is just the average of your highest 36 months of pay for determining your pay base (which is different from base pay) in the pension calculation. For Reservists, it’s calculated at the rank from which you retired, using the pay tables that are in effect when you turn age 60 (or whenever you receive your pension, if earlier), and at the longevity as if you’d been on active duty the entire time up to age 60. If you want a pension at the MSGT rank then you’d have to comply with the Air Force’s rules to “retire awaiting pay” as a MSGT.

    As far as I can tell, time in the IRR counts toward time in grade. We don’t know whether that requires you to earn enough points for a good year, and we’re having a difficult time finding a reference which confirms that. If you can find a way in the IRR to earn your 35 points and get a good year then that absolutely counts for time in grade.

  259. Sorry, Allen, you’ve asked a good question but I’m not knowledgeable enough to have the answer. This post is intended for readers who are working toward both a military pension from the Reserve or National Guard as well as from civil service, and I’m focused on the military side of the question.

    There are very few situations where you’d want to waive your active-duty pension just to qualify for a federal civil service pension. They’d mainly involve already having an active-duty pension at the paygrade of E-6 or below and buying your military service credit deposit in a civil-service pension of GS-14 or higher.

    However there’s one benefit of the military service credit deposit which all military retirees should review:

  260. Sorry to read about this, Shar. The VA has not made (yet) any presumptive connections to the eruption or the cleanup.

    The only other suggestion I have is to work with a Veteran Service Officer (from the VA, or the American Legion, or the DAV, or MOAA) to attempt to establish some sort of service connection (Pinatubo or otherwise) from your military records.

  261. RafE, you’ll get about the same compounding in the TSP (stock index funds) as you would in their equivalent Vanguard stock index funds.

    Better still, the TSP may have a lower expense ratio than your 401(k) provider’s funds. Then your TSP funds would compound faster than your equivalent 401(k) funds.

    The best reason to contribute to your 401(k) is to maximize the employer’s match.

    I can only think of one reason to roll your TSP over to a civilian 401(k): if you decide to retire from that employer at age 55 then you can tap your 401(k) with no penalties. You’d still pay personal-income taxes on any traditional TSP or traditional 401(k) withdrawals, but no penalties.

    Otherwise the TSP offers equivalent (or better) funds with equivalent (or better) expense ratios. In addition, the TSP almost certainly offers better annuity prices if you feel you need additional annuity income (beyond your Guard pension, your civil service pension, and Social Security).

  262. Douglas, you’ve asked a question that we haven’t been able to answer yet.

    If you transfer in “retired awaiting pay” status to the Retired Reserve then you will not be eligible to promote and you won’t earn time in grade.

    If you go to the IRR then you’re still eligible to promote. (That’s unlikely compared to the promotion opportunities in the Selected Reserve, but you’re eligible even in the IRR.) The “problem” with going to the IRR is that it’s very hard to get a good year– especially now that points have mostly been shut off for correspondence courses.

    If you don’t get a good year then I don’t know whether that still counts as satisfactory performance in the O-5 rank. I’ve asked some Reserve and FTS officers to look into it, and those answers may have to come from BUPERS.

    Again, the biggest value of a Reserve pension is the Tricare healthcare and the annual cost-of-living adjustment. Before you decide to go to the IRR, do the math for the pension as an O-5 versus an O-4. If it’s not a big difference to you then go to the IRR or the Retired Reserve (whichever you prefer). If the O-5 pension is a priority then I’d recommend staying Selected Reserve until you meet the time-in-grade requirements.

    If we find out a different answer from BUPERS then I’ll update this post.

  263. I’m not sure, Dee. Every state has different insurance laws and what applies to me in Hawaii might be different in your state.

    The servicemember would be covered by military healthcare, but family members might face the same issues of Tricare paying after insurance. UM/UIM coverage might also lead to a settlement which could fund lifetime care for family members who were permanently disabled by the accident.

    I’d suggest following the same process that I did in the post: call your Tricare rep and your insurance company with the questions. You could also talk to an insurance broker (not just a sales agent for one company). The calls will also give you a feeling for the quality of the insurance company’s service, which might factor into your decision of whether the cheapest premium is really the best choice.

    The “good” news is that UM/UIM insurance is relatively inexpensive, and you may decide to carry it just to offer this additional layer of protection against long-term injury.

  264. Sorry, Mike, no formulas. This spreadsheet is as simple as I can make it and easily edited by copy&paste.

  265. Doris, I’m not sure what question you’re asking. The site comes up fine and asks for a login:

    It looks like they’ve set up a new login system that lets them collect e-mail addresses instead of logging in with the card number: “Patrons with a Rewards Card already registered are required to set up a customer account and re-register their card through the new customer portal.”

    Here’s more info:

  266. Theodore, I’m not sure exactly what you’re asking, but the short answer to your question is “No.”

    The SBP is a survivor annuity which is bought on an installment plan. There’s no cash value and nothing from which to borrow. Although it’s frequently compared to other types of insurance policies, it’s longevity insurance.

  267. Thanks for your feedback, Jim. I’m not sure what the median military pension may be, yet I know several readers who are living on $1800/month.

    I don’t think we have to worry about misleading the civlians. Most of this site’s readers are military, and I’ve written before that people should not join the military to get rich.

    As you’re probably keenly aware, the COLA is based on the same one used by Social Security. I hope the calculation can be made more relevant, but it’s the best measure we currently have.

    For other readers of this comment, the 2018 pay tables show that an E-7>24 earns $4940.40/month base pay. The High Three pension for 25.5 years of active duty works out to about $3000/month.

  268. Excellent, Jason, thanks for your update!

  269. Here’s an update from Jason. Jared, you’re absolutely right. I’ve added minor edits in [brackets].

    “I hit 7305 at the of May and qualified for active duty retirement. I asked for a 1095 waiver and got that, so that I could stay another year since I am waiting for a specific job. RPAs are extremely critically manned (24/7 combat ops with no end in sight). I do not foresee MPA orders running out anytime soon. One of the guys I worked with who just retired received a second 1095 waiver (I guess it’s a 1460 waiver) and was able to fly five years with no break as a TR on MPA.
    I think there isn’t a notification. [Of eligibility for an active-duty retirement.] At least I can’t find one. I was just told that when I go to MyPers and apply for a retirement, I select active duty and the personnelists gonk it out. The only way I think I can check is on PCARs. I can see that I have over 7305, and all of my points are listed as 1 (active duty) since I have always been on MPA. I’ll figure it our soon. I’m going to apply for retirement next June so I should be able to do it when I get back from leave since I’m now a year out.
    We have a ton of people in our unit doing exactly what I’m doing. A bunch of TRs are riding full time MPA orders for 1095 days to get active duty retirements. From my perspective it’s better than AGR. I have all the benefits of a TR (i.e. I can say no), I fly the line, and I earn an active duty retirement. The only downside is you never know what the budget will be or when it will be passed. It hasn’t been an issue other than a bit of pain. I’ve had to be VOCO’d [given verbal orders] twice because the budget wasn’t done on time. But it has always come through.”

