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Retirement / Separation Considerations

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Many of these topics have been discussed here piecemeal before, but my Google-fu has failed to turn up any dedicated thread. I know we have many retirees & separatees (current or imminent), so hopefully this thread will be value-added.

So, I've dropped my papers--I get promoted to "Mister" on 1 July. So far, the retirement outprocessing stuff has been a lot like a PCS, just more painful. I think I've got my brain wrapped around most of it so far, with a couple of glaring exceptions. I'm hoping some of the ORFs who have gone before me can help me work out the best answer(s) for myself & my wife.

Particulars: retiring as an O-5 with 21 yrs, 8 mos; married / no kids; I'm 44, wife is 45; no real debt aside from mortgages, no real health issues ("yet") for either of us. Wife makes more money than I do (score!!).

Questions:

  1. Survivor Benefit Plan (SBP): seems like a no-brainer for a retiree whose spouse is much younger or with young kids or a single-earner household; not so obvious in our case. Is it worth 6.5% of my pension to "bet" that I'll pre-decease my wife by enough to "pay back" those premiums at 55% a month...? I don't know how to gauge if this is worth it or not....
  2. Health insurance: so far, from what I'm seeing, Tricare looks like a pretty good deal*. I look at health care from a catastrophic coverage viewpoint, and a $3,000 / year cap may be painful, but it won't wipe us out. Wife's coverage through work seems both more expensive & lesser coverage (though, of course, with both in place, the non-premium out of pocket would be reduced). [ETA: I've deliberately left off anything about my post-retirement employer-sponsered health care, since I don't have anything concrete lined up yet; eventually, that will also have to be weighed with the rest of this.] So:
    • Is focusing on the annual cap a sound approach, or am I missing the big picture?
    • Keep the wife's coverage or dump it? How best to judge?
    • Standard or Prime? We won't be living particularly close to a base, so Standard seems the way to go; yes/no??
    • How to judge Dental coverage? Wife's plan has optional dental through Delta Dental (same as Tricare), for less than half the premium, so that seems like a no-brainer. Missing anything?
[*]Veterans' Group Life Insurance: seems like a no-brainer not to use this in our circumstance; yes/no?

* I'm certainly sympathetic to the "foul" cries of previous generations who were promised free health care for life (but who must now pay deductibles & co-pays), but since I've never consciously counted myself in that group, I can't get too worked up over it.

No doubt I'll run into other questions along the way, but these are the ones that've got me stymied so far. Appreciate any help from the ORFs or any knowledgeable youngsters...!

Edited by Jughead

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Congrats and thanks for your service. I don't know I'll be able to take 20 years of this nonsense, so much respect to you for gutting through it.

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It's been a few years, but I've run the numbers before to help out a retiring friend. I won't go through the entire background, but I'm not a fan of SBP due to the many sunk costs with minimal gains. If you're retiring in your 40's, the following plan works pretty well. I recommend taking the same dollars that would go to that 6.5% and putting part of them into a good 20 year term life policy. Take the remainder and invest it according to your preferred strategy.

If you die in the next 20, the SPB income your spouse would have received is replaced by the insurance, with possibly more. If you die after the term expires, you have specific investments to support her living in a similar way. By that time, with conservative figures, there should be enough invested to exceed SBP benefits if paid out through an annuity.

When I ran the numbers, it came out to 20-40% above SBP benefits in almost all cases where you die before her. Obviously if she dies before you, it's worth 100% more since you would otherwise get nothing. Caveats: there's more risk in my plan, and I personally have not retired yet.

Edit: Subject-verb agreement.

Edited by HU&W

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Retired 12 years. Don't live near a miltary base. Had Prime for the first couple of years. From my perspective, it seems the further you are from a military town, the fewer doc's there seem to be in the Prime network (especially specialists). Depending on how far you settle from a mil base, might be OBE anyway. I believe Prime is being phased out this fall for persons living further than xx miles from a mil base (40??). Don't take my word for it, please check. Tricare Standard/Extra has worked well for me ("free" broken promise notwithstanding). Only in one semi-big ticket year did I come close to the annual cat cap. There are commercial Tricare supplemental insurances available as well (MOAA, VFW, etc), should you be interested. Haven't had a problem w/docs not taking Standard/Extra. I believe the rule is if they are taking new Medicare patients, they will take new Tricare patients as well. Again, don't take my word on this.

Prescription program is good. Especially mail-order, especially generics.

YMMV.

Good luck on your retirement, thank you for your service.

Cheers!

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Just a question...

Why not push the extra 4 months and earn the additional 2.5% raise in retirement base pay for 22 yrs of service vice 21 yrs 8 months?

Curious. Thanks.

