reserve retirement pay

[epidural man]

Hi,

I need some complicated math done (actually, simple math, I'm just not sure how to do it).

I've tried - but not sure I did it correctly.

I am trying to figure out the dollar amount - assuming about 16 years of equivalence (5760 points) and O-5 pay, what is the dolar value of 1 point (assuming 25 years of pay - so dying at 85)?

I wonder this because I am trying to determine if I should get paid to do online military training as a civilian, or do it on reserve time and get points for it. (I work at a military hospital as a contractor and need to do the same training for both my contract job and for Reserves - and could do it for pay, or for points. I would like to determine which is more valuable).

I am sure someone has calculated the dollar value of a single point over x number of years.

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[deleted480308]

Hi,

I need some complicated math done (actually, simple math, I'm just not sure how to do it).

I've tried - but not sure I did it correctly.

I am trying to figure out the dollar amount - assuming about 16 years of equivalence (5760 points) and O-5 pay, what is the dolar value of 1 point (assuming 25 years of pay - so dying at 85)?

I wonder this because I am trying to determine if I should get paid to do online military training as a civilian, or do it on reserve time and get points for it. (I work at a military hospital as a contractor and need to do the same training for both my contract job and for Reserves - and could do it for pay, or for points. I would like to determine which is more valuable).

I am sure someone has calculated the dollar value of a single point over x number of years.

((O5 base annual)x(.o25xTIS)))/365

That's how much it pays each year you collect retirement

 

[Monty Python]

Very generally the rule of thumb is that retiring as a reserve O-5 will get you $0.60/point/month net after taxes. Reserve O-6 retirement will get you $0.70/point/month after taxes.

I retired as an O-6 just short of 27 years with around 3,500 points. My reserve pension net is $2,264/month but I claim zero tax exemptions.

I usually claimed three unpaid duty points per month over a 15 year period, for duties I performed in between drill weekends while serving as unit training officer, AOIC, OIC, green side XO, CO, HQ OIC, etc etc. And I volunteered for a decade as a professional schools liaison officer. Those ~540 unpaid points add $375 to my monthly pension. Over the estimated three decades I'll live post-retirement, those unpaid points will add $136,000 to my pension.

Admittedly it was much easier to claim unpaid points prior to EDM in NSIPS. It was essentially honor system, by submitting a NAVRES 1570/16 after the fact monthly to your OIC, who endorsed it and sent to the NOSC for entry. Now additional unpaid duty has to be preapproved electronically in EDM and generally it's a procedural pain in the a@@ from what friends tell me. So glad that came on line right as I was winding down my career.

 

[epidural man]

((O5 base annual)x(.o25xTIS)))/365

That's how much it pays each year you collect retirement

Thanks.

So for example, let's say base pay is $8000 and time in service is 16 years.

8000x0.025x16 = 3200
3200/365 = $8.7
So for every point, I will earn $8.70 each year. Does that sound correct?

So in other words, for 25 years of pay, that is $217.5.

So unless I make $217/hr, it is probably better to do the training on reserve non-pay time, then take the pay as a contractor (because I certainly don't make $217).

 

[MTGas2B]

Without fancy math I'm gonna guess you'll come out ahead getting the money now. Add the time value of money since you have to wait til 60 to see the reserve stuff and makes money now look better than money later.


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[deleted480308]

Thanks.

So for example, let's say base pay is $8000 and time in service is 16 years.

8000x0.025x16 = 3200
3200/365 = $8.7
So for every point, I will earn $8.70 each year. Does that sound correct?

So in other words, for 25 years of pay, that is $217.5.

So unless I make $217/hr, it is probably better to do the training on reserve non-pay time, then take the pay as a contractor (because I certainly don't make $217).

the TIS for that calculation is how many years you retire with.... the "total" pay per retirement point is the equation I gave you times the number of years you are alive and collecting retirement.

 

[epidural man]

sb247.

that may answer a question I have.

is the pay different for a guy in the reserves with?

A. 3000 points, 30 good years.
B. 3000 points, 20 good years.

 

[MTGas2B]

No difference. Points determine your multiplier.


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[deleted480308]

sb247.

that may answer a question I have.

is the pay different for a guy in the reserves with?

A. 3000 points, 30 good years.
B. 3000 points, 20 good years.

No difference. Points determine your multiplier.


