Hanging on for the military pension

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A reader writes:

“I’ve read your book and have been following your website for a couple of years. I really enjoy your advice and perspectives and want your advice on an issue I’m having: I’ve focused so much energy on setting up my finances for our impending military retirement lifestyle (in five years) that I literally find it hard to stomach going to work these days.

I have a great billet,however, I’m really burnt out on all things military right now, to the point of I dream about quitting and doing something else. Did you ever have a similar rough patch? I sense the answer lies in trying to the enjoy the everyday things a little more, considering I just got promoted and don’t have to worry about getting the next big job (not interested). Any nuggets of wisdom would be appreciated.”

Thanks for reading the book and the blog!

First, it sounds like your leave balance is too high… I hope you have the chance to take a week or two?

This post is a long answer to a straightforward question, but it’s asked a lot and readers have shared many stories. Your instincts are correct, and the final paragraphs have suggestions for boosting your morale with a few minor tweaks. You’ll get through this by checking your plan and being ready for a few contingencies.

I had several of those “rough patches” during my final five years. It was usually a combination of pushing too hard (in every part of my life) and not sleeping well. Even when I took leave we’d plan a major family trip or a home-improvement project, and I’d usually finish the “time off” even more fatigued than I started. I was essentially clenching my jaw and pounding through those years because I couldn’t figure out a better alternative. It was classic chronic stress: after I retired my headaches stopped and my blood pressure immediately dropped 30 points. I made it but I’ll never know how close I came to a self-imposed health crisis.

I thought I simply had to endure until 20. In retrospect, I was terrified of leaving active duty and couldn’t figure out how to handle the unknowns. I never really learned about the Reserve drill system, let alone the Reserve pension, and I didn’t think that I had the skills to get a “real” job. (Ha!) I was also pretty stupid in my single-minded pursuit of an active-duty pension. My spouse and I were dual military, so I could’ve just dropped out to become an at-home parent for a few years. However, I was locked in on our optimal financial plan and I didn’t have the mental bandwidth to consider alternatives.

At 15 years of service, however, it’s essential to learn about all of your options. As if your morale isn’t rocky enough, and your family hasn’t already sacrificed enough, your assignment officer may feel entitled to send you anywhere. They may be trying to give you an opportunity to break out of your pack, but they may also have to fill a tough billet and they think you’ll do anything to get to 20. I don’t have statistics on that but I have plenty of anecdotes from other readers. I hope your community is the exception to this trend.

Our situation came to a head when my spouse got that “unrefusable offer” from her assignment officer. In their opinion, they could play hardball because she’d be willing to do anything to get an active-duty pension. Our seven-year-old daughter was very unhappy about being separated for a year, and I felt like a seven-year-old too.

While my spouse was negotiating on the professional side, we spent months discussing the personal side. I overhauled our financial independence spreadsheets and our retirement planning. After much introspection she decided to leave active duty for the Reserves. Everyone thought she was nuts, but we’d done the math and we knew that we’d saved up enough money. The fact was that we’d overshot the mark and only needed one Reserve pension to be able to retire in our 40s. Her transition also showed us that we could both get “real jobs” if we needed to.

We already knew our lives could be better, but when she left active duty even we were shocked at how much better it got. She was able to take charge of her career again, do what she wanted to do, and earn plenty of drill pay. She got tremendous respect & love from the Reserves. There was work everywhere (both Reserve and civilian) if she wanted it. We kept the family together, we stayed in Hawaii, our daughter was thrilled, and we all lived happily ever after. It became clear that at least one of us should’ve left active duty when we started our family.

Everyone’s “rough patch” is different, but when I think back on my own final years in uniform I was an obstinate idiot. I could’ve left active duty at 12 and joined the Reserves. I could have handled the homefront, raised our daughter for a few years, and picked up more paid employment any time. Instead of hanging on for the “easy answer” of a pension at 20, I would have figured out how to make our assets last until the Reserve pension kicked in at 60. I would’ve worked less and enjoyed life more. I’ll never know how many years of my health (and my longevity) I sacrificed to get through those last few years to the active-duty pension.