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SBP: A buddy of mine just retired and had is financial planner do a number crunch (33.3 repeating of course).

I don't have the numbers from the crunch, but I was told that CINCHOUSE only has to outlive you by approx 3.69 years in order to get all the money back.

Best of luck in retirement!

Cheers,

Cap-10

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Why not push the extra 4 months and earn the additional 2.5% raise in retirement base pay for 22 yrs of service vice 21 yrs 8 months?

I believe your service time is pro-rated, so he should get full credit for his time.

Any one else want to chime in to confirm this?

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Congrats, good for you. I retired in 2009 and highly recommend Tri-Care Prime and Express Scripts if you or your spouse need prescriptions. We didn't take my wifes available work health insurance, some good savings there. I also recommend Armed Forces Benefit Association (AFBA) for cheap term insurance. Additionally, if you are an aviator don't pass up the opportunity to get all of your type ratings and instructor ratings from the FAA Mil to FAA CFII etc. written test only, no practical. USAA can help you with the decision making for insurance etc, as a member. Also, as soon as practical check in with the VA hospital (If avialable) and get started with them. Its amazing how great the VA is. See the VA assistance rep. (American Legion or Your State Rep etc) in your state, not the VA for working any claims for disability if you have them. Make sure that the family is on the Tri-Care program and have their Military ID's updated. Look into your states veterans benefits. Some are good others are great for tax exemptions, vehicle licenses and educational benefits.

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I believe your service time is pro-rated, so he should get full credit for his time.

Any one else want to chime in to confirm this?

According to Title 10 he would get 52.5% (2.5 X 21) and then would get 1.67% for the last 8 months (8/12 * 2.5) for a total of 54.17ish percent.

(http://www.law.corne...de/text/10/1409):

(b) Percentage.—

(1) General rule.— Subject to paragraphs (2) and (3), the percentage to be used under subsection (a) is the product (stated as a percentage) of—

(A) 21/2, and

(B) the member’s years of creditable service (as defined in subsection ©).

© Years of Creditable Service Defined.— In this section, the term “years of creditable service” means the number of years of service creditable to a member in computing the member’s retired or retainer pay (including 1/12 of a year for each full month of service that is in addition to the number of full years of service of the member)

Edited by Fifty-six & Two

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From guys I know tht have recently retired, they did say there are better options than VGLI. USAA comes to mind.

Let me know any you find....for a smoker of course. If you are a smoker or have any other possible medical issues VGLI IS the PLAN to get...at least for short term--meaning until your investments runneth over and you no longer need a life Ins. policy. But hell, for $400K, at about 40 something, it stil isn't a bad deal.

Edit to Add:

If you snore or have problems sleeping, get a sleep study done BEFORE you retire so it is all documented in your AD Medical records. If you deployed, sleep apnea can be attributed to dust and smoke in the the Persian gulf areas. No one may even ask you about it during all your final outprocessing medical appts, so make sure you get it documented. That is of course if you have any issues. But even it only minor now, still get it in there.

Edited by Finance_Guy

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Let me know any you find....for a smoker of course. If you are a smoker or have any other possible medical issues VGLI IS the PLAN to get...at least for short term--meaning until your investments runneth over and you no longer need a life Ins. policy. But hell, for $400K, at about 40 something, it stil isn't a bad deal.

Edit to Add:

If you snore or have problems sleeping, get a sleep study done BEFORE you retire so it is all documented in your AD Medical records. If you deployed, sleep apnea can be attributed to dust and smoke in the the Persian gulf areas. No one may even ask you about it during all your final outprocessing medical appts, so make sure you get it documented. That is of course if you have any issues. But even it only minor now, still get it in there.

Only do this though if retiring and not just separating and going to a ANG/Res unit.

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Many of these topics have been discussed here piecemeal before, but my Google-fu has failed to turn up any dedicated thread. I know we have many retirees & separatees (current or imminent), so hopefully this thread will be value-added.

So, I've dropped my papers--I get promoted to "Mister" on 1 July. So far, the retirement outprocessing stuff has been a lot like a PCS, just more painful. I think I've got my brain wrapped around most of it so far, with a couple of glaring exceptions. I'm hoping some of the ORFs who have gone before me can help me work out the best answer(s) for myself & my wife.

Particulars: retiring as an O-5 with 21 yrs, 8 mos; married / no kids; I'm 44, wife is 45; no real debt aside from mortgages, no real health issues ("yet") for either of us. Wife makes more money than I do (score!!).