  270. Jared, thanks for the clarification of the section at the top of page 19 of AFI36-2131 of 27JUL11.
    “______ I understand that I will continue to accrue active duty points while performing this tour with a waiver in place. Upon accumulation of approximately 7305 active duty points, I will have earned an AD retirement and may retire immediately with an AD annuity, or continue to participate for additional points and pay.”

    I’m confused too, although it’s still waiving sanctuary.

    However I agree with your point. The paragraph seems to say that should the servicemember somehow perform more active duty for enough additional time (like a series of active-duty orders with voluntary sanctuary waivers) to accumulate 7305 days of active duty (not just drill or training) then they’re eligible to retire on an active-duty pension.

    It looks like the RPA mission (similar to AGR) potentially created another path to an active-duty retirement. It’ll be interesting to see whether the AF considered the mission important enough to pay for the pension difference out of Air Force personnel funds (instead of DoD funds). In light of the aviator retention issues, that may be the case.

    I’ve sent a followup e-mail to Jason. Thanks for noticing this issue!

    (Note to other readers: 7305 points in the Reserves or National Guard does not mean entitlement to an active-duty retirement. However 7305 points of active duty, through a series of active-duty orders, seems to lead to an active-duty pension in at least the Air Force Reserve.)

  271. Got it, thanks– see the above comment.
    Jared, can you link to that AFI sanctuary waiver paperwork or send me a copy (NordsNords at Gmail)?

    Waiving sanctuary means giving up the active-duty pension, but if it’s a program like AGR then it might qualify for an active-duty pension.

  272. Thanks for the feedback, Hawkeye. I sure hope DFAS finishes your retirement travel claim soon.

  273. You’re right, Keith, Reserve & Guard servicemembers have a lot of edge cases in a very complicated pension system.

    First, make sure you get at least 35 points before December 2020. That should earn you the 15 participation points for a good year, but of course it’d be even better if you earned 50 points on your own before December 2020. As usual, you’ll have to meet all of the unit’s other requirements to be awarded that 20th good year.

    Second, make sure now that your official service records are accurate. By December 2020 you’ll ideally have everything in your official Army National Guard database and updated, waiting only on your 20th good year and your Notice Of Eligibility letter. Guard units are notorious for not having the earlier Army service dates in their database.

    Third, you have more than 10 years of commissioned service so you’re eligible for an O-3 pension. (That’s in federal law.) In addition your pension is calculated from the High Three average of the pay tables in the year that you reach age 60 (2020 in your case) and at the longevity as though you’d been on active duty the entire time. This is more than 37 years since February 1983, which is the >34 and >36 columns in the O-3 pay tables (for 2018, 2019, and 2020).

    Finally, I’d apply for a continuation on drill status until April 2021 in order to reach 20 good years. Your Guard unit will either approve the waiver or coordinate with the Army’s National Guard Bureau to make sure you have your 20 good years logged by December 2020.

    It’s worth your time to have a JAG review your service records and your waiver plan to make sure that I’m not missing any details.

    Please let us know how this works out.

  274. Too true, Joseph, I’m sorry to say that we’ve seen a lot of that here over the last eight years.

    People have to track (and correct) their own service records— and it’s a lot easier to do that before retiring or separating!

  275. As you know by now, Joseph, the Navy didn’t have the Army’s records on file and DFAS went only by the Navy’s service record.

    What should be reflected on your LES right now is your Pay Entry Base Date (and Date of Initial Entry on Military Service) of July 1992. When your PEBD or DIEMS is set to that date then you’ll be paid for your current rank— and with over 26 years of longevity.

    The Navy should indeed add in your six months and 26 days. Once your Army records are included in your Navy record, then BUPERS should forward the information over to DFAS.

    In addition, you may have been paid at the wrong longevity rates for the last 17 years. When you joined the Navy in 2001, BUPERS and DFAS should have adjusted your PEBD and DIEMS to July 1992 and immediately started paying you at the >8 years rate. In July 2002 you would have gone >10 years. I don’t know whether there’s a statute of limitations on that. You could ask a PSD supervisor about it, but you may need to consult a JAG to find the rules and the legal references. I think the JAG could be more helpful than DFAS.

    You may already know that if you have at least three good years from your Reserve service then you’re now eligible for a Reserve pension at age 60. You could hypothetically resign from active duty now, file for “retired awaiting pay” from the Reserves, and receive a pension at age 60. You can read more about that at this post:

    If you deployed to a combat zone after 28 January 2008 then you may be eligible to receive a Reserve pension three months earlier for every 90 days in a fiscal year.
    Regardless of when the Reserve pension starts, Tricare would still only start at age 60. You’d have to find other health insurance (like Tricare Retired Reserve) to cover the gap to age 60.

    But before you make a retirement decision, I’d talk to a supervisor at PSD about adjusting your PEBD/DIEMS and correcting your back pay. If they can’t show you the references to explain what they should do (as described above) then your next step would be a visit to the JAG. It’s painful to fix these problems now (while you’re on active duty) but it’s even harder doing the BCNR when you’re a retiree.

  276. Marc, the first advice is to get as healthy as you can.

    Next, you should talk through your situation with your doctor and then see a military doctor to discuss your options. They’ll get you started on the MEB process.

    You should also join the and discuss the details of your disability rating there. It was founded by a JAG and its members include hundreds of veterans who’ve been through your situation. They’re very familiar with the MEB process and they can help you with any potential pitfalls.

  277. Thanks— good feedback. I haven’t been able to quote a DoD reference that covers all of the services.

  278. Great question, Marcus, and it’s a confusing topic.

    I sent this post’s deployment timeline to the DoD’s Blended Retirement System office, and they coordinated the response with the TSP staff. Note that the quotes and the spreadsheet numbers come directly from the TSP, and they said that info is used as training material for their employees. Feel free to quote the TSP’s response in this post to the TSP reps.

    First you’d want to check that your unit indeed meets the DoD and IRS requirements for a combat zone in 2019 and is not simply in transit from the zone. (This is especially important for Navy deployments.) Then you can test the TSP’s software by treating your 2019 contributions as eligible for the annual additions limit. Of course your tax-exempt pay ends as soon as you leave the combat zone but you’ll still have your remaining base pay, special pay, and any other bonus pay for your TSP contributions.

    The best way to test this in 2019 would be to contribute more than $18,500 to the traditional TSP. When that works then you could decide where you want to put your remaining 2019 AAL contributions, but you’d have to stay short of the $18,500 limit in your Roth TSP. Keep in mind that the DoD BRS agency & matching contributions are also part of the AAL’s $55K total, so you’ll want to edit the post’s spreadsheet for your 2019 plan to make sure it all works out.

    Of course if the TSP shuts off your traditional TSP contributions when you reach $18,500 then please let me know. I’ll query the DoD BRS office and the TSP’s legal staff.

  279. Good point, Buddy… drawdowns always seem to overshoot the mark!

  280. Thanks, John, I appreciate the help spreading the word!

  281. It’s not an easy question to answer, Alan, but you can do the analysis.

    As you know from this post, you can earn both your ANG pension and your civil service pension. (That’s permitted by the exception in federal law.) In addition, you can still buy your military service credit deposit in the federal civil service.

