Military members serve their community, protect American interests, and sacrifice time with their loved ones. When they reach the end of their career, it is important that their service is honored and that they receive the retirement benefits they deserve.
Understanding military retirement benefits can help them plan for their future, including:
If you are a military veteran or are an active service member approaching your retirement date, an accomplished retirement and pension attorney from Trotto Law Firm, P.C., can help you create a plan for how to move forward.
When a service member enters the military, they will have access to various retirement plans, depending on factors like when they entered the service. Each plan is unique and calculates the amount of retirement that a veteran will receive differently. Knowing this information prior to retirement can help veterans make informed decisions while estate planning.
The five retirement plans that are currently active for military service members include:
Inflation can be frustrating to deal with, especially if you are on a fixed income like retirement. The Defense Finance and Accounting Service, which is the organization responsible for all payments from the Department of Defense, takes that into account when determining the need for a Cost of Living increase. Veterans receiving military retirement will receive an 8.7% cost of living increase for 2023, beginning in December 2022.
The retirement pay that you will receive as a veteran is dependent on many factors, including when you joined the service, how long you served, and what retirement plan you chose. For example, veterans on the Final Pay plan can calculate their retirement pay by multiplying their years of service by 2.5, then multiplying that total by their pay on the day of retirement. Other plans will calculate the retirement pay differently, so an estate planning attorney can help you understand your plan.
There are several retirement plans available for military veterans, but their availability is often dictated by the length of the veteran’s career and when they entered the service. The military currently has five different retirement plans active, most of them defined by when the individual began their tenure in the military. The plans are Final Pay, High-36, CSB/REDUX, Blended Retirement System, and Disability. The Disability plan is the only one that does not rely on their entry date but rather on if the veteran was deemed medically unfit for service.
There is a proposed military pay raise for 2024, which includes a 5.2% pay increase for military personnel. While this is a deserved pay increase, it will not apply to retirees receiving military retirement. The pay raise is for active military personnel only, so it does not apply to retirees or civilians who work for the federal government. Retired military personnel will get an increase to their payments for 2023, however, in the form of a Cost of Living increase.
You served your country proudly, have reached the end of your career, and are looking forward to enjoying your retirement. It is important to be prepared for any eventuality once you retire from the military, including planning for the end of your life. An experienced estate planning attorney can help you understand what you are entitled to, whether your pension and retirement benefits will be impacted in a divorce, and how to ensure that your assets are protected when you pass. The team at Trotto Law Firm, P.C., is ready to assist you. Contact our office today with any military retirement or estate planning concerns.
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