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Hi, Dual Military Couple here...
Old 11-25-2018, 06:33 AM   #1
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Hi, Dual Military Couple here...

Hi, I am half of a dual military couple. Love the website, lots of great insight. I just read up on TDubs post which is a similar situation to ours but just wanted to put up our info as well and get some tailored advice/opinions.

I’m a 39 y/o O-4 with 16.5 years, hoping to retire as an O-5 at 24 years. Wife is a 30 y/o O-3 with 8.5 years in and a conservative goal of retiring at 20 as an O-5 but maybe as an O-6 at 24.

Only debt is one mortgage in CO which we just refinanced down to a 15 year loan last year. We are overseas right now and are making extra payments each month so the house will definitely be paid off before my wife retires. Goal is to use the rental income from that house to offset the cost of our retirement home which at this point we have no idea where that will be.

Major life change is going to be we will start having kids next year (I had a pretty good run). Planning on 2 and taking care of them is probably what i'll be doing after my military retirement in 2026.

Assets:

Cash: $48k (need a new car/travel/emergency)

Brokerage: Total: $142K
TD Ameritrade: $77K in AAPL/AMZN/FB/TSLA/IBB – Fun Account…pretty much just watch it
LPL: $65K, 7/10/14/19/21/28% in FBK/NEWFX/SMCWX/PG/CWGIX/AGTHX – hate mostly because of fees, plan on transferring it all over to VTI which is where all future savings will go (~$20kish/yr)

Retirement: Total $358K (maxing all of these out each year: $48K)
My Traditional TSP: $215K, 30/40/30% in C/S/I (C=S&P 500, S=Extended Mkt, I=Developed Overseas)
DW Roth TSP: $67K, 20/80 in S/LC50
My Roth IRA: $65K, 8/10/20/27/34% in IEMG/VTI/VWEHX/VGSLX/VHDWX
DW Roth IRA: $11K, 100% in VTI

Total: $548K

My military pension (O5/24 yrs): $76K
DW military pension (O5/20 yrs): $60K
Total: $136K COLA adjusted

Annual Expenditures: ~$85K

SBP: My thoughts are that unless we have disabled kids that we both will pass on it since we will both will still receive our own pensions. I haven’t done much research on it though. Worst case scenario: I die the day after I retire and we have two healthy kids. Wife will still have her retirement, get a life insurance check and have a nearly paid off house.

Life Insurance: Thinking about getting 20 year term life insurance here quickly since I turn 40 in a month…thoughts? Should I drop SGLI or just double up.

I think that we are in a pretty good spot but appreciate any advice you guys may have. Thanks,
-Ben
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Old 11-25-2018, 01:54 PM   #2
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I will let others with more knowledge opine on your situation... but a comment and a couple of questions...


Does your spouse get any of your pension when you die?


Do you get SS if in the military?




BUT, my comment is that your pensions will easily cover all your expenses.... so why save anything? Just keep working until your planned date and enjoy life!!! But also enjoy life currently more....
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Old 11-25-2018, 03:26 PM   #3
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Quote:
Originally Posted by benherring View Post
Hi, I am half of a dual military couple. Love the website, lots of great insight. I just read up on TDubs post which is a similar situation to ours but just wanted to put up our info as well and get some tailored advice/opinions.

I’m a 39 y/o O-4 with 16.5 years, hoping to retire as an O-5 at 24 years. Wife is a 30 y/o O-3 with 8.5 years in and a conservative goal of retiring at 20 as an O-5 but maybe as an O-6 at 24.

Only debt is one mortgage in CO which we just refinanced down to a 15 year loan last year. We are overseas right now and are making extra payments each month so the house will definitely be paid off before my wife retires. Goal is to use the rental income from that house to offset the cost of our retirement home which at this point we have no idea where that will be.

Major life change is going to be we will start having kids next year (I had a pretty good run). Planning on 2 and taking care of them is probably what i'll be doing after my military retirement in 2026.

