Summary

In this episode Amy and Mike discus the financial value of the Blended Retirement System (BRS) pension and how to determine how much more one would need to earn in a civilian job to equate to the value of the pension.

Takeaways

• Military members often consider separating at various points during their career

• Many don’t really know how much more they’d need to earn or how much their pension is worth

• The financial value of the BRS pension can be approximated using a Single Premium Immediate Annuity (SPIA)

• Individuals considering separating from the military should consider numerous factors such as taxes, healthcare benefits, and quality of life

• Calculations should be done based on individual circumstances and assumptions

Chapters

00:00 Valuing the BRS Pension

02:06 Considering Factors in the Retirement Decision

03:50 Using a SPIA to Approximate the Pension Value

08:19 Quotes for the SPIA

11:27 Calculating the Amount Needed to Replace the Pension

19:30 Considering VA Disability and Other Benefits

25:16 The Need for a Retirement Calculator

Summary

In this conversation, Amy and Mike discuss long-term care insurance and how to plan for long-term care. They explain the different types of insurance available, including traditional long-term care insurance and hybrid long-term care insurance. They also discuss the option of self-insurance and the importance of having a plan in place. They highlight the uncertainty and cost associated with long-term care and emphasize the need for independent advice when making decisions about long-term care insurance.

Chapters

00:00 Planning for Long-Term Care in Retirement

06:05 Options for Dealing with Long-Term Care

10:30 The Challenges of Long-Term Care Insurance

12:52 The Importance of Having a Plan for Long-Term Care

12:55 Understanding the Types of Long-Term Care Insurance

16:19 Exploring the Federal Long-Term Care Insurance Policy

20:09 The Benefits of Hybrid Long-Term Care Insurance

22:10 Considering Annuities as an Insurance Product for Long-Term Care

Takeaways

There are different types of long-term care insurance available, including traditional long-term care insurance and hybrid long-term care insurance.

Self-insurance is an option, but it is important to consider the high cost and uncertainty associated with long-term care.

Having a plan in place for long-term care is crucial, and it is recommended to seek independent advice when making decisions about long-term care insurance.

Long-term care insurance can be expensive and complex, so it is important to understand the different policies and options available.

Operation Retirement Readiness: www.operationretirementreadiness.comSchedule a consultation with Mike: https://nextmissionfinancialplanning.com/contact/ Schedule a consultation with Amy: https://www.instarfp.com/contact Disclaimer: This podcast represents the views of the hosts and any guests. It is for informational purposes only and should not be considered tax, financial, or legal advice. All information is regarded to be from reliable sources. The hosts are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. This podcast is not intended to replace professional, individualized advice.

Episode 018 - BRS Lump Sum

Summary

In this conversation, Mike and Amy continue their 3-part series Blended Retirement System focusing on the lump sum payment option at retirement.

Takeaways

• The lump sum payment option in the blended retirement system allows service members to receive a portion of their pension at retirement.

• The lump sum payment is calculated based on the present value of the pension from retirement until the age of 67.

• Taking the lump sum payment reduces the monthly pension payout until the age of 67.

• Factors to consider when deciding whether to take the lump sum payment include tax implications, discount rate, and personal financial goals.

• Consulting with a tax advisor and financial planner is recommended before making the decision.

Chapters

00:00 Introduction to the Lump Sum Payment Option

03:13 Calculating the Lump Sum and Present Value

06:29 Understanding the Present Value of the Pension

10:16 Calculating the Lump Sum Amount

19:19 Reasons to Consider Taking the Lump Sum Payment

20:17 Important Considerations and Conclusion

Links

https://militaryfinancialadvisors.org/blended-retirement-system-evaluate-the-lump-sum-option/

https://militarypay.defense.gov/Calculators/Blended-Retirement-System-Standalone-Calculator/

Operation Retirement Readiness: www.operationretirementreadiness.com

Schedule a consultation with Mike: https://nextmissionfinancialplanning.com/contact/

Schedule a consultation with Amy: https://www.instarfp.com/contact

Disclaimer: This podcast represents the views of the hosts and any guests. It is for informational purposes only and should not be considered tax, financial, or legal advice. All information is regarded to be from reliable sources. The hosts are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. This podcast is not intended to replace professional, individualized advice.

In this episode Mike and Amy continue their series on the military’s Blended Retirement System focusing on the mid-career Continuation Pay. Takeaways - Continuation pay is a mid-career retention tool in the Blended Retirement System (BRS) that incentivizes service members between their seventh and 12th years of service. - Continuation pay does not impact the pension. - Each service sets the multiplier for continuation pay, which can range from 2.5 times to 13 times the monthly base pay. - The service obligation for continuation pay is four years from when the paperwork is executed. - Service members can choose to receive the pay as a lump sum or spread it over multiple years. - It's important to consider the tax implications and TSP contributions when making the decision. - The Army has a pending change to the window for requesting continuation pay, so service members should stay informed. - It's crucial not to leave this money on the table unless you’re certain you’re leaving the service soon. Chapters 00:00 Introduction to Continuation Pay in the Blended Retirement System 03:07 Understanding Continuation Pay as a Mid-Career Retention Tool 07:32 Exploring the Multiplier and Service Obligation of Continuation Pay 09:35 The Pending Change to the Army's Window for Requesting Continuation Pay 13:07 Continuation Pay in the Army and Marines 16:20 Maximizing Continuation Pay Benefits and Conclusion Links DOD Memo: https://militarypay.defense.gov/Portals/3/Documents/BlendedRetirementDocuments/Continuation%20Pay%20Rates%202024.pdf?ver=_TMhTRRq5EgN3AMoZvwWog%3D%3D USAF: https://www.myairforcebenefits.us.af.mil/Benefit-Library/Federal-Benefits/Continuation-Pay-?serv=26 Army: https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/Continuation-Pay?serv=125 Navy: https://www.mynavyhr.navy.mil/Portals/55/Messages/NAVADMIN/FACT_SHEETS/Fact_Sheet_NAV_118_23.pdf?ver=tuyon2ijtBCS7xJJkWlybg%3D%3D Marines: https://www.marines.mil/News/Messages/Messages-Display/Article/3240458/calendar-year-2024-continuation-pay-program-for-blended-retirement-system-parti/ Operation Retirement Readiness: www.operationretirementreadiness.com Schedule a consultation with Mike: https://nextmissionfinancialplanning.com/contact/ Schedule a consultation with Amy: https://www.instarfp.com/contact Disclaimer: This podcast represents the views of the hosts and any guests. It is for informational purposes only and should not be considered tax, financial, or legal advice. All information is regarded to be from reliable sources. The hosts are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. This podcast is not intended to replace professional, individualized advice.

