Enrollment In The Brs Depends On When You Joined The Service
If you joined before January 1, 2006, you remained in the legacy retirement system.
If you joined the service on or after January 1, 2018, you were automatically enrolled in the BRS.
If you joined between January 1, 2006, and December 31, 2017, you could stay in the legacy system or enroll in the new one. The last day to enroll in the BRS plan was December 31, 2018.
Tips For Maximizing Your Tsp
The following tips can help you maximize your Thrift Savings Plan contributions. The sooner you start, the better off youll be when it comes time to retire from the military.
Contribute at least 5%.
The TSP matching contribution comprises two parts: automatic 1% match and 4% agency match. If you do not contribute at least 5% of your pay, you are not making the most of what’s being offered to you. If you are participating in the BRS but not contributing to your TSP, you will only receive the Department of Defense’s 1% automatic contribution. If you do not contribute to your TSP, you do not receive any matching contributions.
Make catch-up contributions.
Catch-up contributions are extra deposits you can begin making into a TSP any time starting in the year that you turn 50 years old, as long as you expect to make the maximum regular contribution as an eligible federal employee. This gives you the chance to save up more for your retirement. You decide how much you want to deposit, and it’s automatically deducted from your basic pay every pay period. There is a yearly limit, determined by the IRS. Catch-up contributions automatically stop when you reach the limit or when the calendar year ends whichever comes first. They don’t continue from one year to the next. You must make a new catch-up contribution election each year.
Traditional TSP vs. Roth TSP.
Weigh your options.
Stay up to date.
Who Are The Best Lieutenants In The Military
Military life naturally attracts those with attention to detail and a desire for order. Unfortunately, there can always be too much of a good thing. You can generally find Lt. Niedermeyer in the parking lot, trolling for salutes or, rather, for those missing salutes so he can joyfully berate them.
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Military Retirement Upon Death Of Retiree Or Former Spouse
Can the former spouse bequeath his/her share of retirement upon death? No – if the former spouse dies, that person’s share of the retirement reverts back to the retiree, until the death of the retiree. Federal law provides: “this section does not create any right, title, or interest which can be sold, assigned, transferred, or otherwise disposed of by a spouse or former spouse.”10 U.S. Code § 1408.
What happens to the retirement benefits upon death of the retiree? Military retirement payments to a former spouse cease upon the retiree’s death. For this reason, the court will often order the retiree to protect the income flow by electing the Survivor Benefit Plan for the former spouse.
How Do I Calculate My Military Retirement Pay
After 20 years of service, military members can retire under the High-3 retirement plan with 50% of their basic pay, full medical coverage and a range of other benefits. Service members who retire under the newer BRS will earn 40% of their base pay with whatever has been accrued in their TSP. Service members in the Guard or Reserves can also earn military benefits based on a point system. Benefits start at age 60, which is close to the traditional retirement age of 65.
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What Is A Good Year
A good year ensures that you show up each year for a certain minimum amount of work. A good year is defined as one in which you earned a minimum of 50 points.
This can be accomplished if you show up for drills on at least 10 of the 12 months , then youve met the intent of a good year.
To be credited with a good year, you must earn a minimum of 50 points within 12 months and maintain your mobilization readiness .
This status is tracked in your services Reserve/Guard databases, and you may be issued occasional updates. Every year you can earn a certain number of points and get a good year. However, youll still have to verify that your service correctly credits you with that accomplishment.
Youre considered eligible for retirement when youve completed 20 good years of service. If you have a combination of active duty and Reserve/Guard duty, then your active-duty service time counts toward the 20 good years.
There are also special circumstances when you may be eligible to retire before reaching 20 good years. However, for purposes of this post, were going to assume that your retirement eligibility is based on the main requirement of 20 good years.
When you reach 20 good years, your service will eventually formally notify you that youre eligible for retirement. When you complete those requirements , then you can apply for retirement.
The key to your retirement is that notice of eligibility, or more commonly called the 20-year letter.
How Years Of Service Are Calculated
For all plans, years of service includes credit for each full month of service as one-twelfth of a year. “Years of service” for officers includes all active service, periods of inactive reserve service prior to June 1, 1958, ROTC active duty time prior to October 13, 1964, constructive service credit for Medical and Dental Corps, and drills performed while in the inactive reserve after May 31, 1958.