Assets:

Cash: $48k (need a new car/travel/emergency)

Brokerage: Total: $142K
TD Ameritrade: $77K in AAPL/AMZN/FB/TSLA/IBB – Fun Account…pretty much just watch it
LPL: $65K, 7/10/14/19/21/28% in FBK/NEWFX/SMCWX/PG/CWGIX/AGTHX – hate mostly because of fees, plan on transferring it all over to VTI which is where all future savings will go (~$20kish/yr)

Retirement: Total $358K (maxing all of these out each year: $48K)
My Traditional TSP: $215K, 30/40/30% in C/S/I (C=S&P 500, S=Extended Mkt, I=Developed Overseas)
DW Roth TSP: $67K, 20/80 in S/LC50
My Roth IRA: $65K, 8/10/20/27/34% in IEMG/VTI/VWEHX/VGSLX/VHDWX
DW Roth IRA: $11K, 100% in VTI

Total: $548K

My military pension (O5/24 yrs): $76K
DW military pension (O5/20 yrs): $60K
Total: $136K COLA adjusted

Annual Expenditures: ~$85K

SBP: My thoughts are that unless we have disabled kids that we both will pass on it since we will both will still receive our own pensions. I haven’t done much research on it though. Worst case scenario: I die the day after I retire and we have two healthy kids. Wife will still have her retirement, get a life insurance check and have a nearly paid off house.

Life Insurance: Thinking about getting 20 year term life insurance here quickly since I turn 40 in a month…thoughts? Should I drop SGLI or just double up.

I think that we are in a pretty good spot but appreciate any advice you guys may have. Thanks,
-Ben


Dual military retired right here. DW retired in Feb 2012 as a 21yr CWO4. I punched in Oct 2013 as a 23 yr O-4. Combined plus VA Dis is $105K. We paid for 2 kids college with our post 911 gibill.

We elected no survivor beni. We have it covered with 500K life thru jobs. We decided to continue working past fi because 1). DW took the uniform off and turned 40 a week later. She needs to figure out what to retire to vice retiring from something. She also does something really cool. She is the maintenance manager(MO) for the Navy's unmanned A/C test squadron. I do some cool aviation stuff also.

Do your own math on survivor benifit. It didn't make sense for us. One back up plan we have that may work for you is delaying SS. I am 6 yrs older than DW. I will take at 70 and then if I die before her (stats say I will) then she will take mine at that point. Shouldn't need it in 17 years anyway because of other investments totalling 1 mil +.

Might want to pick up a good book written by one of the members here. Military Guide to financial independence and retirement-Doug Nordman. He and his DW were dual active for awhile. I believe she went reservist after 10 or so. He punched right at 20.

O-3 is a good rank to start having kids. Past lots of the grunt company grade work. Depends on your MOS I suppose. Good luck.
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Old 11-25-2018, 08:44 PM   #4
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Retired milspouse here. I was a DOD civilian. I want to throw out some thoughts as your scenario is compelling. Id also like to see what Nords says. Hes also dual military.

I agree with your assessment barring special needs children, SBP is prob not a have to have for either of you. Sounds like based on your age diff and diff in years of service, theres a small chance you could get out, elect to not get SBP for wife thinking shed have her own pension, and then she gets invited to depart via force shaping/goodness knows what and then she DOESNT have a pension after all. And no reach back to turn on that SBP after the fact. Check my math though, maybe she would be good to go by the time you retire. But if you have the old school cliff pension 19 years and 364 days is zero pension unless its a medical dealio. Correct me when Im wrong. So she has a glass of wine, blows a .0nothing and they make an example out of her. Im just throwing worst case scenarios, I am in no way accusing anyone of anything. I just spitballing wild ideas bc Ive seen some shizzle in my rotations around the sun with the military crowd. Other wildcard would be divorce. One of you departs with the savings and a substantial share of a pension. NOT AN ATTORNEY but as i understand it the military only has rules on who keeps healthcare and if DFAS gets involved in taking the money from the check or not but divorces and settlements etc are according to STATE law. So that scenario could go sideways for maybe one of you.

