Help, we're retiring someday. or Why, the Thrift Savings Plan is a good idea.
Retirement is a dream of so many. However, if you don’t plan accordingly, you may find yourself and/or your spouse working well into what would be your retirement years. The young Coastie may think Retirement is so far off. I don’t need to think about that now. He/she may also shrug off the idea of savings because of two possible things that could exist during retirement years: (1) military pension, and (2) social security benefits. Right off the bat, many of us know that social security benefits are not likely for everyone. For anyone born after 1960, the retirement age has now been bumped up to 67 years. Wow!
Even if a member serves the military for 30 years after joining around age 18, they will still have roughly 19 years before full retirement according to the SSA. Aren’t you glad I did that math for you? Seriously though, that’s a long time. That’s a whole new go-round in the military, if you think about it. In that time, you could have a child and see them off to college in that time. I don’t know about you, but to me, that’s a tad bit frightening. It’s scary because, if you or your spouse choose to retire earlier than the “set” age, your social security benefits will likely be significantly smaller since you will be receiving them over a longer duration of time.
Of course, there has been speculation as to whether there social security will even exist in so many years. It has been said that there will/could be a tax increase to try to “save” the system. There are many theories on this, but I will spare you. So, we move on to the topic of military pension/retirement pay. Military.com has a neat overview explaining retired pay: OVERVIEW
If you don’t already, you should know that the military has the Thrift Savings Plan (TSP). The TSP allows members to contribute a percentage of their pay (tax-deferred) to retirement savings. Hooray!
I hope that military members and their spouses will educate themselves on the options available to them. We really can’t assume that pensions and possible social security will be there. I’m not saying trying to come across as omniscient or completely knowledgeable on the subject. Rather, I want to share what I’ve learned and hope others will educate themselves too.
For more info on the TSP plan, go to the PSC link and find out more.
I hope you enjoyed this Public Service Announcement.