FINANCIAL MANAGEMENT Financial well-being and the security of loved ones are concerns that are usually at the top of the priority list and should be considered before deciding to separate or retire. Financial Management is part of the Career Readiness Standards that must be met before separating and member must develop and produce a 12 month post separation budget. This would be talked about during the TGPS Financial Planning Seminar section. For Guard and Reservist not located near a military installation Military OneSource can offer financial management assistance.

Objectives Thrift Savings Plan (TSP) Survivor Benefit Plan (SBP) Military vs. Civilian Pay and Benefits Resources

Thrift Savings Plan (TSP) Options Leave funds in TSP account (<$200) Transfer your TSP into another eligible account (i.e., IRA, civilian 401k) or annuity Partially or fully withdraw your TSP funds Withdrawal Deadline TSP is a retirement savings plan similar to a 401k. TSP participation is optional Contributions and earnings belong to the member. Members are required to withdraw the account balance in a single payment, begin receiving monthly payments, or begin receiving annuity payments by April 1st of the year following the year they become age 701/2 or the year following the year separated from service. Account balance will be forfeited to TSP if withdrawals not made by deadlines. Can reclaim account but will not get earnings from time account was forfeited.

Survivor Benefit Plan Government subsidized program Guarantees a portion of retirement pay Covers all active-duty service members automatically at no cost Decision on SBP made at retirement SBP is a form of insurance on retirement pay. Spouse signature required on election form Divorce Decree determines if court requires member to elect coverage Failure to accept or decline will automatically enroll at full coverage

SBP and Financial Planning The Survivor Benefit Plan Basic Financial Statements Insurance Planning Investment Planning Retirement Planning Tax Planning Estate Planning SBP should be considered as part of financial planning

No beneficiary at retirement Election Options Spouse only Spouse and child Child/children only Insurable interest Former spouse No beneficiary at retirement If no beneficiary at retirement and later married can elect coverage after 1 year anniversary.

Full Base Amount Chosen : $3,000 Cost Example Retired Pay: $3,000 Full Base Amount Chosen : $3,000 Premiu m: $3,000 x 6.5% = $195.00 Spouse Benefit $3,000 x 55% = $1,650.0 0

Military vs. Civilian Pay and Benefits When considering leaving the military prior to retirement service members need to carefully compare current military benefits to what is available in the civilian sector. Analyst at DOD claim that military pay gap between military and civilian workers no longer exist and that in 2006 total compensation for both enlisted and officers out earned their civilian counterparts with comparable education and experience. Members of nonprofit associations supporting military members state that there is 3.4% pay gap still exist and DOD’s evaluation doesn’t account for things like major quality of life issues for military such as deployments, long family separations and danger to life and limb. Basic pay for entry level pay for the military compares somewhat favorably to entry level positions for those entering the workforce right out of high school or college. However, due to military promotion system compared to private sector performance bonuses a good performer in private sector will move ahead quickly. To help with that there is Regular Military Compensation Calculator.

INDIRECT COMPENSATION Medical Care Federal Tax Advantage (BAH/BAS) Military Pension SGLI Pay Growth Commissary/NEX Services Education Programs MWR Counseling and Assistance Legal Assistance Space Available Travel Tricare Dental Program

RESOURCES Calculator http://militarypay.defense.gov/Calculators/RMC-Calculator/ TSP www.tsp.gov or the Thriftline at 1-877-968-3778 SBP http://militarypay.defense.gov/Benefits/survivor-benefit-program/ www.militaryonesource.mil

SUMMARY TSP OPTIONS SURVIVORS BENEFIT PLAN MILITARY vs CIVILIAN PAY AND BENEFITS INDIRECT COMPENSATION RESOURCES

QUESTIONS?