Also Im pretty sure SGLI ends at retirement, and you have to transition to VGLI at a MUCH higher expense. SO many folks shop that privately before they are old and lock that in place long before the body begins to fail and the VA has the paperwork to back that up.

TO me worst case scenario is SBP declined on your pension, you die day 1 of retirement leaving wife with 2(?) healthy(?) kids, a mostly paid off house, and her hoping and praying she hits 20 in another 3.5 or so years. BEcause if for some reason she doesn't make those 3.5 years, theres no income stream there at all except the income the rental house is throwing off. Can she make a LI check, rental income and the portfolio last her full life expectancy if for some reason she doesn't vest in her own pension? I think that's the first question to answer. THat cliff vesting pension for her scares me in this case. (maybe she has the newfangled one instead??) Dunno.

We did the math by working kind of a matrix killing me off and evaluating whats left for my husband, killing my husband off and evaluating whats left for me, oh and incapacitating each of us. and then both of us. That is the pressure test I think. And you add in kids. Healthy kids. Unhealthy kids. And don't forget to consider your own parents and siblings. If they will fall to you to care for you need to have thought that through also. If not, then not.

VA disability is a wildcard, and I don't think you should spend money until its in the bank. Ive seen the insanity that is the VA system. Same with SS. Yes military folks pay into therefore can get SS. But its out in the future and we are planning on exactly 0.00 bc we think they are going to means test it by the time I could draw it. (Im in your wife's age group). But others may feel otherwise and say oh yeah Im planning on getting my full benefit. FWIW I think you could get a couple million in the bank no prob esp with 2 BAH's, 2 company grade O paychecks, covered medical, no kids at present etc.. I would feel better popping clogs on day 1 if I knew there were a lot of zeros in those brokerage accounts.
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Old 11-25-2018, 09:11 PM   #5
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I will say that something can happen to someone in the military that is unexpected..


I had a BIL that was in the Navy back in the 70s... was on an aircraft carrier during Vietnam.... well, it was getting to the end of his tour and he was about to get out... then some officer got a hair up his butt and made charges against him... he was arrested and put in jail (or whatever it is called in the Navy).... was in for a few months and missed his exit date.. he refused to do whatever it was that they wanted him to do and he just wanted to get out... at the time he was OK with being discharged with other than honorable or dishonorable (not sure which)....


His dad happened to work for a TV station and knew a few heavy hitter Congressmen and a Senator... they put pressure on and was able to get BIL out of jail and eventually an honorable discharge....


Now, he was not going to stay the 20 so it did not matter, but he was in trouble there for awhile and probably would have been kicked out even if he wanted to stay... only his dad's connections helped him...
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Old 11-25-2018, 10:04 PM   #6
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Quote:
Originally Posted by Bigdawg View Post
Might want to pick up a good book written by one of the members here. Military Guide to financial independence and retirement-Doug Nordman. He and his DW were dual active for awhile. I believe she went reservist after 10 or so. He punched right at 20.
Thanks for the tags, Bigdawg & JDarnell.

My spouse actually left active duty at 17 years, 11 months, and 20 days by the time her relief was located. (The short story is “bad assignment policies”.) She spent another 7.5 years in the Reserves with a much more enjoyable career field.

At the time, we calculated her foregone earnings & pension at about $750K. (It turned out to be closer to $1M.) However we’d already done the financial-independence math and realized that we were FI on our investments alone, whether or not either of us made it to a pension.

The week she left active duty, our family life immediately got awesome. That’s when we recognized that I’d made a mistake by gutting it out to 20. I should’ve left active duty for the Reserves at about the 10-12-year point. I would’ve even been able to show up at the same submarine shore command the following week, in civilian attire or in uniform, for a 40-hour week with a much better work/life balance. Finances would’ve worked out about the same, but our family life would’ve been way better.

Quote:
Originally Posted by benherring View Post
Hi, I am half of a dual military couple.