    You can analyze the financial benefit of buying your military service credit deposit from Eddie Wills’ link at
    That’s part of the collection of “Related articles” links at the end of this post.

  282. T, your description of Title 10 U.S. Code section 12646 of the federal law is accurate, and it’s a completely different topic.

    You’re absolutely right that any servicemember with 18 years (or 18 good years for Reserve/Guard members) can continue in their active-duty, Reserve, or National Guard status until 20. Failure of selection for promotion when you already have 18 years essentially guarantees continuation to 20.

    This post debunks the myth that 18 years of active-duty points entitles a Reserve/Guard servicemember to an active-duty pension. The post’s title emphasizes that sanctuary (based on Title 10 U.S. Code section 12686 of federal law) can only be declared if the Reserve/Guard servicemember is on active-duty orders at the time. They can’t try to declare sanctuary simply because they have 18 years of active-duty points.

  283. Absolutely, Rick, thanks for the tip!

  284. Thanks for asking the question, Travis, you’re absolutely right to check that you have it covered.

    Fortunately a Roth TSP is one of the easiest cases of the early-withdrawal bunch. It’s a category of the Roth 401(k), also known as a “designated Roth account”.

    Once you’ve hung up your uniform (separated or retired) then you simply roll your Roth TSP over to a Roth IRA. After five tax years have passed then you can tap the amount of the Roth TSP rollover (but not the new gains in the Roth IRA!) tax-free and penalty-free.

    If you want to dig into the tax code with a financial advisor then I’d recommend this outstanding detailed post from CFP Michael Kitces. Read the section titled “5-Year Rule For Designated Roth Accounts Under A 401(k) Or Other Employer Retirement Plan” at:

    If you’re one of many servicemembers who have combat zone tax-exempt pay in their Roth TSP, then check with your Roth IRA custodian to see how they’ll handle the tax-free portion. Many of them will not track the basis of that portion of the contributions in a Roth IRA, and a few of them won’t even accept tax-free contributions.

  285. You bet, Godwin! And when you’re back in the U.S., instead of waiting for FinCon you can also do CampFI on a bunch of different weekends:

  286. Great question, Godwin! When the TSP’s higher contribution limits kick in, there’s still a limit on Roth TSP contributions. Here’s the information from the table on the TSP website:
    “If you are a member of the uniformed services, you should know that Roth contributions are subject to the elective deferral limit ($18,500 for 2018) even if they are contributed from tax-exempt pay. If you want to contribute tax-exempt pay toward the annual additions limit, you will have to elect traditional contributions for any amount over the elective deferral limit.”

    As long as you’re below $18,500 in the Roth TSP, you can continue to contribute to the traditional TSP until the end of the calendar year and up to the total annual additions limit ($55,000 in 2018). If you’ve exceeded $18,500 in the Roth TSP, however, then the TSP’s system computers lock you out of further contributions.

    Beyond the annual additions limit, you’re also eligible for catch-up contributions:
    “The maximum amount of catch-up contributions that can be contributed in a given year by participants age 50 and older. It is separate from the elective deferral and annual addition limit imposed on regular employee contributions.”

  287. Good question, Dustin! Every service has different policies which may exceed the minimum requirements of federal law. That seems to be the case with the AF Reserve promotion instruction. I’m not familiar with all the obligation agreements of the various services.

    You are correct on the longevity pay. When you “retire awaiting pay”, then (by federal law) your longevity accrues during the gray area just as though you were on active duty the entire time. If you file for that retire-awaiting-pay status in 2018 with 21 years of service at age 40, then when you turn age 60 in 2038 you’ll use the High Three average of an E-9>40. That’ll involve the pay tables which exist in 2035-2038 for an E-9>38 and >40.

    You can estimate that in today’s dollars by using today’s pay tables. The general idea is that military pay is expected to keep up with the Employer Cost Index while you’re in the gray area, and then after you start your pension it’ll have the same cost-of-living adjustment as Social Security.

    You can read more details at the related link:

  288. Janet, this post is intended for members of the military’s Reserve and National Guard who are also federal civil-service employees. They can earn a pension in both the military and the federal civil service.

    If your spouse simply left the military and has no intention of joining the Reserve or National Guard (or returning to active duty with another service), then he can’t qualify for a military pension. However if he joins the federal civil service (and possibly some state civil services) then he could use his military time to buy his military service credit deposit from the civil-service retirement system.

    Once he’s joined the federal civil service then he can learn more about the military service credit deposit from former civil-service employee (and submarine veteran) Eddie Wills:

  289. Great to hear from you, Zoot!

    The discount code is for everyone– military, affiliated, and total civilian. People can only use one code per ticket, but there’s no limit on the number of codes.

    I hope to see you there, and please bring your friends!

  290. Thanks, MK, I hope to see everyone there!

    Of course they could also make the thousand-mile trek from Florida to Little Rock for the 7-10 September CampFI South, but I’ll write a separate post about that.

  291. You’ve raised an interesting point, Michael.

    These reader questions in that post are for service during the last millennium, and the drawdown after DESERT STORM actually generated some lawsuits over unlawful separations. In the late 1990s the federal law changed for Reserve service as well. I didn’t get into those side issues.

    As of 2018, I’m not aware of any federal law requiring a specific number of years of commissioned service for Reservists or National Guard members. They’d still have to serve satisfactorily in the grade to retire in that grade, and they’d still have to satisfactorily complete a service obligation in their unit. O-5 or above generally have to serve three years time in grade to retire at that grade (which could be waived down to two years).

    As I understand the law, serving in the enlisted ranks and then commissioning in the Reserve or National Guard would not require at least 10 years of service. A Reserve or National Guard officer could retire as an officer as soon as they reached their 20 good years (confirmed by their Notice Of Eligibility letter). They’d still have to comply with the “satisfactory” and “time in grade” caveats of that last paragraph.

  292. You’re welcome, Keegan, I’m trying to give people permission to think about their exit strategy!

    I’ll e-mail you my contact info, and if you’re inport Pearl Harbor we can just get together for a cup of coffee near you.

    If you’re looking into the Health Services Collegiate Program then I’d also recommend the website Vet2MD.ORG.

  293. Thanks, Dave, great recap!

  294. Tim, it’s hard to tell whether your appeal is still working through the system or whether it’s stuck in a backlog.

    You could discuss it with a local Veteran Service Officer from your VA clinic, the American Legion, the Disabled American Veterans, the VFW, or even MOAA. They have the resources to look up your appeal and figure out the next step.

    You could also post your questions to It was founded by a JAG and has hundreds of vets whose disability claims have also gone through the appeals process. They might have more suggestions on how to track it down and speed it up.

  295. Darren, it’s quite possible that your cardiac condition is due to a service-related cause, but I don’t know whether that’s presumptive.

    While you’re getting healthy, I’d strongly recommend reviewing your medical records with a Veteran Service Officer at your local VA clinic, from the American Legion, or the Disabled American Veterans, the VFW, or even MOAA. They’re the experts on presumptive conditions, their services are free to you, and they’ll be able to help guide you through the claims process.

