Active-duty retirement thwarted...advice needed

[Neecy]

I was told last week that I will not be selectively continued in the AF after the results of the O-5 board that met in Mar. I was planning on PCSing to a job in Texas early July. A part of me is relieved that I will not be stuck as an O-4 for the next 5 years on active duty. The other part of me is sad/upset that my active duty pension and upcoming position are both completely jammed up. This year started off promising, I was selected for a major command award, my Promotion Recommendation Form looked better than last year, found missing decoration paperwork, etc...However, as fate would have it, to serve the 5 years on active duty in a higher grade, is not in the cards. Even though my professional development would have been limited (decayed), I thought I would be able to finish out my 20 years on active duty.

I will get a severance of about $118,000 before taxes. I've saved about $89,000 in my TSP and $57,000 in my IRA. I have about 3 months of terminal leave and 1 month of permissive TDY. I am pretty sure I will have to pay hefty taxes this year because of the severance. My goal is to not live on that and land a GS job by the end of next year. I have a pretty good lead on one, but do not want to "count my chickens before they are hatched."

I am also planning on joining the Reserves, so I can make up the 5 years for a reserve pension. I am encouraged by what I read in the ATC thread about the Reserves, but would like to get advice/opinions on my overall situation. TIA.

[braumeister]

Sorry to hear that. Still, you're in better shape than a lot of people. When I was on active duty, if you didn't finish 20 years, you received a severance of $0.00 before taxes, so things are better now.

Definitely go for the Reserves if you can. I strongly believe that's good advice for most people.

For now, probably the best thing you can do is start working out a detailed budget to get a good handle on your expenses.

[JDARNELL]

Sorry to hear about your non selection for continuation. If there is errors in your record have you done an appeal? I am sure we have a process for that as we do for everything else. You might be a victim of "force shaping" of course we don't do that but on the up and up. When do you have to be out by?

Timing might not be that great to make the reserve jump but if you can get in go for it. Just think then in a few years they need your skill, promote you, bring you back on AD and you get 20. I know a guy that got passed over for 0-5, seperated with 17 yrs went to the reserves, brought him back on AD, and he retired with 22 yrs.

I had a Capt that worked for me when I was stationed in LA. He was offered the VSI and got a chunk of change. What he did was in Jan of that year deployed for 6 months to the AOR in a safe place, came back maxed out his TSP, and when the AF dropped 100K on him that was his only taxable income. He joked that he was going to get a picture 100 of his buddies that were seperating standing in front of a F-22 and crop the words "Spirit of the VSI" on the tale. Oh yeah the AF also paid for his education and he is now attending UT on the 9-11 GI Bill.

I assume you have been going to all the transition stuff? Make sure you know what is going on.

Tomcat98

[Neecy]

Quote:

Originally Posted by Tomcat98 Sorry to hear about your non selection for continuation. If there is errors in your record have you done an appeal? I am sure we have a process for that as we do for everything else. You might be a victim of "force shaping" of course we don't do that but on the up and up. When do you have to be out by? Timing might not be that great to make the reserve jump but if you can get in go for it. Just think then in a few years they need your skill, promote you, bring you back on AD and you get 20. I know a guy that got passed over for 0-5, seperated with 17 yrs went to the reserves, brought him back on AD, and he retired with 22 yrs. I had a Capt that worked for me when I was stationed in LA. He was offered the VSI and got a chunk of change. What he did was in Jan of that year deployed for 6 months to the AOR in a safe place, came back maxed out his TSP, and when the AF dropped 100K on him that was his only taxable income. He joked that he was going to get a picture 100 of his buddies that were seperating standing in front of a F-22 and crop the words "Spirit of the VSI" on the tale. Oh yeah the AF also paid for his education and he is now attending UT on the 9-11 GI Bill. I assume you have been going to all the transition stuff? Make sure you know what is going on. Tomcat98

It is part of the force shaping that has been going on for the past 5 years. Normally, they would not strictly enforce the non-continuation policy. I plan on doing the 3-day TAP class when I return to the states in the next couple of weeks.