I’m a 39 y/o O-4 with 16.5 years, hoping to retire as an O-5 at 24 years. Wife is a 30 y/o O-3 with 8.5 years in and a conservative goal of retiring at 20 as an O-5 but maybe as an O-6 at 24.
You have 3.5 years to retirement eligibility, and you’re already well on the way to financial independence. You should stay on active duty as long as you’re feeling challenged & fulfilled, but keep in mind that there’s no reason to push for O-5 (let alone 24 years) if you’re already FI.

Maybe the smart move is retiring the minute you reach 20. Maybe you’d stick around for a year or two of time in grade (and pay) to retire as an O-5, but that’s winning the game in the third quarter and running up the score. You’d want to have a very good assignment to stay motivated until 24.

Your spouse’s goal is not “conservative”. It’s ridiculously optimistic because everyone with less than 12 years of service is blissfully uninformed. As you probably already know, the second 10 years of a military career is completely different from the first 10, and you’re also planning to start a family. You’re not only dealing with fewer billets at the top of the leadership triangle but also with childcare and work/life balance.

I’d strongly encourage you to not only re-run your numbers with an assumption that you retire at O-4>20, but also to consider her opting in to the Blended Retirement System.

BRS means she’s free to go to the Reserves (or full civilian) as soon as her challenging & fulfilling fun stops. In any case, two active-duty pensions are overkill for your current annual spending. Even an active-duty pension and a Reserve pension are overkill. I know this from 16+ years of personal experience.

If your goal is simply FI then you’ll get there on one active-duty pension. If she sticks around for a Reserve pension it would make your heirs very happy. If you both end up with active-duty pensions then you’re probably not looking at yachts and private jets, but yacht charters and a NetJets card would be well within reach. Again, 16+ years of personal experience.

Once you’ve started your family you’ll want an ironclad Family Care Plan which lets you sleep at night without worrying about 20-hour days, surprise temporary duty orders, or even an emergent deployment. I know many dual-mil couples who’ve tried to rely on Grandparents or neighbors, and they’ve ended up going with nannies (occasionally overnight) or even live-in au pairs.

Again, stay on active duty as long as you’re challenged & fulfilled-- but when her fun stops then consider the Reserves or National Guard. Don’t gut it out to 20. Or 24.
http://the-military-guide.com/dont-g...ational-guard/

Quote:
Originally Posted by benherring View Post
SBP: My thoughts are that unless we have disabled kids that we both will pass on it since we will both will still receive our own pensions. I haven’t done much research on it though. Worst case scenario: I die the day after I retire and we have two healthy kids. Wife will still have her retirement, get a life insurance check and have a nearly paid off house.
You could look into child-only SBP, which would end when they’re 18 years old (or 22 for full-time college) or married.
https://www.dfas.mil/retiree-service...nnuitants.html

I think you could cover all the other situations (including the worst case) with term life insurance.

My spouse and I declined SBP on each other. We each have enough of our own assets, and we’d rather have the 6.5% to spend on ourselves while we’re both still alive.

I agree with you on the Special Needs Trust for an adult disabled child. That’s the biggest improvement in SBP in at least 20 years.

Quote:
Originally Posted by benherring View Post
Life Insurance: Thinking about getting 20 year term life insurance here quickly since I turn 40 in a month…thoughts? Should I drop SGLI or just double up.
Before you start shopping the premiums, what are you trying to insure?

Do you want a lump sum to pay off your remaining mortgage or a college fund? Do you want to set up a lump-sum investment fund for your spouse that would carry her through to Social Security? Do you want to insure each of you until you’re 60-ish so that you have a childcare fund if the other dies first?

That’ll help you decide how much insurance you want.

You should maximize your SGLI coverage (both of you). That’s guaranteed insurability (conversion to VGLI) if something should render you uninsurable. You might not need it after you leave active duty, but $28/month is a cheap price to pay for guaranteed insurability via VGLI.

If you each have $400K insurance on the other then if necessary you can buy that 20-year term policy on you now (in addition to your $400K SGLI). Next you can figure out the best combination of SGLI & term for her. Maybe that’s a smaller term policy until she resigns or retires and approaches age 40-- or until you’re firmly FI.

