When you serve in the military for at least 20 years you are entitled to a retirement pension. Recognizing the fact that you will have this ongoing stream of income to go along with your Social Security benefit can make retirement planning a pleasure.
Service members who want to take advantage of the opportunity to receive a retirement pension have a couple of different options available to them with regard to a long-term career path.
You can spend your entire working career in the military and retire when you become eligible to receive Social Security. If you have put in at least 40 years you will receive 100% of your base pay as your retirement pension. When you combine this with your Social Security benefit you should be in very good financial shape when you put your career behind you.
Another possibility would be to retire after serving at least 20 years and then move on to a new job in the private sector. Your pension would be based on a percentage of your pay at the time of your retirement. You could presumably save this money as you live off of your earnings from your job in the civilian world.
You do have to make sure that your spouse is provided for if you are a retired military veteran because your pension is not transferable to your surviving spouse after you pass away. An option that is available to you would be to pay into the Survivor Benefit Plan offered by the military.
You pay premiums every month and if you predecease your spouse he or she would receive a survivor benefit. You decide upon the level of coverage you want to provide when you enroll in the program.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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