“Years of service” for Fleet Reservists and all other enlisted retirements include all active service, active duty for training performed after August 9, 1956, any constructive service earned for a minority or short-term enlistment completed prior to December 31, 1977, and includes drills performed while in the Active Reserves.
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Special Compensation For Severely Disabled
Certain severely disabled retirees of the uniform services that have a disability rating as reported by the Department of Veterans Affairs are entitled to special compensation. The special compensation is paid for that month in accordance with the following schedule:
- 70 or 80% = $100
You must meet the following requirements for entitlement to special compensation for severely disabled:
Retire Awaiting Pay Or Resign
There are two ways to retire, and they require you to consider a certain amount of risk. The first option is to retire awaiting pay. Over 99.99% of Reserve/Guard retirees choose this option. When you retire awaiting pay youre not required to perform any duties or maintain any readiness in the gray area between the time you retire and the start of your retired pay, but the risk of this option is that you could still be recalled to duty for a full mobilization.
A full mobilization requires the President and Congress to declare a war thats bad enough to require the entire armed forces, and its more severe than the Presidential mobilization that was declared after 9/11.
Most Reserve/Guard retirees are willing to take this risk because the Department of Defense pays for it. If you retire awaiting pay then your seniority within your rank continues to accumulate, and when you reach your pension start date then your retirement pay will be drawn at the active-duty pay table in effect that year. In other words, DoD covers you on both seniority and inflation.
You may also want to read the: Reserve Non-Regular Retirement Information Guide
If youre not willing to accept the risk of a full mobilization, then the only way to completely avoid it is to resign. Youll still receive your pension at your start date but itll be at the seniority you had in that rank when you resigned and in the pay scale in effect when you resigned.
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Retirement Pay Calculations Under The Temporary Disability Retirement List
One of two options are used to calculate the benefitwhich one is used? According to the Department of Veterans Affairs, the pay is calculated at whichever method provides the greater advantage for the veteran:
- Pay calculated on your disability percentage. This calculation uses a minimum of 50 percent while on the temporary list. This is known as Method A.
- Pay calculated on the years of active service. This is known as Method B.
Your pay will be computed based on whichever is more beneficial for you.
While on the Temporary list, federal guidelines state you must have a physical no later than every 18 months. Those who fail to do so will have their payments suspended until the examination has been performed.
The date you were signed on to the temporary list is very important. According to the DoD, those on the temporary list prior to January 1, 2017 are allowed to remain on that list for a maximum of five years assuming there is no change in the condition.
Those who were placed on the Temporary list on or after January 1, 2017 are allowed three years maximum, providing you condition does not change during that time. According to the DoD, those who are found fit for active duty during this time may be removed from the list and returned to active duty.
Contribute To Your Thrift Savings Plan
The TSP is a plan for military retirees. It is offered to everyone who retired under the BRS retirement plan. It is a savings and investment plan that the federal government provides. It is like a 401, and people can save money. They get tax benefits like other companies who have 401s.
Initially, the TSP was only for federal civilian employees. Then, starting on October 9, 2001, people who are thinking about joining the Army, Navy, Air Force, Marines, or Coast Guard were also allowed to participate in the TSP.
The TSP is for people who save for retirement. You cant get the money out again until you retire. The amount of income you will get from your savings in a TSP account depends on how much money you put in during your working years and how well it has grown.
The money you place in your TSP is always yours. The Department of Defense will not keep the money that you contribute after you have served for two years.
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Soon Or Currently Retired Maximization
Once service members retire, there aren’t many options to maximize their military retirement pay because that amount is locked in based on service history. However, the TSP account is a portable retirement benefit. This means that when a service member leaves, they can have the TSP transfer part or all of their account into an IRA or another eligible employer plan account of a new employer) and continue to earn an annuity.
Military Retirement Tax Withholdings
In the future, when you retire, your tax withholdings will depend on how you fill out the DD Form 2656-Data for Payment of Retired Personnel. So, this form tells DFAS where to send your pension after retirement. It also calculates your dependent data and tax withholdings, which is like an IRS Form W-4.
