Should I Get Out Early?
Decide when retiring from the military is right for you and your family.
Articles> Should I Get Out Early?
military family

This content is provided courtesy of USAA.

Fifteen-year retirement isn't here for everyone, but it could be soon. What does it mean for service members? In exchange for retiring early, officers and noncommissioned officers receive lowered retirement benefits. The formula is fiendishly complex, but this is the upshot: While someone retiring after 20 years will receive half their annual service pay, after 15 years it's only slightly more than 35 percent.

Here are a few questions to ask yourself:

  • How are your job prospects? Early retirement looks tastier if you think you can land a high-paying job in the private sector. Finding a job can be trickier than a few years ago, notes military career coach Kathy Malone. "Eighty percent of the job market right now is hidden -- you're not going to see it on," she says. Start networking now to get a feel for hiring in your chosen field.
  • How long will you work? Early retirement can make more sense for younger personnel, who have more work life left to boost earnings in a new job.
  • Do you need medical benefits? Early retirees retain full health benefits. So if health coverage is more important to you than a paycheck, it might be time to cash out.

Ultimately, the military's early retirement plan is much like those of private industries that seek to downsize: The carrot of quick cash is balanced with the threat of forced layoffs. With U.S. involvement in Iraq and Afghanistan winding down, many people are likely to leave the service one way or another.

Financial planners agree that the key element in deciding if early retirement is right for you is whether you have somewhere to land once you leave the military.

Getting just 35 percent of your military base pay, not counting food and housing allowances, is "a pretty paltry sum" for most people, says J.J. Montanaro, a Certified Financial Planner practitioner with USAA, but it can be a nice supplement to a private-sector paycheck. "Start making those phone calls and trying to line up that next opportunity," says Montanaro.

Check out live out nannies near you:
Seattle, WA
Clifton, NJ
Macungie, PA
Fort Myers, FL
Madison, TN
Get the right care—
right when you need it.
Get the right care—right when you need it.
Already a member? Sign in
(1) Comment
Marilyn M.
Marilyn M.
I was lzayed off by the Stat of Fl after 23 years. Six months later I saw ads for and became a member. I have so many jobs I have to turn down people. Everyone I sit for has been a gem!
October 14, 2012 at 4:59 PM

Leave a Comment

You can post a comment by logging in to your account or post as a guest.

Success! Your comment is waiting to be approved. It will post soon.
Post another comment
Join free today
Sign up now! It only takes a few minutes.
What best describes you?
Thanks—you're almost there.
Create your login below.