Greetings, nash031 - DINK, 36-yo military officer

[nash031]

Greetings!

Defining DINK - dual-income no kids... don't think I saw that one on the acronyms post!

Wife (32) and I (36) are both employed. She's (non-profit director) got a good defined-contribution plan with 12% matching that we max out. I (13.5-year Naval officer) max TSP, we both max IRAs, continue contributing to taxable accounts as well. We have a good start on our portfolio, but we're not millionaires (yet). We have well into six-figures in equity in our still-mortgaged home. Pretty good at LBOM, saving about 45% of gross every year, but could probably get even better.

Not sure if I'm sticking out 20 years on active duty for the pension, but understand the fantastic inflation-adjusted benefits. If I don't finish out 20 active, I will finish out as a reservist for the healthcare and retirement later. Part of that decision will come down to what lifestyle my wife and I decide we want (spending level in retirement) and whether or not we're going to have children.

Enjoyed reading forum posts and Nord's book enough to join. Love the "human capital" discussions in the appendices there, specifically regarding the often-overlooked increased risk tolerance for someone in the military (or with similar benefits/stability of employment). Am considering adjusting my portfolio balance up from its current 75/25 to a 90/10, and particularly so if I ultimately decide to cash in an active-duty pension.

Not sure what I want to do when I grow up, but the prospect of retiring at age 42 is something I'm definitely interested in. The lifestyle choice and having children decisions to be made in the next year or so will weigh heavily on that. In any event, I don't think I want to work (for someone else, anyway) well into my 50s, so we'll be working to that end.

Glad to be here, looking forward to learning more.

 

[jclarksnakes]

Thank you for your service and welcome to the forum. I agree that someone with a good pension can take more risk with their investments but do be careful before you are sure the pension is guaranteed. I had many friends who had their military careers end before they had the pension. Some of them were strong performers who made no mistakes but were just beaten by low promotion numbers and the up or out policy.

 

[omni550]

Welcome aboard and thanks for your service, nash031!

omni

 

[obgyn65]

Welcome aboard.

 

[haloFIRE]

Welcome aboard Ship Mate!
Well, service mate anyway....I'm Army.

I agree with you on risk, but jclarksnakes point is very good....you aren't there until you are there with a pension.....so may not want to go to far towards stocks on you AA until you are vested.

I'm over 24 years of active service, so since I have a pension awaiting, I'm 95% stocks, 5% cash.

If you still enjoy serving, I'd stick out the remaining 6.5 years and lock in the pension....to good of a deal to pass up...especially since you are over 2/3rds of the way there!

Good luck in your quest for FIRE! Appears you are well on your way!

 

[haloFIRE]

P.S. the longer you are in, the faster the time seems to fly by! 6.5 years will be here before you know it!

 

[Van-Guard23]

Welcome aboard...I am also a "soon to be retired" military officer (20+ years in US Army - retire at 44 years old). Nords and I are both living in paradise here in Hawaii...his blog, www.the-military-guide.com, is fantastic and provides great insights on military retirement, especially for those living in Hawaii.
At 13.5 years in, I would strongly advocate going for another 6.5+ years to achieve 20 years. Though that 15-year early retirement might seem enticing (they're still offering that to USN and USMC?), a PhD paper referenced in Nords' blog cautions against it...a full military pension with COLA adjustments and the relatively cheap health care/insurance can't be beat.

 

[nash031]

Thanks guys, I appreciate the welcome. From a FIRE standpoint, it makes no sense whatsoever to consider getting out at 15 years. To the point of early retirement, my line of work is one that "need not apply", therefore it's 20-or-bust for a pension.

There are a lot of other issues that go into the retire/reserve decision for me, one of which is whether or not we decide to have kids. Obviously financial security and health care become very important, but so does spending time with them. At this point, however, I could be around all the time for years 6-18 if we had a child next year. So, we'll see. Part of my frustration comes from 5 years of pretty miserable sea duty, so to say I still "enjoy" serving might be a stretch. We'll see how I feel after a couple of months on shore duty to stretch my legs.

I am currently 75/25 stocks to bonds (with a rebalance due in a week or two since I'm probably closer to 80-20, not because I'm counting on the pension, but because we're still relatively young. If I DON'T get a pension, my retirement horizon is likely out about 15-20 years. So either way, I'm a little more risk-tolerant.

I appreciate all the thoughts, and always willing to hear "sea" stories and advice! Now if I can just push DW to find a job that will double her salary (and thus increase our savings rate even more!), none of this matters as much!

 

[jclarksnakes]

If I was in your situation 75 or 80 % stocks would not bother me at all.

 

[Huston55]

Welcome Nash.

I'd echo the advice to stay until 20, with or without kids. Almost seems like a no brainier, at least financially.

I made the decision to separate at 6 yrs active duty and retired as a Reservist with 23 yrs. When I was in, we talked about 10 yrs+ as being the go/no go decision point. You're well past that, and can always start a second career if you so choose. But, you can't go back and undo a decision to separate; easily anyway.

All the best to you. Hope to see you around the forum frequently.

 

[jimnjana]

Welcome,

I'd just say that it would make sense to leave AD early if you could lock in separation benefits. Otherwise, IMO you already crossed the "get out early" point for life style purposes.

 

[nash031]

Thanks all, I largely agree. It is always tough to think about at least two more deployments and the prospect of missing things that only happen once - first steps, first words, etc., or having to uproot and move a young family. It's a weighty decision, but I think both my wife and I are smart and logical enough that we're not likely to turn down a $5M lottery ticket.