Within this form, you can ask DFAS to withhold more taxes at a higher rate. This might be helpful if you get a job after the military and earn a lot of money. This is also good for families with more dependents or exemptions that they are allowed to claim. The IRS has instruments on their website that you can use to figure out how much money the government will take from your paycheck every month.
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Earning Annual Participation Points
15 retirement points are awarded to Guard and Reserve members for each year of service. This includes times spent as a drilling participant or while serving in the Inactive Ready Reserve .
A drilling participant is a member of a Reserve component who regularly serves a minimum of one weekend per month and approximately 14 days a year during annual training . While their IRR counterparts, serve in an inactive status after completion of active duty or electing to transfer into the component.
Thanks to Reservist and CFP Jeff Clark for researching the history of participation points. Its discussed on page 164 of the 11th Quadrennial Review of Military Compensation. Its the inset box which includes the text Unfortunately, no documentation was available to explain the purpose or rationale for the 15 membership points. However
You accumulate points for drill weekends, active duty periods, and under some special circumstances:
- completion of online or correspondence courses
- serving on funeral honors detail
- providing support to recruiting personnel
Each day of active duty counts as one point. Each drill counts as one point , as do the days of active duty in the Reserve/Guard for training or mobilizations.
Youre also limited by the number of points you can get in a category you cant do 52 drill weekends in one year and get points for every one.
Of course, you can certainly be mobilized during a leap year and receive 366 points of active duty.
- Annual Participation 15
Does Frozen Benefit Affect Other Retirement Plans
No. The federal government administers several defined benefit retirement plans , including FERS and CSRS. The 2017 NDAA affects only military retirement, so a spouse married to a DOD civilian with a FERS retirement would still receive the benefits of post-divorce promotions.
The law also does not affect state defined benefit plans , nor any defined benefit plan administered by a private company. In those situations, as with the civilian federal plans, the traditional coverture formula still applies, and the former spouse still receives the benefit of post-divorce enhancements to income.
It also does not have any effect on defined contribution retirement plans, such as the TSP , or IRAs, 401s, etc.
How Much Do Veterans Make From Military Retirement
Although many American corporations have done away with a traditional pension system, the U.S. military has not. If youve put in long years of service with the U.S. Armed Forces, youre entitled to a fairly significant retirement payout. However, determining exactly how much youll earn as a member of the military with a long service record can require some advanced calculations. There are, in fact, four different military pension programs available, and which one applies to you will depend in large part on when you began your military service. Heres a quick overview of what type of retirement benefit you may be entitled to if you served in the military.
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Transfers In And Out Of The Schemes
If you have built up pension benefits elsewhere before joining the armed forces you have the option to transfer in the value of your other benefits to receive a service credit in your Armed Forces Pension Scheme.
Before you apply to DBS Veterans UK for a transfer in, you need to obtain details of the amount of your transfer value from your previous pension scheme, and then an estimate from DBS Veterans UK of the additional pension that this will buy. If you decide to go ahead with the transfer, you should make your application to DBS Veterans UK in writing.
You must be serving in the armed forces to be eligible to transfer in and once you have committed yourself to a transfer from your previous pension scheme, you cannot change your mind and you will have given up forever your rights and those of your dependants under the previous schemes.
Transfers into AFPS 15 must be completed within one year of joining the scheme. For members who remain solely in AFPS 75 and AFPS 05 who may still make transfers in from a non-public service scheme. AFSP 75 the transfer in must be made before your 54 birthday and in AFPS 05 the transfer in must be made before the beginning of your final year of service before your pension is due.
If you leave without receiving immediate pension benefits under AFPS 15 or AFPS 05) you have the option to transfer the value of your deferred pension benefits to other defined benefit schemes. A pension in payment cannot be transferred.
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When Does Military Retired Pay Begin
Eligibility for your first monthly retired pay is 30 days after your 60th birthday. If you apply after age 60, your pay will be retroactive to your 60th birthday. Your claim must be received within 6 years after your 60th birthday to receive your full entitlement. If the claim is filed more than 6 years after age 60, one day’s retired pay will be lost for each day’s delay. Delaying the application after age 60 can affect your Survivor Benefit Plan and health care benefits. The risk increases if you have not elected one of the options available under the Reserve Component Survivor Benefit Plan . Retirement pay stops with the death of the servicemember unless the SBP election has been made.
**You must APPLY for military retired pay it is not automatic**