Sailor heading ashore for the final time in 2026

[Nuke]

Thanks to everyone who spends time on these boards sharing their wisdom.

My situation:

I'll retire from the US Navy in June 2026 with just a bit over 30 years of active service. Looking to get a COLA'd pension of about $128K/year; that's at pay grade O-6. After federal and state (CA) income taxes, Tricare premium, and Survivor Benefit Premium, I calculate about $8,100/month or $97K/year take home. Our house will be paid off in May 2025 and will have about $9,500/ year in property taxes and home owner's insurance. My wife and I will both turn 53 in 2026. DS will be 18 with one more year of high school and DD will be 16 with two more years of high school to finish.

Current assets in 2024 dollars:
My TSP: $1.17M
Her TSP: $227K
My Roth IRA: $449K
Her Roth IRA: $444k
DS 529: $51K
DD 529: $51K

$30K in a 12 month CD with 5.05% apy

Approximately $55K in cash

DW was in the Navy for nearly 12 years, then became a SAHM and often single parent while I was out to sea. That's why she has her own TSP account.

I've transferred 18 months (four semesters of traditional college) my GI Bill to each child and will have enough cash on hand to fund four semesters of college for both children. So that's 8 semesters per child funded including room and board at in resident rates for California schools.

Current expenses outside of savings, Roth IRAs, and 529 contributions are right at $11K/ month. Our mortgage is $1,300 every two weeks. Based on stopping the 529 ($1,200 month) and Roth ($1,340/month total for both) contributions and no longer paying the biweekly mortgage, that leaves expenses:

Current expenses: $11,000
Mortgage: -$2,600
529 Plan: -$1,200
Roth: -$1,340
Remaining Expenses: $5,860 a month plus $800 to fund property taxes and home owners' insurance. So, $6,700 out of $8,100 spoken for.

DW is pulling the last two years of expenses so that we can fine tune things, those are the rough numbers. I did read Gumby's post in the FAQs! It's just a bear trying to get to my accounts at sea, especially those that use two-factor authentication.

I plugged my numbers into the Retiree Portfolio Model from the Bogleheads site and it looks like we will never need to touch our retirement savings so long as I am alive. If I die the Survivor Benefits Plan will give DW 55% of my pension for life unless she remarries. she has assured me that she will just live in sin with the pool boy should I shuffle off before her. She would likely need to tap into some of the accounts and we have had some discussions about that and will have more as my retirement gets closer.

Looking at my tax brackets, I will likely always be in the 22% bracket for Federal taxes and the 9.3% for CA state taxes. Based on that I don't think it makes sense for me to do any Roth conversions.

I am considering stopping my TSP and Roth contributions at the end of 2024. And then put the equivalent dollars into short term savings, so that we can handle any lumpy expenses before we can tap into our retirement accounts if needed. The house was reroofed, painted, extensively landscaped (xeriscaped), and solarized in 2019. So there shouldn't be any particularly major expenses to handle. My car is a 2023; DW insists that her 2015 minivan is still fine at least until the kids get out of high school.

Due to my agreement to slightly glow in the dark, I have one more nuclear bonus due me next spring, which will be around $37K after taxes. That money will be put into whatever cash vehicle I think will get the best return for about 2 years so that I have it to supplement the 529 money when DS goes off to college. The only other windfall I expect is when I sell back 60 days of leave upon retirement which should net me $21K or so. Some of that will be used to fund a bit of a retirement party and to fly my parents out for a visit when I retire.

I do not intend to pursue work post military. I might substitute teach or do something along those lines. There is the possibility of doing some travel in the US, but not until the kids graduate; we have a dedicated savings fund for that. There is the distinct possibility that DW will tell me to go away so that she can miss me after I have been ashore for a while.

What am I missing?

Thanks in advance!

 

[Backpacker]

Sounds like you're set up for an amazing retirement. Thanks for serving our country. I'm a navy brat (born at great lakes). Dad was a CPO, so I served my time at a very young age, lol!

Only thing that still surprises me post retirement is that kid expenses never seem to end. We've got 5 kids and 9 grands, and seems as though there is always something we need/want to help out with. So a bit of cushion in the budget is good for that.

