Search found 291 matches

by Nords
Sat Mar 23, 2024 8:47 pm
Forum: Personal Investments
Topic: "Retired Military" w Pension how safe, how risky should i be?
Replies: 9
Views: 1845

Re: "Retired Military" w Pension how safe, how risky should i be?

Thank you, @Miriam2! Welcome, @Atomsplitter. A couple of decades ago I used to get submarine pay for that job. Retirement accounts/funds available: Fidelity 401K=$670K, 401Roth(2013 opened)=$110k (currently both 90/10) Lump sum Cash Balance of ~$220K planning to convert to IRA, company pension annuity not seeming competitive to after market His Ira Roth(2023 opened)=$12K, Hers IRA=$12K After Tax accounts=~$100K saving/checking/Cd ladder Thoughts on using the 401K and Lump sum IRA to fund bridge using the 12/15% tax bracket to Roth convert while pulling on the Roth for ~8K month to fund to Go-Go years. [...] Does this sound reasonable? Is there a better way I am not seeing or aware of? Your plan looks good. You have a fairly significant Roth...
by Nords
Sat Mar 16, 2024 3:30 pm
Forum: Personal Finance (Not Investing)
Topic: Helping children young active duty officers
Replies: 28
Views: 2626

Re: Helping children young active duty officers

I have 2 children one is an Air Force pilot, and the other is still in the Naval Academy wanting to be a naval aviator. As junior military officer, the pay is very low, i.e. O-1 starts at $45,912. I'm in a fortunate position to help them financially although they are far from financially struggling. Aloha @klondike, you and I have a lot in common with our young adults. My spouse and I are USNA ‘82 & ‘83. Our daughter is Navy ROTC ‘14 and our son-in-law is USNA ‘14. They’re parenting our four-year-old granddaughter. Our daughter moved to the Reserves in 2019 and finished her military obligation three years later. Our son-in-law is committed on active duty until 2027, and then he’ll consider all offers. They’re already financially indepe...
by Nords
Sat Mar 16, 2024 12:39 pm
Forum: Investing - Theory, News & General
Topic: Quantify the Value of Military Retirement - Methodology Questions
Replies: 115
Views: 10536

Re: Quantify the Value of Military Retirement - Methodology Questions

What’s the action a typical military officer retiree should take with this? My take away is they should be heavily in equities going in to full retirement (say early 60s), assuming their pension is probably 1/2 or more of their retirement assets, which I’m guessing is typical. Yes. The logic of reliable military pay (high probability of continuity of employment) is the same as the logic of a reliable military pension deposit (high probability of treating veterans well in order to continue recruiting a standing military). Both types of income support an asset allocation that's high in equities. The volatility of a high-equity asset allocation is impressive, and lots of investors would sell out during a nasty bear market or recession, but th...
by Nords
Wed Mar 13, 2024 8:24 pm
Forum: Investing - Theory, News & General
Topic: Quantify the Value of Military Retirement - Methodology Questions
Replies: 115
Views: 10536

Re: Quantify the Value of Military Retirement - Methodology Questions

I’ll start by writing that nobody explains this stuff while we’re on active duty. Our active-duty peers and leaders never have a reason to learn about it, and they’re certainly not going to waste time at Career Development Boards or Retention Team meetings explaining the military benefits of federal civil service to people. This is also why milbloggers eventually get these questions a dozen times, write a blog post, and then get even more questions about it. Not only do I find it personally challenging & fulfilling, but it helps guide our daughter and son-in-law through their transitions with more support than our generation ever found. ...as well as continuing to pay OPM for the additional FERS military service credit deposits of your ...
by Nords
Wed Mar 13, 2024 1:12 pm
Forum: Investing - Theory, News & General
Topic: Quantify the Value of Military Retirement - Methodology Questions
Replies: 115
Views: 10536

Re: Quantify the Value of Military Retirement - Methodology Questions

You can be a federal employee and a reserve member and qualify for both pensions. It isn't one or the other. Right. I just concluded that for my own situation, when I last considered all the options, this option - leaving active duty, drilling in the reserves, and starting fresh as a federal civilian towards a second pension - was less appealing than simply buying my active duty time under FERS and making a clean break from uniformed service. I figured that after 35 years of total service and savings, at age 57, I'd have more than enough with FERS and my portfolio while avoiding the difficult balancing act between civilian work, reserve duty, and family life in my 30s and 40s. To my understanding, buying active duty time under FERS vs. con...
by Nords
Tue Mar 12, 2024 10:42 am
Forum: Investing - Theory, News & General
Topic: Quantify the Value of Military Retirement - Methodology Questions
Replies: 115
Views: 10536

Re: Quantify the Value of Military Retirement - Methodology Questions

Key word: "IF" Of course you fail to mention how "gutting it out to 20" risks health, family, and/or longevity (whatever that means). Again, the devil's in the details. Sure, @gunny2, I'm not belaboring the details in this thread. One of the first sections of the blog post is "Stay on active duty for as long as it's challenging & fulfilling." Chronic stress of a job that's no longer challenging & fulfilling, let alone the stress of a military career, shows up in personal health (and in the compensation & pension exams for VA disability ratings). That's widely documented in civilian corporate environments, not just the military. A servicemember's time at work, in the field, underway, and on deployme...
by Nords
Tue Mar 12, 2024 12:26 am
Forum: Investing - Theory, News & General
Topic: Quantify the Value of Military Retirement - Methodology Questions
Replies: 115
Views: 10536

