Making Millions

[azanon]

Nords,

As maddy said (I believe it was her), there are "early outs" in the federal system; if you're offered them anyway. I can "early out" as soon as 50 years old (since i'll have 20 years+ of service then) and get a reduced pension + healthcare benefits.

If i can afford to and if i'm offered one then, I might very well take it. Too many unknowns now though.

[work4beer]

Geeman-

I was in your shoes 10 years ago: 22, no savings, making $45k and saving 25% after taxes (17% before taxes).

With any luck, I will have $1M in liquid assets within 5 years at age 37. Work hard and pay yourself first and you'll get there.

I have no regrets about forgoing nice cars and the like, I much prefer the freedom that having some wealth offers.

-W4B

[Michael Moore]

azanon, I think the rule is at least 20 years of service and at least 50 years of age, or 25 years of service and any age. The hit on the pension when we had our last early out 2 years ago was pretty significant for me, as the high-3 was lower and I had the extra 2 years of reduction (plus we'd just paid the house off and my cash reserves were very low).

This year things are definitely "good enough" so 29 and 52 is out for me.

cheers,
Michael

[azanon]

Quote:

azanon, I think the rule is at least 20 years of service and at least 50 years of age, or 25 years of service and any age.

That's correct. I wasn't stating the actual rule as you can see in my post above; just stating when i'd first be eligible, which is using the first aspect of the rule. Going by the latter aspect of that rule, I wouldnt be eligible until i was 52 (my 25 year point).

[Arif]

What most people don't realize with military pensions is although you get 50% after 20 years it is only 50% of base pay. So although you may be getting an allowance for housing (BAH) of $1000 per month and $200-300 for food (BAS). That is not calculated in your retirement. Most soldiers don't think about it till they get that first retirement check. So for instance if I stayed in the Army and retired as an 04 making $80k my retirement would be $33k. Not chump change but not quite 50% either. Part of the reason I decided to make my own pension instead of doing another 10 years.

[Nords]

Quote:

Originally Posted by Arif What most people don't realize with military pensions is although you get 50% after 20 years it is only 50% of base pay. So although you may be getting an allowance for housing (BAH) of $1000 per month and $200-300 for food (BAS). That is not calculated in your retirement. Most soldiers don't think about it till they get that first retirement check. So for instance if I stayed in the Army and retired as an 04 making $80k my retirement would be $33k. Not chump change but not quite 50% either. Part of the reason I decided to make my own pension instead of doing another 10 years.

Absolutely, but the best data available, scant & anecdotal as it is, indicates that at least 85% of those officers use their pension as a launching pad for a new career.

I think the biggest advantage of a military pension, small as it may be, is that (1) you survived to receive it and (2) it solves ER's challenges of healthcare & inflation.

[Arif]

Quote:

I think the biggest advantage of a military pension, small as it may be, is that (1) you survived to receive it and (2) it solves ER's challenges of healthcare & inflation.

Very true. Witnessed it first hand when a coworker (retired military working GS job) was diagnosed with cancer. He said the best benefit of retiring was not the paycheck but the health benefits as the bills he racked up fighting lung cancer was astronomical.
BTW-Got a ballpark quote for health insurance (wife, son and I) in Panama of $130 per month. They are suppose to be sending me more details on what it covers and doesn't. I might be comparing apples and oranges at this point but Tricare (COBRA) for a family was $8k per year! If I chose that option that would be half of my annual living expenses in Panama. For that much money I'll just clone some body parts for spares. Pretty sure it would come out cheaper.