May 29, 2024

40. Stay In or Get Out? The Military Pension

I tackle the common question, "Should I stay in the military or get out?" by diving into a real client case study. And I promise, if you do, you don’t have to live under a bridge or eat cat food the rest of your life. My client, an Air Force major with 13 years of service, is contemplating leaving the military and is exploring three scenarios: immediately transitioning to a civilian job, joining the reserves, or completing 20 years of service. I analyze each scenario in depth, examining the financial implications, potential VA disability benefits, and retirement income projections. Throughout the episode, I underscore the importance of combining quantitative data with qualitative aspects to make the best decisions for one’s future. In conclusion, I also provide a detailed breakdown of the pension's value and its civilian equivalent.

Key Takeaways:

  • What’re the Financial Benefits in Retirement Pension of Joining the Reserves?
  • A Walkthrough of a Quantitative Analysis of 3 Scenarios: Leaving the Military, Joining the Reserves, and Staying for 20 Years of Service
  • What Will Your Monthly Retirement Income Look Like?
  • Calculating True Military Pension Value: Will a $509,000 Salary Compare?

Key Timestamps:

  • (00:00) Should I Stay in the Military or Get Out?
  • (00:22) Case Study: Air Force Major at a Crossroads
  • (02:26) Scenario Analysis: Getting Out with No Reserves
  • (03:52) Scenario Analysis: Getting Out and Joining the Reserves
  • (05:28) Scenario Analysis: Staying in Until 20 Years of Service
  • (07:37) Financial Comparison: Military vs. Civilian Income
  • (09:39) When a $509,000 Salary Still Doesn't Replace Military Benefits
  • (10:32) Download the Ultimate Military Finance Checklist

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, Veteran Finances, Military Pension, VA Disability, Military Reserves, Civilian Income

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

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