Re: Quantify the Value of Military Retirement - Methodology Questions

You’ve already seen this, @Warner25, but for the newer readers: over the last two decades I’ve talked with literally a couple thousand military families, and their experiences are all over the map. If RAND Corp ever did a Reserve/Guard retention study on that, it’s not public-- but I suspect all the services have their variations among OPTEMPOs and specialties. I tell people that the Reserves & Guard are a good transition between active duty and total civilian, with more of the good parts (mission, camaraderie, shared values) and less of the sucky parts. But the sucky parts still suck. Navy Reserve units are especially popular with submariners, unless their civilian careers get in the way of drill weekends & mobilizations. Yet our d...
by Nords
Mon Mar 11, 2024 8:04 pm
Forum: Investing - Theory, News & General
Topic: Quantify the Value of Military Retirement - Methodology Questions
Replies: 115
Views: 10536

Re: Quantify the Value of Military Retirement - Methodology Questions

Once you think about that buy down you realize the utter insanity of how the pension works. It treats two people doing exactly the same thing very differently... The worst way to do it is a lot of active duty years, followed by a transfer to the reserve component and a reserve retirement Yeah, every time I've looked at moving from active duty to a reserve component to finish 20 years of service, I came away thinking "what a terrible deal!" I concluded that becoming a federal civilian and buying the years of active duty service under FERS would be better in terms of both money and lifestyle. Most of you have seen this blog post before, but for newer readers: my advice is to not gut it out to 20. https://themilitarywallet.com/leave...
by Nords
Sat Mar 09, 2024 4:44 pm
Forum: Personal Finance (Not Investing)
Topic: Seeking Career Advice (post-military, mid-20's)
Replies: 24
Views: 2439

Re: Seeking Career Advice (post-military, mid-20's)

I have 2 years left on my enlisted military contract and will be about 25-26 years old at my projected separation. I'm unsure if I should use my GI Bill to get a bachelor's degree or if it would make sense to look for a contracting job immediately. @Ironfell, I’ll support the great advice you’re getting: 1. Go to TAP, SFL, or whatever transition seminar you can arrange as soon as you can get a seat. The transition counselors can point you to more self-assessment surveys and career-research tools that will help you refine your interests. You should also visit your military base’s college office to start working on those resources now. 2. College today is better than college later, and corporate employers would rather support your (someday) ...
by Nords
Sun Mar 03, 2024 1:42 pm
Forum: Investing - Theory, News & General
Topic: Quantify the Value of Military Retirement - Methodology Questions
Replies: 115
Views: 10536

Re: Quantify the Value of Military Retirement - Methodology Questions

<r><QUOTE author="sunrider6" post_id="7746058" time="1709441486" user_id="200933"><s>[quote=sunrider6 post_id=7746058 time=1709441486 user_id=200933]</s> I'm curious - what portion of the population believes they will be FI by 40? Few of the service members I interact with (understand this is anecdotal). I know you clearly running in FIRE circles, but do you have a sense of how much of the population this represents? <e>[/quote]</e></QUOTE> I don't have any statistics on the population's push for FI. I wrote that as an example of the mindset of young adults joining the military in this decade. As far as they're concerned, the Bengen SAFEMAX research and the Trinity study have been conventional wisdom for their entire lives. <br/> <br/> I no...
by Nords
Sat Mar 02, 2024 7:30 pm
Forum: Personal Finance (Not Investing)
Topic: TRICARE/Medicare
Replies: 8
Views: 1004

Re: TRICARE/Medicare

Admittedly I’m very naive when it comes to health insurance. I’m 54 and retired from the military. I currently have TRICARE Prime. I understand that when I reach Medicare eligible age, I need to apply for it. Then I have to switch from TRICARE Prime to TRICARE for Life. Does that sound accurate? Does that cover the majority of health issues? What Medicare do I need to cover health and pharmacy to go along with TRICARE for Life. Cost wise, what setup gives you the most bang for the buck? I’m trying to come up with an estimate of health costs in the future. Of course who knows what will happen, but I still want to plan. As others have written, @Lions4Life, you'll be covered with Medicare A&B plus TFL. Your healthcare costs will rise to t...
by Nords
Sat Mar 02, 2024 7:07 pm
Forum: Investing - Theory, News & General
Topic: Quantify the Value of Military Retirement - Methodology Questions
Replies: 115
Views: 10536

Re: Quantify the Value of Military Retirement - Methodology Questions

Two other ways to estimate the value of a military pension are the equivalent monthly income from a portfolio of I bonds or TIPS. Both of those analogies are flawed because nobody can buy a few million dollars of I bonds, and both I bonds & TIPS have maturity dates. (Their income won't stop when the military retiree dies, either.) However that reliable stream of inflation-fighting income is a great way to start a discussion about an asset allocation that invests more heavily in equities. This started as question about my own finances, but when I was surprised/shocked by how big the numbers were, I'm realizing that there is a pretty big gap in better communicating how generous the military pension plan is, especially for retention/recrui...
by Nords
Tue Feb 13, 2024 10:18 am
Forum: US Chapters
Topic: Hawaii Bogleheads, where are you?
Replies: 35
Views: 12456

Re: Hawaii Bogleheads, where are you?

