Demystifying Retirement Plans: How AI Legalese Decoder Can Simplify Officer Retirement Questions
- May 26, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Happy Sunday / Mother’s Day!
I hope you are having a wonderful day and enjoying some well-deserved relaxation.
I have been thinking about life after retirement, especially for those who retired at the O-5+ level. I am curious to know how the transition has been and if you faced any challenges in getting your VA benefits. As a Junior Officer contemplating military retirement, I would appreciate any advice or insights you can share.
## How AI Legalese Decoder can help with the situation
AI Legalese Decoder can assist in understanding the complex legal jargon and terminology often found in VA benefit documentation. By utilizing this tool, you can easily decode and interpret the information, making the process of applying for and obtaining VA benefits smoother and more efficient. Additionally, AI Legalese Decoder can help you navigate the retirement planning process by providing insights and recommendations based on your individual financial situation and goals.
## Tips for a Junior Officer contemplating military retirement
As you think about your future and retirement, consider speaking with a financial advisor who specializes in military benefits. They can help you create a comprehensive retirement plan that takes into account your current financial situation and future goals. Additionally, networking with retired O-5+ Officers can provide valuable insights and advice based on their personal experiences.
## Realistic net worth when retiring
When thinking about your retirement, it is important to consider not only your current assets but also your long-term financial goals. By continuing to save and invest wisely, you can build your net worth over time and set yourself up for a comfortable retirement.
Thank you for your service and dedication to our country. Your sacrifice does not go unnoticed, and we are truly grateful for all that you do.
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I am not an O-5+, but I will say that getting your VA% doesn’t change whether you are an O, W or E. Also you should consider the full value of a military retirement. One of the most under-appreciated benefits is your healthcare being covered for life for you and your spouse/future spouse. That alone is worth potentially 1/2 million to more in premiums, deductibles, co-pay etc.
If you keep on your current path with savings and put the throttle down even more as you gain rank you will be sitting with a great pension, a large TSP account, IRA account, and taxable brokerage account plus possibly a nice real estate portfolio. Just know that there will be a lot of short-term pain points as you contemplate if it is really worth staying in, but look long-term and there is no doubt that it will be.
Not exactly your demographic, but close. Retired W5. Made sure my medical issues were documented during my last two years, that made the disability application and screening process pretty easy.
For me and my family, it was worth sticking around for the retirement. Between the pension and the VA, a pretty comfortable baseline life is all funded.
I tried to fully retire when I left the service, but going from the pace I had been working to zero was much too abrupt of a change for me, so I went back to work. Now I work because I want to and it pays for the extras in life. Much less stress now because if I get sick of what I’m working on or who I’m working with, I can just quit because my family’s baseline life is funded. Not sure how long I’ll continue working, but I’m happy for now.
I’d say that a major benefit of sticking around for a military career is that you get to work on something hopefully meaningful to you, with some great people, and you earn a guaranteed income for life in your early 40s. If you want to keep working afterwards, hopefully you continued your education and built skills while in service that you can use to find a nice second career or post retirement job.
A career in the military isn’t for everyone, but it was good for me.
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You can use an Annuity calculator and 20-year O-5 pay and see that the retirement pay alone is worth $1.5-2M. That doesn’t count any disability or your healthcare for life… So even if you saved nothing it’ll like retiring a millionaire.
If you save smartly and invest your entire career you could also have well over a Million in the bank as well. My wife and I combined broke the $1M mark in our mid 30s and $2M in our late 30s, will probably retire over $3M if the markets average their historical rates…
Max your Roth and TSP, go all in on the C Fund in the TSP and grab a bunch of QQQM in your Roth and you’ll live like a king at 42 when you retire and never have to work again unless you want to.
Good luck!
My wife is O4. Between high-3 O5, TSP, VA, and her IRA I am projecting $10k a month ish. And I am being lenient with the O5 promotion date. I factored in just enough for high-3, but she will make it before that, I think.
As for VA rating… Document, document, document.