 

[street]

Thank You, Thank You for your time of service!!!!

Not much help other than You won[t have any problem financially set to ER.

Great Job!!

 

[Gumby]

Welcome aboard, Captain. I can see that you have planned things well, as any good nuke would. Some thoughts, in no particular order

1. I don't know if Tricare also covers your wife and children. If not, then you'll need to look into the ACA.

2. One of the things people often report here is that when they retired they found they had saved too much in pretax money (i.e. - TSP) and not enough in post tax money (regular taxable or Roth). If it were me, I might stop the TSP contributions right now and just save after-tax. If I am doing the math correctly, your marginal tax rate is probably 22% right now and would stay there even if you stopped the TSP contributions. You could also consider a back door Roth strategy to protect future gains on those savings from being taxed.

3. It appears you may have you children's undergraduate school covered by the GI Bill, but you should make sure you know how the 529 plans and GI bill will be counted on FAFSA if they either choose a more expensive school and/or go to graduate school. We don't have children, so I never needed to know the details, but there are many here who can advise you on that.


Gumby (USNA 1981 and also a nuke)


Edit to add: The guy on this board who probably knows the most about your situation is Nords, who is a retired nuke. He doesn't post much anymore, but I know he checks for his name periodically and almost always responds if he is mentioned.

 

[G POP]

Thanks to everyone who spends time on these boards sharing their wisdom.

My situation:

I'll retire from the US Navy in June 2026 with just a bit over 30 years of active service. Looking to get a COLA'd pension of about $128K/year; that's at pay grade O-6. After federal and state (CA) income taxes, Tricare premium, and Survivor Benefit Premium, I calculate about $8,100/month or $97K/year take home. Our house will be paid off in May 2025 and will have about $9,500/ year in property taxes and home owner's insurance. My wife and I will both turn 53 in 2026. DS will be 18 with one more year of high school and DD will be 16 with two more years of high school to finish.

Current assets in 2024 dollars:
My TSP: $1.17M
Her TSP: $227K
My Roth IRA: $449K
Her Roth IRA: $444k
DS 529: $51K
DD 529: $51K

$30K in a 12 month CD with 5.05% apy

Approximately $55K in cash

DW was in the Navy for nearly 12 years, then became a SAHM and often single parent while I was out to sea. That's why she has her own TSP account.

I've transferred 18 months (four semesters of traditional college) my GI Bill to each child and will have enough cash on hand to fund four semesters of college for both children. So that's 8 semesters per child funded including room and board at in resident rates for California schools.

Current expenses outside of savings, Roth IRAs, and 529 contributions are right at $11K/ month. Our mortgage is $1,300 every two weeks. Based on stopping the 529 ($1,200 month) and Roth ($1,340/month total for both) contributions and no longer paying the biweekly mortgage, that leaves expenses:

Current expenses: $11,000
Mortgage: -$2,600
529 Plan: -$1,200
Roth: -$1,340
Remaining Expenses: $5,860 a month plus $800 to fund property taxes and home owners' insurance. So, $6,700 out of $8,100 spoken for.

DW is pulling the last two years of expenses so that we can fine tune things, those are the rough numbers. I did read Gumby's post in the FAQs! It's just a bear trying to get to my accounts at sea, especially those that use two-factor authentication.

I plugged my numbers into the Retiree Portfolio Model from the Bogleheads site and it looks like we will never need to touch our retirement savings so long as I am alive. If I die the Survivor Benefits Plan will give DW 55% of my pension for life unless she remarries. she has assured me that she will just live in sin with the pool boy should I shuffle off before her. She would likely need to tap into some of the accounts and we have had some discussions about that and will have more as my retirement gets closer.

Looking at my tax brackets, I will likely always be in the 22% bracket for Federal taxes and the 9.3% for CA state taxes. Based on that I don't think it makes sense for me to do any Roth conversions.

I am considering stopping my TSP and Roth contributions at the end of 2024. And then put the equivalent dollars into short term savings, so that we can handle any lumpy expenses before we can tap into our retirement accounts if needed. The house was reroofed, painted, extensively landscaped (xeriscaped), and solarized in 2019. So there shouldn't be any particularly major expenses to handle. My car is a 2023; DW insists that her 2015 minivan is still fine at least until the kids get out of high school.