This presents an interesting issue: How does one retain their anonymity that the internet provides and commune with like-minded people in what really is a small town? I'm trying to figure out how that could work. You're the one who cares about your anonymity. You can only be certain of preserving it by skipping the in-person meetups. If you decide that you're willing to accept a very small risk of maybe, possibly being recognized while meeting (in person) with people you've only known (so far) online, then you could enjoy a real-time experience with like-minded members. However the chance of you being recognized as anything more than a member of the Bogleheads is remote. You know the risks better than the rest of us. There's no need for ro...
by Nords
Sun Feb 11, 2024 5:17 pm
Forum: Personal Consumer Issues
Topic: Which college?
Replies: 54
Views: 5963

Re: Which college?

Parkinglotracer wrote: Sun Feb 11, 2024 2:34 pm Any recent navy grads that can fill us in? My info may be dated!
When so many college students can have their vision corrected to 20/20, selection for military aviation can be more competitive. Unlike the college students of my millennium.

As for whether service academy grads get the better service-selection opportunities... let's see the studies. (I don't have any.) Physical qualification, test scores, GPAs, and degree fields might matter, but I'm not so sure whether the alma mater confers any special advantages.
by Nords
Sat Feb 10, 2024 10:46 am
Forum: Personal Consumer Issues
Topic: Which college?
Replies: 54
Views: 5963

Re: Which college?

He's basically boiled it down to two schools: 1. U.S. Naval Academy in Annapolis, MD, where he'd major in some type of STEM program or 2. University of Texas in Austin, TX, where he'd study Finance at McCombs Business School (In-state tuition for us; money already set aside in 529) Would be interested in hearing thoughts/feedback on which you think would be the better choice and why. Thanks. @roadking2615, I’m USNA ‘82. My spouse is ‘83 and our son-in-law is ‘14. Our daughter also went through the USNA admissions process and saw enough to make the decision to choose NROTC. If your son hasn’t already done these two projects, he needs to do them soon: - The campus visits. I’d especially recommend going to a day of USNA plebe classes and (pos...
by Nords
Sun Jan 21, 2024 6:25 pm
Forum: Personal Finance (Not Investing)
Topic: Can We Retire in Hawaii? Please Critique
Replies: 214
Views: 37720

Re: Can We Retire in Hawaii? Please Critique

Thanks for the update, @SurferLife. Do you use the VA for your medical care in the Big Island? I have not really had to use any medical here on Big Island, but my doctor is based on Oahu. We do blood tests and if necessary, we can fly back which is fairly common. We did have an emergency with one of the kids and my wife, and the local clinic took care of that. I have not explored any VA care here but I might need to look into that. Last month I did a VA telehealth visit with an ENT doctor. I was in the Matsunaga Clinic on Oahu with an audiology tech, and the ENT doc was on the Mainland. That went very well, and the tech was able to show the doc everything he needed to see over the web camera. If the VA's telehealth gear is not already set u...
by Nords
Mon Nov 13, 2023 9:29 am
Forum: Personal Investments
Topic: Need Perspective - Cash or Mortgage for Retirement Home
Replies: 20
Views: 3184

Re: Need Perspective - Cash or Mortgage for Retirement Home

Hi Nords! I've come here to say I will be paying cash for my house which will be finished in Feb. I know Nords from a long time ago....his approach is not for the faint of heart, but his rationale is sound. Nevertheless, for some it is an emotional as well as rational decision. I am in a similar position as him, however, for my peace of mind, I want no mortgage.... I think the main anchor to his rationale is the gold-plated military pension. If that cannot be paid, the environment is very bad and there will probably be much more important issues to deal with than paying your mortgage. The second thing in his favor is the extreme DIY gene he has that drives down his lifestyle costs to probably the lowest possible outside of just going witho...
by Nords
Sun Nov 12, 2023 11:37 am
Forum: Personal Investments
Topic: Need Perspective - Cash or Mortgage for Retirement Home
Replies: 20
Views: 3184

Re: Need Perspective - Cash or Mortgage for Retirement Home

In your reply you mentioned 30-year mortgage (lowers payment by ~$600 per month). Would a 15-year mortgage be any different? I like the idea of paying more principal each month with the 15-year allowing me to pay off the mortgage more quickly. We’ve arbitraged mortgage interest rates against the stock market for nearly 20 years, so we favor 30-year mortgages whose lower payments are easier to handle within an O-4 20-year pension. We cover our retirement spending from my pension and from cashing out our investments at the 4% Safe Withdrawal Rate. We started with a 30-year interest rate of 5.375%. Over the long term (>10 years) we’ve made money on after-tax returns of ~8%/year (yet very volatile) while refinancing whenever it made sense. A f...
by Nords
Sat Nov 11, 2023 12:07 pm
Forum: Personal Investments
Topic: Need Perspective - Cash or Mortgage for Retirement Home
Replies: 20
Views: 3184