  296. Here are two things to keep in mind between our different situations, Rob:
    1. Insurance laws vary by state, and your state may allow USAA to charge a premium for a teen driver– even an occasional one.
    2. In our household we had three drivers for two cars, and our daughter did not own her own vehicle. USAA chose to consider her an occasional driver, and it’s probably because Hawaii state law allowed this.

    I’d encourage everyone– especially active-duty military– to check their state’s laws and USAA’s premiums whenever they’re in a new state.

  297. Arthur, without knowing any further details in your situation, the Army probably made the right choice at the Medical Evaluation Board.

    I’m guessing that your MEB disability rating was at least 30%. Because you apparently were already qualified to retire (with a Notice Of Eligibility letter) then your Reserve pension should have resulted in the higher amount when compared to a disability pension.
    Note that by federal law, a disability pension is limited to 75% even if the disability rating is higher.

    Your Reserve pension will start paying at age 60, and even if the disability Reserve pension was the higher amount then that would also have started paying at age 60. Between the time you retired awaiting pay and age 60, you’re only eligible for VA disability compensation.

    I can’t tell what went into the VA’s 100% disability rating, but that’s a completely separate process (and a different part of the federal government) than the Army’s MEB. Because your VA disability rating is at least 50%, when your Reserve pension starts at age 60 then you should be eligible for Concurrent Retirement Disability Pay. You’ll get both your current VA disability compensation as well as your Reserve pension.

    If you decide to dig into the details of the MEB and the VA disability rating process, I’d suggest posting your question at It was founded by a JAG and has thousands of veterans who’ve also been through the MEB process. Your situation may be similar to theirs, and they can advise you on the MEB’s logic as well as on the VA rater’s decision. The members and the lawyer are also familiar with the law and can help you figure out any errors.

  298. Good question, Henry, I’m sorry to say that you could have started your Reserve pension over a year ago. The good news is that you can have it paid retroactively to your 60th birthday.

    The first step is applying for your pension through your military service:
    You’ll need your Notice Of Eligibility for your pension, your point count, and your approved retirement request.

    You can apply through the service’s websites (or by a phone call). If you’re near a Reserve Center or a military base then you could stop by their personnel center to start the process.

    Once you have your retirement package from your service you can apply to the Defense Finance and Accounting Service to start the deposits. In your case they should also pay you for the months you’ve already missed back to your 60th birthday.

    You can calculate your retirement pay using the information in this post and your point count. (DFAS will also do this calculation for you.) You’re a Final Pay retiree because your Date of Initial Entry into Military Service was before 8 September 1980. Your pension will be based on the 2017 pay table (the year you turned age 60) at the longevity of your rank as though you’d been on active duty all the way up to 2017. (It’ll probably be a column like “>30”.) Because your pension system is “Final Pay”, you do not have to worry about High Three.

    By the way you’re also eligible to apply for Tricare health insurance, either Tricare Select or Tricare Prime:

  299. Thanks, Gabi, and you’re absolutely right.

    I hear both sides of this issue from the military women in my life (my spouse and our daughter) and from the male military spouses (my son-in-law and the Facebook group “The Men’s Room” for male milspouses).

  300. Thanks, WSPP, VA benefit appeals are a frequent problem. I hope you’re also able to tap into the healthcare that you need to cope with your symptoms.

    First, I’d recommend talking with a Veteran Service Officer from the Disable American Veterans, the American Legion, VFW, or even MOAA. They might uncover additional information in your medical, dental, or service records– or spot errors in the VA’s claim file.

    Next, I’d post more details about your claim at the It was founded by a JAG and it’s filled with hundreds of military vets who have had VA problems similar to yours. They’ll be able to tell you more ways to approach the solution.

  301. Thank you, Jordan, very good point!

    You’re not late– just early for next year’s tax season…

  302. Casey, as Penny says, your service will almost certainly approve your retirement request at your enlisted rank. Be aware that your pension will be calculated at your last enlisted rank before commissioning.

    The processing time varies by service. You’d have to check that with your personnel branch.

    When the sum of your years of active duty and your years of retirement reach 30 years, you’ll be automatically advanced to the officer rank which you held at retirement, and your pension will be recalculated (going forward) at the pay of your commissioned rank. For example, that federal law for the Air Force is:

  303. That’s correct, Roger, and I’m sorry to say that the Navy’s VTU seems to be the same as when my spouse served her time in it nearly 15 years ago.

    The requirements of “time in rank” and “top 3 for pay” are two separate time periods.

    In order to retire as an O-5 you’d need to serve three years’ time in grade. (O-4 time in rank is only six months.) The O-5 time in grade requirement at can be waived by the service secretary to two years, which depends on Reserve manpower needs.

    Three good years in the VTU would definitely qualify toward O-5 time in grade, as would three good years in any pay billet. It’s also possible that simply being in the IRR for three years (good years or not) would also qualify for time in grade, but I have not found a reference to confirm that.

    Whatever rank you retire at in the Reserves or Guard determines the row of the pay tables upon which your pension is calculated. However the pension’s High Three pay base is also the average of the 36 months of the highest pay you’ve earned on active duty.

    Here’s the important part: when you “retire awaiting pay” and turn age 60 and start receiving your pension, that pension calculation uses the pay tables in effect at age 60 as though you’d been on active duty the entire time that you were in gray area. When you turn age 60 in 2027 and your High Three average is calculated from the highest 36 months of your pay, it also includes the pay tables (at your retirement rank) from 2018 through 2027– including 2024, 2025, and 2026. I sure hope those pay tables are higher than any of the pay tables before those years.

    In order to use the O-5 row of those pay tables, you’d have to retire as an O-5… and that means that you’d have to have the three years’ time in grade as an O-5 or at least two years with the service secretary waiver.

    If you promoted to O-5 but only served 23 months before retiring as an O-4, then DFAS would include those 23 months of O-5 pay in their comparison against the O-4 row of the pay tables in 2024-2027. If the O-5 pay in 2020 is higher than the O-4 pay in 2024 then you’d use the 2020 O-5 pay which you actually received. If you were an O-5 in the VTU then DFAS would still use the O-5 pay that you would have actually received.

    From a financial perspective, you’d earn more pension if you stuck around as an O-5 for at least two years (with a waiver) or three years. I agree that doing it in the VTU is a struggle.

    The real value of a Reserve pension is in Tricare Reserve Retired, Tricare (and Tricare For Life), and the pension’s inflation-fighting cost-of-living adjustment. When you do the math between retiring as an O-5>30 or an O-4>30, you might decide that the extra money is not worth the cost of your time away from your civilian career (let alone the loss of your family time). You’re doing the math correctly, but you’d have to decide whether the difference in rank (and the 150+ points, and the three years) is worth the cost. You might already have enough investments in your own assets to be able to retire as an O-4>30 without feeling the need to serve the additional time to retire as an O-5. Either way you’d get the same health insurance and the same annual CPI COLA percentage.

  304. Good question, Laura, and you might have a misunderstanding of the sanctuary program.

    You’re only able to declare sanctuary when you’ve already been mobilized on active duty and authorized to continue those orders past 18 years of active-duty days. At that point you stay on active duty at the same command and retire (on an active-duty pension) as soon as you reach 20 years.

