Personal finance for military, veterans, and their families. During that time, the military contracted in many ways, including the retirement of weapons systems, base closures, and the mass attrition of personnel. Following a decade of relative peace, the world was rocked by the terror attacks of September 11th, which brought us into the War on Terror.

Instead of decreasing in size, our military increased its numbers, and even implemented measures to temporarily prevent some members from leaving the service.

Many military members were unable to leave the service when they originally intended to, as several branches enacted stop-loss measures that kept servicemembers in uniform long past their initial separation date. However, as the war slowed, the need to keep as many servicemembers in uniform decreased. In recent years, each military branch has used different methods to reduce their force size, including offering servicemembers the opportunity to get an early transition from active duty to the Guard or Reserves, transition to another branch of the military, or even get an early out through Force Shaping or other measures.

Now, the military is offering select servicemembers the opportunity to retire with only years of service, a substantial reduction from the normal requirement of 20 years of good service. This program, called the Temporary Early Retirement Authorityor TERA, was last available to servicemembers during the end of the Cold War era, or during the fiscal years.

The National Defense Authorization Act signed in reauthorized the branches to offer the Temporary Early Retirement Authority program to select members who meet certain criteria. This law is currently set to be on the books until The time in service requirement, which is more than 15 years and less than 20 years, is set by law.

The other criteria are set by each branch so they can determine how best to shape the quality of their force. Generally, this program is only available to servicemembers who are in overmanned career fields.

You will need to check with your respective service to determine if you are eligible for early retirement under TERA. How to Calculate High-3 Retirement: This retirement plan gives the servicemember a pension based on their average basic pay for their highest 36 months of service. Under this plan, each year served is worth 2. Each additional year served increases their base multiplier by 2. How to Calculate REDUX Retirement: REDUX is calculated in a similar fashion as the High-3 retirement plan, with a few notable differences.

Instead of using a 2. However, there is one more catch: Since the annual Cost of Living Adjustment is less, the pension grows more slowly over time.

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Read more in this article about deciding if REDUX is worth it. How to Calculate TERA Retirement: Start with whichever retirement system you chose, the High-3 or REDUX, then apply the following formula:.

Here are two examples for someone who served 15 years:. It gets a little more complicated if you want to calculate your retirement benefits if you served over 15, but less than 20 years. Here is a pdf that explains in more detailand an article which also discusses the value of an early military retirement.

To be clear, this is a full military retirement, complete with TRICARE and TRICARE for Life, starting immediately, the same COLA adjustments, base access, and access to the same benefits available to other military retirees.

The biggest considerations include your final pension and your quality of life. Now all you need to do is run the numbers and look at your future income potential and take into consideration quality of life issues.

If you are financially secure and are ready to move on to the next stage of your life, then an early retirement may be well worth it from a quality of life standpoint, even with the reduced pension. This may also be the case if you believe you have a high income potential after your military service. Many civilian jobs pay much better than a comparable military job, and the difference in the pension can be easily made up with the higher civilian salary.

Take your time, run the numbers, consider your quality of life if you stay or get out, do some soul searching, and speak with your spouse or significant other. This is a major decision and one you should spend some time on. Ryan Guina is the founder and editor of this site. He is a writer, small business owner, and entrepreneur.

He served over 6 years on active duty in the USAF and is currently serving in the IL Air National Guard. He also writes about money management, small business, and career topics at Cash Money Life.

You can also see his profile on Google.

Is REDUX Retirement Worth it? Can Your Investment Returns Make REDUX a Good Retirement Option? Military Retirement Pay No Longer Capped A Military Retirement is Worth Millions of Dollars Congress Cuts Military Retirement Pay. July 9, at 8: Who is eligible for this type of retirement?

Is this for recent soldiers from to present? July 10, at J Marie, As Doug from The Military Guide mentioned in his comment, this program is only open to current military members. I am not aware of any programs that would retroactively apply to those who have already separated from the service. I have the same question double pin bar forex J Marie.

I have been in the inactive reserve since I will be turning 60 soon and they sent me retirement paperwork from St. Can I apply for retirement with less than 20 years?? Thank you very much. The Military Guide says. July 10, at 9: I volunteered for TERA three different times during the s and was turned down every time. Quality of life is just bonus. I wish it was retroactive, but I doubt that will ever happen. The process will give you a definite answer.

Thanks for the comments, Doug. I like how you have covered this topic on other sites. There is much more to the decision than I gave. I focused on the numbers, but the real decision extends much further than the raw numbers. Your TERA numbers are wrong. Also, there is a reduction factor to lower even that by a partial percentage on tera online how to make money of the 2.

I have the following formula listed in the article as taken from a DFAS site:. In your case, we have the following numbers: These calculations can be tricky, and the terminology may differ from branch to branch. January 6, at beginner investing stock market investing for dummies January 17, at 2: Your retirement pay is based on 2.

So each year under 20 is a reduction of 2. But there is also a reduction factor added on to the calculation. This is the cost of getting stock exchange xmas hours early. For each year you served, you get a credit of 2. So if you served 15 years, you would multiply your base pay like this: The final number you come up with is Keep in mind this is a rough calculation.