[Neecy]

Quote:

Originally Posted by braumeister Sorry to hear that. Still, you're in better shape than a lot of people. When I was on active duty, if you didn't finish 20 years, you received a severance of $0.00 before taxes, so things are better now.

If you leave on your own, you still get nothing. I am leaving involuntarily.

[martyb]

I knew a guy in the reserves who had been an office (O-3) who could not stay in as an officer, so he went into the reserves in an enlisted position, until he reached elgibility to retire. When he reaches the age to receive his reserves retirement pay (60), he will be paid at the O-3 rate, because he lost his officer position due to no fault of his own. ie, no misconduct etc. It was kind of funny, because nobody besides he & I knew he used to be an officer. They only knew him as an E-6. Also, having spent a long time as a reservist, I've known several officers who''ve gone into enlisted slots for one reason or another. I'm not suggeting anybody do this if it's not absolutely neccessary, but sometimes we have to consider the ultimate goal of getting a pension vs. just losing the time we've already invested. I know it would be an easy answer for me. My younger sister's currently dating a guy who spent 17 1/2 yrs in the Navy on active duty. Then, he got a divorce & separated from service, to raise his 2 kids as a single parent. He never went back, never joined the guard or reserves. He now is a federal employee, but at a fairly low pay grade (GS-6). I tried tactfully to explain to him what he is giving up by not trying to get in to the guard or reserves. He's past the usual age to join up, but being a nurse, I told him he might have a shot at some kind of waiver. They sometimes make exceptions for age in the medical fields. Especially the guard. He's giving up a pretty decent retirement check. All those years, down the drain!!!

[Rustic23]

I also knew an O-3 that was separated when he did not make O-4. It was at about the 14 year point. He was allowed to enlist as an E-5 I think, maybe higher, served his time out and retired as an O-3. Several others went to the reserves and got promoted and retired.

[Nords]

Quote:

Originally Posted by Neecy I was told last week that I will not be selectively continued in the AF after the results of the O-5 board that met in Mar. I was planning on PCSing to a job in Texas early July. A part of me is relieved that I will not be stuck as an O-4 for the next 5 years on active duty. The other part of me is sad/upset that my active duty pension and upcoming position are both completely jammed up. This year started off promising, I was selected for a major command award, my Promotion Recommendation Form looked better than last year, found missing decoration paperwork, etc...However, as fate would have it, to serve the 5 years on active duty in a higher grade, is not in the cards. Even though my professional development would have been limited (decayed), I thought I would be able to finish out my 20 years on active duty. I will get a severance of about $118,000 before taxes. I've saved about $89,000 in my TSP and $57,000 in my IRA. I have about 3 months of terminal leave and 1 month of permissive TDY. I am pretty sure I will have to pay hefty taxes this year because of the severance. My goal is to not live on that and land a GS job by the end of next year. I have a pretty good lead on one, but do not want to "count my chickens before they are hatched." I am also planning on joining the Reserves, so I can make up the 5 years for a reserve pension. I am encouraged by what I read in the ATC thread about the Reserves, but would like to get advice/opinions on my overall situation. TIA.

Welcome back, Neecy. Sorry the AF is whacking away at the end strength. Their loss. Like Tomcat says, in 3-4 years they'll be begging people to come back.

One dumb question-- three years ago you had 17 years of service. I understand that may not have been all active duty. If you have at least 18 years of active duty, though, it's my understanding that Title X allows you to be continued the final two years to 20. The catch is the calculation of that 18 years. Have you and the AF been through all the due process and the tallying of your time?

The Reserves sound like a great move. If you're still planning to relocate to the Baltimore-Washington area then you'll have no trouble picking up drills and short periods of active duty. In fact the contacts you make during drills & AT may lead to a civil-service job or at least contractor time. I've also seen the AF bust sanctuary more than once to get you to an active-duty retirement. Of course if you get an active-duty or a Reserve retirement then you're expected to pay back the severance. However you'll be happy to do it for an active-duty retirement, and you'll enjoy the use of that severance pay until your Reserve retirement pay starts.

