Planning Point: Military retirees also contend with the traditional risks associated with running out of money in retirement. Those risks include a significant increase of federal income taxation, outliving their retirement savings, and paying for the costs of long-term care. Without careful analysis and professional guidance, a servicemember could make mistakes in the present that will not manifest themselves until retirement. Justin L. Baker, JD, MBA, Army Reserve Lieutenant Colonel, Candidate for LLM in Wealth Management and Masters in Strategic Studies at the U.S. Army War College; https://www.bakerwealthstrategies.com/welcome/
Retirement Benefits Generally
Members of the armed services can qualify for Department of Defense (DoD) retirement benefits after completing a satisfactory period of service. The amount of benefits depends primarily on whether the servicemember receives an active duty retirement or reserve retirement. Several other factors are considered in determining a servicemember's eligibility for retirement, variety of retirement benefits, the age at which benefits begin, whether the plan is a defined contribution or defined benefit plan, and how much the pension pays. Additionally, any service-related disabilities factor into the determination of benefits that a veteran is entitled to receive.
In January of 2018, the DoD rolled out a new program called the Blended Retirement System to provide a benefit to those who missed out on the traditional 20-year, cliff-vesting program.
For more information on the legacy retirement system, see Q - Q . See Q for a discussion of the Blended Retirement System.