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There is a difference in reserve retirement pay based on years. The TIS is part of the equation.

[(base pay of high 3)*(.25*TIS)] * (total retirement points/(365 for each good year)

 

[MTGas2B]

When you retire and transition to the retired reserve (aka gray zone) you'll keep making rightward shifts on the pay scale.

O5 pay caps at the 22 year mark, O6 at 30 years.

My current PEBD is 2005. I turn 60 in 2039. Assuming I retire from the reserves, my high three pay be two years over 32 and one years over 34, all at the over 30 plateau, if they're crazy enough to make me an O6.

For the non-traditional types who got a later start, the difference between their PEBD and age 60 would be smaller they may not hit the over 30 point in their reserve retirement. I'm guessing everyone on this site is high 3. I doubt we have many old enough to qualify for final pay.



A unique feature of Reserve retirement is that the pay base is determined as though the reserve member were serving on active duty immediately prior to retirement, thus the years of service continue to accumulate even after the member has entered the retired reserve and continue until they actually begin receiving such pay (usually age 60).
From
http://militarypay.defense.gov/Pay/Retirement/reserve/


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[MTGas2B]

One exception to above. You do have the option to resign from the reserves after applying for retirement and completing 20 good years. You would freeze at the current pay scale going that route. I'm guessing a retired reserve recall is less likely than an IRR recall.


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[MTGas2B]

One more rub. You can't change when you turn 60 (although you could get an age waiver and keep drilling past 60) and you probably can't change your PEBD. Which really just means as far as reserve retirements go, it's the points that determine pension. Years really don't matter all that much.


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[epidural man]

When you retire and transition to the retired reserve (aka gray zone) you'll keep making rightward shifts on the pay scale.

O5 pay caps at the 22 year mark, O6 at 30 years.

My current PEBD is 2005. I turn 60 in 2039. Assuming I retire from the reserves, my high three pay be two years over 32 and one years over 34, all at the over 30 plateau, if they're crazy enough to make me an O6.

For the non-traditional types who got a later start, the difference between their PEBD and age 60 would be smaller they may not hit the over 30 point in their reserve retirement. I'm guessing everyone on this site is high 3. I doubt we have many old enough to qualify for final pay.



A unique feature of Reserve retirement is that the pay base is determined as though the reserve member were serving on active duty immediately prior to retirement, thus the years of service continue to accumulate even after the member has entered the retired reserve and continue until they actually begin receiving such pay (usually age 60).
From
http://militarypay.defense.gov/Pay/Retirement/reserve/


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Thanks for you help. I think I finally get it.

But by way of example,

Lets say I make 20 good years at age 50 and I enter reserve retirement or IRR - and let's assume I make O6 by then - are you saying that even if I don't get 50 points in the IRR to qualify for a good year, the pay scale continues to move to the right for me until age 60 (when I start getting paid)? (i.e....based on the pay scales today, and assuming 5760 points - or 40% base bay - I would get 40% of $11328 instead of $10524?)

 

[Monty Python]

Several things:

1. attached is my reserve pension calculation sent to me by NPC, showing the formula used with my particulars plugged into it.

2. the "grey zone," referenced in an above post. That's where a reservist resides if they retire prior to age 6o. (Reservists are the only category of federal employees who must reach both a years-of-service and an age threshold before receiving a pension). Unlike active duty, who receive their pension regardless of age, a reservist is ineligible to receive a pension prior to age 60 even if they have 20 years in uniform. There are a few exceptions such as quarter-for-quarter for time spent in hostile fire areas. The grey area pertains to a reservist who retires prior to age 60. They get a retiree ID card, have all base privileges, etc, but must wait until age 60 to start getting a pension.

3. age 60 waiver. Current USNR policy holds that a reservist must retire NLT age 60. Waiver requests are accepted. The first waiver is for two years to age 62, and is generally rubber-stamped approved. Beyond that you must request a yearly waiver and those are much tougher to get, completely dependent on the USNR's need for your particular expertise. Mandatory retirement at 68.

4. I received the letter from NPC on my 59th birthday informing me of the above items, giving me four months to inform them of my choice. After reviewing all the financial and non-financial variables I decided to just go with the flow and take retirement at age 60. While I do miss the camaraderie and sense of purpose, I note that my annual pension is ~50% higher than a year's pay for drill weekends and several weeks of active duty, with 100% reduction in expenses and time commitment.

