Anyone Comfortably Retired With Retirement Savings Under the Million Mark?

[Red Badger]

I hit my 20 year mark in exactly 2 months from today. All Army National Guard, but over 5 years of active time with deployments. I'll be putting in another 10+ years... Unless I get too fed up with it!

Congrats on the upcoming 20 year letter. Those 5 active years will juice that retirement nicely.

 

[Offgrid Organic Farmer]

Farmer has said repeatedly that he lives on his 20k/year military pension. I know people with bigger ones.

Actually my pension is just a hair under $19,000 a year.

In 2016, we bought a mixed-use commercial/residential building that we are remodeling. We hope to finish its Certificate-of-occupancy here in the next month. Its income will be significantly more than my pension.

My pension has been enough that we have been able to save up enough to buy this other property and remodel it.

 

[Teacher Terry]

I do admire your frugal skills.

 

[Offgrid Organic Farmer]

When I retired in 2001, we returned stateside from living in Italy and my pension started. At that time, we owned an apartment complex in Connecticut. We moved into one unit of our Ct property and we took a couple of years to make repairs and capital improvements to that property.

We refinanced that property as a method of extracting the equity it had accumulated.

We used that cash to buy/build our long-dreamed-of off-grid homestead.

The Recession hit us hard, all of our tenants lost their jobs, our mortgage company foreclosed on us and sued us for the market value of the Ct property.

In 2009, we had to file bankruptcy to get through that mess. We lost the income property but we held onto our vehicles and our farm.

And in 2016 we had sufficient capital to buy another income property. Now we have four tenants paying rent and when all renovations are legal we will have an additional ten tenants paying rent [a total of fourteen tenants].

 

[dirtbiker]

I was surprised at my recent college reunion the number of those retired from the military, most O-5.

I've recommended the same to my kids (use the Reserves if needed, but get the pension)

The military pension for new recruits is watered down now. This happened within the last couple of years. They have decreased the pension and added a matching (max 5%) Thrift Savings Plan (military's version of 401K). Fortunately I was grandfathered into the old system, so I'll get the regular pension. The problem is that most young servicemembers won't contribute to the TSP, just like most young civilian workers aren't contributing significantly or at all to their 401Ks, and they'll be left with a lighter pension and an under-funded TSP.

For reserve members, this is an especially poor option for most, because the TSP has the same contribution limits as a 401K or 403B, so most people are better off contributing to their employer's plan (if it's matching) because the average civilian job pays much more than the one weekend a month military does, and thus will generally have better matching.

For someone on active duty who is diligent at contributing as much as they can to their TSP, this is a good option. For me, it just didn't make sense, as I already max out my civilian 401K and get much better matching, so if I had opted in, all I would get is a lower pension. So obviously I didn't opt into the new system. They sold us pretty hard on it, and I know a few who very unwisely were convinced to opt in... and once you opt in, you can't opt out.

Congrats on the upcoming 20 year letter. Those 5 active years will juice that retirement nicely.

Thanks! The pension will be nice, but the Tricare for life (and other Tricare programs available until Medicare age) is really the best part of the retirement plan for me.

 

[ncbill]

Well, "watered-down" means they've gone from 2.5% -> 2% for the pension.

Still, there aren't many professions anymore from which one can retire after only 20 years with essentially free retirement healthcare.

My oldest who just graduated & commissioned elected the new system for the match & the reality (as Nords has pointed out) that most service members don't stay long enough for the pension.

 

[Offgrid Organic Farmer]

The military pension for new recruits is watered down now. This happened within the last couple of years. They have decreased the pension and added a matching (max 5%) Thrift Savings Plan (military's version of 401K). Fortunately I was grandfathered into the old system, so I'll get the regular pension. The problem is that most young servicemembers won't contribute to the TSP, just like most young civilian workers aren't contributing significantly or at all to their 401Ks, and they'll be left with a lighter pension and an under-funded TSP.

Any US servicemember who is intent on retiring 'early' still needs to live frugally and invest.

... Thanks! The pension will be nice, but the Tricare for life (and other Tricare programs available until Medicare age) is really the best part of the retirement plan for me.

When I retired, I checked around to see how much healthcare insurance coverage would have cost me for my family, it was going to be more than what my pension pays.

So yes, my Tricare prime is worth much more than my pension.

 

[dirtbiker]

Any US servicemember who is intent on retiring 'early' still needs to live frugally and invest.





When I retired, I checked around to see how much healthcare insurance coverage would have cost me for my family, it was going to be more than what my pension pays.

So yes, my Tricare prime is worth much more than my pension.

Absolutely they need to... But the problem is that most don't... Just like in the civilian world.

I've got a friend who did 20 active, starting at age 17. Then retired and did 20 in the state police and now lives off of more after retiring than he ever did working, and is still several years from SS. I have no idea if he tucked away any money to help fund his retirement, but even if he didn't, he's doing well.

 

[Offgrid Organic Farmer]

Absolutely they need to... But the problem is that most don't... Just like in the civilian world.

I've got a friend who did 20 active, starting at age 17. Then retired and did 20 in the state police and now lives off of more after retiring than he ever did working, and is still several years from SS. I have no idea if he tucked away any money to help fund his retirement, but even if he didn't, he's doing well.

I know a lot of people who got a 20-year pension from the military, who then went on to get a second pension, and who plan to squeeze in a third pension before they get SS.