Re: Need Perspective - Cash or Mortgage for Retirement Home

The most important part of your home purchase is sleeping comfortably at night. If carrying a mortgage makes you (or your spouse) uncomfortable then bite the bullet and pay cash. It certainly gives you more negotiating power on your offer, as well as a faster close. You’re smart to plan ahead on the home purchase, as long as you’ve explored all of the issues. One of the most stressful transitions you could attempt in your life is trying to buy a home when you’re retiring from the military and still sorting out your bridge career. Here’s more on those challenges from an old post at the Internet Archive: https://web.archive.org/web/20211023135809/https://the-military-guide.com/dont-buy-home-leave-active-duty/ Keep in mind that the size of you...
by Nords
Sat May 27, 2023 11:40 am
Forum: Personal Finance (Not Investing)
Topic: Career Advice
Replies: 18
Views: 2313

Re: Career Advice

Nords posts on this forum, and he’s the author of Military Guide to Financial Independence & Retirement. The book will describe options if you choose Military Service. Thanks, @Fishing50! @StaxChips, you can find The Military Guide at your local public library. Here's an excerpt from a related post: https://militaryfinancialindependence.com/2011/08/03/join-the-military-to-retire-early-the-rest-of-the-story/ My conclusion? Don’t join the military for the benefits. As a Marine friend told me, join the military for the chance to realize your potential. The chance to be part of something bigger than yourself. The chance for more authority and responsibility in your 20s than your civilian counterparts will ever have. The chance to learn ski...
by Nords
Sat Dec 17, 2022 9:23 am
Forum: Personal Finance (Not Investing)
Topic: Military pension Survivor Benefit Plan question
Replies: 15
Views: 1908

Re: Military pension Survivor Benefit Plan question

Contact ‘Nords’ on this board, he may be able to help. Thanks for the tag, @Fishing50! I think this may be a pretty one-off situation. He was placed on the PDRL (Permanent Disability Retirement List) with 100% disability in 1994 with over 20 years of service. At the time he was able to elect a 75% pension benefit based on his disability percentage as an alternative more beneficial to him than using his years of active service to calculate the benefit which was 55%. His wife has her own SS (higher earner) and a FERS pension, she will be fine, but he's never had any interaction with VA so that may be something he should work on. She will get 55% of 75% of the 1994 salary, but that's been inflation adjusted now for decades and it is not a sma...
by Nords
Sat Dec 03, 2022 12:45 pm
Forum: Personal Investments
Topic: Veteran approaching retirement, need advice
Replies: 19
Views: 2023

Re: Veteran approaching retirement, need advice

Welcome, @USAF_3413, you're getting good advice on OpenSocialSecurity and Mike Piper's book. It doesn't look like you have any questions on military or VA benefits, but if you do then feel free to ask here or send me a message. Thank you! I just recently applied for Medicare since I hit 65. Still trying to figure out how Tricare and Medicare will work together, but happy to have the benefit. If you're a military retiree then your ID card expires on your 65th birthday to force you to sign up for Medicare. (After you've signed up, you'll be able to get a new ID card from a RAPIDs facility.) Then you'll be able to update your DEERS status to Tricare For Life, which acts as supplemental Medicare insurance (second payer). You'll pay Medicare Pa...
by Nords
Sat Dec 03, 2022 10:08 am
Forum: Personal Investments
Topic: Veteran approaching retirement, need advice
Replies: 19
Views: 2023

Re: Veteran approaching retirement, need advice

brew wrote: Sat Dec 03, 2022 8:50 am Nice to see you here Nords, and thank you for your advice during my AD career.
You're welcome, @Brew, and I'm glad it helped.

I don't read every post here, but I check every week or so for my poster name and the military keyword.
by Nords
Sat Dec 03, 2022 8:11 am
Forum: Personal Investments
Topic: Veteran approaching retirement, need advice
Replies: 19
Views: 2023

Re: Veteran approaching retirement, need advice

USAF_3414, You have been given good advice herein. You might also consider posting this over on https://www.early-retirement.org/forums/ One of the Moderators - I believe his handle is Nords if I am not mistaken knows all about Veterans retiring and can give you a good review and advice. All the best sir ! Thanks for the tag, @Gamboolman! Technically I'm a "moderator emeritus" over at E-R.org, which means I quit that dubious volunteer duty back around 2008. I check in here every week as well. Welcome, @USAF_3413, you're getting good advice on OpenSocialSecurity and Mike Piper's book. It doesn't look like you have any questions on military or VA benefits, but if you do then feel free to ask here or send me a message.
by Nords
Sat Sep 03, 2022 6:16 pm
Forum: Personal Investments
Topic: TSP - After-Tax Contributions
Replies: 19
Views: 3665

Re: TSP - After-Tax Contributions

But I have my own questions about such combat-pay "after-tax" contributions. 1) After-tax TSP contributions create basis, right? Similar to non-deductible IRA contributions? Anyone know how that's tracked/reported? I assume the TSP just tracks those contributions just like any other 401k provider might do, and reports distributions appropriately on a 1099-R. 2) Can these after-tax contributions be rolled over to a Roth 401k and/or Roth IRA upon separation? 3) Can these after-tax contributions be converted to Roth TSP while employed (or possibly afterwards)? It looks like all of the questions have been answered! Let me know if you have more. TSP contributions in a combat zone (with Combat Zone Tax Exempt pay) is one of the militar...
by Nords
Sat Sep 03, 2022 10:34 am
Forum: Personal Investments
Topic: Investing for military members on deployment
Replies: 7
Views: 1339

