Sailor heading ashore for the final time in 2026

[Nuke]

I have not taken the normal route pretty much ever in my career.

Applied for and received a Marine Corps Option NROTC scholarship. Then joined the Marine Reserves, went to Parris Island and found out once I reported to my NROTC unit that I could not be a drilling reservist and be on scholarship at the same time. Stayed with the college scholarship. Went to Marine OCS in 1994 and completed it sucessfully. Came back and asked to transfer to the Navy. That got approved. Commissioned in 1996. Was told I didn't have the grades to even apply to be a nuclear operator. Went to an old steam ship and qualified there. My second CO was a nuclear trained aviator some to be headed to a carrier. He gave me a glowing recommendation to nuclear power and I was accepted.



I got a degree in math.

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..

 

[Calico]

Thank you for your service.

My dad was a navy man in WWII, and he liked to raise his three daughters in that spirit. Every morning he came around banging on our bedroom doors to wake us up, hollering "Rise and shine, time to swab the decks." As a lifelong, 100% night-owl I did not appreciate that habit of his one little bit!

 

[wrigley]

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, Captain.
Dual retired Navy couple here!

Mike

 

[38Chevy454]

Little late to the discussion here. I think you are great shape for a successful retirement. Between your pension, potential disability, savings and SS later, you are good to go! Thanks for your service, I worked with many nuke officers in my career; even spending time as an IPA at DOD. I was on DOE side.

Just as several have suggested, you might want to up the after tax savings now until you retire. Given your current tax rates, some smaller Roth conversions may fit in as well. Just be cautious of the incremental tax rates.

Get the kids through school and then start enjoying a full retirement doing whatever you and your wife want to do. I agree that keeping high equity allocation in your savings is a good choice given it is mostly longer term money.

 

[Nuke]

After doing some pondering and figuring, DW and I are in discussions about how to shift our savings.

In full on staff officer mode, I created a PowerPoint and sent it to her last night. Of course I then found an error as I was reviewing it later.

Anyway, I'm making the pitch to stop investing the TSP and divert those funds into a HYSA to build up a larger cash cushion as I prepare to retire.

Some quick back of the envelope math shows that we should have a little over $160K in cash by Jun 2026. $30K of that is a 12 month CD earning 5.05% maturing in July 2025. About $21K will be from selling back leave, and another $37K from my last nuke bonus payment. The rest comes from dumping money that used to go into TSP.

We will continue to contribute to our Roth IRAs and the kids' 529 plans. Plus our already existing savings into sinking funds for cars and vacations.

Once I get a better feel for our actual spending, there's likely to be more money which can be used to plump up the account. We have been doing the save first and then deal as we pleased with the rest. Need to actually look at those Amazon purchases.

On the subject of Roth conversions, running several iterations through the Retirement Portfolio Model, it seems like the sweet spot is converting $110K a year starting when I turn 54, so 2027 and using funds in the TSP to pay the tax on the $110K works the best. Then I would stop when I turn 63. That will help me avoid the bigger IRMAA adjustments and leave several hundred thousand in both my wife's and my TSP accounts. Those accounts will be useful if one or both of us need LTC. That conversion rate smooths my effective federal tax rate out nicely and keeps me out of the higher tax brackets once we have to take RMDs. There is a nice dip in my tax rate right about the time I am waiting to take SS and my kids hitting their mid 30s. If needed or desired, money could be withdrawn then to help them pay down a house loan or fund their own retirement accounts or 529s for any grand children that maybe.

I haven't run the numbers yet on what happens if we pass many years apart.

I'm sure I'll be back with more questions as I navigate my way into getting this all setup.

 

[AginMS]

You're definitely in great shape - congratulations on a 30 year career!

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.

Actually, your DW can marry that pool boy after she turns 55 and continue to receive her SBP payments for life. Or, she could marry him before 55 and her SBP payments would end, but if she later divorced the pool boy her SBP would resume. So there's that. Maybe you don't want to share this info with DW.

For TRICARE, your kids can stay on the affordable TRICARE family coverage until they turn 21, or 23 if enrolled in college. From 23-26 they can enroll in TRICARE Young Adult but that coverage is much more expensive (around $637/mo plus co-pays). I haven't compared it to the ACA plans yet, but will be soon to determine what to do with my youngest DD (22 yoa and in her Masters).

Link to TRICARE Young Adult costs is: Copayments & Cost-Shares | TRICARE

 

[Nuke]

You're definitely in great shape - congratulations on a 30 year career!


Actually, your DW can marry that pool boy after she turns 55 and continue to receive her SBP payments for life. Or, she could marry him before 55 and her SBP payments would end, but if she later divorced the pool boy her SBP would resume. So there's that. Maybe you don't want to share this info with DW.

For TRICARE, your kids can stay on the affordable TRICARE family coverage until they turn 21, or 23 if enrolled in college. From 23-26 they can enroll in TRICARE Young Adult but that coverage is much more expensive (around $637/mo plus co-pays). I haven't compared it to the ACA plans yet, but will be soon to determine what to do with my youngest DD (22 yoa and in her Masters).

