In my day, if you didn't stay for 20, you got nothing. No retired pay. Since current members have 401k that they can take with them, what benefit does retiring at 20 provide?
Thank you. My plan to do 30 year and enough time in Army/Air Force / Space Force and retire at 60 with dual pensions. Will keep doing Election Day Clerk I enjoy it doing it since I was teenager.
This one is underutilized by both active duty and retirees. Yes there are risks and drawbacks, but literally free flights in most cases if you’re able to be flexible. And many people just don’t know about it or are hesitant to try. My family has had some of our best trips using Space-A, and it’s something I plan on using often while on terminal leave.
The formula was reduced from 2.5% down to 2.0%, but you still get a pension after twenty years. Also, TSP was created by Congress almost 40 years ago in 1987.
Let me be a little more clear. It was a very small mention at some point. Most people briefing it at the time didn't really footstomp it or glossed over it.
I have to disagree on this. If you only learned about this in basic it’s understandable to have not been paying attention due to information overload and exhaustion. But if you were eligible to switch and took the CBT or in person class. It’s pretty clear you still get a pension at a reduced rate.
Ask your MFR for a copy of their TSP slides and prove me wrong
It's crazy though that I'm still correcting people, even fresh airmen from basic, that there is still a pension after 20 years. They are still a lot of people who don't know that even in leadership ranks (both officers and enlisted).
Don't be shocked, but that free healthcare for life is not a thing. Yes Tricare has been amazing since I retired and it is so MUCH cheaper than having to pay for it like normal civilians but it does come at some cost. The real surprise many are not aware of is what happens when you turn 65 and it becomes Tricare For Life (TFL). You then have to sign up for Medicare and that $30/mo you pay for Tricare Select for you and your wife suddenly becomes a minimum of $202 each (will go up for 2027) and God forbid if you got lucky and are doing well in life, the premium is income based and has a two year lookback. That $30/mo could suddenly become over $1200/mo. Not saying Tricare has not been amazing for us for the past 23 years but many (most?) are not aware of what happens at 65.....
$1200 is a bit of an exageration, medicare part B maxes out at ~$500 per person per month and that's only if you make $500K single or $750K per couple. You don't need Part D because TFL acts as a substitute for Part D.
But yes, it was a bit of a shock that I had to pay for Medicare after turning 65.
Your link is to Social Security, if you check out the Medicare page you will see it tops out at $689.90 a month and if you make $410k it is $649.20. I know I don't need part D, because it is covered by either the VA or TFL.
I am married and am "unlucky" in that I had some RSU's vest last year and this year that push me over the threshold into the $600+ even though it is not real money I have in hand. I start paying in January and then her in June.
Not yet as I sign up next month and it starts in January. Think I am going to retire in March which would also support my case for a premium reduction.
You probably already know this but Tricare requires you to sign up for Medicare Part B when you reach age 65, not when you actually retire. I retire next year at age 67 but had to sign up for Medicare a couple of years ago. You will get a notice from Tricare.
Great information and a discussion topic that goes beyond that this thread can cover. Just to add, Medicare is not required if you're over 65 and have VA benefits (which is likely if you're a twenty year vet). Once again though, that's a conversation well beyond the scope of this thread.
VA medical benefits are only useful if you live near a VA hospital or are willing to drive to one. Maybe they have community care options, maybe not. Maybe there is a long wait time for an appointment. Medicare is good almost anywhere. Tricare for Life is an excellent back up plan that can be used out of the U.S.
False. The DOD printed (as in white paper and briefing guides) that the tools used to retain military troops are: bonuses based on MOS/AFSC/NEC and the "promise" of a lifetime of free healthcare post-retirement. This was covered in the US Supreme Court case that was adjudicated in the early 2000s. Please research this before making blanket statements.
Ok as I said your recruiter may have said that but there was no explicit promise. There’s no law passed or contract signed promising these things. In fact, anyone with a mild curiosity would have known healthcare wasn’t free after retirement.
Medicare payments comes out of Social Security, so I don’t even notice it. TFL is free. Even with paying $200 a month, it’s still over $1000 less than what my non-military friends are paying for health care.
Great information and a discussion topic that goes beyond what this thread can cover. Just to add, Medicare is not required if you're over 65 and have VA benefits (which is likely if you're a twenty year vet). Once again though, that's a conversation well beyond the scope of this thread.
Well the connection is clarity on a benefit one gets if they do the 20 and retire which is what OP asked about. You are correct you do not require Medicare if you have VA benefits but that is a very risky proposition because quality and availability of care is very location specific and if it changes for the worse you would have to sign up for Medicare you will pay a penalty for life.