Due to my agreement to slightly glow in the dark, I have one more nuclear bonus due me next spring, which will be around $37K after taxes. That money will be put into whatever cash vehicle I think will get the best return for about 2 years so that I have it to supplement the 529 money when DS goes off to college. The only other windfall I expect is when I sell back 60 days of leave upon retirement which should net me $21K or so. Some of that will be used to fund a bit of a retirement party and to fly my parents out for a visit when I retire.

I do not intend to pursue work post military. I might substitute teach or do something along those lines. There is the possibility of doing some travel in the US, but not until the kids graduate; we have a dedicated savings fund for that. There is the distinct possibility that DW will tell me to go away so that she can miss me after I have been ashore for a while.

What am I missing?

Thanks in advance!

This advice is worth exactly what you are paying me for it. Here is what I would do: You will be getting a 1 Jan raise of aprox 3.5%. Assuming you will also get a raise on 1 Jan 2026. Save both of those into a taxable account. Personally, I would plan an exit from CA. We used to live in San Diego. Now on Chesapeake Bay. $ goes soooo much further here. The golden ticket for you and your DW is VA Disability. I'm not a doctor but can pretty much guarantee you have a few medical issues. All 50+ yr old men who have been in the military do. During these last 22 months make sure you document every nick, scratch, head ache, etc... You most likely snore. Guessing you may have some sleep apnea. If you do that is a 50% VA rating by itself. Your DW can also submit a VA disability claim. Use an advocate. DAV, Fleet reserve association, etc... Do not sell your leave. When you do that, you miss out on your BAH. Take your leave before you retire so you get the BAH and also take your house hunting leave (even though you have a house you still rate it). Go to all of the retirement seminars.

Our resident military guy on here (Nords) is a good source of intel. He is a retired submariner. He wrote "The military guide to financial independence and retirement.

Good luck to you sir. Fair winds and following seas.

 

[MarieIG]

Welcome to the forum Nuke - and thank you for your service. I agree that you appear to be (for the most part) set for smooth sailing, with just some tweaking as you approach the finish line. I agree with Gumby's recommendations above, and you may want to look at setting up a Roth TSP if you don't already have one.

 

[Gallaher]

You are golden but you smashed my head when you said $9,500 in property tax and insurance. What state is your mansion in?
Those are crazy taxes!

 

[Gumby]

You are golden but you smashed my head when you said $9,500 in property tax and insurance. What state is your mansion in?
Those are crazy taxes!

That sounds very reasonable to me. My property tax and insurance together are $21,500 per year.

 

[Exchme]

Thank you for your service. Your financial mission is accomplished! With a great COLA pension, Tricare, and ample savings, you are in great shape.

Since you are using the RPM model, you could look at whether it's better to continue to make tax deferred contributions now or stop. Usually it's best to keep money out of taxable, so my guess is you should continue to contribute.

Once you retire, I would think that modest Roth Conversions could be worthwhile, say up to the top of the 22% bracket. With over twenty years until RMDs start, those tax deferred accounts could go up by a factor of 4, leaving you in higher brackets in the future, especially once one of you passes.

Another thing you can do to help with future taxes is hold your stocks in Roth and taxable, bonds in tax deferred while keeping your asset allocation the same. That can slow down the growth of tax deferred and so lower those RMDs. The RPM model can examine that option, it's one of the few tools that does. (Pralana Gold is the only other one I know of that does this. Pralana costs $ but gets to answers on optimum Roth Conversions faster vs. RPM which is purely manual, but you don't have a lot of other complexity, so RPM will work OK).

 

[Koolau]

Just for fun, I'd suggest you also input your data into FIRECalc and get yet another confirmation that you are golden.

Let me add my thanks for your service!

