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Question about Military Pensions


stratasfan
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Hi! I am posting this under misc., as I can't really think of a different place. I've been wanting to ask this for ages, and am finally going to!

 

It was explained to me by a USCG officer that after 20 years service, your pension would be the value of your pay check. That for every year of service, your pension increased by a percentage.

 

My questions . . .

 

If you serve 20 years, starting enlisted and eventually commissioned . . . would your pension be the value of your final paycheck?

 

Or does it depend on how many years served at each rank?

 

Is it different for non-comm to commissioned vets?

 

Is it different in the different branches (Army, USCG, USN, etc. )?

 

 

We knew someone who served about 40 years in the USAF. He is as high a non-comm as you get, and is a specialist trainer for guys doing something on choppers. What kind of a pension would someone like that get?

 

I only know mu Grampa who was a 20 year USCG vet, ending as a WO2.

 

Thanks for any thoughts!

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I'm not retired (yet) but I'll take a stab at the question. Some of the retired guys I'm sure will chime in as well.

 

At 20 years, your retirement is 50% of your base pay. Each year, it goes up a further 2.5% of base pay. Thus, 22 years would be 55% of base pay and so on.

 

As far as enlisted/commissioned time, that doesn't matter for pay, aside from the amount of pay base on the retirement paygrade (obviously, a retired E-6 would make less than a retired O-6, even with the same time in service).

 

Pay is a DoD function, so it's all controlled centrally, and thus, when I retire, I will make the same as someone from any other branch who retires with the same years of service and paygrade.

Hope that helps!

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Good morning.

 

Your rank for retirement pay is the highest rank you achieved and served honorably. (I believe you have to serve at that rank for 2 yrs but could be mistaken.) This impacts battlefield commissions who are returned to the enlisted rank; those who are demoted for disciplinary reasons (though that gets complicated in and of itself); etc.

 

There have been from what I know of 3 different "systems" for retirement. There is the "classic" 50% of your base pay which hasn't been around for years. "High 3" which is 50% of your highest 3 pay years. (For most that is the last 3 year obviously.) Today's system is actually 40% of your base pay I believe. It all depends on your pay entry base date.

 

I might be off here or there but that's generally my experience.

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A bit more concerning the Coast Guard. As a grade of CWO, he would have been able to stay in active duty until age 60, then have to retire. His retirement pay would have been 75% of his base pay which was maxed out by 30 years. He also would have been eligible to retire at 30 years service with the same 75% of base pay. Coast Guard enlisted personnel had one small side benefit up until the mid 1960s. If they maintained good conduct through the 20 years service they were entitled to an additional 10% based on that good conduct.

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It is called the "high three." You get paid for the average monthly base income of your last 3 years. You don't get a retirement based on your last check. It is a scam, but it is what it is. Retirement GRADE is based on a minimum two years in grade, but that doesn't affect your retirement pay.

 

-Ski

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It is called the "high three." You get paid for the average monthly base income of your last 3 years. You don't get a retirement based on your last check. It is a scam, but it is what it is. Retirement GRADE is based on a minimum two years in grade, but that doesn't affect your retirement pay.

 

-Ski

Ski - Just for clarification how does your retirement grade/rank not affect your retirement pay? Thanks

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Ski - Just for clarification how does your retirement grade/rank not affect your retirement pay? Thanks

 

 

It does to a large extent by the fact that your retirement is based on your base pay, which of course, goes up the more rank you have. What I am saying is just because you had less than two years in let's say as a SMSgt and you retire as a MSgt, you still are paid for the average pay for the last three years no matter what. The member still was paid as a SMSgt, for the time they were in that rank.

 

The new Blended Retirement System just started up in January. The new system rolled back retirement to 40% at 20 years and instituted a TSP to cover the difference (among other changes). SO a CMSgt that goes 30 years now gets only 60% retirement instead of the old 75%......

 

-Ski

 

p.s. Remember that retirement is based on your BASE pay which is only perhaps 60% of your total pay with housing allowances, COLA etc. So, it is not 50% of your paycheck!!

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Thanks Ski. Makes perfect sense what you're saying. I also got thinking about battlefield commissions who reverted back under the 50% system. Let's say a SSgt gets promoted to Lt during Vietnam. Afterwards he's reverted back to SNCO ranks and retires as a SgtMaj. Without running the numbers I'm figuring a SgtMaj's retirement pay would be greater than a 1st Lt. I assume his retirement grade is 1st Lt since that the highest rank he served honorably at but his retirement pay would be based on his SgtMaj pay. I'm really SWAGing that scenario but I think you see where I'm going with it.

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With your grandfather retiring from the CG as a CWO2 Pharmacist, another small wrinkle would have come into play. In the 1950s and most of the 1960s, he would have been promoted and warranted as a temporary W-1 Warrant Officer. After about 4 years ?? as a temp W-1 he would have been a permanent W-1 and a year or so later promoted to Temporary W-2. The Warrant officer promotion went along those lines..

 

Quite possible he was retired as a CWO2 but receiving the retired pay based on the W-1 pay scale.. After retirement a Cost of Living allowance COLS was added to the retired pay..

 

FWIW, enlisted CG personnel did not receive the 20 year retirement benefit until about 1940. From 1915 to then, it was 30 years or nothing..

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Thanks Ski. Makes perfect sense what you're saying. I also got thinking about battlefield commissions who reverted back under the 50% system. Let's say a SSgt gets promoted to Lt during Vietnam. Afterwards he's reverted back to SNCO ranks and retires as a SgtMaj. Without running the numbers I'm figuring a SgtMaj's retirement pay would be greater than a 1st Lt. I assume his retirement grade is 1st Lt since that the highest rank he served honorably at but his retirement pay would be based on his SgtMaj pay. I'm really SWAGing that scenario but I think you see where I'm going with it.