    While you’re at your mobilization duty station getting to 20 years, you can apply to be augmented to your military service for an additional tour. That would make you a part of your service’s personnel (not a Reservist or National Guard member) and you’d be eligible for worldwide assignment. You’d fill out a duty preference worksheet and see what your assignment officer could do for you.

    However continuing beyond 20 would depend on your service wanting to move you from sanctuary to integrate you with the rest of your service’s active-duty personnel headcount. You’d count against their end strength, and they’d have to need your skills somewhere else after your sanctuary duty. I’ve only seen that happen once.

  305. Glad it’s helping, Wendy! This is the most popular post on the blog every week for over five years.

    Your Date of Initial Entry in to Military Service is after 8 September 1980, so you’re under the High Three pension plan. With three years’ time in grade *after* you start receiving O-5 pay, then you’ll retire as an O-5.

    O-5 pay in 2018 tops out at $9280.20, and your High Three average of today’s O-5 pay would be roughly 97% of that (assuming 1.5% pay raises every year).

    High Three = points / 360 x 2.5% x High-Three average
    = 5324 / 360 x 2.5% x ($9280.20 x 97%)
    = $3328/month.

    Your estimate is good. Many Reserve/Guard members have 3500-4500 points at retirement, so you’re a little on the higher end of the bell curve.

    You’ll earn even more points (and good years) as an O-5.

    Keep checking the new pay tables every year in case O-5 pay has any longevity raises past the current 22 years. The actual numbers depend on the pay tables in effect when you’re ages 57-60 to determine the average of those 36 highest months, but using the 2018 pay tables puts the calculation in today’s dollars.

    The real significance of $3328/month (in today’s dollars) is that your savings/investments may only have to bridge the gap between the day you stop earning a paycheck and the day you start your Reserve pension. (Because it’s in today’s dollars, when you start the pension it should have about the same buying power.) That includes Tricare at age 60, Tricare For Life at age 65, and Social Security somewhere between ages 62-70.

  306. This is way outside my circle of competence, ThatMom.

    If you’re not getting any help from the VA then I’d suggest contacting a Veteran Service Officer from a local chapter of your Disabled American Veterans, or the American Legion, or the VFW, or even MOAA. Their VSO services are free and they’re typically used in filing VA disability claims, but they might be able to help with the Navy Reserve pension as well. They’ll want to review all of the Navy records & paperwork you have for your father, even if it’s only the letter. If you’re not near one of those chapters then you could also contact your state Veteran Services office to meet with one of their staff.

    As a long-shot possibility, you could contact Navy BUPERS about his 20-year Notification Of Eligibility letter to see whether you’re able to obtain a set of retirement orders and process the application for the pension:

    If your father is within the low-income limits then he might also be entitled to a VA “Aid and Attendance” pension. (The VA calls it a pension, but it’s actually a stipend.) That’s completely separate from the Navy and DFAS.

  307. In that case I’d check your eBenefits account for any information, and to make sure that they have the right bank-account information on file for your deposits.

    You could also ask the VSO for their estimate, or ask them to request a status update through their system.

  308. Thanks for asking, Rina!

    The rough-draft schedule is here:
    and that’ll update over the next few months.

    The only weekend events are on Sunday 23 September– nothing on Saturday. Sunday includes golf in the morning, workshops in the afternoon, and the kickoff dinner that evening. There’s plenty of time for networking and talk story.

    I no longer golf but I’ll be at the resort all weekend (and the following week) and I’ll be happy to get together to answer questions!

  309. Amy, I’m not sure how long it takes to get your decision letter after the Statement of the Case letter. It might depend on the complexity of rating the rest of your disability claim.

    You can check your eBenefits account for updates, but you should absolutely discuss your SOC with your Veteran Service Officer (or a lawyer) to decide on further appeals. The VSO may also have an estimate on when you’d receive the decision letter.

  310. Mike, your understanding is not quite correct. Since you have less than three years’ time in grade as an O-5, then you’ll have “Major” on your retirement certificate– and your pension will be based on the O-4 row of the pay tables in effect in 2034 (when you turn age 60).

    However if you have at least two years as an O-5 when you retire at that 21 years, then you can apply for a waiver from your service to retire with the rank (and the pay tables) of an O-5.

    The applicable sections of law are in Title 10 U.S. Code section 1370 paragraphs (3)(A) and (5)(A).

    Let me recap:
    1. If you apply to “retire awaiting pay” with three years in rank as an O-5, your retirement rank is O-5.

    2. If you apply to “retire awaiting pay” with at least two years in rank as an O-5, and a waiver from your service to retire at that rank, then your retirement rank is O-5.

    3. If you apply to “retire awaiting pay” with less than two years in rank as an O-5, then your retirement rank is O-4.

    Once you’re retired awaiting pay (gray area) then your rank longevity accrues as though you’re on active duty until the day your pension starts, and at the pay tables in effect when your pension starts. At the O-4 and O-5 ranks, for the vast majority of Reserve retirees, this is the maximum pay for those ranks.

    In your case, 16 years later in 2034, that would be as an O-4>36. If you had at least two years as an O-5 and were granted the waiver from your service to retire as an O-5, then your column in the pay tables would be O-5>36. In the 2018 pay tables, O-4 pay tops out at >18 and O-5 pay tops out at >22, but Congress and DoD could change the pay tables again (like they did in 2007) to reflect more pay raises beyond those years of service.

    When your pension starts (usually at age 60, perhaps a little younger from deployments qualifying for an earlier pension) then DFAS looks back at all your pay tables in effect over the years that you were in uniform and in gray area. They take the highest 36 months of pay and calculate your High Three pay base by averaging those months.

    If you retired as an O-4, then in 2034 DFAS would note that you received O-5 pay in 2016-1018. If that O-5 pay in 2016-18 was higher than the pay for an O-4>36 in 2034 then they’d include the O-5 numbers in the high three calculation.

    If you retired as an O-5 then in 2034 DFAS would just pick out the highest 36 months of O-5 pay in the pay tables up through 2034. Hopefully military pay continues to rise every year (or at least stay flat) and highest O-5 pay would have occurred during the 36 months of 2031-2034.

    Bottom line for O-5s and above: If you’re not going serve for three years in grade, then get the waiver for two years or retire at the lower rank.

  311. Shawn, these are excellent questions for a future blog post, and I’ve sent you a long e-mail (from NordsNords at Gmail) about the issues.

    There are three different dates which could affect your retirement pay, and I’m having trouble figuring out how to put them on the calendar. Please e-mail me what these dates would be:
    1. The date of your 60th birthday.
    2. The date you’d expect to start being paid as an O-5.
    3. How many months early you could start your pension.

  312. Thanks, MERJ!

    Eddie and I are both submarine vets, so our shared background offers a balanced perspective on this perpetual debate.

    I don’t know whether we’ll change anyone’s minds, but we’ll definitely make sure that prospective homeowners understand their risks.