Summary

The conversation discusses the blended retirement system (BRS) and its components, including the pension, TSP match, and continuation pay. The BRS was implemented in 2018 to modernize military compensation and retirement. The pension part of BRS is similar to the legacy system, requiring 20 years of service and basing the pension on the highest three years of pay. However, the multiplier was reduced from 2.5% to 2% per year. The BRS also introduced a TSP matching component, where service members can receive a match for their contributions. Additionally, continuation pay was added as a retention tool, allowing service members to receive a lump sum in exchange for four more years of service.

Takeaways

• The blended retirement system (BRS) was implemented in 2018 to modernize military compensation and retirement.

• The BRS pension requires 20 years of service and is based on the highest three years of pay, but the multiplier was reduced from 2.5% to 2% per year.

• The BRS introduced a TSP matching component, allowing service members to receive a match for their contributions.

• Continuation pay was added as a retention tool, offering service members a lump sum in exchange for four more years of service.

• Senior leaders should educate themselves about the BRS to mentor younger service members and help them make informed decisions about their retirement.

Chapters

00:00 Introduction to the Blended Retirement System (BRS)

07:51 The Pension Component of BRS

12:11 The Valuable Benefit of TSP Match in BRS

15:39 Retention Tool: Continuation Pay in BRS

Operation Retirement Readiness: www.operationretirementreadiness.com

Schedule a consultation with Mike: https://nextmissionfinancialplanning.com/contact/

Schedule a consultation with Amy: https://www.instarfp.com/contact

Disclaimer: This podcast represents the views of the hosts and any guests. It is for informational purposes only and should not be considered tax, financial, or legal advice. All information is regarded to be from reliable sources. The hosts are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. This podcast is not intended to replace professional, individualized advice.

Episode 15 - Using the Post 9/11 GI Bill Benefit

In this show Mike and Amy cover:

• Mistakes to Avoid when splitting Post 9/11 benefits among multiple beneficiaries (1:31)

• Advantages of transferring benefits to a spouse rather than children (5:15)

• Student Aid Index Considerations (6:48)

• Understanding the schools funding model (8:32)

• Leveraging the housing allowance (12:07)

• Yellow Ribbon Program (13:04)

Links:

Link to Mike’s Blog: https://nextmissionfinancialplanning.com/5-mistakes-to-avoid-when-splitting-the-gi-bill/ Operation Retirement Readiness: www.operationretirementreadiness.com Schedule a consultation with Mike:

https://nextmissionfinancialplanning.com/contact

Schedule a consultation with Amy: https://www.instarfp.com/contact Disclaimer: This podcast represents the views of the hosts and any guests. It is for informational purposes only and should not be considered tax, financial, or legal advice. All information is regarded to be from reliable sources. The hosts are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. This podcast is not intended to replace professional, individualized advice.

GI Bill Overview In this show Mike and Amy cover: History of the GI Bill (1:26) Components of Post 9/11 GI Bill (3:21) Post 9/11 GI Bill Tuition Benefit (4:07) Yellow Ribbon Program (5:25) Housing Allowance Benefit (7:31) Length of benefit (10:01) Limitations of the benefit (12:05) Transferring Post 9/11 Benefit (12:37) When beneficiaries must use the benefit (16:07) Links: Operation Retirement Readiness: www.operationretirementreadiness.com Schedule a consultation with Mike: https://nextmissionfinancialplanning.com/contact/ Schedule a consultation with Amy: https://www.instarfp.com/contact Disclaimer: This podcast represents the views of the hosts and any guests. It is for informational purposes only and should not be considered tax, financial, or legal advice. All information is regarded to be from reliable sources. The hosts are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. This podcast is not intended to replace professional, individualized advice.

In this show, Mike and Amy continue discussing Traditional and Roth Retirement Accounts looking at some scenarios when they might be best used: Mike and Amy cover: Roth Vs Traditional Retirement Accounts (01:44) Scenario #1 – Roth vs Traditional – Early military career (03:55) Scenario #2 – Roth vs Traditional – Post Retirement Second Career (04:55) Roth Income Limits & Backdoor Roths (09:09) Roth Conversions (18:18) Amy & Mike’s Preferred Accounts (25:49) Links: Operation Retirement Readiness: www.operationretirementreadiness.com Schedule a consultation with Mike: https://nextmissionfinancialplanning.com/contact/ Schedule a consultation with Amy: https://www.instarfp.com/contact Disclaimer: This podcast represents the views of the hosts and any guests. It is for informational purposes only and should not be considered tax, financial, or legal advice. All information is regarded to be from reliable sources. The hosts are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. This podcast is not intended to replace professional, individualized advice.