Will "the rules" let you put the severance in your TSP? Can you at least max it out this year to reduce your before-tax income? IIRC severance for a disability is not taxable, but that might only be for a pretty significant disability rating of 50% or more.

As soon as you join the Reserves you may want to sign up for Tricare Reserve Select. But if you get a civil-service job then the federal benefits are probably cheaper.

Are you going to miss the Japanese culture? Plenty of it here on Oahu, and PACOM is desperate for Reserve/civil-service labor. But it ain't exactly NYC or even Baltimore/DC.

If you PM or e-mail me your name & APO mailing address then I'll send you a copy of "The Military Guide". Until then you could start with these two posts:
Six months before retirement… | Military Retirement & Financial Independence
Retirement and discharge paperwork | Military Retirement & Financial Independence
and then scroll forward through the next 10-12 posts to get to the Reserve parts.

Let us know how we can help. Life can suck for the next few months, but you'll get control of your career (and your life!) back in your hands. Five years from now this will all have worked out.

[Neecy]

Quote:

Originally Posted by Nords Welcome back, Neecy. Sorry the AF is whacking away at the end strength. Their loss. Like Tomcat says, in 3-4 years they'll be begging people to come back. One dumb question-- three years ago you had 17 years of service. I understand that may not have been all active duty. If you have at least 18 years of active duty, though, it's my understanding that Title X allows you to be continued the final two years to 20. The catch is the calculation of that 18 years. Have you and the AF been through all the due process and the tallying of your time? The Reserves sound like a great move. If you're still planning to relocate to the Baltimore-Washington area then you'll have no trouble picking up drills and short periods of active duty. In fact the contacts you make during drills & AT may lead to a civil-service job or at least contractor time. I've also seen the AF bust sanctuary more than once to get you to an active-duty retirement. Of course if you get an active-duty or a Reserve retirement then you're expected to pay back the severance. However you'll be happy to do it for an active-duty retirement, and you'll enjoy the use of that severance pay until your Reserve retirement pay starts. Will "the rules" let you put the severance in your TSP? Can you at least max it out this year to reduce your before-tax income? IIRC severance for a disability is not taxable, but that might only be for a pretty significant disability rating of 50% or more. As soon as you join the Reserves you may want to sign up for Tricare Reserve Select. But if you get a civil-service job then the federal benefits are probably cheaper. Are you going to miss the Japanese culture? Plenty of it here on Oahu, and PACOM is desperate for Reserve/civil-service labor. But it ain't exactly NYC or even Baltimore/DC. If you PM or e-mail me your name & APO mailing address then I'll send you a copy of "The Military Guide". Until then you could start with these two posts: Six months before retirement… | Military Retirement & Financial Independence Retirement and discharge paperwork | Military Retirement & Financial Independence and then scroll forward through the next 10-12 posts to get to the Reserve parts. Let us know how we can help. Life can suck for the next few months, but you'll get control of your career (and your life!) back in your hands. Five years from now this will all have worked out.

Hello Nords, I was hoping to hear from you! I have about 19 years of total service, since I started in the Army National Guard. I have about 14.5 years of active duty. I changed my mind about MD a couple of years ago. I still want to move forward and settle in Texas in the near future.

I like the idea of maxing TSP to reduce my taxable income. I had just discontinued it yesterday, so I could shore up money in my transition. I don't think they will let me put everything in TSP. I am leaning more towards preparing myself for the "emergency" of being without an income if I'm unemployed longer than expected.

I loved Japan...left there in 2009 and totally miss it. I will send you a PM with my address. Thanks much for your input/guidance!