Questions:

  1. Survivor Benefit Plan (SBP): seems like a no-brainer for a retiree whose spouse is much younger or with young kids or a single-earner household; not so obvious in our case. Is it worth 6.5% of my pension to "bet" that I'll pre-decease my wife by enough to "pay back" those premiums at 55% a month...? I don't know how to gauge if this is worth it or not....
  2. Health insurance: so far, from what I'm seeing, Tricare looks like a pretty good deal*. I look at health care from a catastrophic coverage viewpoint, and a $3,000 / year cap may be painful, but it won't wipe us out. Wife's coverage through work seems both more expensive & lesser coverage (though, of course, with both in place, the non-premium out of pocket would be reduced). [ETA: I've deliberately left off anything about my post-retirement employer-sponsered health care, since I don't have anything concrete lined up yet; eventually, that will also have to be weighed with the rest of this.] So:
    • Is focusing on the annual cap a sound approach, or am I missing the big picture?
    • Keep the wife's coverage or dump it? How best to judge?
    • Standard or Prime? We won't be living particularly close to a base, so Standard seems the way to go; yes/no??
    • How to judge Dental coverage? Wife's plan has optional dental through Delta Dental (same as Tricare), for less than half the premium, so that seems like a no-brainer. Missing anything?

[*]Veterans' Group Life Insurance: seems like a no-brainer not to use this in our circumstance; yes/no?

* I'm certainly sympathetic to the "foul" cries of previous generations who were promised free health care for life (but who must now pay deductibles & co-pays), but since I've never consciously counted myself in that group, I can't get too worked up over it.

No doubt I'll run into other questions along the way, but these are the ones that've got me stymied so far. Appreciate any help from the ORFs or any knowledgeable youngsters...!

FWIW: Retired E-7 in 2006, wife 2 kids with 24 yrs. Your situation is a bit different and YMMV but here's my two cents:

1. Took the absolute minimum SBP option. Our financial guy said to take whatever money that would have gone into SBP and put it in a Roth IRA, better return and can change the "allotment" up/down if ever need to based on your financial situation and have other options. Once $$ goes in SBP it’s there forever. No option to change the amount, ever, you’re locked in for life. At least that’s how it worked when I left, I’m sure it’s the same now.

2. Went with Tri-Care Prime. Worth every damn penny. Had a non-cancerous tumor the size of a large Roma tomato removed from my neck this summer. Total cost with surgery, hospital, MRIs, doc visits etc... cost me way less than $1K for a procedure that racked up more than $100K total. Thanks you Uncle Sam!

3. VGLI: Had a term civilian policy before retirement, renewed it when the time came. DO NOT get a Whole Life policy especially with the savings component big time rip off!!!!

Again, YMMV Keep gathering info so you can make the best decisions possible.

OBTW, there are some things I miss like working on kick ass jets, TDYs to Vegas, Combat Archer and Alaska. But other stuff like ORIs, MOPP 4, PT gear and other assorted bullsh*t, not so much...

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If you snore or have problems sleeping, get a sleep study done BEFORE you retire so it is all documented in your AD Medical records. If you deployed, sleep apnea can be attributed to dust and smoke in the the Persian gulf areas. No one may even ask you about it during all your final outprocessing medical appts, so make sure you get it documented. That is of course if you have any issues. But even it only minor now, still get it in there.

Document EVERYTHING before you leave is what the old timers have told me.

I had not heard about the dust/smoke link, but I have been told Sleep Apnea = automatic 50% disability (M2 didn't you post about that once?). 50% disability is a magic number for several post military considerations including tax free retirement payments, veterans preference for follow-on hiring, and many states have programs for disabled vets such as free or reduced tuition for your kids.

One common misconception is the calculation of disability....M2/Huggy/Rainman being the oldest can certainly share their knowledge, but as I understand it if your initial disability rating comes in at 30%, and you subsequently develop another condition worth 20%, the follow on disability rating is not additive, instead it is a function of the remaining value. The VA will review each disabling condition that you claimed was caused by your military service. The highest disability rating will be applied to the most severe disability. The next rating will be assigned for the next less severve disability. This will continue until each disability is rated from zero to 100%. The VA uses a table that determines the maximum rating for all of the disabilities that were rated. The total disability is not additive e.g. If you were rated at 40% for disability #1, 20% for #2, and 10% for number 3, you would not have an overall disability of 70%. The table 1st considers the 40% disability and then the 20% to get a disability rating value. From that value, it considers the 10% which results in your total VA disability rating. Go to www.va.gov and search on "disability rating table"

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I have been told Sleep Apnea = automatic 50% disability

Anyone know whether having a Sleep Apnea diagnosis documented in your records would lead to a medical disqualification from flying? I've heard it might but don't know for sure. What about future post-AF flying opportunities?

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Never... EVER... say "sleep apnea" around the FAA.

I'm not an expert,... and don't know why this 2-word phrase is such a big deal.

I just know people that did say it... and they don't fly any more.