Since my spouse and I were already FI when I retired (even without my pension), when I retired we stopped both of our SGLI policies.
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Old 11-26-2018, 09:04 AM   #7
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I want to do a shout out to Nords who always helps people in the military...


Sorry you do not post as much as you used to...
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Hi, Dual Military Couple here...
Old 11-26-2018, 09:09 AM   #8
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Hi, Dual Military Couple here...

Quote:
Originally Posted by Texas Proud View Post
I want to do a shout out to Nords who always helps people in the military...

Civilians too!!!
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Old 11-26-2018, 09:18 AM   #9
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Civilians too!!!
and if you are ever in Oahu he will meet you for lunch.
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Old 11-26-2018, 11:18 AM   #10
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9/11 GI Bill - With 72 months of eligibility between you and spouse, that could be worth over $350k, depending on where your kids attend college and if they are a "yellow-ribbon" school. As soon as you have kids, get their names on to the paperwork. You'll then need 4 years of service AFTER the paperwork is accepted to meet transfer requirements.
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Old 11-26-2018, 01:49 PM   #11
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Quote:
Originally Posted by benherring View Post
Hi, I am half of a dual military couple. Love the website, lots of great insight. I just read up on TDubs post which is a similar situation to ours but just wanted to put up our info as well and get some tailored advice/opinions.

I’m a 39 y/o O-4 with 16.5 years, hoping to retire as an O-5 at 24 years. Wife is a 30 y/o O-3 with 8.5 years in and a conservative goal of retiring at 20 as an O-5 but maybe as an O-6 at 24.

Only debt is one mortgage in CO which we just refinanced down to a 15 year loan last year. We are overseas right now and are making extra payments each month so the house will definitely be paid off before my wife retires. Goal is to use the rental income from that house to offset the cost of our retirement home which at this point we have no idea where that will be.

Major life change is going to be we will start having kids next year (I had a pretty good run). Planning on 2 and taking care of them is probably what i'll be doing after my military retirement in 2026.

Assets:

Cash: $48k (need a new car/travel/emergency)

Brokerage: Total: $142K
TD Ameritrade: $77K in AAPL/AMZN/FB/TSLA/IBB – Fun Account…pretty much just watch it
LPL: $65K, 7/10/14/19/21/28% in FBK/NEWFX/SMCWX/PG/CWGIX/AGTHX – hate mostly because of fees, plan on transferring it all over to VTI which is where all future savings will go (~$20kish/yr)

Retirement: Total $358K (maxing all of these out each year: $48K)
My Traditional TSP: $215K, 30/40/30% in C/S/I (C=S&P 500, S=Extended Mkt, I=Developed Overseas)
DW Roth TSP: $67K, 20/80 in S/LC50
My Roth IRA: $65K, 8/10/20/27/34% in IEMG/VTI/VWEHX/VGSLX/VHDWX
DW Roth IRA: $11K, 100% in VTI

Total: $548K

My military pension (O5/24 yrs): $76K
DW military pension (O5/20 yrs): $60K
Total: $136K COLA adjusted

Annual Expenditures: ~$85K

SBP: My thoughts are that unless we have disabled kids that we both will pass on it since we will both will still receive our own pensions. I haven’t done much research on it though. Worst case scenario: I die the day after I retire and we have two healthy kids. Wife will still have her retirement, get a life insurance check and have a nearly paid off house.

Life Insurance: Thinking about getting 20 year term life insurance here quickly since I turn 40 in a month…thoughts? Should I drop SGLI or just double up.

I think that we are in a pretty good spot but appreciate any advice you guys may have. Thanks,
-Ben
Welcome, benherring. A huge congrats, too, on your progress to FI and your proximity to 20 years TIS!

Taking care of the kids immediately upon retirement from service is my plan, too. That and a long list of hobbies. Looking forward to seeing you reach the finish line in a few years..