[Neecy]

Quote:

Originally Posted by Nords Welcome back, Neecy. Sorry the AF is whacking away at the end strength. Their loss. Like Tomcat says, in 3-4 years they'll be begging people to come back. One dumb question-- three years ago you had 17 years of service. I understand that may not have been all active duty. If you have at least 18 years of active duty, though, it's my understanding that Title X allows you to be continued the final two years to 20. The catch is the calculation of that 18 years. Have you and the AF been through all the due process and the tallying of your time? The Reserves sound like a great move. If you're still planning to relocate to the Baltimore-Washington area then you'll have no trouble picking up drills and short periods of active duty. In fact the contacts you make during drills & AT may lead to a civil-service job or at least contractor time. I've also seen the AF bust sanctuary more than once to get you to an active-duty retirement. Of course if you get an active-duty or a Reserve retirement then you're expected to pay back the severance. However you'll be happy to do it for an active-duty retirement, and you'll enjoy the use of that severance pay until your Reserve retirement pay starts. Will "the rules" let you put the severance in your TSP? Can you at least max it out this year to reduce your before-tax income? IIRC severance for a disability is not taxable, but that might only be for a pretty significant disability rating of 50% or more. As soon as you join the Reserves you may want to sign up for Tricare Reserve Select. But if you get a civil-service job then the federal benefits are probably cheaper. Are you going to miss the Japanese culture? Plenty of it here on Oahu, and PACOM is desperate for Reserve/civil-service labor. But it ain't exactly NYC or even Baltimore/DC. If you PM or e-mail me your name & APO mailing address then I'll send you a copy of "The Military Guide". Until then you could start with these two posts: Six months before retirement… | Military Retirement & Financial Independence Retirement and discharge paperwork | Military Retirement & Financial Independence and then scroll forward through the next 10-12 posts to get to the Reserve parts. Let us know how we can help. Life can suck for the next few months, but you'll get control of your career (and your life!) back in your hands. Five years from now this will all have worked out.

I do not know what happened to my previous email.
Hey Nords, I was hoping that you would respond. I actually have 14.5 active duty years. My total years of service is 19 years since I started in the Army National Guard.

I changed my mind on MD a couple of years ago. I think I want to eventually move to Texas in the near future. I do not know if I can put everything in the TSP. I discontinued it a couple of days ago to shore up money for my "emergency" transition in the event I am unemployed longer than intended.

I do miss the Japanese culture...left there in 2009. I sent you a PM. I will read through the threads you posted. I think the Reserves is the best way to go at this point. I was surprised how much a major gets paid for a weekend! I think it the table said $954! Not sure if I am reading that right? I hope my job lead will pan out, especially in this horrible job market.

Thanks again for your help! Much appreciated.

[Nords]

Quote:

Originally Posted by Neecy I changed my mind on MD a couple of years ago. I think I want to eventually move to Texas in the near future.

Let me be the first to offer my condolences on forsaking Japan, Hawaii, and even MD for Texas... REWahoo will be along shortly to tell you about all the hazards of living near him.

But seriously, my daughter loves Houston and I have a couple shipmates in other towns who seem to think it's a good deal. Lots of Texas residents here who will give you a wealth of conflicting advice.

Quote:

Originally Posted by Neecy I do not know if I can put everything in the TSP. I discontinued it a couple of days ago to shore up money for my "emergency" transition in the event I am unemployed longer than intended.

It's probably more prudent to pile up career-search cash. But if you feel that you have more than enough to keep you going for six months then you could avoid some income taxes.

I know that if you earn a military retirement after being involuntarily separated, then DoD will want the $118K back. I'm just not sure how soon that happens... at the time you're declared eligible or not until the first pension payment. Either way, trading your severance for a pension works out to one heck of an interest-free loan.

Quote:

Originally Posted by Neecy I do miss the Japanese culture...left there in 2009. I sent you a PM. Thanks again for your help! Much appreciated.

I've sent you a PM with more info on why I'm being so uncharacteristically generous. Please let me know if the USPS' opinion of your mailing address will work-- their website was pretty insistent.

Quote:

Originally Posted by Neecy think the Reserves is the best way to go at this point. I was surprised how much a major gets paid for a weekend! I think it the table said $954! Not sure if I am reading that right?

Most of my shipmates were extremely surprised at how much I was paid, too, especially considering the quality of my productivity... just kidding.