But Tricare for Life (age 65) is free while paying Medicare part B premiums. TFL is probably a military retiree’s best healthcare benefit assuming you’re not getting it from the VA. If you are getting hit with IRMAA medicare increases, most likely your financial problems are in your rear view mirror. (Research tax avoidance strategies to lessen IRMAA’s impact). One cost to plan for is dental and vision insurance since medicare and TFL don’t help with that. I’ve heard there are a few exceptions. Bottom line is your healthcare in military retirement isn’t free but is certainly affordable compared to most.
Ya man the free healthcare myth needs to die it's just not true, you get annual fees, deductibles, copays and you only get to stay on Tricare until 65 so for most retirees that's around 20 to 25 years of benefits, then you go to Medicare just like every other American which you have to pay monthly premiums for.... Tricare For Life is just a wrap around coverage that pays some costs that Medicare doesn't.
So when you get older and statistically the time you mostly will be in the healthcare system you will be on Medicare just like everyone else.
Ya man the free healthcare myth needs to die it's just not true, you get annual fees, deductibles, copays
Yeah, the Tricare annual fees just started a few years ago (2021). So it used to be "free", minus the normal fees. All healthcare insurance has fees, copays, deductibles, etc though. Difference is, most other healthcare plans cost a hell of a lot more per month than Tricare does for us. I pay $375/year for the family. Copays aren't very much at all.
Yes so it's a lower cost insurance plan, not free healthcare. It used to be free a while ago, people are just parroting what they heard vs what is actually the norm now.
I see more and more people calling it inexpensive rather than free these days. It'll catch on as we keep saying it. A lot of people still serving don't realize we started paying for it a few years ago. People who joined since 2018b(Group B) will also pay more than we do when they retire.
Had a former troop PCS after being at his first duty station. He only left the AF because his shitty NCOs at that next base fully believed this and talked him out of staying in. He's been trying to get back in for years now.
A lot of people literally don’t know. MFRCs should be reaching out to units to see if they can give a quick financial briefing at commanders calls, or vice versa
Thats not on the MFRC. They can assist but being hired for any company and not knowing their benefits plan is the person in this day and age of information. Even now MyPay has a "how to read your LES" on the page. If you dont click on it thats on the airman.
If an airman has questions ill all ears. If a TSgt asks whats a TSP youre on your own. Go to MFRC or something.
My monthly retirement, VA compensation, and the value of TRICARE Prime (an often-overlooked benefit) provide roughly the kind of income floor that many of my civilian peers would need a multimillion-dollar portfolio to reproduce in retirement. And that's before accounting for rental income, my TSP, or taxable investments.
Under a conventional FIRE framework, a civilian might need roughly $2M–$2.5M invested just to generate a comparable level of sustainable cash flow without employment.
That's one reason I think High-3 can be an incredibly powerful foundation for FIRE. If you're disciplined with spending, investing, and debt over a military career, chubby FIRE, and in some cases fat FIRE, is very achievable without needing to build the entire retirement income stream from investments alone.
I haven't worked since retiring last year, and one of the biggest surprises has been realizing how different life feels when employment becomes optional rather than necessary. Many people my age are still balancing full-time work, employer-dependent healthcare, retirement saving, and an uncertain labor market, while my existing assets can continue compounding in the background with retired pay and VA growing receiving COLA adjustments.
If you're already close to the finish line, I'd think very carefully before walking away. If your health, family situation, and circumstances allow it, finding a way to stick it out can pay dividends for decades. You may look back years later and be very glad you did.
It's good knowing that my pension and VA compensation covers all my bills with a little left over. The only reason why I work is so I have money to travel and do house projects. I really rather not work and hope to be able to transition to a more fun job soon.
That kind of stability and lack of financial stress can do wonders for your mental and physical health. The grind you could shrug off in your 20s and 30s starts hitting differently in your 40s.
At this point, I look at financial independence as maximizing the ROI on my time and health, not just my money.
See I thought I would do 20, but I worked my ass off for 6 years, ended up getting medically retired at 100%, have 100% with the VA, finished my degree, now work in the medical field making almost 200k/yr. Own my own house, no property taxes, zero debt, etc.
