As a service member getting closer and closer to retirement myself, I like to look at and think about how to value my military pension. I recently received my last promotion I plan to get before I retire, so I’m getting a lot more serious about how this fits into our overall plan for financial security and independence.
Overview
Erik Baskin has posted a few different articles that I thought were interesting and he’s also created some nifty spreadsheets (who doesn’t love a good spreadsheet?) that I felt were handy to have.
I talked with Erik about why he created these tools, how to use them, and what things military members need to think about as they look toward transitioning to civilian life whether you’re retiring or leaving service after your initial enlistment or commission.
Key Action Items
The main takeaways I had was that you need to have awareness around what your military pay and pension is actually worth. You have to be able to do an “apples to apples” comparison with pay in the civilian sectors so you can make the best decision for you and your family.
In the military, we often just say we’ll “figure it out” because we’re trained to do so. Failure isn’t an option, but we don’t ever go into a training or battlefield situation blindly if we can help it. You owe it to yourself and your family to know exactly what the financial transition to civilian life will look like and make a proper plan.
Links to Resources Mentioned
Erik’s LinkedIn
https://www.linkedin.com/in/erikbaskin/
Erik’s Calculators and Blog
https://www.baskinfp.com/post/military-transition-income
https://www.baskinfp.com/post/military-retirement
Military Pay and Pension Calculators
https://militarypay.defense.gov/Calculators/
Kate Horrell’s Checklists
https://www.katehorrell.com/military-retirement-checklist/
https://www.katehorrell.com/military-separation-checklist/
Doug Nordman – Don’t Gut It Out To 20: Leave Active Duty For The Reserves Or National Guard
Doug Nordman – Military Guide to Financial Independence & Retirement
Resources Not Mentioned
One resource that we didn’t mention that is very helpful is the DoD Actuary’s Survivor Benefit Program (SBP) calculator. When you’re retiring, this is a vitally important decision. Overall, I feel that electing the SBP as the default is going to be the best option, but this is a personal choice and there isn’t always a “right” answer because we can’t ever know exactly when you’ll pass away.
Just make sure that you factor this into your calculations.