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Financial appendices to "The Military Guide to FIRE"
Old 07-21-2009, 09:28 AM   #1
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Financial appendices to "The Military Guide to FIRE"

The writing is just about done, and I'd like to thank all the members of the social group for the hours of their time they've spent slogging through my drafts. You've made the book a lot better. As my teenager told me the other day, you really helped me clean my writing up.

I asked the mods to let me post the appendices here so that everyone, military or not, can cast a critical eye. These six financial topics are too detailed to fit into the chapters but too significant to leave out:
- Effect of inflation on a dollar
- Saving base pay and promotion raises
- Retiring on multiple streams of income
- Effect of inflation on a REDUX military pension
- "Present value" estimate of a military pension
- Asset allocation considerations for the lump-sum value of a military pension

You've already helped me write them by commenting on these threads:
Active-duty military: investing the promotion pay raises
Estimating "present value net worth"
Another look at the military's REDUX pension

I'd appreciate a good look at the numbers as well as the text. I've made several simplifying assumptions that don't cover the whole bell curve but hopefully won't jeopardize a typical ER's planning. I've also tried to write without drowning us in military vocabulary or acronyms, so please let me know if something seems incomprehensible. I'm trying to clarify it, not make people learn more jargon.

Feel free to make formatting comments-- as you can tell, I'm not a graphic artist and my spreadsheet skills are rudimentary. I haven't spent much time on formatting because I'm depending on the editing process to turn the text & graphs into eye-popping pages.

These ideas aren't new, but I'm trying to summarize them for readers who are perhaps too busy worrying about warfare to spend their time pondering the intricacies of retirement planning. I added numbers and graphs where it helps but I could probably supply more citations for some of the assertions. Again I'm trying to educate veterans & families on issues that we almost never see in military financial-planning or benefits guides.

(The spreadsheet is also attached for those who want to see the source data. The spreadsheet's charts are already in the text, so you don't have to look at the spreadsheet if you're not curious about the formulae.)

If you've already given me suggestions or references, you may not see it here. No offense intended. Some of it will go in the "Recommended Reading" section that I'm working on now. If I didn't put it in the book at all, it's because it won't survive the editing process-- but it will be included on the website and a future edition's DVD. The spreadsheet will go on the website, where I'm also hoping to upgrade it to let readers tweak the numbers on their own.

Thanks again to Andy and the mods for supporting this non-profit project-- all royalties will be donated to military charities.
Attached Files
File Type: pdf Appendices.pdf (242.8 KB, 23 views)
File Type: xls Saving percentages of base pay and promotions plus REDUX comparison.xls (96.0 KB, 8 views)


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Old 07-21-2009, 02:00 PM   #2
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Glad to see the book moving forward as I know you've been working hard on it. Also glad to see you analyze the cons of REDUX. I used to get so many inquiries as a finance officer on whether REDUX was worth it or not. That spreadsheet pretty much spells it out.
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