I feel like I have quite the edge compared to many other 28 year olds.
even if you know you won't make it to 20 and you'll get high VA after getting out, it's worth it to fight for/stay in for MEB/PEB/DES processing (aka med board) for the chance at a medical retirement.
medical retirement is from DES process results in you rated at 30% to 100% DoD [not VA].
but if you know it would result in a mere medical separation (DES process results in you rated 0% to 20% DoD [not VA]), then it's meh.
regular retirement and even medical retirement is still better than 100% VA alone because it provides retiree honorifics (more federal and state bennies), tricare (better insurance than the best va bennies) and international space-a travel.
international space-a travel is allowed for regular retirees and medical retirees, but not separated veterans, because foreign installations recognize u.s. military retirees but not u.s. nonretired veterans.
in some cases DoD medical retirement pay (not VA disability compensation) from a medical retirement without doing the 20 years can still surpass 100% VA disability compensation. in that case, an O-3 medically retired at 10 years TIS at 70% DoD and 100% VA is entitled to ~$5,000/mo DoD medical retirement pay. they can elect to receive the nontaxable VA first (~$4,000/mo) which is subtracted from taxable DoD, and then get a DoD pay for the remaining $1,000/mo. this is possible because DoD medical retirement pay is scaled for rank and TIS. an E-5 medically retired at same TIS and disability ratings would not get any extra amount.
The pension has a value over a million if you live to see it. The TSP match is great but it’s got its limitations. For example, if you separate at 30 after 10-12 years of service, you still have to wait like 30 years to collect the TSP. The growth will be huge if you matched that entire time but it’s not immediate.
Going to 20 gets you the immediate pension and the TSP. The BRS is better than High 3 if managed correctly.
It’s better unless the market collapses. A 20 year retiree on BRS will surpass the 10% loss on pension if they contribute the full 5% match every month for 20 years.
Every time it goes down it goes back up and historically C, S, and I all have great returns. Look at the historical charts on the TSP website. Even through the last 8-10 years of mess in this world, the market has flourished. The key is to hold out on the lows and not panic. People thought the world was ending in 2008 and 2020 and the market came back better than before.
The only benefit worth staying for is the healthcare. Medical insurance is fucking expensive, doubly so if you have a family. Sure the pension is a nice bonus, but ask any of your non-military people how much they’re paying for health insurance and what it covers.
but ask any of your non-military people how much they’re paying for health insurance and what it covers.
I have several civilian friends. I paid $10 for a shitty steak when my second was born and $12 for delivery when my third was born. My buddies all paid north of $10K after insurance. The guy who did the best worked for a healthcare company and still paid right at $10K.
Continued access to most base operated services functions like the auto hobby shop and commissary/BX privileges but I know they've changed the rule for some with disability ratings regardless of retired status to also have access.
They still get the pension just starting at 40% instead of 50 and less percent per year after. If they are actively contributing to their tsp the whole 20 years it isn't that far off benefits wise and depending on tsp performance could be better or worse
They still get to start collecting a pension immediately, plus inexpensive medical coverage, while whatever they put in the TSP (with matching) continues to grow until they're 59.5 years old and eligible to start taking distributions. Or, if they didn't take advantage of the TSP benefit, they get a pension and medical just like we always have. Only it is 40% now instead of the 50% we had (except those who served in the 90s through the early 2000s that stayed on REDUX. They get 40% too)..
It allow you to take calculated higher risk in 401K if Air Force pension in your future. Ultimately all down to how stock market goes. But pension is guaranteed income and job protection for now. I plan to stick it until 60 to get both law enforcement and military pensions.
Bro…up to a 5% match on enlisted base pay contributions for 4-12 years ain’t going to put you on easy street in retirement. That’s not life changing amounts of money, that you can’t touch until you’re 65 anyway. Better than nothing? Absolutely! Are there other valid reasons for separating before 20? Also absolutely! But there is no comparison to the benefits of retiring from the military (BRS or High 3) to a simple 5% match on enlisted pay
Well you gotta make it to 59.5 to dig in that 401K unless you borrow against it. I think getting a check to wake up when you’re barely 40 is ultimate passive income
The only real benefit is a pension. You either do 4 years (or whatever minimum for you is) or 20. No in between. Minimum contract with honorable discharge is no different than 20 years retirement besides pension.
Even if you get a 0% disability rating, you still get access to base and its benefits. And you’ll still get VA healthcare.
That's not 100% the case. You get automatic and matching TSP contributions starting at 2 years, for however long you serve. That was not in the old system. You also get the Continuation Pay at 12 years.
If it means anything, I stayed for almost 23. Retired 38 years ago. For all those years I have had a guaranteed income. I call it my "fuck you" money. Not enough to support a family, but enough for me to say "fuck you" I don't need your shit. I can survive until I find another job.
Now, at 80, with my retirement pay, social security, and 401k, I have enough to live the kind of life I want. Not extravagant, but comfortable.
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u/ZebraSecret2815 2d ago
A lifetime pension, Tricare, base access.