 

[Nuke]

Welcome aboard, Captain. I can see that you have planned things well, as any good nuke would. Some thoughts, in no particular order

1. I don't know if Tricare also covers your wife and children. If not, then you'll need to look into the ACA.

2. One of the things people often report here is that when they retired they found they had saved too much in pretax money (i.e. - TSP) and not enough in post tax money (regular taxable or Roth). If it were me, I might stop the TSP contributions right now and just save after-tax. If I am doing the math correctly, your marginal tax rate is probably 22% right now and would stay there even if you stopped the TSP contributions. You could also consider a back door Roth strategy to protect future gains on those savings from being taxed.

3. It appears you may have you children's undergraduate school covered by the GI Bill, but you should make sure you know how the 529 plans and GI bill will be counted on FAFSA if they either choose a more expensive school and/or go to graduate school. We don't have children, so I never needed to know the details, but there are many here who can advise you on that.


Gumby (USNA 1981 and also a nuke)


Edit to add: The guy on this board who probably knows the most about your situation is Nords, who is a retired nuke. He doesn't post much anymore, but I know he checks for his name periodically and almost always responds if he is mentioned.

1. Tricare covers DW and the kids until the kids turn 26 so long as they are in school.

2. You're correct on my marginal rate being 22%. I am 90% sure that I will stop the TSP and shift those dollars to after-tax savings.

3. I assumed that the 529 plan and GI bill would be considered by FAFSA; we can afford to send our kids to college. Don't get me wrong, we will happily take any scholarships my kids earn.

Buz Sorce was one of my commanding officers; he was a USNA grad around 81 or so.

I've read Nords book often and always recommend it to Sailors as a good guide.

 

[Nuke]

You are golden but you smashed my head when you said $9,500 in property tax and insurance. What state is your mansion in?
Those are crazy taxes!

We live in SoCal, that's the sunshine tax I guess.

 

[Nuke]

Thank you for your service. Your financial mission is accomplished! With a great COLA pension, Tricare, and ample savings, you are in great shape.

Since you are using the RPM model, you could look at whether it's better to continue to make tax deferred contributions now or stop. Usually it's best to keep money out of taxable, so my guess is you should continue to contribute.

Once you retire, I would think that modest Roth Conversions could be worthwhile, say up to the top of the 22% bracket. With over twenty years until RMDs start, those tax deferred accounts could go up by a factor of 4, leaving you in higher brackets in the future, especially once one of you passes.

Another thing you can do to help with future taxes is hold your stocks in Roth and taxable, bonds in tax deferred while keeping your asset allocation the same. That can slow down the growth of tax deferred and so lower those RMDs. The RPM model can examine that option, it's one of the few tools that does. (Pralana Gold is the only other one I know of that does this. Pralana costs $ but gets to answers on optimum Roth Conversions faster vs. RPM which is purely manual, but you don't have a lot of other complexity, so RPM will work OK).

We don't hold any bonds at the moment. Most of our accounts are in S&P 500 ETFs, some international ETFs, and a small cap ETF.

I considered the pension to be what was going to paid all the needs and most of the wants; I stayed all in on stocks as the most likely plan to grow the most. Seemed to me that not needing to worry about how to make my savings last made it more simple for me.

I have not worried about asset allocation or re-balancing pretty much ever. My strategy was to just shovel as much money as I was allowed into all retirement accounts and forget it.

Along the way, especially in the past few years, we've taken advantage of my bonuses to make real improvements to the house and work to get the kids set for starting their life.

I will fiddle with RPM some more and see about the Roth conversions.

 

[FlaGator]

Thank you for your service!!

My oldest brother did time on a nuke sub and surface ship in the 70's and went on to do nuke construction/maintenance. You guys have the self-discipline we need more of in the workforce today.

Props to your wife, what the two of you have accumulated, and the advance planning to provide for the kids' education.

Enjoy San Diego!

 

[Route246]

You are golden but you smashed my head when you said $9,500 in property tax and insurance. What state is your mansion in?
Those are crazy taxes!

In NorCal this is a bargain.

 

[Nords]

Gumby (USNA 1981 and also a nuke)

Edit to add: The guy on this board who probably knows the most about your situation is Nords, who is a retired nuke. He doesn't post much anymore, but I know he checks for his name periodically and almost always responds if he is mentioned.

