The bonus is the Career Status Bonus that is offered to military personnel.

I realized from another persons reply that I left out or didn't clarify some details.

The plan was to let the money sit in a fund until I retired, and then post retirement, take that retirement pay and dump it in to the same fund.

I'll have to look in to the ETF's. I don't think I've heard of those before.

You are correct on the tax withholding. The bonus is treated as income, which makes it taxable under federal and state. In this case CA, but since I am military I think I will be exempt from state.