Depending on how your Guard service is counted, the DFAS pay tables claim between $915-$940 for a drill weekend (and four points toward retirement pension). Of course you'll have to furnish your own transportation (perhaps including a plane ticket) and your own lodging/meals. (Possibly a VOQ & galley pass.) You'll also be paying for your own health insurance (except for when you're actually drilling or on active duty). My spouse was always supremely annoyed that the Navy Reserve expected her to pay for some of her own medical tests in order to comply with their deployment-readiness criteria. So at O-4 you tend to break even or perhaps lose a little money. You gain it back in retirement points.

It is not inconceivable to promote to O-5 in the Reserves. It depends on your service's rules, but if they're letting you join the Reserves then you can compete for selection with a fresh slate. I'm hoping Tomcat or Deserat will chime in shortly with their AF knowledge.

TAP will tell you more about veteran's credits for preferential hiring into the civil service, possibly state civil service as well as federal. Pay close attention to the criteria for medical disability screening for even more points toward hiring preference. And finally, if you're near a major military command then you may just end up making the Reserves your primary job. It's career networking on steroids. When my spouse was on her Reserve AT she was usually getting offers by the third day-- ADSW, contractor, civil service-- they didn't care as long as they could get her to start working for them in the long term.

Keep an eye on your GI Bill benefits, too!

[ATC KH]

Quote:

Originally Posted by Nords Depending on how your Guard service is counted, the DFAS pay tables claim between $915-$940 for a drill weekend (and four points toward retirement pension). Of course you'll have to furnish your own transportation (perhaps including a plane ticket) and your own lodging/meals. (Possibly a VOQ & galley pass.) You'll also be paying for your own health insurance (except for when you're actually drilling or on active duty). My spouse was always supremely annoyed that the Navy Reserve expected her to pay for some of her own medical tests in order to comply with their deployment-readiness criteria. So at O-4 you tend to break even or perhaps lose a little money. You gain it back in retirement points.

Perhaps the USNR is organized much differently than the ANG, as I have never had to pay for lodging and lunch was always provided. This might be because I am enlisted, and I confess I'm not sure if officers in the ANG have to pay for their own lodging out-of-pocket. I've also never had to pay for any mandatory medical exams or tests, and I would also be supremely pissed if I were required to pay for mandatory medical tests/exams.

The other interesting thing is that there is a program to pay each reserve component member mileage for travel to drills if their HOR is outside of 120 miles. According to our Group Commander (O6), the problem is that the program is just not funded at the federal level. Unfortunately, I doubt it will ever be funded with the budget issues and I am even more skeptical of backpay. Lastly, Guardsmen/Reservists are eligible for Tricare Reserve Select which doesn't seem to be too bad of a program. If you are mobilized, Tricare Prime starts when your orders are cut (or 180 days prior, whichever is closer); it continues through the deployment and for 180 days after the end of the deployment.

A great website to check for military benefits: Militaryonesource.com. There are a lot of little perks out there.

[Nords]

Quote:

Originally Posted by ATC KH A great website to check for military benefits: Militaryonesource.com. There are a lot of little perks out there.

Spouse had just started drilling in the Navy Reserve at PACOM when the 9/11 mobilizations began.

You would think that the four services all working in harness together in the spirit of joint duty would have the same benefits. Not even close.

[martyb]

Don't know about officer stuff, but in the Air Force reserve, enlisted who come in from out of town don't have to pay for billeting, and they can eat at least twicea day for free, on drill (UTA) weekends. I'm glad I retired from the reserves last year, as it's nice to have my weekends back...but I sure do miss that extra $$$$!!! Not to mention the cool TDY's.

[HawkeyeNFO]

Sorry about Uncle Sam jacking around with your retirement.

How common is this? My command has numerous passed over O-4's, including lots of reservists and some full-time Navy guys. I knew the USAF was getting rid of people, but I figured it was usually at the O-3 and below pay-grades.