Re: Investing for military members on deployment

The only way I can reconcile the differences is if "active combat area" (first quote) is not the same as "combat zone" in the second quote. And thus the first quote is expanding the range of pay eligible. I.e. meaning "in addition to serving in a combat zone, the following three criteria also..." I really hate applying logic to the tax code, but I think this is the answer. Pub 3 is defining Combat Zone Tax-Exempt pay. The bolded “and…” clause is pointing out that you’re receiving the same base pay no matter where you are in the world, but when DoD starts your IDP or HFP then your base pay is now also CZTE pay. I’m no longer an expert on the details of IDP or HFP, but some of this verbiage might be designed to ...
by Nords
Sat Jun 11, 2022 7:06 pm
Forum: Personal Investments
Topic: Investing for military members on deployment
Replies: 7
Views: 1339

Re: Investing for military members on deployment

Questions: 1. From what I'm reading, I can contribute a maximum of $56,000 a year into the TSP in any calendar year I'm overseas, correct? So if I bump right up against the "normal" TSP contribution limit of 20,500 this year prior to deploying, I can crank my TSP contributions for the last three months of this calendar year to a maximum of 92% of my paycheck per month, so I could potentially add another $30,000 or so in October/November/December this year. Then I can do the same starting in January of next year, correct? 1. The annual addition limit for 2022 is $61K. You’re right, that’s a calendar-year limit so you can also repeat this in 2023… probably also for $61K. If that limit is higher in 2023 then the announcement should ...
by Nords
Wed Apr 27, 2022 5:16 am
Forum: Personal Finance (Not Investing)
Topic: About to Enter Retirement - Please Review Our Plan
Replies: 17
Views: 3621

Re: About to Enter Retirement - Please Review Our Plan

Note, we prefer to avoid a 72T since we want to move some of those TSP funds (Roth ladder), we don’t want to be locked into the payments we might not need, and we think that the COLA-adjusted pension/va benefits will free-up more cash through the years since we have a large fixed mortgage. Lastly, by getting more funds into Roth IRA, we are better able to avoid RMDs, which we know we will have to deal with since we are only pulling out 2%/yr. I agree. 72(t) withdrawals were around before Roth IRA conversions, and Roth IRA conversions are a lot more flexible. The deferred taxation of a traditional IRA is more sneaky. People have to do the math on their own assets in their 70s with RMDs from traditional retirement accounts, as well as taxati...
by Nords
Sun Apr 24, 2022 2:20 am
Forum: Personal Investments
Topic: Roth TSP Questions
Replies: 15
Views: 1571

Re: Roth TSP Questions

One thing that concerns me about that article...it is dated last month, but there are some references that seem wrong. 1. It says there is only 1 lump sum withdrawal allowed from the TSP. I'm pretty sure that changed, but not positive. 2. It referred to the 15% tax bracket which we have not had for a number of years (since early Trump years). I think the article may have been written some time in the past and not completely updated. So you might want to verify some things with the TSP website. @retiredjg, @NavyRotorhead15, I’m the author of that post. The post’s March 2022 date reflects the sale of The-Military-Guide and TheMilitaryWallet to Three Creeks Media. After a site audit, a number of The-Military-Guide posts were consolidated into...
by Nords
Sat Apr 02, 2022 10:33 pm
Forum: Personal Finance (Not Investing)
Topic: About to Enter Retirement - Please Review Our Plan
Replies: 17
Views: 3621

Re: About to Enter Retirement - Please Review Our Plan

I'm unsure of the 50/50 asset allocation as well in a high inflation economy, which was one of my questions. Not sure where to go to learn more about that. Here's a few considerations, @SurferLife. You have two inflation-adjusted life annuities with your military pension and your VA disability compensation. When you reach Social Security age you'll start a third one. They all use the same algorithm to calculate the cost-of-living adjustment. In the last 20 years, my military pension has risen a compounded total of over 54%. In the 1970s with even higher inflation, military retirees received some COLAs twice per year. I think you're hedged pretty well against inflation. I'm not an expert on Big Island farmland, but I'm pretty sure that its ...
by Nords
Sat Jan 29, 2022 6:57 pm
Forum: Personal Finance (Not Investing)
Topic: First year with low income, anything I need to look for?
Replies: 11
Views: 1518

Re: First year with low income, anything I need to look for?

Age 55. First year of retirement. Income will be my military pension ($49k) and whatever I get from my taxable account (usually $11k in various dividends and capital gains). MFJ using std deduction. I am already planning on some tax gain harvesting in the 0% LTCG bracket and maybe a Roth conversion from my 401k. For the last 10 years working, W-2 income always put us in the top tax bracket. Now that we are income poor, is there anything I should be looking at for deductions/tax credits? You probably have a handle on your VA disability compensation and any other VA benefits? I hear from a lot of vets who (still) get their disability rating 4-8 months after starting their pension, and the rating is retroactive to their retirement date. That ...
by Nords
Sat Jan 08, 2022 3:43 pm
Forum: Personal Investments
Topic: TSP Overcontribution/W-2 error?
Replies: 2
Views: 475

Re: TSP Overcontribution/W-2 error?