  313. Sandra, 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.

  314. Great question, Scott.

    If you’re already “retired awaiting pay” (gray area) and your commissioning date gave you nine years & two months at the date you started gray area, then you’ll stay an Army Reserve CPT.

    When you retire awaiting pay, your longevity continues to accrue as though you were on active duty during the gray area years. Eight months after you retired, you would have reached 10 years of service as an O-3.

    Your longevity will continue to accrue until the day you start receiving your pension (probably at age 60, maybe a little earlier for combat deployments after 28 January 2008). When your pension starts then it’ll be from the future pay tables in effect during the year that your pension begins. If you were enlisted for more than four years of active duty (or had more than 1460 points in the enlisted ranks) then you’d use the O-3E pay tables.

    Here’s another little-known feature of the federal law: even if you’d retired from active duty under those conditions starting in 2011, you would have been approved for a waiver to retire with only eight years of commissioned service. That authority expires in September 2018.

    Here’s a third little-known federal law: even if you had been disapproved for that waiver, when your total years of military service (active duty, Reserve, and retired awaiting pay) reached 30 years then you would have been advanced to the highest rank held during your time in uniform: Army Reserve captain.

    By the time you start your pension you’ll probably meet all three of those situations.

    If you want help calculating your actual pension (estimated in today’s dollars) then feel free to let me know more details. You’ll need your point count and your rank at retirement (O-3 or O-3E). You’ll also need to know the dates of any combat deployments after 28 January 2008 (or possibly some national emergencies). Finally, you’ll need to know whether you’re Final Pay (Date of Initial Entry into Military Service before 8 September 1980) or High Three (DIEMS after 7 Sep 80). You can comment here, or use the “Contact me” form on the blog, or e-mail NordsNords at Gmail.

    Here’s the post to calculate your pension:

    And here’s the post with more details about any combat deployments after 28 January 2008:

  315. Good question, Peter. I’m not sure that there’s a growing need for long-term care insurance, as indicated by the research statistics in this post:

    USAA does offer a policy underwritten by John Hancock:
    Considering my experience with John Hancock, I can’t recommend buying anything from them— even if it’s backed by USAA.

  316. Thanks for listening, Joe, I enjoyed guesting on Brandon’s podcast!

    Congratulations on your commission, and let me know if you have any questions on the posts.

  317. Allan, my first suggestion would be to check any Explanations of Benefits that you’ve received from Tricare in the mail, or in your online account with your manager’s website for your Tricare region.

    You could also talk to the doctor’s office where you were treated for a copy of the bill (documenting the claim to Tricare) and then ask the doctor’s office about obtaining the lien letter.

    If you’re near a military treatment facility then you could ask their Tricare ombudsman (patient representative) for assistance at getting the Tricare document.

    Finally you could phone the Tricare contractor for your region and try to get the lien letter.

    Frankly, from your lawyer’s seeming inability to solve the problem, you might also want to consult a different lawyer.

  318. Elizabeth, you’d qualify for a Reserve pension as soon as you had 20 good years (the five good years in the drilling Reserve plus 15 years of active duty). You’d qualify for an active-duty pension if you stayed to 20 years of active duty, or a total of 25 years in uniform.

  319. Joshua, you’re certainly eligible to file a claim. The investigation of your claim would highlight the medical mistakes and make the command pay more attention to the procedures.

    Again, this is a situation for consulting a JAG.

  320. I’d be good with that too, Troy– I’m still waiting on K-1s before I can finish prepping my return.

  321. Thanks, Godwin, I hope more readers take heed of your experienced advice!

  322. Sounds good to me, Peter, and not just around tax time!

  323. Sorry to read that, Aaron. I hope other readers will benefit from your warning.

  324. Joy, I don’t have the legal knowledge to offer a recommendation on this.

    Perhaps your lawyer could talk with a military JAG, or maybe you could have your ex-spouse provide copies of his electronic Retiree Account Statements.

  325. Thanks, Mary, I’m glad the VSO came through for you guys!

  326. Emy, you’ve asked a good question, but I’m the wrong guy for the active-duty answers. I don’t know enough about the military’s 1970s pension or compensation systems. In general I’d suspect that he is not eligible for any pension benefits.

    However he’s certainly eligible to request that the Veterans Administration evaluate his health for a disability rating. If he has any disabilities which have been caused by his military service then he can have the medical exams which could lead to a disability rating and some financial compensation or other benefits. If his income is very low then he may also be eligible for other VA financial assistance.

    You should contact a Veteran Service Officer near you. They’re usually found with a local chapter of the DAV, the American Legion, the VFW, or even MOAA. Their services to you are free, and they know how your spouse’s time in uniform can be compensated with the VA disability rating rules.

    I’d also research your state veteran’s benefits.
    It’s not just license plates and discounts at Home Depot but possibly lower property taxes and other state support.

  327. Another minor point, Matt, is that the BRS Continuation Pay contract can run concurrently with other bonus contracts (as long as the other bonus contract allows it).

    If your skills are in high demand then you might find yourself looking at a high CP contract and an attractive bonus program, both running at the same time for the same service obligation.

  328. Philip, you’ll need a couple more details when you do your calculation.

    As the post says, when you retire awaiting pay then your longevity in your rank will continue to accumulate (just as though you were on active duty) until your pension starts at age 60. E-7 pay tops out in the >26 years column of the pay tables, so if you’re an E-7 retiree then you’ll probably earn the maximum pay in that retirement rank.

    You’ll have to calculate your own High Three average of the future pay tables that will be in effect when you reach age 60. If you want to do the calculation in today’s dollars then just take roughly 96% of the latest pay tables for the maximum pay in your retirement rank. (That 96% assumes two years of 2% raises.) If you’re already close to age 60 (or starting your pension early) then you might be able to calculate your High Three average from the current pay tables and assume a 2% pay raise for next year.

    Your deployment dates cross over a fiscal year. Your pension will start three months earlier for every 90 days during a fiscal year that you spent deployed to support combat operations in accordance with the 2008 NDAA requirements. You already know that you have 90 days before 30 September 2010, and you probably have another three 90-day periods before the end of the deployment. You’ll also have to check that your orders comply with the deployment requirement to support combat operations. If your orders were written correctly then you’ll be eligible to start your pension at age 59.

    You can look at the example calculations I’ve done for David J. and Sophia below and follow the format with your numbers.

    Keep in mind that although your pension could start at age 59, Tricare will still only start at age 60. You’ll have to cover your own health insurance all the way to your 60th birthday.

  329. You’re welcome, Josh, and thanks for letting us know that it worked out!

  330. I agree, Peter, flipping is a tough way to make money.

    Franchising probably works a lot better for most people… and that’s pretty challenging too.

  331. Interesting question, Ronald. I’m weak on warrant officer rules, and I’m especially weak on military law before 1980.

    Your friend has probably had their warrant officer commission for at least 10 years of service:
    or else they’re retiring after at least 30 years of service:

  332. DB, the criteria is “active duty”. Drill points don’t count because they’re for training, and neither does ADT. However the AFI 36-2131 goes into considerable detail in sections 2.1 and 2.2:
    That’s dated in 2011, and you may have a more current version on an Air Force website.