Link to TRICARE Young Adult costs is: Copayments & Cost-Shares | TRICARE

Thanks for that information. I'll check it out.

 

[Brat]

Are you aware of the Western Undergraduate Exchange which softens the cost of out-of-state tuition for many western state universities? California is a member. Explore those schools if your children don't find the right program in-state.

There are many advantages to living in California - my daughter can afford to live anywhere she wishes in retirement but is staying put.

If you have family members who may need nursing care keep in mind the fact that California has a income-based Medicaid, assets are not a factor.

 

[G POP]

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.

Your last day in uniform can still be your last day in uniform. What I'm saying is work that last day, relinquish command, have your ceremony and then go on leave for 30 days receiving an additional 30 days of BAH the whole time. On day 30, walk into admin, hand in your ID card, receive a retiree ID card and be on your way. If you have already relocated you can hand in your active ID card to any military ID office. I took the uniform off in mid June and had my ceremony on my beach. THEN I went on my house hunting, some PTAD for DAU courses and handed my ID in over 100 days later. Getting BAH the whole time.

 

[G POP]

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..

Yes, but your friend DID get free college using the GI bill

 

[Koolau]

Yes, but your friend DID get free college using the GI bill

Slight quibble. NOTHING is free. Someone pays and it's a benefit for service. It WAS paid for.

 

[Nuke]

Your last day in uniform can still be your last day in uniform. What I'm saying is work that last day, relinquish command, have your ceremony and then go on leave for 30 days receiving an additional 30 days of BAH the whole time. On day 30, walk into admin, hand in your ID card, receive a retiree ID card and be on your way. If you have already relocated you can hand in your active ID card to any military ID office. I took the uniform off in mid June and had my ceremony on my beach. THEN I went on my house hunting, some PTAD for DAU courses and handed my ID in over 100 days later. Getting BAH the whole time.

Thanks, something to consider for sure.

 

[ncbill]

You're definitely in great shape - congratulations on a 30 year career!


Actually, your DW can marry that pool boy after she turns 55 and continue to receive her SBP payments for life. Or, she could marry him before 55 and her SBP payments would end, but if she later divorced the pool boy her SBP would resume. So there's that. Maybe you don't want to share this info with DW.

For TRICARE, your kids can stay on the affordable TRICARE family coverage until they turn 21, or 23 if enrolled in college. From 23-26 they can enroll in TRICARE Young Adult but that coverage is much more expensive (around $637/mo plus co-pays). I haven't compared it to the ACA plans yet, but will be soon to determine what to do with my youngest DD (22 yoa and in her Masters).

Link to TRICARE Young Adult costs is: Copayments & Cost-Shares | TRICARE

Or they can join the Guard/Reserve & pay for inexpensive Tricare Reserve Select.

Which is what one of my kids did to pay back their ROTC scholarship.

And in many states, joining the Guard also covers tuition @ in-state public schools.

 

[Nuke]

Or they can join the Guard/Reserve & pay for inexpensive Tricare Reserve Select.

Which is what one of my kids did to pay back their ROTC scholarship.

And in many states, joining the Guard also covers tuition @ in-state public schools.

Thanks. I had not heard of Tricare Reserve Select. Something to keep in mind as the kids sort out their post high school plans.

 

[Mr Gadget]

Congrats Captain, I pulled the plug as an E-8 back in 2010 after 25 years across the Navy and Coast Guard, and haven't worked a day since. My Navy recruiter tried to get me to go nuke, but I was not interested and I intentionally failed the test so he would leave me alone. I wanted to play the Fire Control game instead and got 10 years of sea time visiting 6 of the 7 continents for my efforts.

All good advice here, I used Nord's suggestions as well for my planning, but my parents had already started me on the frugal path that allowed me to quit working when I retired from the service, I still think the decision to retire at 43YO was my very best, because the old adage about making above $75,000 rang true for me. I've sent his books to both of my stepsons who are active duty as well. Daughter finished her Bachelors on my GI Bill and I burned the last bit left over on a Welding school, because I'm one of the people who lose it after 15 years. It may be more beneficial for the kids to do cheaper Community College first on grants and then use the GI Bill for the final costs as my Daughter did. Also pay attention to the automatic cutoff at 18 for kids, my VA disability dropped because you have to re-inform them if your dependent is in college beyond 18, and I didn't realize I could add her back until she was only a year before the final 23 cutoff. My daughter used the Tricare Adult plan as well; while it is expensive, its usually cheaper than other options.

Biggest thing I can add to the conversation is pay attention to your health, it's the one thing you can prop up with all the money your bringing in, but you can't really "buy" it, and usually we've been pretty well beaten up over our years of service, even if we were the lucky ones to even make it here.

Fair winds and following seas.

 

[Nords]

I've sent his books to both of my stepsons who are active duty as well.

Thank you!