Can You Live Off Military Retirement?? | How Much Do You Get??

what is going on guys so today we are gonna answer the question of whether or not you can actually survive off of military retirement pay okay so in this video I am not only going to answer the question of can you live off of military pay I'm actually going to try and show you what you can kind of expect to get whether you're an officer whether you're enlisted whether you did 20 years in the reserves or whether you're doing 20 years active duty I'm going to try to give you a roundabout of what you could actually expect getting and in these examples I'm kind of going off of what I would potentially get so if I did accidentally 20 years officer endless scissors to help things kind of simplify out but some of these numbers could change link is down in description if you want to play around with a calculator retirement calculator for the new army Retirement System and kind of figure out what you would actually be looking at if you want to enlist later on or if you've already got a few years in service right now so two key things to point out really quickly is that no matter what branch of service you're in in the military it's the same retirement paint right so all the pay grades across the military are the exact same whenever you get your retirement pay you're not going to be getting all the special bonus pay it's just going to be your base pay that you're going to get which is going through the same across the board the only thing extra that you might get is if you happen to have any disabilities or anything that was caused by the military they could give you extra pay but I'm not going to cover that whatsoever in this video and then also obviously 20 years of active duty service you get retirement immediately when you retire if you do not do all 20 years of active duty service and you have some reserve service right you were gonna get retirement pay at age 60 you will get it at age 60 so if you did 19 years active and one-year Reserve then you're gonna have to wait until 60 so I would just recommend obviously you know doing that extra time okay so just put it all up there up front can you actually survive and live off of retirement pay in the military for people in the reserves or the National Guard the answer unless I guess you did nineteen years active duty is not right so for 99.99% people if you're in the reserves of the guard will you be able to live off your retirement payment the answer is no because things are done a whole lot differently you don't have 20 years of activities services basically 20 years of part-time service so there's no reason of why your page should be the exact same as somebody who did 20 years of active duty service so you will not be able to live off of that if your active duty though it's going to depend upon number one where you live the lifestyle that you like to keep up the rank that you retire at and potentially how many more years than 20 years you actually do for the purpose of this video I'm just going to simply cut things off at 20 years but if you didn't know if you do your 20 years and you do extra years on top of that so let's say you do 24 years 25 years you're gonna get a lot more benefit from your retirement from doing that so keep that in mind that's why a lot of people stay in a really long time so for reservists liked myself it is a little bit of a bummer obviously you know I'm you're not gonna get retirement pay that are gonna get to you know chill out on the beach all the time and just not have to worry about finances but the pay that you're going to get as I will show you for reservists later in the video is it's definitely nothing to just feel like oh that's just play money or whatever it's a it's a substantial amount of money that is going to help improve your lifestyle a lot but you're not just going to be living off of that for the rest of your life so if you go to the site I link down below you're gonna be able to input all of these different variables on what you want to do I try to stick with the defaults and kind of the roundabout averages that you're gonna do and since we're in the new blended retirement system that means you're gonna have the Thrift Savings Plan Thrift Savings Plan which is essentially kind of like a 401k in which the Army is going to or the military is going to match wherever you put in so if you want to make the blended retirement system work for you in order to actually get some of the numbers that putting in this video is you need to max out your TSP right so whatever pay you're getting from the Army you need to go and make sure you have that set up and set to five percent of your income because the army or the military is going to match five percent of your income okay so you need to above all else right do that it's free money that you're getting from the government do it in order for the blended retirement system to work out in full effect now in the first example that I'm going to do it's 20 years of myself if I were to have if I happen to do active duty service 20 years from now you know what's my retirement pay gonna be looking at whenever I retire and then you know whenever I turned 60 whenever I can start drawing from that thrift savings plan my actual retirement account right so that's kind of like a normal in there like 401 K you can't start drawing from that until you're I think age 59 and a half but for these purposes I just put 860 and the last thing that I want to point out that is super duper duper important is the majority of these numbers that will show you guys are with future dollars so the worth of the dollar right now is not the same as what it's going to be later on in life so whenever it's twenty years from now when you retire you know the Army's pay is gonna be different you know inflation is going to change all these variables are gonna change so in order to get kind of like an accurate look of the amount of money you're gonna happen then you need to take the little futures dollar thing but if you want to kind of like show how much the money is worth in today's money it's gonna be a whole lot less but you can also have that option available for you but I pretty much on most of this stuff did futures dollars and for futures dollars as an officer starting out right now as an over 120 years of service when I go to retire right so my retirement pay if you were active duty and you retire as an o4 which is a major you can change that can be an O five that could be whatever but retiring as an O for the retirement pay for the first year is gonna be about fifty five thousand dollars right fifty five thousand dollars a year is pretty good money right so potentially you could live off of that but you're not gonna be living a luxury lifestyle at fifty five thousand year for North Carolina I looked it up the average home income in North Carolina is 52,000 but California it's like 72,000 right so you're gonna be below average in California if you got that the army doesn't say hey if you live in this one area we're gonna pay you more it's just base pay across the board now the thing is though whenever you turn 60 years old your retirement pay is going to now include the TSP and with the futures dollars and stuff you're gonna be looking at getting about a hundred and forty nine thousand dollars a year that first year whenever you turn sixty years old if you are an active duty officer and you're tired of oh four that's about how much are we getting as long as you have you know contributed five percent to your TSP and then whenever you projected Lee died at age eighty five you're going to be having about two hundred sixty-five thousand dollars a year so like a quarter of a million dollars for your retirement so if you're an officer you are definitely not going to have to like worry about like going under if you retire as an officer through tires an oaf or again variables can change you can do more than twenty years and that fifty five thousand dollars at retirement could easily be $70,000 or $80,000 and another major factor that could really increase or decrease the amount of retirement pay you're gonna get is whether or not you decide to do a lump sum payment for your retirement so whatever pension you have you can choose to do a 25% lump sum you can choose to do a 50 percent lump sum you can have that in one payment or multiple payments so you know for the example of this officer that I think it was about a hundred and ninety four thousand dollar lump sum for a 25 percent pension whenever you retired so basically at 20 years of service as soon as you retire you can request that lump sum payment and if you're like good and investing or maybe you're trying to start a business or something when you retire you can use that and that would be if you use it smartly you could end up you know creating more wealth free of the rest of your life if you don't use this martin lee then you could just blow it and then because you're using that lump sum then your pension is a little bit less for the rest of your life but it's not really dramatic i would just recommend honest 25% because of 50% I'm not sure what you would be spending it on maybe if you want to start a business and you have the money to where it would be okay if you went under but I would just recommend a 25% lump sum that's probably what I'm gonna do now quickly looking at an active-duty enlisted soldier I put it on this that you're starting at rank e2 which is what I think the vast majority of you are going to be coming in at and then you're retiring at e7 it is very possible to retire as an EA or even an e 9 at 20 years but for the majority of people you're probably just going to get to e7 and because it's a little bit more difficult to get promoted to try to get that e8 or to try to get first sergeant ever so keep that in mind it's gonna be e to to e7 is what I'm going for for this and at 20 years whenever you retire your pay is gonna be about $41,000 okay so $41,000 it's not you know a crap ton of money that future dollars as well keep in mind that's future dollars and today's dollar I did write down that it's actually only $22,000 so that same amount of money today is technically worth only about $22,000 and this is why I said that for officers you know you're probably gonna be pretty good if you retire and you just retire it as oh four and just write on the diet 20 years however I would just recommend doing a little bit longer because the benefits are really good if you just put in an extra four years but let's say you didn't listed you retire the e7 you're getting about forty one thousand dollars a year for your first year the pay will go up because as I've mentioned you got inflation things like that and your retirement pension and stuff that what the military is matching for you right that is also going to go up as the military pay goes up itself so forty-one thousand dollars that first year you know it'll be very very nice but I think in most cases with that amount of money in most places in the United States you're gonna need at least like a part-time job to where you're making maybe $20,000 a year $30,000 a year or maybe you have a spouse and they're just doing something or if you just want to start a small little business with us with a little bit of income that's something that you can definitely do and then also keep in mind that you still can't do like that 25 percent lump sum and kind of maybe live off of that for a little bit maybe try to start a business and then if that fails then you can kind of just start drawing your your pension which would be pretty simple it's a nice little cushion for you are you gonna live off of 41 thousand dollars a year 20 years from now probably not but it's going to be really beneficial now if you retires in the nine that number is gonna be a lot higher if you do 25 years in the military that number is also gonna be a lot higher but if you do 20 years and it's kind of iffy now the nice thing about the TSP here is whenever you're you know theoretically from age 40 to age 60 you know you're getting that smaller amount whenever you hit that age sixty and you can start drawing from your TSP in this example you know your pay is going to be about a hundred thousand dollars a year again that is future money so I know this video is long and I'm going to talk about the reserves here in just a second but in summary for officers you should definitely be good to go there's really no reason why I would see you retiring at anything less than two oh four I don't see like a captain retiring in the military and then for a listed I don't see somebody retiring less than the e7 those are goals that you should definitely hit if you are going for 20 years but keep in mind also you can retire at a higher rank you can do more years in service link is in the description if you want to calculate what you're going to be looking at getting and it's also kind of fun to do like if you were to look at the retirement pay for generals and stuff that's got like 30 years of time and service is absolutely insane but now for my real world example Army Reserves or just National Guard Reserve military pay what is that going to be for the numbers that I put in on this example it is essentially a reservist who has done their 20 years of service but of those 20 years about four of those years are active-duty right so you're gonna get more points and just to explain really really quickly the way Reserve and National Guard retirement is it's based off of points and every year you get so many points and I think the minimum for a good year is like 70 or 75 points and essentially you get one point every day okay so technically active duty you're gonna be giving like 365 points a year reservist you're probably gonna be getting around let's say 75 80 points a year so you can look at your retirement just based off of that bare bones minimum it's gonna be about 1/4 of your active duty counterparts so if you just did drilling your entire Army Reserve or National Guard career you just drilled and you didn't have any deployments your retirement pay is probably gonna be somewhere around 1/4 of what this same rink is gonna be retiring yet on the active duty side but for this example I've put four years right of active duty time because maybe you're gonna have three or four deployments maybe you've done some extra training and stuff for me personally like I've been military for about four years and I've got probably close to a year and a half of like active duty time so I'm kinda just going based off of that maybe I get a couple deployments and some more trainings and stuff so those are the numbers that I'm working with and also I'm not calculating enlisted retirement pay for this because it's it's just not a lot right so it's just it's just simply not a lot you can probably cut the officer pay them talking about here like at least I mean around about a half right so about half of what I'm going to cover here and that is for myself this is like my retirement plan right here at sixty years old because again you don't get your retirement pay until you're 60 I'm probably throwing up some graphs there's a gap of where you're not gonna be getting any kind of pay so from one of the time you retire from the military in the reserves in the National Guard until the age you until age 60 you're just gonna have to figure things out for on your own but once you hit age 16 you can start drawing from your government pension as well as your TSP you're going to be looking at getting about forty-one thousand dollars which includes your pension and your TSP and that is at age sixty so for the officer side on active it was about 50 was like 57,000 I already forgot it goes 50 something thousand but that was after 20 years from today this is $41,000 40 years from today so today's money that's only about $22,000 now again this is not enough to live off of right I really do not like you have to live in a very very very humble life right to live off of this but it's definitely like it's definitely some good money and hopefully you've had other retirements and counts of whatever your civilian job is you've been you know contributing to your retirement there you got a Roth IRA or something so this forty one thousand dollars is just supplemental to whatever else that you have going on and then also I do have here you may have seen it in the little bit of me scrolling down is I did opt into hopefully getting of 25 percent lump sum so in this calculation the first year that I turned 60 years old I'm gonna get basically about seventy nine thousand dollars which is the regular base pay of about forty one thousand dollars that I get plus my lump sum and future dogs keep in mind future dollars and then for me whenever I die at age 85 I'll be getting about eighty two thousand dollars from my military pension my military retirement you know you might think that it's kind of stupid but really at age sixty you're still really young you know my dad I think is turning 60 in like a year or two like it's he's almost 6 years alright now and he's got so much of his life ahead of him so waiting until 63 retirement is not that big of a deal me personally that was a 20-year time and service calculation I plan on doing about 25 years time and service so that should go up a little bit maybe it's not forty one thousand dollars and I retire maybe it's gonna be about 45 thousand dollars and I retire it's still gonna be nice to have that little bit of extra money which will be about you know three to four thousand dollars a month that I don't have to worry about for the rest of my life so I know this was a really long video but there was a lot of numbers and a lot of things that I wanted to discuss I want to talk about active reserve officer and enlisted in retirement pays and the topic of you know you actually live off of it again active yeah you should be good reserved no you definitely need something else to live off of but it's definitely some good money that you don't want to just like throw away like it's not a big deal it's definitely a big deal like I said getting 41 thousand dollars a year for myself whenever I retire so if you made it today in this video leave a comment down below because this is definitely gonna be one of my longer ones and I would really appreciate it if you guys did that it's good for the algorithm likes also good for the algorithm and all of that stuff and you haven't already hit the like button if you want to stick around some more my videos hit that subscribe button that would be even better the notification Bell button is really where it's at the people the notification Bell button that really make my day fall I'm gonna Instagram and snapchat if you haven't already pick up some of this awesome merch right if you don't get this shirt you're probably not going to have a retirement pension whenever you retire from the military they're just gonna say hey you know you didn't pick up that mount word army gold paint t-shirt you know you really just shot yourself in the foot there so make sure you guys do that link is now inscription as well as on the end card I hope you got something amazing freaking day and I'll see you a little later [Music]

Channel: Matt Ward

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Keywords: Matt Ward, Matthew Ward, Army Vlogs, army college, Army, Military Education, Army Education, Army Reserves, Red phase, Army Basic Training, Army BCT, Army BCT Red Phase, army ed, Va Loan, military retirement pay, military retirement explained, military benefits, Military pension, roth ira, 401k, army pension calculation, army pension, military pension calculator, military pension amount, Army Reserves retirement, retirement planning, retirement investing, Investing

Id: cocDg97n8H0

Length: 18min 12sec (1092 seconds)

Published: Mon Aug 05 2019