Planning A Military Retirement

Congratulations Soldier, Sailor, Airman or Marine. You’ve served your years and you’ve decided it’s time to retire. You’ve served your country well but you’re ready to move on to the next stage of your life.

In planning for a military retirement, the first decision you will need to make is whether you are going to retire entirely or continue working as a civilian. Naturally, this will depend largely on how old you are and how well off you are financially. If you served for, say, 20 years you will have a decent pension but maybe not enough to live on–especially if you have a family. There are both advantages and disadvantages to working in retirement.

The advantages

First, if you go to work in a civilian job it will shorten the amount of time that you are fully dependent on your investments and other income. A fact is that the longer you work, the less time you will need to draw income from your portfolio.

Your post-retirement work may allow you to continue adding to your retirement portfolio so you will have additional retirement savings. If you are over 50, most IRA and employer retirement plans will allow you to make catch-up contributions so you will be able to infuse more cash into your retirement portfolio.

The longer you wait to take Social Security benefits, the higher they will be–until you reach age 70. Depending on the year you were born, your benefits will rise between 5% and 8% for each year you work past your full retirement age.

If you are less than 65 and not eligible for Medicare, health insurance could be a major concern. If you continue working, you may be able to access group health insurance through your employer, which could be a huge bonus.

The disadvantages

The biggest disadvantage of working after you retire from the military is that, well, you’re still working.

If you can parlay the skills you’ve learned in the military into a job you enjoy, you won’t have a problem. However, if you can’t, there is always that old joke about getting a job as a greeter at Wal-mart, that is – the kind of job that is more of a nightmare than a dream job.

Creating a resume

Once you decide what kind of civilian career you would like to pursue, you’ll need to update your resume and then tailor it for each job for which you are applying. Your resume usually creates a first impression with any potential employer so here are some things to keep in mind as you write it.

• Communicate clearly your skills and experience. When you are describing your accomplishments, use active, direct verbs. Examples of such words are managed, sold, designed; developed, and saved. Use facts as much as you can and measurable results whenever possible.

• Your paragraphs should be short–no longer than six or seven lines as a more organized appearance is easier to read. Don’t be wordy and do not include irrelevant information such as how long you played the trumpet in your high school marching band.

• Be sure to proofread your work. All words must be spelled correctly and your grammar should be perfect. Use spell-check on your computer and, if possible, have someone proofread the resume before you start distributing it. If you don’t have anyone who can prove it for you, reading it out loud to yourself is a good way to find errors.

Calculating your retirement pay

How much will you get in retirement pay? As a general rule, if you entered the service before September 8, 1980, your retirement plan will be eligible for the Final Pay Retirement System. If you entered service between Sept. 8, 1980 and August 1986, you are eligible for the High 36 System. And if you joined after August 1986, you are under the REDUX System, which means you have the option of choosing the High 36 Retirement System or the Career Status Bonus/REDUX (CSB) Retirement System.

Beyond this, the question of how much your retirement pay will be is too complicated to cover here. However, www.military.com and the Defense Department have Military retirement pay calculators that can answer this question for you.

Choosing a place for retirement

You will also need to decide-if you haven’t already made that decision-where you want to spend your retirement years. If you are going to continue working, this decision should probably be based largely on where you stand the best chances of finding a job. Living in a small town in the Sunbelt or retiring to Belize may seem very attractive but you need to know if you will really be able to find work there.

On the other hand, retiring to a major metropolitan area may not seem like a wonderful thing but that’s where you would stand the best chances of landing a job. On the other hand, if you will not be working after you retire, you can decide to live just about anywhere that catches your fancy.

You can choose to retire in the United States or you can retire abroad.

If you’re in the Guard or Reserve–add up your points

If you are in the regular service, your goal will probably be to reach 20 years of service. However, Guard and Reserve members need to focus on accumulating retirement points, which are then divided by the number 360 to determine the equivalent years of service.

You can earn retirement points a variety of ways, including monthly battle assemblies, belonging to unit, serving on active duty and completing correspondence courses. 20 is still your magic number. After you complete 20 years of creditable service, you will receive a 20-your letter, which makes it official that you qualify for retirement benefits.

Hopefully you have found this useful to help you plan a military retirement. You’ve served your country, make sure you get all the benefits due you in retirement.