By Military1 Staff
The military’s current retirement structure as many have known it will no longer be the reigning plan come Jan. 1, 2018. All new recruits after that date will be enrolled in the new Blended Retirement System (BRS), which will allow the 83 percent of military troops who receive no retirement benefits to become eligible for some compensation for their service.
While new recruits will be automatically enrolled in the BRS, troops who joined after Jan. 1, 2006 will have the option to stat under the current High Three retirement plan, or switch to the new system.
The choice is a complicated one, as the new system lowers the multiplier for those who stay through 20 years, but does offer the option for a Thrift Savings Plan percentage match from government up to 5 percent, as well as an incentive bonus at 12 years.
Clearly, the decision to either stay in the current system or switch to the new plan is dependent on a number of factors, both personally and professionally for each individual.
This week, the Department of Defense released a retirement calculator that service members can use to predict what their future retirement funds would be.
Using a five step process, the calculator uses the service member’s date of entry into the military, and estimates a career progression, which they can alter based on what rank they estimate they will be all the way up to retirement.
They can then estimate how much of their income they will contribute to their TSP, and if they want a portion of their retirement as a lump sum. However, the calculator
Once a service member puts in all the necessary information, the calculator will show them a comparison of their retirement pay under the current system and the BRS. They can then change their variables, mess with the numbers and understand all of their options.
For those who have the choice to switch to the new plan or stay under the old one, this is invaluable information to have as the deadline to decide approaches on Dec. 31, 2018.
To access the DoD retirement calculator, click here.