March 25, at With MAJ selection rates plummeting, I am fearful I will be passed up for promotion a second time next March I will have 17 years in in June of But I notice that TERA says it is not automatic…Is this something anyone gets turned down for IF they are already facing involuntary seperation for being passed over twice?

May 11, at product diversification strategy pros and cons This is determined by your service and service branch. It most definitely is NOT AUTOMATIC, as this occurs every year after the the promotion boards, but requires an additional step. If all things fail, you will receive a LARGE severance check and a honorable discharge.

April 15, at 9: If you had elected the CSB will that have to be paid back if you are going to do the 15 yrs instead. However I am considering TERA. What will happen in that case and what would the monthly pay for a 15 yr E6 be if the last 3 yrs were at E6 pay?

Some things to keep in mind for service members who may be offered TERA as an option as the military continues to decrease its numbers until I was an senior officer in the US Army who was non-promotable but retained for service into Title 10 requirements for sanctuary. I was offered TERA, and determined this was my best option at 19 years, at a time when the US Army was repeating history from the period of the First Gulf War.

Learn your benefits BEFORE YOU RETIRE. It may mean the difference of HUNDREDS of THOUSANDS of DOLLARS. September 9, at 9: September 10, at Here are a couple references that should help out: I also recommend setting up a meeting with your HR department and requesting an official statement of your benefits and an official estimate of what it would cost to buy out your military time.

This should help you better understand your benefits and whether or not buying back your military time would be a good option. I hope this points you in the right direction.

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Best of luck, and thanks for your service! February 23, at 6: To be clear, early retirement is NOT the same as a full 20 year retirement for a former spouse.

Unless the soldier has served 20 full years, there is no protection, no TRICARE benefits for the former spouse. Even with the Uniform Former Spouse Protection Act. My husband served 17 years six months. He took advantage of the early retirement.

July 22, at I have a good friend who is curretly working in Iraq as a US soldier. He submitted his early retirement is it easy to make money in forex to UN office in Understanding charts stock market early this Janyary because of his only son who has no family to look after him.

They sent is forex trading taxable in india letter to the States, but it has not been granted yet. Lately he received the letter to notify him the upcoming another mission.

I wonder how we can find out how far the retirement application process is going and how he can avoid this mission. Please help me and give me some advice as soon as possible. Where should I contact for this issuelol. July 26, at 6: Is there any way you could provide a direct to someone who could answer a simple question. Can I apply for early retirement, if so, what are the requirements?. Thank you so very much. July 26, at 9: You need 20 full years of active duty service to qualify for an active duty retirement, unless you are medically retired, or are offered early retirement under the TERA program.

You would already be retired and receiving military retirement benefits if you had been medically retired, or you had retired under TERA. Qualifying for a retirement under the Guard or Reserves requires 20 good years of service. Again, it sounds like you are just short of that number. The only thing I can recommend doing is reviewing your records to see where you ended up with your service.

You could get copies of all your service records from the National Archives. Then you should visit a VA benefits counselor to see which benefits you may be eligible to receive. A benefits counselor will also be able to help you review your service dates to see if anything was missed at the time you left the Army.

They can help you apply for any benefits which you may be eligible to receive. January 4, at 1: January 12, at 1: Hello Richard, Thank you for contacting me. Yes, from what I understand, TERA has to be offered. However, you should inquire about it to see if it has been offered for servicemembers in your particular situation career field and years of service. If it has not been offered, you would most likely receive Involuntary Separation Pay.

If you wish to continue your service, then it may be a good idea to look into joining the Guard or Reserves, where you may be able to continue working toward a military retirement. I wish you the best, and thank you for your service!

June 11, at I came across several of your articles.

I have a few questions. Quick run down first. I am a MSG in the US ARMY. Unfortunately I have been forced to medically retire Do to major vision loss.

I am currently on transitional leave. I have a little over 15 Years of active duty service. Since I have had three brain tumors. Surgery number 1 in March of Tumor returned, surgery again in I have had one round of radiation and we are hoping that worked.

My drivers license has been medically revoked; because of the significant vision loss. I recently just completed the grueling task of a medical board.

Of course I was found unfit. I am currently on my terminal leave. My last day on active duty is 28June I entered service in Jan If so how do I go about doing so. If your answer is no. Is there any other form of retirement on the Military side that I am entitled or eligible for. Your email address will not be published. The Military Wallet Personal finance for military, veterans, and their families.

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Article by Ryan Guina Ryan Guina is the founder and editor of this site. Comments on this website do not reflect the views of the site owner, Department of Defense, or any other government agency. The responses below are not provided or commissioned by the bank advertiser.

Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. Comments J Marie says July 9, at 8: Great post, Ryan, and I appreciate the link! I have the following formula listed in the article as taken from a DFAS site: Why is this important?

Where should I contact for this issuelol Noriko. So here are my questions. This is something that was never offered to me while going through the medical board process. Speak Your Mind Cancel reply Your email address will not be published. Join Our FREE Newsletter! Military Benefits — ID Cards Veterans Benefits Guide How to Get a Military ID Card How to Get a Veterans Identification Card from the VA Veterans Designation on Drivers Licenses How to Replace Lost Military Service Records How to Replace Lost Military Medals, Awards, and Decorations Thrift Savings Plan New Military Retirement Plan Benefits?

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