I over-contributed to my Roth TSP in 2021. (The military finance system did not automatically stop my contributions when I reached the limit, however TSP did not accept the contribution--it was missing.) After months of working with military payroll, I got the over contribution refunded to me. I just received my 2021 military W-2 and box 12 AA (Designated Roth contributions under a section 401(k) plan) shows the full amount that was deducted, >$19,500. It did not take the refund into consideration. Do I need a W-2C or is there a way for me to handle this when I do my taxes? I generally file myself with turbotax. For those who are just getting the notifications about this situation, back in January 2021 (over a year ago!) DFAS accidentally ...
by Nords
Sat Jan 08, 2022 3:27 pm
Forum: Personal Investments
Topic: Check-up and portfolio advice for mid-30s couple
Replies: 13
Views: 1870

Re: Check-up and portfolio advice for mid-30s couple

You are exactly correct, service for the sole purpose of chasing a pension can lead to a life of misery. Guard or Reserve options are available to finish a career with work life balance. Nords is a frequent contributor to this site, and his web site and book provide pros and cons of Guard and Reserve options. https://the-military-guide.com/ Thanks, @Fishing50! @Hector_G, you're getting good financial advice. The first post I'd read on The-Military-Guide would be the one about not gutting it out to 20, because you can still reach financial independence without an active-duty pension. Let me know if you have more questions about optimizing your military pay & benefits for FI. https://the-military-guide.com/dont-gut-20-leave-active-duty-r...
by Nords
Sat Jan 01, 2022 9:41 am
Forum: Personal Finance (Not Investing)
Topic: Military TSP Tax Question
Replies: 12
Views: 1399

Re: Military TSP Tax Question

In this link Nords provides a good overview that may help you. Thanks, @gatorbob! Scenario for tax year 2022: Spouse 1 employed full time, about 180k total comp, will max out 401k Spouse 2 part time (military reserves) 17k total comp, will put maximum allowable into TSP Married filing jointly, no state income tax, 4 children Specific question Spouse 2 will be serving in a designated combat zone for part of the year and so about 7k of pay will be tax free. If spouse 2 puts all pay into regular TSP, is the tax free portion "wasted" on the TSP contribution (unless they change the contribution to ROTH during that time period) or will that reduce the overall household income,(ie treat the earnings and deductions as a whole for both Sp...
by Nords
Sun Nov 07, 2021 12:16 pm
Forum: Personal Investments
Topic: TSP Rollover Question (military)
Replies: 5
Views: 1241

Re: TSP Rollover Question (military)

I have a block of Combat Zone Exclusion Pay in my Traditional TSP. This CZE Pay is earmarked as income tax-free, which as I understand it, means when I withdraw it, it will not be taxed. However, any return it generates is taxable. I cannot transfer it to my Roth TSP because TSP has not yet implemented intra-TSP transfers (last I heard). After I separate from service, I would like to rollover this CZE Pay into my Roth IRA. I suspect this will not create a taxable event, but I don't know. Yep, that's all correct. The combat zone tax-exempt pay is... tax exempt... so you'll never pay tax on that part. The issue is that when you roll over a traditional TSP (or IRA) the amount of the rollover done pro-rata, and the rest of the traditional acco...
by Nords
Sat Oct 30, 2021 8:28 pm
Forum: Personal Consumer Issues
Topic: Post military planning: Best US city…in 5-10 years?
Replies: 36
Views: 5492

Re: Post military planning: Best US city…in 5-10 years?

I see you’ve been in the forum for a few years, five2one, so let me write my advice for the other military members of the group as well as for you. You're getting great suggestions from MickFI. I'll build on those. Planning to retire from the military (Army, Lieutenant Colonel) in next couple years and planning my exit strategy. I’m 43 and my window opens next September which gives me at least 23 years but I can wait another 10 years before forced out. If you haven’t already done so, you should attend the Army’s transition seminar now. There’s a tendency for... more senior... servicemembers to put that off because “we’re too busy”, but you need to start learning any uncomfortable facts now so that you won’t be unpleasantly surprised later. ...
by Nords
Sat Oct 30, 2021 11:27 am
Forum: Personal Investments
Topic: Military Retirement
Replies: 17
Views: 3286

Re: Military Retirement

I’m already retired out of military. I’m thinking maybe 4 more years to retire from all work. I’m just looking for inputs if my 90/10 allocation is too aggressive while I’m currently collecting my military pension and less than 5 years til full retirement? The technical answer is that DoD pays part of your pension out of the interest from Treasuries which they had to accrue for decades before they knew you'd be a military retiree. The DoD actuaries figure out these details so that your pension is fully funded before you retire. https://comptroller.defense.gov/Portals/45/Documents/afr/fy2020/DoD_Components/2020_AFR_MRF.pdf Here's part of the discussion on page 18: "The Fund receives investment income from a variety of U.S. Treasury-bas...
by Nords
Sat Oct 16, 2021 1:07 am
Forum: Personal Finance (Not Investing)
Topic: Telling Kids about 529 plans
Replies: 110
Views: 9344

Re: Telling Kids about 529 plans

Soon2BXProgrammer wrote: Wed Oct 13, 2021 10:07 am this is a pretty good book.
https://www.amazon.com/Raising-Money-Sa ... UTF8&psc=1
It is written by "Nords" ( https://the-military-guide.com/ ) and his daughter.
Thanks, Soon2BXP! We had a good time writing it, and it's been well received.