I haven't heard of the Navy doing this yet. The only thing the Navy is doing is forcing a few hundred O-5's out as soon as they hit 20 years, and forcing some O-6's out too. The SERAD board determines who is shown the door (Selection for Early Release from Active Duty).

[Rustic23]

I always found Military logic fascinating. I could go to the field with the army, spend the night in an unheated tent, sleep on the ground, eat cold food, and use the woods for a bathroom. When I got back, I got about three bucks a day. On the other hand, I could be sent to Paris, spend the night in a 4 star hotel, heat 4 star meals, and when I came back they would give you $185 a day and pay for the hotel! What a country!

[Neecy]

Quote:

Originally Posted by HawkeyeNFO How common is this? My command has numerous passed over O-4's, including lots of reservists and some full-time Navy guys. I knew the USAF was getting rid of people, but I figured it was usually at the O-3 and below pay-grades. I haven't heard of the Navy dong this yet. The only thing the Navy is doing is forcing a few hundred O-5's out as soon as they hit 20 years, and forcing some O-6's out too. The SERAD board determines who is shown the door (Selection for Early Release from Active Duty).

The force shaping has been going on for 5 years. There is a force-shaping board coming up in September for O-4s and O-3s. In 2007, the AF was offering double separation pay. There is not enough money to do that now. I got my job in Japan because the guy took about $200,000 in VSP.

[Nords]

Quote:

Originally Posted by HawkeyeNFO I haven't heard of the Navy dong this yet. The only thing the Navy is doing is forcing a few hundred O-5's out as soon as they hit 20 years, and forcing some O-6's out too. The SERAD board determines who is shown the door (Selection for Early Release from Active Duty).

BUPERS screwed it up pretty badly overshot the mark in the mid 1990s... TERA at the top and reduced accessions at the bottom. I predict that this time they'll hold out until it's too late the absolute last possible moment.

By the late 1990s I remember seeing O-4 selection rates in the submarine force like "107%". Unless you were convicted of DUI and ran aground you were promoted. In the early 2000s one O-5 selection board was specifically forbidden from deep-selecting anyone below zone because there were already not enough O-4s to go around. YG96 in the submarine force is practically guaranteed command, and some of them are going to have to do it twice.

My daughter's response: "So, would they be putting more women aboard submarines?"

[Neecy]

Quote:

Originally Posted by ATC KH Perhaps the USNR is organized much differently than the ANG, as I have never had to pay for lodging and lunch was always provided. This might be because I am enlisted, and I confess I'm not sure if officers in the ANG have to pay for their own lodging out-of-pocket. I've also never had to pay for any mandatory medical exams or tests, and I would also be supremely pissed if I were required to pay for mandatory medical tests/exams. The other interesting thing is that there is a program to pay each reserve component member mileage for travel to drills if their HOR is outside of 120 miles. According to our Group Commander (O6), the problem is that the program is just not funded at the federal level. Unfortunately, I doubt it will ever be funded with the budget issues and I am even more skeptical of backpay. Lastly, Guardsmen/Reservists are eligible for Tricare Reserve Select which doesn't seem to be too bad of a program. If you are mobilized, Tricare Prime starts when your orders are cut (or 180 days prior, whichever is closer); it continues through the deployment and for 180 days after the end of the deployment. A great website to check for military benefits: Militaryonesource.com. There are a lot of little perks out there.

Yes, according to the recruiter briefing:
Free medical care when on-duty
Low cost coverage available through Tricare Reserve Select ($50 for single, $190 for family)
Lodging/all meals paid
Tuition assistance $4500 a year (I'm done with school)
Full BX and commissary privileges
Base gym
MWR

[Neecy]

Quote:

Originally Posted by martyb Don't know about officer stuff, but in the Air Force reserve, enlisted who come in from out of town don't have to pay for billeting, and they can eat at least twicea day for free, on drill (UTA) weekends. I'm glad I retired from the reserves last year, as it's nice to have my weekends back...but I sure do miss that extra $$$$!!! Not to mention the cool TDY's.

Congratulations on your retirement!