Thank you for the tags, Gumby & JDarnell!*

Current assets in 2024 dollars:
My TSP: $1.17M
Her TSP: $227K
My Roth IRA: $449K
Her Roth IRA: $444k
DS 529: $51K
DD 529: $51K

$30K in a 12 month CD with 5.05% apy
Approximately $55K in cash

I’m counting roughly $2.3M (not including 529 accounts) and $8100/month pension with expenses of $6700/month. You’re also going to earn another two years of O-6 pay & allowances.

With the numbers you’ve listed, the 4% Safe Withdrawal Rate on $2.3M is already $92K/year above your pension and VA disability compensation. You’ll only be nine years away from Social Security if any spending gaps pop up.

I think you’ll be fine, and any expenses you’re overlooking (like first-class airfare) will be tinkering at the margins.

Looking at my tax brackets, I will likely always be in the 22% bracket for Federal taxes and the 9.3% for CA state taxes. Based on that I don't think it makes sense for me to do any Roth conversions.

What am I missing?

As others have mentioned, while it might not make sense to do Roth IRA conversions, take a look at your traditional TSPs' compounding up to your Required Minimum Distributions. By then you’ll both be drawing Social Security and your pension will have kept up with inflation. Most retirees don’t consider compounding effects on starting RMDs in their mid-70s, and there aren’t really any comprehensive Roth IRA conversion calculators.

In your 70s you’ll already be paying IRMAA on your Medicare premiums and you’ll be taxed on your Social Security. Maybe your RMDs will stay in the 22% income-tax bracket, but if you get into the higher income-tax brackets then you’d want to try to do small annual Roth IRA conversions in your 50s & 60s.

A frequently overlooked issue is the survivor’s RMDs after one of you passes away. Those taxes will be at the Single income-tax bracket, which is one reason that the governments are so patient about waiting on RMDs. You can avoid some of that taxation with Qualified Charitable Distributions, which are now also adjusted for inflation.

These factors might not make enough of a difference in your RMD years for you to care about the additional income taxes, but you’d want to do the math now so that you don’t miss out on the years of conversion opportunities.

We don't hold any bonds at the moment. Most of our accounts are in S&P 500 ETFs, some international ETFs, and a small cap ETF.

I considered the pension to be what was going to paid all the needs and most of the wants; I stayed all in on stocks as the most likely plan to grow the most. Seemed to me that not needing to worry about how to make my savings last made it more simple for me.

I have not worried about asset allocation or re-balancing pretty much ever. My strategy was to just shovel as much money as I was allowed into all retirement accounts and forget it.

With an inflation fighting pension plus VA disability compensation (and as close as you are to Social Security), you have plenty of bond-like income. For asset-allocation purposes you could consider those income streams the equivalent yield from I bonds or a TIPS fund. (It’s a flawed analogy because bonds mature, but it’s close enough for asset allocation.) Because of those income streams, you can also stay 100% equities with your investments. You’ll experience breathtaking volatility at that high equity allocation, but you don’t have to care.

You might reduce your equity exposure if the volatility keeps you awake at night, but the math (and the COLAs) are on your side.

On the career side, I strongly recommend going to at least one session of TAP/GPS-- and it's even better if your spouse can accompany you. The two of you will have different perspectives on the same presentations, as well as plenty of time for thoughtful conversations about your future together.

In the last few years I've seen two O-6s who completely neglected their health and their imminent retirements out of a fear that the entire Navy would grind to a screeching halt without their constant presence.

Don't fall into that trap-- take care of your TAP and your retirement physical (and the rest of your retirement planning) so that the rest of your plans aren't derailed.

Buz Sorce was one of my commanding officers; he was a USNA grad around 81 or so.

I've read Nords book often and always recommend it to Sailors as a good guide.

Now you’re just making Gumby & me feel old!

... and thank you for passing on the book recommendations.

*(I check this forum every week or so for the "Nords" keyword. Of course people can reach me faster with a PM, too, and thanks to those who let me know. For the last four years, though, I've spent 95% of my time on ESIMoney's Millionaire Money Mentor forum and I don't see that percentage getting smaller anytime soon.)

 

[iloveyoga]

Thanks to everyone who spends time on these boards sharing their wisdom.

My situation:

I'll retire from the US Navy in June 2026 with just a bit over 30 years of active service. Looking to get a COLA'd pension of about $128K/year; that's at pay grade O-6. After federal and state (CA) income taxes, Tricare premium, and Survivor Benefit Premium, I calculate about $8,100/month or $97K/year take home. Our house will be paid off in May 2025 and will have about $9,500/ year in property taxes and home owner's insurance. My wife and I will both turn 53 in 2026. DS will be 18 with one more year of high school and DD will be 16 with two more years of high school to finish.

Current assets in 2024 dollars:
My TSP: $1.17M
Her TSP: $227K
My Roth IRA: $449K
Her Roth IRA: $444k
DS 529: $51K
DD 529: $51K

$30K in a 12 month CD with 5.05% apy

Approximately $55K in cash

DW was in the Navy for nearly 12 years, then became a SAHM and often single parent while I was out to sea. That's why she has her own TSP account.

I've transferred 18 months (four semesters of traditional college) my GI Bill to each child and will have enough cash on hand to fund four semesters of college for both children. So that's 8 semesters per child funded including room and board at in resident rates for California schools.

Current expenses outside of savings, Roth IRAs, and 529 contributions are right at $11K/ month. Our mortgage is $1,300 every two weeks. Based on stopping the 529 ($1,200 month) and Roth ($1,340/month total for both) contributions and no longer paying the biweekly mortgage, that leaves expenses:

Current expenses: $11,000
Mortgage: -$2,600
529 Plan: -$1,200
Roth: -$1,340
Remaining Expenses: $5,860 a month plus $800 to fund property taxes and home owners' insurance. So, $6,700 out of $8,100 spoken for.

DW is pulling the last two years of expenses so that we can fine tune things, those are the rough numbers. I did read Gumby's post in the FAQs! It's just a bear trying to get to my accounts at sea, especially those that use two-factor authentication.

I plugged my numbers into the Retiree Portfolio Model from the Bogleheads site and it looks like we will never need to touch our retirement savings so long as I am alive. If I die the Survivor Benefits Plan will give DW 55% of my pension for life unless she remarries. she has assured me that she will just live in sin with the pool boy should I shuffle off before her. She would likely need to tap into some of the accounts and we have had some discussions about that and will have more as my retirement gets closer.

Looking at my tax brackets, I will likely always be in the 22% bracket for Federal taxes and the 9.3% for CA state taxes. Based on that I don't think it makes sense for me to do any Roth conversions.

I am considering stopping my TSP and Roth contributions at the end of 2024. And then put the equivalent dollars into short term savings, so that we can handle any lumpy expenses before we can tap into our retirement accounts if needed. The house was reroofed, painted, extensively landscaped (xeriscaped), and solarized in 2019. So there shouldn't be any particularly major expenses to handle. My car is a 2023; DW insists that her 2015 minivan is still fine at least until the kids get out of high school.

Due to my agreement to slightly glow in the dark, I have one more nuclear bonus due me next spring, which will be around $37K after taxes. That money will be put into whatever cash vehicle I think will get the best return for about 2 years so that I have it to supplement the 529 money when DS goes off to college. The only other windfall I expect is when I sell back 60 days of leave upon retirement which should net me $21K or so. Some of that will be used to fund a bit of a retirement party and to fly my parents out for a visit when I retire.

I do not intend to pursue work post military. I might substitute teach or do something along those lines. There is the possibility of doing some travel in the US, but not until the kids graduate; we have a dedicated savings fund for that. There is the distinct possibility that DW will tell me to go away so that she can miss me after I have been ashore for a while.

What am I missing?

Thanks in advance!

Thank you for your service! Very nice, well deserved pension. Best wishes in your retirement.

 

[Texas Proud]

Welcome and like all others have said, thanks for your service...

WOW... $128K per year pension!!! I guess I should have signed up for the Navy way back when... I was in NJROTC and had a lot of friends go into the Navy... sad to say their experience was not like yours and most dropped out after one or two tours...

Back then the pay was really low so that is why I passed... now looks like it is more in line with other jobs...