    Once you get past 16 (or 16.5) years of active-duty points, the personnel tracking systems should kick in to notify your chain of command about the procedures to be followed for voluntary orders and for waiving your rights to sanctuary. The only sanctuary declarations I’ve heard of in the last four years have resulted from long-term database errors.

  333. Good question, Jennifer!

    Note that USAA offers benefits on credit cards during PCS or deployments, or even for campaigns. Those USAA credit cards could have been opened before the start of active duty, but most USAA members opened their accounts after starting active duty. Give USAA a call, read them the USAA part of this post, and see what they can do for you.

    The same advice applies for Chase. Some servicemembers have received benefits in excess of the SCRA laws, but that decision is up to the card issuer. The policies seem to change every few months, so the best advice is to contact Chase for their SCRA benefits. You can also ask for any additional benefits that they may offer under the Military Lending Act, which was extended in October 2017 to apply to all credit cards.

  334. Great questions, Matt, and here’s some more thoughts.

    The first benefit of the BRS is the one that everyone overlooks: the possibility that you won’t make it to 20 for reasons beyond your control. It doesn’t matter how good you are. The military could go through another large downsizing. Your specialty could be declared overstaffed or even obsolete. You might already have the skills & performance of an E-8, but a decade from now there might only be one or two E-8 openings per year. (Not even the assignment officers can project a decade of career promotion rates– let alone the rest of us.) You could suffer a career-ending injury or a medical crisis.

    Statistically, those enlisted who make it to 10 years have only a 50% chance of staying to retirement.

    The BRS offers flexibility (and more money in your TSP) than taking the risk of making it to 20 (or getting nothing). It’s cheap insurance against the risks that you can’t control.

    Next, the BRS matching contribution, invested aggressively in your TSP, can grow faster than the amount of High Three pension you’re giving up. Run the BRS calculator with various long-term return assumptions from the TSP’s C, S, and I funds to see how long it takes for the BRS matching contributions to exceed the difference between the pensions. DoD actuaries have made the BRS a revenue-neutral decision, and the longer you live then the more the odds shift in your favor.

    Third, the Continuation Pay bonus is a retention contract. All of the services are currently using 2.5x monthly base pay, but in October 2018 those multiples will start to rise as the community managers use them for mid-career retention incentives. You have to sign up for CP before you reach 12 years of service, and it still carries a four-year obligation, but you could wait for two more Octobers before you make a retention decision. If you’re going to stick around to 20 anyway (if you can!) then you might as well invest the CP bonus in your TSP. That will also compound faster than the part of your legacy High Three pension which you’d give up for BRS. Run the BRS calculator with an assumption that you receive 2.5x for CP and see how much more quickly the BRS return exceeds the legacy High Three pension.

    To be excruciatingly correct, when you opt in to BRS you’re losing 20% off the legacy High Three pension because the pension multiplier drops from 2.5%/year to 2.0% per year. At 20 years of service your BRS pension drops the same 20%, but it’s 10 percentage points (from 50% to 40%) of the 36-month average of your base pay. When you add in the BRS matching contributions of 5% of your base pay (not a 36-month average but just your base pay at various ranks from now until 20) then it’s not a straight 5% equivalent of your pension. Better yet, the BRS matching contributions are compounding in your TSP instead of waiting for you to cliff vest at 20 years.

    Both types of military pensions will be adjusted for inflation for the rest of your life (and for your Survivor Benefit Plan, too) but the TSP can be invested in funds which will grow faster than inflation.

    Better still, your TSP funds can be passed on to your heirs no matter how short your life might turn out to be. Your survivors will have their own assets, and you could decide that you don’t need to buy as much of the SBP.

    Finally, your military pension will be taxed each and every year at the federal level (and possibly at the state & local levels). When your BRS matching contributions are invested in your traditional TSP, they’re only subject to income tax once (at withdrawal). If you’ve converted your traditional TSP to a Roth IRA (after the military) then the funds were taxed once (in the conversion) and never taxed again.

  335. Great question, David J.!

    First, your Date of Initial Entry on Military Service is after 8 September 1980 so your pension is High Three. Back in the days of the Final Pay dinosaurs (I’m one of them), some Reserve/Guard retirees would delay the start of their pension until after the next pay raise. They’d lose a month or three of pension deposits and they’d eventually make it up on a higher base pay number in their pension calculation. (Assuming they lived long enough.) However today’s High Three averages 36 months of base pay to start the pension calculation, so you have no benefit to delaying the start of your pension.

    Second, when you’re retired awaiting pay (gray area), your longevity in your rank continues to accumulate as though you were on active duty the entire time. O-5 pay tops out at >22, which means there are no more longevity raises to affect your pension calculation. Even if you start your pension four years early (because of the 2008 NDAA deployments) you’re still maximized on the O-5 pay table. It’s possible that Congress will pass legislation in the next two years to change O-5 pay, yet the last overhaul of the pay tables was in 2007. I wouldn’t delay the start of a High-Three pension because it takes so long for the (very slightly) higher payments to make up for the skipped deposits.

    Third, the early-pension accounting is finicky. The 2008 NDAA initially required each 90-day qualifying period to be served within the same fiscal year. If your deployments started on 1 October and ended the following 30 September then you had four 90-day periods. Any other combination of dates meant that you’d only accumulate three 90-day periods. This fiscal-year law was changed for deployments beginning on 1 October 2014. The details and chronology of the law are in this post by ANG servicemember Ryan Guina:
    You’ll need to go back over your deployment orders and your DD-214s to make sure that you have valid 90-day periods with each one before October 2014 inside the same fiscal year. Any 90-day periods after September 2014 can cross over the fiscal-year dates.

    No matter how many 90-day periods you count up, it’s almost always better to take the early pension. Let’s see whether we can confirm that.

    By federal law, the pension is calculated using the pay tables in effect during the month that you start your pension. In other words, you’ll be figuring out your High-Three average of the pay tables in effect at age 60 (or in your case, as early as age 56). You don’t explicitly mention the date that you’ll turn age 56, but I’m guessing that it’s before your MRD of 21 August 2020.

    Your base pay is already maximized on the pay tables and the High Three average is not worth waiting for a pay raise, so the only advantage to delaying the start of your pension would be if you’re on active-duty orders all the way up to your MRD. That’s a complicated calculation but we can come up with an estimate and you can refine it.

    The first issue is the future pay tables that’ll be in effect during the month you start your pension. We don’t know what the pay tables will look like in 2019 or 2020 but 2% each year is a reasonable estimate on the current 2.6% legislative proposal. You could use those estimates to calculate the 36-month average of your O-5 base pay.

    The High Three Reserve pension calculation is:
    (points / 360) * (36-month average of base pay) * 2.5%

    Calculating the 36-month average of your O-5 base pay is a little tedious. If you start your pension in September 2020 then your High Three average is eight months of the 2020 O-5>22 pay, 12 months of 2019 O-5>22 pay, 12 months of 2018 O-5>22 pay, and four months of 2017 O-5>22 pay.
    With the assumptions we’ve made on O-5>22 pay, the numbers are:
    2017: $9062.70/month
    2018: $9280.20/month
    2019: $9280.20 * 1.02 (a 2% pay raise)
    2020: [($9280.20 * 1.02) * 1.02] (another 2% pay raise)
    The High Three average is
    [(4 * $9062.70) + (12 * $9280.20) + 12 * ($9280.20 * 1.02) + 8 * ($9280.20 * 1.02 * 1.02)] / 36
    = $9401.22/month.
    Your pension would be:
    (4600 / 360) * ($9401.22/month) * 2.5% = $3003/month starting September 2020.
    (Federal law rounds down to the dollar.)