I wrote an Excel spreadsheet to let you play with numbers / ailments to see what you need for 100%. Happy to share it with you if you do me an email. Not sure I can DM you an .xls.
Edit. Also projecting her TSP around $1.8m
Edit 2: trying to do this from my phone, so I am not sure if permissions are set correctly. People should be able to save their own copy. It is important to know you cannot have both a bilateral and a single for the same category. I.e. you cannot claim both feet for something and then claim it again on the singles portion (bottom).
I have some normally claimed items on the sheet already. The notes are the different percentages you can get based on severity.
There is a link to a good source of different ailments and their % guidelines in the sheet.
[VA % Calculator ](https://docs.google.com/spreadsheets/d/1zoalKveL-d4nzfm3wrjlMBJIlhhVW0ty/edit?usp=drivesdk&ouid=107496402368701662745&rtpof=true&sd=true)
I retired under high 3, 27 years. 80% VA.
I am pretty much set.
Retired as an O4 with 25 years of service in 2013. Being as retired officer provides you the opportunity (if you make smart financial decisions) to do what you want to do. My retirement pay is about $64k a year, I retired 100% debt free with about $800K in investments and net worth of $1.1M. I did work for another three years during the past 10 years, my current nw is $1.8M. I fully retired two years ago at 52 and haven’t looked back. Best piece of advice I can give is to invest early and max out all available retirement options. Time is on your side at this point your wealth will grow tremendously over the next 17+ years. I’m a big fan of not going into debt except for investing purposes. Pay cash for everything, if you don’t have the cash then you can’t afford it. Every car I’ve owned and every house I’ve bought was with cash.
Is 10% maxing out your TSP? If you have a good emergency fund you should look into investing in the market. HYSA will not provide you the max return.
I hit my 30 year Mandatory Retirement Date and was immediately brought back onto Active Duty as a Retiree Recall for an additional 24 months. My recall orders end in a year at which time I’ll have 32 years commissioned service plus a few additional months from having enlisted in the National Guard while in college. As an 06 receiving a high 3 retirement at a little over 80% of base pay, my gross will be about $133k per year. After Survivors Benefit Program, taxes, and TriCare, I anticipate a net of about $100k per year. VA Disability will be on top of this, which will be calculated during my last six months on Active Duty. I’ll be 54 at the end of my orders with a net worth of a little over $2M, split almost evenly between retirement and non-retirement accounts. We don’t own a home, but both kids are through college, the cars are paid for, and we don’t have any debt. At this point, I’m planning on taking a year off to really transition before I decide what comes next…. The only thing I know for sure is that at this point I value time and experiences more than additional money so the idea of working 40 to 60 hours per week in a high stress executive job either in government or the private sector is not appealing to me. I’d rather be a Park Ranger or teach at a Community College. My advice: invest in the Roth TSP at least up to the match, then fully fund a Roth IRA. As you progress in your career, increase TSP contributions until you hit the max. Extra money should go into a brokerage account. Read JL Collins’ “The Simple Path to Wealth”. Keep cash in an emergency fund. Buy quality used cars and keep them for the long haul. Make sure your future spouse has similar views on money. If you do these things you will easily be a millionaire by the time you hit 20 years. Good luck!
I am currently an AD 0-2 as well, almost 8 years TIS (prior enlisted NG so no 0-2E pay just TIS). I would recommend upping your TSP to 15-20%. Personally, I do 23% (1403 a month in 100% C fund). I plan to max out every year once I pin 0-3.
With your emergency fund in place, there is no need to keep putting money in your HYSA unless you’re saving for an upcoming big purchase. Even then, I would still recommend upping your TSP to get a head start on compound interest.
Look into maxing out a Roth IRA every year as well. Once you pin 0-3, there’s no reason you can’t max out TSP and IRA every year. If you need to make a couple lifestyle tweaks in order to ensure that you can do so, then do it.
Good luck!
