2018 Blended Retirement System

Updated : Sep 06, 2019 in Articles

2018 Blended Retirement System


Financial security. We all want it. For us
and our family, changes to the military’s retirement system could have a big impact
on the way you invest in your future. Service members that have less than 12 years
of service as of the 31st of December of 2017 will have an option to either opt-in to the
new blended retirement system. Or they can continue under their current system that they
have. For those that are in prior to that 12 years
and have been serving for several years, like myself for 29 years, I stay under the current
system. Those service members that entered the service
after January 1st of 2018 will all be under the new Blended Retirement system. The big difference is that you’ll now have
an automatic Department of Defense contribution to your Thrift Savings Plan of one percent. So that’s a change compared to the TSP program
and under this new retirement system. The other great thing about that is — is which
we’ve never had — is matching funds for our service members. So a service member can put
in five percent, and the government will match — or the Department of Defense will match
up to 4% for that service member. So this is a huge change for us. Right now,
currently 81%, we estimate, of service members that join, if they don’t serve their full
20 years, they walk away with nothing. Under blended retirement that same service
member can walk away with a retirement benefit after just two years. Those service members that serve to 20 years
on active duty will collect their retirement at an annuity of 2% versus the current 2.5%
after 20 years of creditable service. And for our Reserve component service members,
the same rules will apply that currently exist today. After 20 years of creditable service
and at age 60, they’ll collect their annuity or retirement check at a 2.0% versus the current
2.5%. We’re keeping up with looking at what the
force of the future will look like for the Department of Defense, and part of that is
we need to keep up with our civilian counterparts out there. We ensure leadership. We answer
every question for them. We educate them on their choices. And we’re there to support
them and their family members and we try to guide them in the best direction. But again,
at the end of the day, it’s going to be their personal decision to make. The 2018 Blended Retirement System: Financial
security for you and your family.

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