How To Plan For A Military Retirement With General Michael Meese

Check out Jeremy’s latest podcast on retirement planning by listening on “Apple Podcasts” or “Spotify” or read below for How To Plan For A Military Retirement. Summary: [150] – Are you a member of the military? Curious about how to navigate retirement planning? Embarking on a retirement journey holds distinct significance for those who’ve dedicated their lives to military service. In this episode, Jeremy Keil interviews General Michael Meese from the American Armed Forces Mutual Aid Association (AAFMAA) about military retirement planning. Mike talks about the changes made to retirement benefits for military personnel, including the introduction of a defined contribution plan similar to a 401(k) and the Thrift Savings Plan (TSP). He also highlights the importance of insurance coverage and the Survivor Benefit Plan for retirees. Mike discusses: His military career and role in the American Armed Forces Mutual Aid Association (AAFMAA) How the military retirement system works What the Thrift Savings Plan (TSP) is What the ServiceMembers Group Life Insurance (SGLI) is and how to switch to VGLI after leaving the military What key factors service members need to consider about retirement What his personal retirement plan looks like And more How To Plan For A Military Retirement What is AAFMAA and what do they do? AAFMAA, the American Armed Forces Mutual Aid Association, is a unique and historic organization originating from the Midwest in the late 19th century. Born out of a need to support families of service members lost in battle, AAFMAA was initially established as the Army Mutual Aid Association, offering a form of mutual insurance to provide financial assistance to widows and families. Over the years, it has evolved into a comprehensive mutual organization dedicated to assisting military members and their survivors. With a membership of over 100,000, AAFMAA provides a range of services, including insurance, mortgages, financial planning, and wealth management. Through its mutual aid principles, AAFMAA focuses on taking care of survivors of service members, both active duty and retirees, offering critical support in areas such as military retirement and the survivor benefit plan. How does the military retirement system work? The military retirement system operates based on a defined benefit plan designed to encourage service members to retire after about 20 years of service. Traditionally, people became eligible for retirement benefits only after completing a 20-year tenure. Upon reaching this milestone, retirees would receive a base payment equivalent to 50% of their average base pay from the last three years. With each additional year of service, retirees would gain incremental increases in their retirement payment, reaching 75% of their base pay after 30 years of service. Some service members, typically senior officers or sergeants majors, might extend their careers up to 40 years to retire with 100% of their base pay. However, in 2018, Congress introduced changes to address the issue of people leaving the military before reaching 20 years without any retirement benefits. This reform modified the defined benefit plan, offering 40% of pay at 20 years and 60% at 75 years. What is the Thrift Savings Plan (TSP), a