A note about divorce decrees: I’ve seen some divorce decrees which had a “work around” for that bit about leaving service before qualifying for retirement. The decree would direct the now former service member to provide the equivalent amount of cash as if he or she had actually stayed in long enough to retire and the ex-spouse would not “suffer monetary loss due to the service member’s early separation without benefit”.
For certain ex-spouses, there are additional benefits: Commissary, Exchange (it’s officially no longer PX or BX), etc. Some of those bennies may be restricted overseas because of the SOFA treaties with various countries.
I find this one of the most disturbing things I read today. That would really suck for that person - HAVE to continue working just to pay your ex after you retire. SHUDDER
I wonder what the decree said about a dishonorable discharge?
IIRC, there was some baseball player about 20 years ago who sat out the season so his income would be zero, so he did not have to pay a large settlement (based on income) in his divorce. the judge said that avoiding/declining earned income simply for the purpose of evading divorce payout meant he could be assessed as if he had actually worked.
This would depend on your rank when you retired and how long you were enlisted. A 30 year E-9 would make a nice living. I retired at 22 years as an E-7 and do ok. I do have another job now, but child support takes half my retirement.
I find it even more disturbing that someone could put in a decade or more military service and have nothing to show for it. I’m pretty sure Canadian soldiers get military pensions, even if they are paltry and don’t kick in until age 65 for short-timers. My wife’s grandfather did a few years in the army during WWII and for the last few years of his life before he moved into a home, DVA would pay for things like someone to shovel his driveway.
I retired at 23 years at E-7 in 1990; my net is about $1800+. Even if I got the whole thing, I couldn’t live on that, let alone half. It’s never amounted to much more than grocery and gas money since I got out. The only thing that made that career worthwhile has been the medical benefit, and the commissary access to a far lesser degree (especially since I live nowhere near one now).
Well, I enlisted in 1991, so I was fortunate to get the great pay raises throughout the 90’s, and I think a different retirement plan than you are under. My net is $2200 a month, which is WAY more than just gas and grocery money.
Plus, I think a lot of people would be grateful to receive $1800 a month, every month, forever, just by being alive.
I’m not saying it’s a lot of money, but I wouldn’t discourage anyone from enlisting in the AF simply because the amount of money they could get every month for life starting at age 38 isn’t “full time job” money
Agree. My point was that you can’t retire on that amount unless you live a very restricted lifestyle. $24,000 a year isn’t going to allow much latitude. I still had three kids at home when I retired, and there was no way I could have supported a family that size on that retirement.
You’re right, definitely depends on family size. I always looked at it as free mortgage payment when I retired. But now, it’s mortgage AND child support, so two things I don’t have to worry about
I did 8 years in USAF (mid 80s’ roughly) and have zero pension for that. The same would have been true had I stayed in for 19 years and 364 days.
To boot, the IRS regulations at the time said I could not contribute to an IRA (tax deferred savings plan) because I was covered by a pension plan at work. I never intended to stay for 20 and a retirement, so as far as I was concerned I was NOT covered by a pension plan at work and never would be.
The fact I was also prohibited from using the only tax-advantaged retirement plan savings then available was doubly galling.
Wow. Hard to believe. I wonder what percentage of enlisted people actually make it to 20? 10%? 30%? I assume that most people don’t, but I have no idea how many people do.
yes. Canada recognized the issue of employee turnover and vesting of pensions, and the impending burden of supporting all those baby boomers in old age; sometime in the late 80’s the law changed and anyone with 2 years or more in a plan had the choice of remaining with the plan, to get the pension they’d earned, or taking a locked-in savings (RRSP).
One lady I worked with at a big company had quit when her 3rd child was born. Before she quit, she verified that she had reached the 10 year vesting point, and was assured she had. A few months after she quit, they informed her they had forgotten to subtract the previous maternity leave and she did not have 10 years, it was all gone. Fortunately a few years after she got back they re-instated that time.
But even before the rule changes, the Canadian armed forces had a pension plan that worked for short-timers. My brother quit the Canadian army somewhere around the 10-year mark. This was before the pension rules changed, so he apparently got his pension back as a cash payout. That paid his living expenses through engineering and grad school. (I remember a number of RCMP officers also had the same deal, they would be Mounties for about 10 years, then quit and join a local police force, while taking a big pension payout.)
As I said, I cannot believe there is no provision for people working a decent amount of time in the US armed forces. But, I guess it fits in with everything else I know about US “labor” standards.
I suppose the good thing about child support is it has an eventual expiry date, unlike alimony. Another rule in Canada is that pension entitlements are communal property. Unless otherwise agreed, pensions are split on divorce. If you were married for say, 20 of the 30 years it took to earn that pension, then the spouse is entitled to half of 20/30 of your pension… or they can calculate the current payout as if you quit, and pay the spouse half of the value. Another co-worker of mine was married for 10 of the 20 years of his working there, before he divorced. Since he was 40, it was 25 years before he could collect. Net present value of something 25 years in the future was quite low. (I believe at the time the interest used in calculations was 7%) So she was expecting some big payout, and half of 10/30 of a buyout for a pension due in 25 years was less than $10,000; I think he went and borrowed the money to pay her off, rather than take the lump sum payout from the pension, so his pension accrual did not reset.
Minor quibble - Retirement in the military context means you are getting a pension so he didn’t retire at 18 with no pension. He opted to resign.
The idea of getting out short of retirement and starting a civilian career is attractive, especially to military doctors who want to leave as soon as they have paid back their obligations. I always thought the extra couple of years (they are getting paid pretty well) is a small price to pay when you consider a serious accident could end their projected earnings. I’m sure it works for most people and insurance could mitigate that.
I was an officer. About 20% of officers go to 20 years unless there’s major shrinkage in the total officer headcount during their time.
For enlisted it varies by service. A smaller percentage in the Army / Marines and a larger percentage in USAF / USN. I don’t have a number but I’d WAG it at well below 10% in the Army & below 15% in USAF.
It’s hard to see how the math would work for your brother-in-law. Say his pension is worth $50k a year. That’s about $2 million over a lifetime (not considering cost of living adjustments). Hard to see him making that up in two years with the airlines. You’d think he would have at least joined the reserves.
At the time I was serving there was no pension provision until becoming fully vested at 20 years. As I said, 19 years 364 days got you zero.
As pointed out by others above, that has since changed.
AIUI, the DoD now offers the equivalent of a civilian 401(k) account which is a voluntary tax advantaged savings plan with a pretty high contribution limit compared to the earnings of the folks it’s aimed at. It’s still not much, but it’s something.
The other significant change has been to the IRA regulations which apply to all US workers. In the early days if you were covered by a pension plan at work you were prohibited from saving via IRA. In a further piece of benighted social injustice, non-working spouses were also prohibited from having an IRA.
What changed gradually over the years is now folks are able to save in an IRA even though they’ve got a pension plan or are a non-working spouse. The annual contribution limits are still too low to allow saving for a cushy retirement, but these programs are aimed at the lower-end working class, not the doctor / small businessman class. And those folks don’t have the free cashflow to max out even the current low annual contribution limits.
Not sure I understand what’s hard to believe. How many jobs give you a pension after eight years (unless you’re a Congressman)? If the military gave a partial retirement early on, it would be difficult to keep people in for the long haul, and the military needs that longevity of leadership and repository of skills. If they dangle a carrot, some will stay to take a bite.