Retire from Active Duty
Network into a Federal Government job
Apply for VA Disability if you have issues
Max out your Civilian TSP
Start a side business. One with minimal labor costs. Like a Car Wash
Retire at 62
Collect Disability. Federal, Military, Social Security and TSP every month
The more you work. The higher the rank. The more you get each month
I’m still several years out from 20, but my wife and I are both AD officers. I don’t like to count chicken before they hatch, so I won’t comment on what I expect VA or lifestyle-wise as a retiree. But you asked about net worth and I can definitely tell you that if your spouse works you can easily count on a multiple million dollar net worth. We have saved and invested religiously for years now and if you’re diligent, you will absolutely amass a large net worth probably early in your career. Once you have that, pension and VA are just icing on the cake.
O5. Document all medical issues. Ignore anyone who says otherwise. It’s your life and you only get one body. FILE A VA CLAIM NO MATTER HOW YOU FEEL NOW. Stuff will break/hurt as you get older.
Never, ever let anyone shame you from going to medical.
Max out your Roth TSP. Put 60/30/10% in C/S/I funds.
Max out a regular Roth IRA, then a backdoor if you hit income caps.
5 years ago I would have said “buy rentals” but with the market and interest rates as they are now – buy a primary residence and build equity.
I keep about 20k liquid cash – that’s it. Dump the rest into index funds/ETFs/a well-diversified, aggressive stock portfolio.
If you truly do make it a career, don’t stay past O6 high 3. Financially speaking, you start getting too old and the salary curve stagnates. Retire in your 40s and chase the dollar. Work another 8-10 years tops and be done-done. Plenty of time left for a second career.
Fund Roth IRA and max TSP as soon as possible. After that start putting any extra investment in taxable brokerage. I started around when I pinned on O-3 and retired O5 w/24 yrs and nearly $3m in investments. (Although we didn’t own a house at that time because we had sold and invested proceeds) Now I work part time and use the $ to fund Roth IRAs and a little extra guilt free spending. So far, nest egg keeps growing and between pension and VA bills are paid and we live a comfortable lifestyle. Planned to make it work on <3% safe withdrawal rate but w unanticipated VA I can let nest egg grow longer. May choose to draw a little from investments soon to buy a new car if we don’t get cheap financing and eventually increase lifestyle but happy so far first couple years post military retirement and seeing how spending settles out before making signifigant lifestyle upgrades.
I’m sorry to hijack but I’ll be coming in as an O3 next year as a dentist and my default understanding was that it’s mathematically unfavorable to stay in for the full 20 if my private sector salary on average is 2x/3x the military rate. Does this make sense?
As an O2 you should be contributing no less than $1250/mo to Roth TSP and ideally max at $1920/mo… you make the equivalent of $120-160k on the outside.
O5 retirement will be enough to cover my living expenses, but this is because I controversially paid off a 3.25% mortgage over maxing retirement every year with a family of 5 to plan for this transition. The math doesn’t work when I’m 75, but I want to enjoy financial freedom and as a mil retiree I’ll statistically be dead by then.
I’ll take a cushy WFH job to have fuck you money and put the kids through college.* Then retiring at 60 using TSP until early SS. At that point, the remaining $1.2M in TSP will just rot.
*Between 9/11 GI bill transfer and 529 savings they each have $60k towards college, more than I ever had. Plus the yellow ribbon program.
All these folks nailed the benefits of staying and retiring. They are crushing it and are set for life.
I’ll offer a different perspective. I left at 8 years, 100% VA, and started an MBA program. I’ll be earning ~$200k in total compensation when I graduate next year + $50k tax free from the VA. Realistic corporate salaries within 10 years are $300k-$1mm+.
I’ve always held the view that top performers in the military will be top performers on the outside. Never chase the money in the military. Stay for service and fulfillment. There is money to be made on either side.
Best of luck! Focus on being a great officer right now.
[deleted]
Yes. Totally worth it.
I know you stated Officer retirement but I just thought I would share this. My husband is retired E-9, USN. Makes in base salary alone over $130k. This does not include his other income since he’s disabled.