Edited by Huggyu2

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Anyone know whether having a Sleep Apnea diagnosis documented in your records would lead to a medical disqualification from flying? I've heard it might but don't know for sure. What about future post-AF flying opportunities?

I can't speak to the civilian flying requirements, but a buddy of mine was diagnosed with "very mild" sleep apnea at the 17-year point. He spent 9 months DNIF, then 6 months waiting for a waiver. On the flip side, I was tagged with "moderate-severe" sleep apnea after complaining to the flight doc about poor quality sleep from back pain. The flight doc's direct quote--"Good thing your retirement's already approved..."

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Not personally experienced the Sleep Apnea but have flown with a couple guys who have it. If you end up diagnosed with sleep apnea and require an FAA 1st Class medical, you might find yourself having to complete sleep studies every year and must carry one of those sleep mask things (CPAP?) with you when flying trips in order to keep your medical.

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On the flip side, I was tagged with "moderate-severe" sleep apnea after complaining to the flight doc about poor quality sleep from back pain. The flight doc's direct quote--"Good thing your retirement's already approved..."
He wasn't joking. Severe frequently leads to PEB/Separation. Moderate will often end up with an ALC-C2 (Y).

Also read the posts from Motrin and me in this thread if anybody wants more advice on Pre-Sep. Physicals. -

Here's the link for percentages/criteria for disabilities - http://www.benefits....rms/bookc.asp#h

Sleep apnea has different categories

"

6847 Sleep Apnea Syndromes (Obstructive, Central, Mixed):

Chronic respiratory failure with carbon dioxide retention or corpulmonale, or; requires tracheostomy 100

Requires use of breathing assistance device such as continuous airway pressure (CPAP) machine 50

Persistent day-time hypersomnolence 30

Asymptomatic but with documented sleep disorder breathing 0

"

Here's the link to figure out the combined total - http://www.benefits....PART4/S4_25.DOC

Be sure to read the intro.

Edited by deaddebate

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Thread revival regarding a separation question: If this question has been answered already at some point, please forgive me. Background - All my ADSC's will expire by Aug of 2015. I understand I can establish a DOS NET 6 months, but NLT 12 months from the request. MY specific question is in regards to a 179. I think I am safe from a 179 until Aug 2015 based on the fact that I returned from OCONUS in Aug '14. However, I am concerned with the possibility of a 179 after that and want to know my separations options to mitigate that threat. As an example, if I were tagged for a 179 in October of 2015, but didn't have a DOS set at the time of notification, can I effectively opt out by establishing a DOS (assuming I give them 6 months notification). Or, could my leadership deny a DOS request (even if i set the date within the 6-12 month window) if it wasn't already submitted by the time I was notified of the 179? Bottom line, if I know I don't have the option to opt out, I would rather just go ugly early and establish a DOS. However, if i knew i had the option to "opt" out, I would like to stay on AD for another year or so (until I have a job lined up) and "reactively" set a DOS if tossed the 179 present. I understand the 365 / 3 day opt situation, just don't know the 179 options.

Hope the question makes sense… any help would be appreciated.

Edited by Longeron

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To piggy back on this question, what would his options be for a 365 or PCS given the same scenario?

365 - 3 day opt rules

PCS - 7 day opt rules

For both see the AFI

Posted from the NEW Baseops.net App!

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As an example, if I were tagged for a 179 in October of 2015, but didn't have a DOS set at the time of notification, can I effectively opt out by establishing a DOS (assuming I give them 6 months notification). Or, could my leadership deny a DOS request (even if i set the date within the 6-12 month window) if it wasn't already submitted by the time I was notified of the 179?

Unless you have a DOS in the system already that would prevent you from fulfilling the 179, you have no options. If you get tagged for a 179 without an established DOS, you can't set one to get out of it.

Posted from the NEW Baseops.net App!

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Unless you have a DOS in the system already that would prevent you from fulfilling the 179, you have no options. If you get tagged for a 179 without an established DOS, you can't set one to get out of it.

Posted from the NEW Baseops.net App!

Actually, you can. I know someone that did exactly that. He was notified of the 179, set a DOS that was actually after he would return from the desert and he was pulled from the deployment. His CC a tried to keep him on the deployment and ultimately had to find someone else. YMMV.

Posted from the NEW Baseops.net App!

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Actually, you can. I know someone that did exactly that. He was notified of the 179, set a DOS that was actually after he would return from the desert and he was pulled from the deployment. His CC a tried to keep him on the deployment and ultimately had to find someone else. YMMV.

Posted from the NEW Baseops.net App!

Very late reply...would be Interested to hear how this went down for future reference. When this situation hit our squadron, setting a DOS after getting a tasking wasn't an option unless the DOS was well past the projected return date. Edited by RTB

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