    If you turn age 56 in August 2019 and started your pension in September 2019 then your High Three average would be about 2% lower. You’d also have less than 4600 points, so you’d have to forecast your August 2019 point count to come up with a closer estimate of your pension. Maybe the result would be $2900/month.

    If you’re eligible to start your pension at $2900/month in August 2019, then the only reason you’d delay it would be to continue serving (until your MRD) for at least $2900/month of pay & allowances. The drill weekend for an O-5>22 in 2018 is $1237.36 and one drill is $309.34. You’d have to do a drill weekend plus another 5-6 days of orders or drills (every month) to get up to an average of $2900/month. That’s 65 days of AT orders or an extended ADSW, although some of that would be allowances for food & housing (BAS, BAH).

    Once you verify the dates of your 2008 NDAA deployments, the start date for your pension might be later (closer to your MRD) than I’ve forecast. You’ll have to check your 90-day periods on your DD-214s to make sure it really is 48 months earlier and not a smaller number.

    If you let me know your date of birth (to figure out ages 56 and 60) and your estimated point counts at those ages then we can refine the estimate.

    Another caveat to the 2008 NDAA is that it applies to the pension but not to Tricare. When you retire awaiting pay (and then start your pension early) your health insurance will shift from Tricare Reserve Select to Tricare Reserve Retired. You’ll start Tricare (Select or Prime) on your 60th birthday. (Five years later, after signing up for Medicare, you’ll be eligible for Tricare For Life.) Of course you’re also free to use insurance from a civilian employer, to search for a better policy on the ACA insurance exchanges, and to use the VA for your service-connected health issues.

  336. 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.

  337. 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.

  338. 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.

  339. 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.

  340. 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.

  341. 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.

  342. 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.

  343. 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.

  344. Thanks, Jan, I appreciate your retirement moving experience!

  345. 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.

  346. 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.

  347. 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.

  348. Sophia,

    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.

  349. Daniel,

    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.

  350. 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.

  351. 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.

  352. Good points, Peter!

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

  353. 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.

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

  355. 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).

  356. 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.

  357. 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.

  358. 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.

  359. 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…

  360. 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.

  361. 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.

  362. 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.

  363. 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.

  364. Thanks, FIndependentOne!

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

  365. 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.

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

  367. 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.

  368. Thanks, Peter.

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

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

    Wise words for the younger servicemembers…

  370. 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.

  371. 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.

  372. 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.

  373. 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.

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

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

  376. Thank you, Vikyat. I hope it keeps spreading.

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

  378. 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.

  379. (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.

  380. 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.

  381. 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.

  382. 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.

  383. 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.

  384. 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.

  385. 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.

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

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

  388. 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.”

  389. 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.

  390. 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.

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

  392. 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.

  393. 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:

  394. 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.

  395. 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.

  396. 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.

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

  398. Thank you, Julie. I completely understand the “living in the present” part.

  399. 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.

  400. 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.

  401. 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.

  402. 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.

  403. Thank you very much, Eva!

    Financial independence has completely changed the culture during the last couple generations. That’s a very good thing.

  404. 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.

  405. 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.

  406. 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:

  407. 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.

  408. You’re welcome– servicemembers & vets need to see these transition success stories!

  409. 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.

  410. Thanks, I updated the link! I guess the memo has to be tracked down at AFPC behind a firewall.

  411. 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.

  412. Thanks, Military Dollar, I just hope people start discussing and deciding.

  413. 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”.

  414. 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.

  415. 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.

  416. 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.

  417. 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:

  418. 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.

  419. 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”.

  420. 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?

  421. Thanks, Tori! I love these testimonials. And here’s another endorsement for!

  422. 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.

  423. 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.

  424. 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!

  425. 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.

  426. 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.

  427. 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:

  428. 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:

  429. 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.

  430. 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.

  431. Good questions, Peter, thanks!

  432. 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.

  433. 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.

  434. 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.

  435. 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.

  436. 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..

  437. 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.

  438. 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!

  439. 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.

  440. 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.

  441. 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.

  442. Great point, Ranger Vic– thanks!

  443. 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.

  444. 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:

  445. 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!

  446. 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.

  447. 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.”

  448. 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.

  449. 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.

  450. 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:

  451. 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.

  452. 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.

  453. Thanks, Mack, that’s a great feature of 401(k)s.

  454. 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.

  455. 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.

  456. 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.

  457. Thanks, Kevin, great advice!

  458. 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.

  459. Good question, Rey!

    Overseas, we’ve done well with Booking .com and AirBnb. In America we’ve also used VRBO .com.

  460. 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

  461. Sorry to read that, Rachel.

    In the year since this post has been published, the entire insurance industry has been raising their rates:

  462. 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:

  463. 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.

  464. 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.

  465. 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:

  466. 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.

  467. 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.

  468. 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.

  469. 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.

  470. 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.

  471. 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.

  472. 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.

  473. Thanks, Ben! Two years later, I’m still using almost exactly the same checklist…

  474. Thanks, Roger, great numbers!

  475. I agree, Dave, if you’ve picked up O-5 then you’ll have up to 28 years to get your 20 good years.

  476. 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:

  477. 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.

  478. Good comments, Peter– and I’m keeping an eye on the tech improvements.

  479. 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.

  480. 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!

  481. Good question, Lloyd!

    The BRS pension (40% at 20 years) is still for life, just like today’s High Three pension.

  482. 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!

  483. Thanks, John, and congratulations on making the most of your retirement!

  484. 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.

  485. 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.

  486. 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:

  487. 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…

  488. 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.

  489. Thanks! I’m glad to learn that Darrow and I aren’t the only ones…

    … and let us know how your retirement transition goes!

  490. 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.

  491. 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.

  492. 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!

  493. 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.

  494. 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.

  495. 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.

  496. 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.

  497. 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.

  498. Thanks, Peter, good advice.

  499. 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.

  500. 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:

  501. 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.

  502. Ha! Murrysville, Franklin Regional ’78. And yes, Steeler Nation is all over these islands…

  503. 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.

  504. 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.

  505. 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.

  506. Thanks, Peter!

    I shoveled my lifetime quota of snow growing up in Pittsburgh, but the surfing is a lot better over here…

  507. 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.

  508. 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.

  509. Thanks, John!

    I so want to believe that it’s business checking, but I’m not holding my breath…

  510. 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.

  511. 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.

  512. 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.

  513. 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.

  514. Thanks, Marsha, it’s the best resource for gray-area retirees who are tracking down records and retirement info!

  515. “… 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!

  516. 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.

  517. 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.

  518. Stephanie,

    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 r