—This is the best advice I’ve received regarding life insurance (from aknowhow78):

“For your life insurance don't wait to increase as premium will be higher as you age. Try to get a term that will get you to at least 65 years old, then self insure after with TSP and SS, etc. Essentially if something should happen to one of you before 65, life insurance will kick in covering the pension lost. After 65, the growth from TSP+SS will make up the lost difference. For SBP, think about taking it out for the kids only, lower premium and the life insurance will cover spouse.”

DW and I have enough term insurance to cover us through our military careers (on top of SGLI) to replace lost income and help cover the kids’ education. Soon we’ll likely get additional terms to cover us through age 65 and lock in low rates (we should’ve purchased 30 years instead of 20 years in the first place, but alas). We’ll be overinsured while we’re AD and still covered by SGLI, but I’ll sleep better. Plus SGLI is so dang cheap. (USAA was wonderful to work with, btw, when we each got our 20-year terms.)

—Is your spouse opting into BRS? I know she’s eligible with her TIS and it would likely be a good option given life’s uncertainty.

—Check out FIRECalc sometime. With 2 pensions and your current assets/annual spending, I think you’ll like what you see. Try running it with lots of worst case scenarios, too, and see how you’re doing.


Quote:
Originally Posted by Texas Proud View Post
I want to do a shout out to Nords who always helps people in the military...


Sorry you do not post as much as you used to...
+1

Speaking of, have you read “Have you read “Military Guide to Financial Independence and Retirement” by Doug Nordman? I recommend it highly.
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Old 11-26-2018, 11:04 PM   #12
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Quote:
Originally Posted by Texas Proud View Post
I want to do a shout out to Nords who always helps people in the military...

Sorry you do not post as much as you used to...
Quote:
Originally Posted by steelyman View Post
Civilians too!!!
Quote:
Originally Posted by Bigdawg View Post
and if you are ever in Oahu he will meet you for lunch.
Quote:
Originally Posted by TDub View Post
Speaking of, have you read “Have you read “Military Guide to Financial Independence and Retirement” by Doug Nordman? I recommend it highly.
Thanks, everyone!

I still check in here every week or so to search for my name and the "military" keyword. I appreciate all of you who tag me when I can help.

These days I spend a lot of my time answering questions on Facebook military personal finance groups... mostly "Personal Finance For Military Service Members And Families" and "ChooseFI Military".
https://www.facebook.com/groups/mili...rsonalfinance/
https://www.facebook.com/groups/ChooseFIMilitary/
... and working on the next book.

Coffee or lunch around Oahu is always good, as long as I'm not wandering the globe on slow travel.

We also have several personal finance groups meeting on Oahu now, particularly Windward Real Estate Investors (first Tuesday of the month), BiggerPockets, and ChooseFI Honolulu.

In 2019 Marge and I will be in Norfolk and Spring Grove, VA April-May to visit our daughter & son-in-law and to speak at CampFI Mid-Atlantic. We'll also be in Washington DC in September (FinCon19 and Military Influencer Conference) plus Portugal (whenever the date is picked for the next Chautauqua). Our son-in-law has orders to the Naval Postgraduate School (Monterey) next June so we might stop by to help them unpack their household goods. There will be surfing and possibly diving. We're also hoping to hear from a friend about Bangkok in December or January, but nothing so far.
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Thanks to everyone
Old 11-29-2018, 11:57 AM   #13
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Thanks to everyone

You guys are amazing. Thanks for all the advice, viewpoints, considerations, etc… It really does give me and the wife a lot to think about as we move forward. I feel good with where we’re at but we could always be better. Below are replies to your comments. Please let me know if I misinterpreted something or am just way off the mark.

Quote:
Originally Posted by Texas Proud View Post
Does your spouse get any of your pension when you die?
Do you get SS if in the military?

Texas Proud: At the bottom of my post I reference the SPB. That is our Survivors Benefit Plan which has a couple different options but the main two (for me) are to pay a premium from my pension to let my wife get up to 55% of my pension once I die or to pay the premium to allow payments to go to a disabled child. By the time I retire I presume I will know if my yet to be born kids will be disabled and if they are then I will definitely opt in however since I am confident that my wife will also retire and get her own pension I don't really see the sense in opting in for that option. As for SS yet I will be eligible for that when I reach SS age.