I’m even more keenly aware of these issues now that I’m in my 50s and my classmates are starting to drop dead of unsuspected medical issues.

What if you get “the call” from the assignment officer? What if you or your spouse have a health crisis? What if one of your kids is struggling and needs more of your time? How much safety margin do you have left in your life, and how much faster can you juggle until you reach 20? Again I don’t have the statistics, but my readers have shared plenty of eye-opening stories.

Your body and your subconscious are trying to tell you something. Here’s how you can boost your morale and check your contingency planning. Just walking through the process will make you feel better.

First, think through the worst case by assuming that you get your own “final offer” from your assignment officer. Now figure out your alternatives. Could you leave active duty for the Reserve or National Guard? What unit would you join, where would you drill, how much money would you earn? What would your Reserve pension be (in today’s dollars)? Would you need a civilian or civil-service job along with the Reserves, or could you still maintain your lifestyle with drill weekends? Do you need a bridge career after the Reserves, or do you have enough assets to make it until your Reserve pension kicks in at age 60? Dig into your spreadsheets, forecast your spending and your investment returns, and figure out your cash flow. I’m pretty sure that you’ll discover some pleasant surprises, and you might fix a few issues.

Next, prepare your transition. It’s early, but tell your chain of command that you’re facing some life decisions and you want to do the research. Take a few days to attend your service’s transition seminars, and pay particular attention to the stories & attitudes of those around you. (It’s even better if your spouse is able to attend with you.) Work through the self-assessment surveys and interest-discovery questionnaires. Take a Ruehlin seminar if there’s one in your area, or e-mail a Lucas Group headhunter. You’ll feel better because you’re getting an early start on your own planning, and even happier that you’ve saved for financial independence. At least one seminar attendee will tell you that they wish they’d started earlier.

Finally, talk it over with your spouse (and maybe even your kids). If one of you had a health crisis, what would have to change? What if you decided to leave active duty for the Reserves or a civilian bridge career? What impact would that have on your current location, lifestyle, and spending?

By the end of this planning review, you’ll not only know what you want to do– you’ll also feel good about it. You’ll know why you’re staying on active duty (or why not). You’ll know that you can handle the transition. You’ll be mentally & emotionally ready for a crisis and confident that you have the resources to handle it. Your planning will be refined and you might even patch a few holes. You’ll know what you want to do after the military, and you can find a way to explore it before you finish your 20.

Readers, how did you get through the “rough patch” before you could finally leave the military?

Related articles:
When should you stop working?
I’m going to retire. Now what?
Six months before retirement
During retirement: Healthy lifestyle
Life After the Military – Now What?
Book review: “The Longevity Project”
The “fog of work”

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WHAT I DO: I help you reach financial independence. For free. I retired in 2002 after 20 years in the Navy's submarine force. I wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other financially independent servicemembers, veterans, and families. All of my writing revenue is donated to military-friendly charities.

  1. “First, it sounds like your leave balance is too high…”

    That’s awesome! And pretty accurate.

    We had 3 moves in 4 years, and the shortest one seemed like the worst. For the other 2 moves, we took long, Odyssey-like vacations en route to the new duty station. It really broke things up, whereas the last duty station and this one feel like one long slog. I hate having to move, but I love the excitement of exploring and living in a new location (if that makes sense).

    That’s for my wife’s active duty career. I got off active duty with nothing more than “handshake, second award.” Five years later I found myself drilling in the Reserves by luck. Once I figured out that I could earn a Reserve retirement, we made it a priority and made it work.

    If you do transition to the Reserves, make sure you do it at least 35 days after your anniversary date. That way your last 35+ days on active duty count as a whole “good year” towards Reserve retirement.

    Comment? Question? What's on your mind?