5. one thing which still has me shaking my head: several times I've called friends at BUMED, DHA, and COs/XOs at NavHosps, volunteering my services for a few weeks as backfill or on MEDRETEs as long as they cover my travel and per diem. (I still earn paid military leave at my civilian job). Their response: "Uhhh .... thanks for your offer, but we don't have a policy or process for that."

 

[d2305]

You get 5 years of Tricare before medicare too. There are advantages to living close to a base.

 

[notdeadyet]

What are the health benefits for retired-from-reserve? And what is the cost, if any?

I have over 8 years now in RC and am contemplating doing the 20...


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[d2305]

When one reaches 60, one is eligible for Tricare. One can also buy Tricare as a reservist prior to 60.

 

[notdeadyet]

When 60, is that Tricare to buy or free? Just curious if it's the same as regular active retirement with free medical at the MTFs and the like....


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[d2305]

Yes, at 60 you get the same benefits. You just make about 1/4 in pay.

 

[Homunculus]

Yes, at 60 you get the same benefits. You just make about 1/4 in pay.

do mean from age 60 on or are you including the pay you "missed" by retiring at 6o instead of at 20 years active duty (age 46 for most of us)?

I did the math and in regards to retirement pay (not the missed pay from 46-60) for me it isn't that bad. if I get out at 14 (5040pts) and do a minimum of 6 years in the reserves w/ 75 pts per year (450 points) then go into retired awaiting pay status I would get roughly 38% of a maxed out O-5 at a minimum. In today's pay scale that would be 38% of $9062 or around $3443, or a little over 41k a year. if I happen to make O6, it would be 51k/yr. not bad for 6 years of reserve (or guard) work. the lack of an AD retirement at 46 is somewhat offset by making more money as a civilian. granted, I end up on the "losing" end in regards to total dollar amount but there's a point when it's not all about the money. I don't plan on retiring in the classic sense until after 60 anyway. will be interesting if SDN is still around then-- I'd have been here from start to finish, lol.

--your friendly neighborhood nearing 17 years creditable service on SDN caveman

 

[MTGas2B]

If you're looking at post AD reserve time and you're prior HPSP don't forget get about the 2 for 1 deal.


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[d2305]

do mean from age 60 on or are you including the pay you "missed" by retiring at 6o instead of at 20 years active duty (age 46 for most of us)?

I did the math and in regards to retirement pay (not the missed pay from 46-60) for me it isn't that bad. if I get out at 14 (5040pts) and do a minimum of 6 years in the reserves w/ 75 pts per year (450 points) then go into retired awaiting pay status I would get roughly 38% of a maxed out O-5 at a minimum. In today's pay scale that would be 38% of $9062 or around $3443, or a little over 41k a year. if I happen to make O6, it would be 51k/yr. not bad for 6 years of reserve (or guard) work. the lack of an AD retirement at 46 is somewhat offset by making more money as a civilian. granted, I end up on the "losing" end in regards to total dollar amount but there's a point when it's not all about the money. I don't plan on retiring in the classic sense until after 60 anyway. will be interesting if SDN is still around then-- I'd have been here from start to finish, lol.

--your friendly neighborhood nearing 17 years creditable service on SDN caveman

It would depend on how much one makes as a civilian as to whether getting out will be more financially rewarding. I know civilian gastroenterologists crank out the colonoscopies all day long while the military runs at a less feverish pace. One does run the risk of getting deployed while in the reserve, which could upset one's colleagues.

It also depends your tolerance for mickey mouse military games and meetings. It does wear on you.

 

[Homunculus]

It would depend on how much one makes as a civilian as to whether getting out will be more financially rewarding. I know civilian gastroenterologists crank out the colonoscopies all day long while the military runs at a less feverish pace. One does run the risk of getting deployed while in the reserve, which could upset one's colleagues.

It also depends your tolerance for mickey mouse military games and meetings. It does wear on you.

no doubt. in the end like I said its probably less financially rewarding getting out at a point later in your career. even 100k more a year puts a dent in the loss.

reservists are I think limited to 90 days, correct? at least when I went through CRC that's what the majority of them were doing. a few of them (and some NG folks) were going for longer but it sounded like it was at their request. 90 days (including pre and post deployment processing) isn't too bad. none of the people I spoke to were upset about their deplyments- most I think were looking forward to the points. and there is I think a 2 year non-deployable stabilization phase after transitioning from active duty which should help. either way, it's enticing and I'm seriously looking into it.