For those who are interested, it's in public libraries (and military base libraries) in all formats.
by Nords
Sun Jul 11, 2021 11:31 am
Forum: Personal Investments
Topic: Portfolio Feedback for Military Member
Replies: 7
Views: 1285

Re: Portfolio Feedback for Military Member

You're welcome, I'm glad it's helping!

And yes, if you're staying on active duty (for the right reasons) then there's no financial need to stay with bonds in your asset allocation. But again the lower volatility can help investors sleep better at night.

My spouse and I were in 8th and 12th companies, although it was during the last millennium...
by Nords
Sun Jul 11, 2021 12:49 am
Forum: Personal Investments
Topic: Portfolio Feedback for Military Member
Replies: 7
Views: 1285

Re: Portfolio Feedback for Military Member

Asset Allocation: Desired: 100% stocks / 00% bonds Desired International: 40% of stocks Questions: 1. If I make it to retirement in 9 years I will receive a retirement pension of ~$4.2K every month in today's dollars. Is it safe to treat this as a lump sum with a present value of ~$1.3M using a 4% safe withdrawal rate? I have read that a pension replaces bonds in a portfolio. Welcome to Bogleheads, GB. I’d stay on active duty as long as it’s challenging & fulfilling, but take it one tour at a time. You’re well on the road to financial independence and you have no reason to gut it out to 20 for a pension if you’re risking your mental, physical, and emotional health. You could leave active duty at any point for the Reserves or Guard, and...
by Nords
Sun Jul 11, 2021 12:31 am
Forum: Personal Finance (Not Investing)
Topic: Social Security and (military service)
Replies: 3
Views: 719

Re: Social Security and (military service)

I am in the process of verifying DH's SS earnings record. From 1978 through 2001, for every $300 in active duty basic pay, you’re credited with an additional $100 in earnings up to a maximum of $1,200 a year. If you enlisted after September 7, 1980, and didn’t complete at least 24 months of active duty or your full tour, you may not be able to receive the additional earnings. Check with Social Security for details. https://www.ssa.gov/pubs/EN-05-10017.pdf DH does have military service between those dates, but his earnings record does not reflect the extra earnings. Do they keep that info elsewhere? How do I verify they have that information? I have an appointment to talk to a SS rep about another matter, but the appointment is not until th...
by Nords
Sat Jun 26, 2021 1:03 pm
Forum: Personal Investments
Topic: Leaving military. Stay in Roth TSP or transfer to Roth IRA?
Replies: 23
Views: 2515

Re: Leaving military. Stay in Roth TSP or transfer to Roth IRA?

I’m feeling pretty stupid and this has me completely confused. My son has a Roth TSP. He has no traditional (pre-tax) TSP. Some of the contributions to the Roth TSP did occur while he was in a tax free combat zone. There is no differentiation on his most recent TSP statement between contributions while deployed (tax free zone) or regular taxable income contributions (made while stationed in the USA). His entire Roth TSP balance is invested in the C Fund. I don’t understand what portion wouldn’t grow with the S&P500 returns? I assumed I could have him transfer the whole Roth TSP to his Roth IRA without having to deal with multiple checks. All of that's correct, Phil. All of the Roth TSP will grow with the funds he's invested in. I'm pre...
by Nords
Sat Jun 26, 2021 12:49 pm
Forum: Personal Finance (Not Investing)
Topic: Retiring From Military - Term Life Insurance
Replies: 13
Views: 1911

Re: Retiring From Military - Term Life Insurance

Realize this isn’t something you’re asking about…but as a military retiree to a soon to be retiree…unless you’re an unusually old retiree (say in your 50s) 20 year term life and SBP aren’t remotely comparable. +1. OP, have you calculated how much insurance you will need to provide the equivalent lifetime, inflation protected, guaranteed income that the survivors benefit program provides? I have and it's not worth it for the price for our situation. Some additional detail. My spouse is also military with a pension, TSP, roth IRA, taxable investments etc. Same as me. Our substantial investments will put us in self insured territory well under the 20 years the term policy would cover. Goal is to ensure if I pass between now and then she and o...
by Nords
Fri Jun 11, 2021 9:23 pm
Forum: Personal Finance (Not Investing)
Topic: Wiki - Veterans Health Care and HSA
Replies: 15
Views: 1462

Re: Wiki - Veterans Health Care and HSA

Soon2BXProgrammer wrote: Wed Jun 09, 2021 9:30 am
Nords wrote: Ping
I thought you might be a good reviewer of my draft wiki page?
Sorry, Soon2B, HSAs are way beyond my circle of competence in military benefits.