 

[haloFIRE]

Nash031,
I can seriously relate to what you say about missing things. Most of the time I'm happy to serve...somedays though....If I had time to do it I'd drop my paperwork!
The good outweighs the bad though. Hopefully shore duty will help reset your tolerance. I've got a ton of respect for Sailors, and the Opstempo you live....even pre 9-11 y'all had high Opstempo and long deployments.
Hope you get as much out of the site as I have! I've always wanted to ER, but until I started spending time here I thought ER was 10-15 Years away vice 2 plus.

 

[Gumby]

Welcome aboard, Nash. I did the 5 and out route, but if I were in your shoes, I'd think long and hard about walking away before 20.

 

[packrat44]

Welcome aboard from another retired military. Tough it out for the next 6.5 years. Medical is one of the biggest issues facing a retiree, especially an early retiree. Tricare is an especially good benefit for your family. While the pension is good, it is the medical that that locks it in.

You didn't say what career field you are in. If happen to be an engineer you will be in double good company on this forum.

 

[HawkeyeNFO]

hi Nash. My timeline is similar to yours. Currently have 15.5 years in. My last job was at a reserve squadron (although I'm not a reservist), and while the reserves is certainly appealing, you need to know ALL your options before you try to get out and go that route, and also understand the reduction in benefits, especially wrt health care.

Have you considered FTS? Changing your designator to something else like HR or IP (where people have to beg to get sea duty)?

Not sure what your background is, but I strongly recommend you stick it out for 20. I think you'll find that the time goes pretty quick. And at 20 years, you will have the equivalent of an annuity worth no less than $1M, and even more than that if you make CDR.

 

[nash031]

For those that asked, I'm a nuclear engineer for the Navy. Already done with the nuke shore thing, so I am a straight-stick SWO to the 20-year point, which is nice. Thanks for the continued feedback!

 

[HawkeyeNFO]

I'd be putting in a package for Engineering Duty Officer right now if I were you. Great quality of life, good promotion rates, and interesting work too. PM me if you have questions.

 

[nash031]

Heh, just looked at this again after seeing a few updates from others. So here's mine:

I've signed the contract to stick around through at least 20. It only made sense. Now at 16 years and tracking above 55% of our minimum required liquid NW for FI, I think we're on track. Still saving at the same rate as two-plus years ago, but raises and such mean the net going in has grown. I suspect we'll be about 10% above our estimated FI number by 2020. Now working on ways to reduce spending, and focusing on what's next during whatever downtime there is. Definitely still focused on keeping up the current performance, however... No ROAD here.

So that's that. Riding out the last four years... Should be fun, exciting, and eye opening as 20 approaches!

 

[NanoSour]

You won't regret it Nash. Had the opportunity to leave at 17 when the there was major hiring in my industry. So glad I didn't jump ship so to speak.

 

[EpicRider]

Nash031....Congrat's on the decision; it will pass quickly. Best to you!

 

[nash031]

Three years on ER.org... Update!

Wife (32) and I (36) are both employed. She's (non-profit director) got a good defined-contribution plan with 12% matching that we max out. I (13.5-year Naval officer) max TSP, we both max IRAs, continue contributing to taxable accounts as well. Pretty good at LBOM, saving about 45% of gross every year, but could probably get even better.

No changes here. Jobs are the same, gross savings rate has gone up a little bit and with pay raises for both of us in the last three years, we've increased our savings by about 15% from amount saved in 2013 to amount saved in 2016. Coupled with growth, we're on track to hit our project FI number by 2020, which will open up our options. We're at about 60% of our FI number in invested assets, up from about 35% when I first logged in here three years ago.

Not sure if I'm sticking out 20 years on active duty for the pension, but understand the fantastic inflation-adjusted benefits...

Am considering adjusting my portfolio balance up from its current 75/25 to a 90/10, and particularly so if I ultimately decide to cash in an active-duty pension.

As mentioned above, I am in it to win it. Contract through 20 years, with 3.5 to go. We've gone with 85/15 for our AA, and I'm dabbling with some value investing with a small portion of our portfolio as well.

The lifestyle choice and having children decisions to be made in the next year or so will weigh heavily on that.

As mentioned in other threads, this is happening! DD1 due in September.

In any event, I don't think I want to work (for someone else, anyway) well into my 50s, so we'll be working to that end.

Hasn't changed a bit! While I will likely do the "bridge career" thing for extra income and savings now that DD1 is on the way, I don't plan on working into the years that start with "5" if I can help it.

Obviously the biggest change is DD1 inbound. This will almost certainly impact savings a little bit, and certainly expenses in the longer term, thus I don't think I'll retire for good at 42, but the option may still be there. As we prepare for DD1's arrival, we think a little bit about life after military service, and specifically locations, as the draw of owning a home free and clear in a lower COL area is appealing. We both love SoCal, but taxes here take a big bite, the job market can be tough, and if DD1 finds herself an older sister someday, we'll have to move from our current home anyway which negates the property tax advantage of long-term home ownership here. Coupled with the draw of grandparents, I can see us moving back east at least for a few years to raise the family, continue saving, and potentially make a return west someday.

I've learned a lot here the last three years, and enjoy reading and contributing periodically! DW even enjoys reading some of the threads that I show her about "quality products" and car shopping! Good stuff abounds.

 

[Katiek]

Thanks for the update! Congrats on your continued progress and the impending arrival of DD1! If you get a chance, post an update when she arrives.

 

[NW-Bound]

DINK turning into DIOK (Dual Income One Kid).

Congrats.

 

[FI by 2024]

Congrats! Are you set on getting out at 20, or would you continue for a few more years on AD if given the opportunity vs starting a bridge career?