 

 

That is 100% correct. He retired as a Lt but only was paid as an E-9. That scenario happened a lot during the 50's and 60's as there were quite a few MSgts that retired as Majors and Lt Cols from war service commissions lost after the war.

 

-Ski

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That is 100% correct. He retired as a Lt but only was paid as an E-9. That scenario happened a lot during the 50's and 60's as there were quite a few MSgts that retired as Majors and Lt Cols from war service commissions lost after the war.

 

-Ski

 

The Navy had a program in the 1950s that drew down the wartime commissions to permanent grades for retirement. However, the people actually reverted, entirely, to their new (former) rank. For example, the XO of my father in law's ship went from CDR to CPO...it was either bail out as a CDR without retirement, or as a CPO (I don't know the rate) for retirement.

 

Totally random... :D

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The Navy had a program in the 1950s that drew down the wartime commissions to permanent grades for retirement. However, the people actually reverted, entirely, to their new (former) rank. For example, the XO of my father in law's ship went from CDR to CPO...it was either bail out as a CDR without retirement, or as a CPO (I don't know the rate) for retirement.

 

Totally random... :D

 

 

Remember that the Navy also allowed enlisted the "pop" out of the top enlisted ranked into commissions other than WO. The one PH group I have had the guy retired as a Navy Lt after promotion from SCPO in the late 1950's. Not sure that it was a courtesy rank or not.

 

-Ski

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Oh, thanks to all! I've read it through once, and am going to go back over it and really put it together in my mind and look at that link! I'll be back with thoughts, afterwards! :)

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If you want to through a real monkey wrench into the works, then you have to include Reserves and Guard. A totally different retirement system based on number of points earned throughout your career.

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There are not 3 systems, there are 2. The “old one” and the “new one.”

 

Old: it is 50% of base pay based on your ‘high 3’. If you promote to LTC, but retire after one year in grade, then your high three average will be 2 years as a MAJ and 1 at LTC pay. You might get a “retirement grade” after less than 3 years, but you would have to be a LTC for 3 years to get that base pay percentage at retirement.

 

The “new way” is apparently a pretty standard IRA. Don’t ask me how it works. I’m too old to opt in and therefore could care less.

 

 

Sent from my iPhone using Tapatalk

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Retired (but not militarily Retired) naive question in this regard:

 

To what, if any, degree is the DoD/US Military pension plan, such as it is ever-changing, one of the very few remaining traditional pension plans in America?

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There are not 3 systems, there are 2. The “old one” and the “new one.”

 

Old: it is 50% of base pay based on your ‘high 3’. If you promote to LTC, but retire after one year in grade, then your high three average will be 2 years as a MAJ and 1 at LTC pay. You might get a “retirement grade” after less than 3 years, but you would have to be a LTC for 3 years to get that base pay percentage at retirement.

 

The “new way” is apparently a pretty standard IRA. Don’t ask me how it works. I’m too old to opt in and therefore could care less.

 

 

Sent from my iPhone using Tapatalk

The new Blended Retirement System (BRS) is an effort to make the military retirement more like those in the civilian world. Most civilians no longer work toward a pension from the company or organization they work for. Retirement money is built in employer based 401Ks that provide company matching funds on top of employee contributions. the TSP component of the BRS is essentially a 401K. TSP is nothing new; it has been part of the civil service retirement structure for many years, and has been available to active duty (without the matching component) since the early 2000s. The new BRS actually works a lot like the FERS civil service retirement, although FERS is more complicated. One of the great aspects of BRS is that it provides active duty service members with a portable retirement tool should they choose (or be forced) to leave the service prior to 20 years. If someone leaves at, say, 10 years, they can roll their TSP in to a company 401K without missing a beat. Under the old system, if someone was forced out before 20 years because of downsizing, failing a fitness test or for some other reason, they left with nothing. The BRS only works though if service members take full advantage of the TSP component. If they don't, they will wind up with less money than retirees under the old system.

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Some perspective...

 

I retired in 2014.... My Check is 50% of my base pay. My base pay does not include any BAH (Housing allowance) and other pays...in my case flight pay.

 

SO... after 25 years serving about almost 6 of them in the reserves at the front end... I get a retirement based on 20 years service and my pay check is about 30 percent of what I was making on active duty. When you factor in that now I have to pay for medical (at a good rate, but still have to pay), my actual take home is about 25% of what I was making on active duty.

 

There are many other things that aren't discussed much such as disability and how that effects what portion of your retirement is taxed....another thing is what you want to happen to your spouse if you die before he / she does. If you want them to collect a pension, then your retirement is further reduced right off the bat.

 

 

I would do it all over again

 

every meal a feast, the only hard day was yesterday,....etc

Semper Fi,

John

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It is called the "high three." You get paid for the average monthly base income of your last 3 years. You don't get a retirement based on your last check. It is a scam, but it is what it is. Retirement GRADE is based on a minimum two years in grade, but that doesn't affect your retirement pay.

 

-Ski

 

 

I was a 2009 retiree (Army) and am under that system with 50% at 20 years and 2.5% for every additional year.

 

The system has changed (my 2LT daughter told me about it) and if I remember correctly, those that choose a 401k with a small percentage matching only get a 40% at the 20 year mark and an adjustment at some age point down the road.

 

Also in years past when folks (Army) were kicked out due to meeting certain retention points (not a certain rank based on years of service) were given a severance pay. This didn't include those who were kicked out for misconduct.

 

Scott

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