Quote:
Originally Posted by Bigdawg View Post
We elected no survivor beni. We have it covered with 500K life thru jobs.

Do your own math on survivor benifit. It didn't make sense for us. One back up plan we have that may work for you is delaying SS. I am 6 yrs older than DW. I will take at 70 and then if I die before her (stats say I will) then she will take mine at that point. Shouldn't need it in 17 years anyway because of other investments totalling 1 mil +.
BigDawg: Congrats on the FI. I'm sure we will work after mil retirement as well but I just want it to be to do want we want not because we need to. I think I'm going to pull the trigger on term life to offset the choice of not selecting SBP as well. Also agree with delaying SS, hopefully there won't be any need to pull from it before 70 anyway.
Quote:
Originally Posted by MrsHaloFIRE View Post

I agree with your assessment barring special needs children, SBP is prob not a have to have for either of you. Sounds like based on your age diff and diff in years of service, theres a small chance you could get out, elect to not get SBP for wife thinking shed have her own pension, and then she gets invited to depart via force shaping/goodness knows what and then she DOESNT have a pension after all. And no reach back to turn on that SBP after the fact. Check my math though, maybe she would be good to go by the time you retire. But if you have the old school cliff pension 19 years and 364 days is zero pension unless its a medical dealio. Correct me when Im wrong. So she has a glass of wine, blows a .0nothing and they make an example out of her. Im just throwing worst case scenarios, I am in no way accusing anyone of anything.

Also Im pretty sure SGLI ends at retirement, and you have to transition to VGLI at a MUCH higher expense. SO many folks shop that privately before they are old and lock that in place long before the body begins to fail and the VA has the paperwork to back that up.

TO me worst case scenario is SBP declined on your pension, you die day 1 of retirement leaving wife with 2(?) healthy(?) kids, a mostly paid off house, and her hoping and praying she hits 20 in another 3.5 or so years. BEcause if for some reason she doesn't make those 3.5 years, theres no income stream there at all except the income the rental house is throwing off. Can she make a LI check, rental income and the portfolio last her full life expectancy if for some reason she doesn't vest in her own pension? I think that's the first question to answer. THat cliff vesting pension for her scares me in this case. (maybe she has the newfangled one instead??) Dunno.

We did the math by working kind of a matrix killing me off and evaluating whats left for my husband, killing my husband off and evaluating whats left for me, oh and incapacitating each of us. and then both of us. That is the pressure test I think. And you add in kids. Healthy kids. Unhealthy kids. And don't forget to consider your own parents and siblings. If they will fall to you to care for you need to have thought that through also. If not, then not.

VA disability is a wildcard, and I don't think you should spend money until its in the bank. Ive seen the insanity that is the VA system. Same with SS. Yes military folks pay into therefore can get SS. But its out in the future and we are planning on exactly 0.00 bc we think they are going to means test it by the time I could draw it. (Im in your wife's age group). But others may feel otherwise and say oh yeah Im planning on getting my full benefit. FWIW I think you could get a couple million in the bank no prob esp with 2 BAH's, 2 company grade O paychecks, covered medical, no kids at present etc.. I would feel better popping clogs on day 1 if I knew there were a lot of zeros in those brokerage accounts.
MrsHaloFIRE: Great insight (even if a little depressing). You're absolutely right about the possible of getting the boot early. I feel confident on her ability (as of right now) that she would survive any force shaping measures but you do have a point as she does enjoy her wine ;-) I’ll look into running some death matrices to see how we would pan out under different scenarios. She surely would not be able to live of a LI check, rental income and our portfolio (although maybe so by the time I kick the bucket) for the rest of her life, but again I’ll analyze some scenarios to come with a risk/benefit analysis.

