UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next
Author: DragonTales Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76237  
Subject: Re: Need Present value (?) calculation help Date: 1/16/2013 6:33 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
Isn't the difference between retiring at 20 or 30 years from the military - 1/2 salary or full salary ? So for staying 3 years, he doubles his retirement income for the rest of his life ?

No, it's graduated, monthly, between 20 & 30 years, and between 50% & 75% of base pay, respectively. Goes up by ~.2083% per month (2.5% per year). So, if someone stayed in for 24 years and 4 months, their retirement multiplier would be 50% + 52/120*25% or 60.833%. But retirement pay is based on base pay, not total pay. Little gotcha that's not well known.

Pay breakdown (as a percentage of what you see in your paycheck):
~70%  Base Pay
~30% Basic Allowance for Housing (BAH)

So if you retire at 20 years of service, your retirement is really about 35% of your pay(check), and that goes up to 52.5% if one serves 30 years.

If he makes it to 52, he's expected to live to 79(according to a quick look at the SS tables).

Regarding the life expectancy, I used this SSA site: http://www.ssa.gov/OACT/population/longevity.html

When I insert an age to make it say the person is 52, it shows that they should live 30 years.

Tails
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Saul's Investing Discussions

Why Did I Buy a Bunch of PFIE Today?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement