For many years the government offered an annuity style retirement plan for those who served and then actually retired from military service. This used to be common practice for many industries. However, pensions and unions are a bit of a dying breed in the U.S., and the days of people working in the same industry or job for even 20 or more years is now the exception, not the rule. In fact, 83% of those who enlist for military service do not serve long enough to reap retirement benefits under the old plan. So, in 2018, the government added a Thrift Savings Plan (TSP) and blended it with the current military retirement plan. The new plan is called the "Blended Retirement System".
The TSP allows members to save on their own AND receive additional savings from the government towards retirement without having to complete 20 years of service. It follows a system similar to an employer 401k where some contributions are made solely from the government, and others are matched by the government based on the participants personal contributions.
The new BRS has also added a mid-career continuation pay for most military service members at about the 12 year mark. This was designed to help encourage members to continue their service to 20 years. Actual continuation payments vary per branch and position.
Lastly, they have also added a lump sum distribution option once you do reach age 60. Whether or not a lump sum pay out option is right for you is something we can certainly discuss.
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All in all, the 2018 changes aimed to give service men and women more choice, more freedom and more money towards retirement. Remember that even if you, as a service member, aren't contributing, the government is contributing for you, and you still get control over how it is invested. That means it is well worth your time to learn the ins and outs of the system. Military retirement benefits can be confusing. One of my greatest honors is helping our service people and their families plan for the future that they have worked so hard for.