 

[JDARNELL]

Welcome to the board Captain. I retired in 2011 as an AF 0-5 and many on this board especially Nords helped me with my transition and prep.

A few things. I attended TAP 2 yrs prior to me retiring the first time. That gave me a good roadmap of things that I needed to take care of before my departure. Over the two years I shored up medical care, got funds put into correct places, got CINC House educated, and began sharpening the pencil on expenditures. So when I attended TAP 6 months out it was a much more relaxed time. I saw many 0-5s and 0-6s that were so stressed and really struggling with having to make a transition.

I transferred the remaining GI Bill benefits to our kids. Each year we filed FAFSA and while there was no need based money there were private scholarships that the school had access to along with some money for them being college athletes and some private money from military units that I had been in each year. Everything else we covered as they maintained on task and worked hard.

Plan on helping the kids at least the first year upon graduation with some level of economic outpatient care. Even with good jobs they may struggle with living in accommodations that CINC house will agree with until they get their first promotion. Then of course one day a wedding.

Nords mentioned keeping an eye on how those traditional TSP balances are going to impact RMDs. You and your spouse numbers it right in line where we are in our house at this point even though I am just two years older than you. We did not have access to the TSP Roth back in the day. I have used multiple planners including Prilana which has a pretty detailed RMD impact calculator and it is not pretty. Don't get me wrong it's a good problem to have however trying to thread the needle under the 2nd IRMAA point is going to take some work. I am not sure that IRA conversions buy me anything as compared to once the money is being pulled out we put it into ETFs.

Asset allocation of 85% to 100% probably makes sense if you can live with the volatility. However you might think if I have already won the game why keep playing. It's at that point or sooner you might begin to fund kids ROTH IRAs each year etc. I suspect you're going to get to the point to where once SS kicks in and your kids get through school and are established you're going to be trying to figure out how to give money away. It may be harder than the accumulation phase.

Your marginal tax rate will be at the 22% floor so as you begin to take IRA money think about the most tax efficient way however there isn't many options. This will impact a surviving spouse even more in the event that happens. We are working through estate planning now and looking at the potential impacts of these scenarios. Who knows one day you may decide to leave that 9% tax state for somewhere else. I know we have bought 3 forever homes.

Traveling after retirement is much slower and more relaxed. For example we are departing for a 30-45 day trip to Japan and Korea in the next few weeks. Sometimes we will use Space A for part of a trip or use FF points on the front end of the trip. Then when we are ready to come home well just drop the credit card. Flexibility is great.

I think you're gonna be in great shape just take your time and don't rush into doing things once you retire. Slowing down and adjusting fire was a struggle as when you are always use to being on point it takes time. The good thing is you will have more time to focus on exercise and taking care of your health. It is my goal to be the oldest living recipient of retirement income from DFAS. I'm gonna die trying. Welcome again!

 

[Nords]

I know we have bought 3 forever homes.

It is my goal to be the oldest living recipient of retirement income from DFAS. I'm gonna die trying. Welcome again!

Well phrased on the homes... and ouch.

The DoD Actuary report used to list the oldest living retirees, and they were at age 110. Today they just have a row at "100+", and there's 879 people in that category:

https://media.defense.gov/2023/Oct/06/2003315292/-1/-1/0/MRS%20STATRPT%202022%20V999.PDF

 

[Texas Proud]

Well phrased on the homes... and ouch.

The DoD Actuary report used to list the oldest living retirees, and they were at age 110. Today they just have a row at "100+", and there's 879 people in that category:

https://media.defense.gov/2023/Oct/06/2003315292/-1/-1/0/MRS%20STATRPT%202022%20V999.PDF

Interesting....

What about the 7 that are unknown

 

[Nuke]

Thank you for the tags, Gumby & JDarnell!*




On the career side, I strongly recommend going to at least one session of TAP/GPS-- and it's even better if your spouse can accompany you. The two of you will have different perspectives on the same presentations, as well as plenty of time for thoughtful conversations about your future together.

In the last few years I've seen two O-6s who completely neglected their health and their imminent retirements out of a fear that the entire Navy would grind to a screeching halt without their constant presence.