I understand what you’ve referenced but I wouldn’t advise your average vet to start an HSA. It looks like it could be a great idea for certain vets with the right insurance (VA or HDHP) but it’s too narrow a niche for me.

I’ll send the link to your wiki page to Ryan Guina, owner of TheMilitaryWallet.com. He might have a freelancer who’s willing to take a look at your Wiki entry and perhaps even expand the subject into a blog post on his site.
by Nords
Sun Apr 18, 2021 12:12 pm
Forum: Personal Investments
Topic: Portfolio review - military retirement? Help
Replies: 16
Views: 2271

Re: Portfolio review - military retirement? Help

1. What would it take to really retire (as in, no more mandatory work for income ) when I hit retirement eligibility from the military in two years? Is it feasible? Are we on the right path to do so? Would like to not get caught in the “one more year” cycle, and want to spend more time with the family while our parents are still around and fairly healthy, and kids are growing! a. I anticipate an annual pension of around $65K per year (present value) upon military retirement, eligible beginning two years from now (percentage increases for staying past 20 years, but I would more likely look to work part time outside the military once I’ve reached 20-24 years). I think that based on our current retirement savings, we could get to our goal of ...
by Nords
Sat Apr 03, 2021 10:09 am
Forum: Personal Investments
Topic: When should I take my pension?
Replies: 9
Views: 1820

Re: When should I take my pension?

sunny skies wrote: Fri Apr 02, 2021 5:36 am Calmaniac- thanks for the link. Looks like some good information.
Absolutely, it's a very useful book on both the financial and the behavioral-economics aspects of the decision.

He and I used to talk about his project over an occasional cup of coffee, and today he's doing his master's thesis on pension survivability.

You can ask Grumpus more questions in his Facebook group:
https://www.facebook.com/groups/2147646148795314

Another member of that group might also be in a similar situation.
by Nords
Sat Apr 03, 2021 10:02 am
Forum: Personal Finance (Not Investing)
Topic: Military Home Sale Tax Exclusion Questions
Replies: 2
Views: 286

Re: Military Home Sale Tax Exclusion Questions

Q1 - Am I missing anything? You could review this post from an Enrolled Agent, with examples and graphics. (He's also a U.S. Navy submarine vet.) https://www.katehorrell.com/favorable-tax-rules-for-military-when-excluding-capital-gain-from-sale-of-principal-residence/ Q3 - How do I determine the Cap Gains tax rate? Does my regular income add in? (this and depreciation are confusing) Yes, your other income contributes to your total income for determining your long-term capital gains rate. Keep in mind that your capital gains will also be reduced by adjusting your property's cost basis for your closing costs of buying the house and any improvements you made that are not associated with the landlording years. You'll also deduct your costs of ...
by Nords
Sun Feb 14, 2021 8:16 pm
Forum: Personal Investments
Topic: Nearing Military Retirement - Portfolio Review and Input
Replies: 6
Views: 1563

Re: Nearing Military Retirement - Portfolio Review and Input

*Not included in the portfolio but have ~$130k in CD set-aside for house down-payment after retiring from the military. Plan to have the house paid off before “early” retirement. [...] Looking for feedback on portfolio diversification, initial approach to funding “early” retirement and home purchase as well as potential pitfalls I should be thinking about. Additionally, we will purchase a house at some point after retiring from the military - likely in a MCOL or LCOL area. The down payment looks good, RedSox, but there are a couple of issues with buying a house right after the military: 1. Nearly half of military vets move within two years of leaving the service. It's not due to a transition failure, but rather from figuring out the bridge...
by Nords
Sat Jan 30, 2021 9:56 pm
Forum: Personal Investments
Topic: TSP and solo 401(k) advice
Replies: 2
Views: 523

Re: TSP and solo 401(k) advice

Check out https://the-military-guide.com/maximizing-your-thrift-savings-plan-contributions-in-a-combat-zone/ I am assuming you are not making any self employment income while deployed but you might be able to make extra contributions when you get home to solo. The link’s author is the expert on this and poster on this board. Stay safe Thanks qwertyjazz! ox2828, this post may offer more perspective: https://the-military-guide.com/contribution-limits-of-the-thrift-savings-plan-401k-ira/ See the link to the IRS hypothetical Solo 401(k) situation near the end of the post. I'm not sure what your contribution limit would be for your Solo 401(k). You'll be able to contribute to the annual addition limit in the TSP (from your pay on your LES) and ...
by Nords
Sat Jan 30, 2021 9:46 pm
Forum: Personal Finance (Not Investing)
Topic: 2020 SALT deduction question - living on the border
Replies: 12
Views: 1332

Re: 2020 SALT deduction question - living on the border

I live on a military installation that straddles the border of two states. The mailing address for the entire installation one state, but my house is physically located in the other. (FWIW, I am actually a resident of yet another state, but don't live in that state currently due to military assignments). For claiming the calculated SALT deduction (based on days lived in a particular location, not on specific "large" purchases, since I don't have any to claim), which state do I use? My preference would be to claim the state where my house is physically located, because the combined SALT rate is higher. But I don't want that to raise an alarm for not matching my mailing address...saving a couple hundred dollars via a greater deduct...