--your friendly neighborhood reserves/NG is just a little bit of the BGW caveman

 

[deleted480308]

no doubt. in the end like I said its probably less financially rewarding getting out at a point later in your career. even 100k more a year puts a dent in the loss.

reservists are I think limited to 90 days, correct? at least when I went through CRC that's what the majority of them were doing. a few of them (and some NG folks) were going for longer but it sounded like it was at their request. 90 days (including pre and post deployment processing) isn't too bad. none of the people I spoke to were upset about their deplyments- most I think were looking forward to the points. and there is I think a 2 year non-deployable stabilization phase after transitioning from active duty which should help. either way, it's enticing and I'm seriously looking into it.

--your friendly neighborhood reserves/NG is just a little bit of the BGW caveman

It's currently 90 boots on ground + processing

 

[epidural man]

do mean from age 60 on or are you including the pay you "missed" by retiring at 6o instead of at 20 years active duty (age 46 for most of us)?

I did the math and in regards to retirement pay (not the missed pay from 46-60) for me it isn't that bad. if I get out at 14 (5040pts) and do a minimum of 6 years in the reserves w/ 75 pts per year (450 points) then go into retired awaiting pay status I would get roughly 38% of a maxed out O-5 at a minimum. In today's pay scale that would be 38% of $9062 or around $3443, or a little over 41k a year. if I happen to make O6, it would be 51k/yr. not bad for 6 years of reserve (or guard) work. the lack of an AD retirement at 46 is somewhat offset by making more money as a civilian. granted, I end up on the "losing" end in regards to total dollar amount but there's a point when it's not all about the money. I don't plan on retiring in the classic sense until after 60 anyway. will be interesting if SDN is still around then-- I'd have been here from start to finish, lol.

--your friendly neighborhood nearing 17 years creditable service on SDN caveman

For me (I had 14 years) - that fuzzy math on an excel spreadsheet made it about equal - but a little in favor an active duty retirement.

However, there are a few things that made me get out.

First, the loan repayment program, or the bonus pay, adds a bunch (that I didn't calculate in the excel spread sheet).

As mentioned, I am not sure how long the 2 for 1 HPSP deal will be around.

Third, if I happen to get even just a little disability rating, my kids get free tuition in a California state school. I have a senior this year, and 4 more coming up behind him. That is a big chunk of change.

Four - the Navy basically guaranteed I would be going to Iwakuni Japan this summer. I wouldn't see my boys for 2 years - that's a no-go for me.

Five (I'm not really 100% sure about this next item)- Since my ex-wife will get a percentage of my retirement pay, the percentage is based on years of service. If I stay active and get out at 20, vs if I do reserves and do 30 - the difference in percentage is a huge difference compared to the increase in pay difference. That means I will give away less of my money.

Six - I feel I have a better chance of getting O6 in the reserves than I ever did on Active Duty - if I decide to pursue such an option.

 

[Homunculus]

Five (I'm not really 100% sure about this next item)- Since my ex-wife will get a percentage of my retirement pay, the percentage is based on years of service. If I stay active and get out at 20, vs if I do reserves and do 30 - the difference in percentage is a huge difference compared to the increase in pay difference. That means I will give away less of my money.

I am also previously divorced- but it was early in my career, and her attorney didn't pursue anything regarding retirement. ex-spouses are only entitled to their marital share of your retirement up to a max of 50%. so if you were married (and in the military) for 10 years she can get the max of 50%. hopefully she didn't get more than that. otherwise it should be a percentage based on how long you were married while on active duty. I guess I can see the argument for it "she sacrificed for your career" argument) but man, that's a tough pill to swallow. hopefully you had a good attorney.

not included in my calculations is the actual drill pay you get. for an O-5 w/ 14 yrs, it's a little over 15k a year. not too bad. National Guard

--your friendly neighborhood drill baby drill caveman

 

[notdeadyet]

I'm also curious: I know you can "buy-in" military service into federal retirement schemes (such as at the VA). Is the inverse true? Meaning, can you buy-in federal employment as points into your military retirement as a reservist.

Highly suspect not, but it never hurts to ask...

 

[epidural man]

Nope.