Don't fall into that trap-- take care of your TAP and your retirement physical (and the rest of your retirement planning) so that the rest of your plans aren't derailed.

I will be attending TAP/GPS once I return from my present deployment. I will schedule it to be during the school year so that DW can attend.

I'm making sure to go to medical and tackle those things that need attention. I keep telling myself that the Navy was sailing before I joined and it'll probably sail after I retire.

Thanks for the detailed review of my situation. I'm working to educate myself on the Roth conversion process and running the numbers to see what makes sense

 

[Nuke]

This advice is worth exactly what you are paying me for it. Here is what I would do: You will be getting a 1 Jan raise of aprox 3.5%. Assuming you will also get a raise on 1 Jan 2026. Save both of those into a taxable account. Personally, I would plan an exit from CA. We used to live in San Diego. Now on Chesapeake Bay. $ goes soooo much further here. The golden ticket for you and your DW is VA Disability. I'm not a doctor but can pretty much guarantee you have a few medical issues. All 50+ yr old men who have been in the military do. During these last 22 months make sure you document every nick, scratch, head ache, etc... You most likely snore. Guessing you may have some sleep apnea. If you do that is a 50% VA rating by itself. Your DW can also submit a VA disability claim. Use an advocate. DAV, Fleet reserve association, etc... Do not sell your leave. When you do that, you miss out on your BAH. Take your leave before you retire so you get the BAH and also take your house hunting leave (even though you have a house you still rate it). Go to all of the retirement seminars.

Our resident military guy on here (Nords) is a good source of intel. He is a retired submariner. He wrote "The military guide to financial independence and retirement.

Good luck to you sir. Fair winds and following seas.

Several good points and thank you for your advice.

DW likes CA, DS and DD are in high school and want to stay until they graduate. Dollars may go further in VA, but not if they are spread across two households.

DW and I will be working to ensure that we are living under what I expect to receive in my pension. All the excess will be put into a HYSA.

One other issue, selling back leave means you just get your basic pay. But here's how I look at it. in my last year, the Navy will pay me for 365 days as an O-6, BAH included. During that time I will earn 30 days of leave. Now, I can retire on the 1 st day of the 12th month and take terminal leave for 30 days. I will get paid for 365 days that year, but only show up for work 335 days.

Or, I can work 365 days, getting my full pay (Base Pay, BAH, BAS, etc.) and then sell back 30 days of leave. then I will have been paid 365 days of full pay, plus 30 days of just my Base Pay. So more ducats from the government.

Plus there's the intangible benefit of retiring on the last Friday of May 2026. That will be 35 years to the day that I got off the bus at boot camp. For those doing the math, I went to NROTC immediately following boot camp and my 5 years of getting my 4 year degree don't count for active service computations. Also, I will be able to combine my relinquishment of command with the retirement ceremony. One only party to pay for and only one ceremony for the Sailors to setup and clean up.

 

[Nuke]

Thanks for having me look at the tax implications of one of us passing before the other. Interestingly, the worst tax situation is if DW leaves before I do. Those single tax brackets are rough.

Looks like I will be doing Roth conversions to keep the RMD bite down. if I wind up single, then I would quickly get into what is currently the 32% bracket. Three of DW's grandparents passed before 70 and her mother went at 53. All of my grandparents lasted until their mid 80s at least.

Still need to do some figuring, but I'm leaning heavily towards doing Roth conversions to the top of the 24% bracket once I retire. More math to follow.

 

[Texas Proud]

Interesting that you went to college after signing up... what degree did you get?

That was one of the reasons I was interested to go into the Navy... they talked about going to nuclear school for 2 years, going to college for 4 years (or more in your case) and then having to serve 4 more years in the Navy...

Well, for an 18 YO making a 10 year or more commitment was not something I wanted to do... and they could not tell me what percent my chances were to be able to go to college... it was not guaranteed... if I knew that 90% got to go if they applied it might have been different... but no number given so I thought it would not happen and I would be stuck...

And my friend who did sign up for nuclear school did not make it...he said he was told things that were not true.. that nuclear school fails a majority of students...

It is also funny that I eventually became a CPA... did not go the engineering route..