Also, you are correct SGLI does end at retirement. I plan on getting some 20 to 25 year term insurance here soon that should help her pay off a house and get the kids through school. Also I’ve had the talk with my parent and they should be okay, my wife’s mother may need some help but we are planning for that. Luckily she is still young(ish) and healthy. Finally, yes I agree I’m not counting on any VA disability or SS…if it comes along then great but I’m not planning for it. Thanks again for some great perspective.
Quote:
Originally Posted by Nords View Post
You have 3.5 years to retirement eligibility, and you’re already well on the way to financial independence. You should stay on active duty as long as you’re feeling challenged & fulfilled, but keep in mind that there’s no reason to push for O-5 (let alone 24 years) if you’re already FI.

Maybe the smart move is retiring the minute you reach 20. Maybe you’d stick around for a year or two of time in grade (and pay) to retire as an O-5, but that’s winning the game in the third quarter and running up the score. You’d want to have a very good assignment to stay motivated until 24.
Nords: Also some great points (as always.) For a little more clarification on our situation obviously barring any major situation I am staying in until 20. As of today I WANT to stay in until 24. I like my job, I like the people I work with and I’m getting to the position where I can be put in to greater leadership positions. So, I agree with your point to stay in as long as I feel challenged and fulfilled to stay in…so far I’m staying. I realize that maybe on my next assignment that might all fall away but for right now it holds true. Two very possible scenarios that could lead me to get out is first if I want to spend more time with my unborn kids or second if after I hit 20 and my wife and I don’t get join spouse, then I would punch.
Quote:
Originally Posted by Nords View Post
Your spouse’s goal is not “conservative”. It’s ridiculously optimistic because everyone with less than 12 years of service is blissfully uninformed. As you probably already know, the second 10 years of a military career is completely different from the first 10, and you’re also planning to start a family. You’re not only dealing with fewer billets at the top of the leadership triangle but also with childcare and work/life balance.
As for my wife, again as of right now she is committed to staying in 20 but I definitely agree with you that the first 10 years are not the same as the second and she may change her mind. Neither of us have given a good look at the reserves and it probably wouldn’t hurt to see what that option looks like.

In regards to the SPB with your comments along with others I think the best thing to do now is just get more educated on the options. I’m still leaning no but before I retire our kids will be 5ish and my wife should be within 4 years of retiring (if she stays active duty that long.) At that point we’ll probably be able to make a much more informed decision.
Quote:
Originally Posted by Nords View Post
Before you start shopping the premiums, what are you trying to insure?

Do you want a lump sum to pay off your remaining mortgage or a college fund? Do you want to set up a lump-sum investment fund for your spouse that would carry her through to Social Security? Do you want to insure each of you until you’re 60-ish so that you have a childcare fund if the other dies first?

That’ll help you decide how much insurance you want.
As for insurance, my thoughts were to use it to offset some of the money she will lose by not receiving my pension while I’m alive and justify not getting the SBP. Hopefully, one way or another (either active or reserves) she will receive a pension at some point so insurance would be to just close the gap.
Quote:
Originally Posted by TDub View Post
—Is your spouse opting into BRS? I know she’s eligible with her TIS and it would likely be a good option given life’s uncertainty.

—Check out FIRECalc sometime. With 2 pensions and your current assets/annual spending, I think you’ll like what you see. Try running it with lots of worst case scenarios, too, and see how you’re doing.
TDub: Congrats to you too and thanks for your original post. It looks like we are in similar situations and I learned a lot of stuff off of the replies to your post. DW is not in BRS and we need to decide pretty darn quick if she’s going to switch over. We talked about it earlier in the year and decided against it based on where we were at the time. I feel like it’s kind of a crapshoot since she will have already missed out on 9 years of matching funds on her TSP that we are already maxing out. We’ll definitely relook at it though. Also I’ve run FireCalc a few times as well but I probably can run some more grim scenarios and see where we land with what.

I just want to thank all of you again. I’m sure it gets repetitive giving similar advice to different people but it really does provide valuable food for thought which can have huge impacts.

-Ben
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