JOINT BASE CHARLESTON, S.C. –
Have you looked at your Leave and Earning Statements lately and saw what retirement plan you have? If you have less than years in the military, your LES will say "Choice."
If you have served more than 15 years, you will have already made your decision on which retirement plan to except. For those who do not know what "choice" means, let me explain.
If you entered the military after Aug. 1, 1986, then you have two options for your retirement. The two options are the High 3 plan or CSB/Redux plan. The following will explain the criteria for each one.
High 3: Under this retirement plan, after 20 years of service you will receive 50 percent of your highest three years of base pay. For example, if you retire as an E-8, but you only served as an E-8 for two years, you would receive two years of E-8 pay and your last E-7 pay. You will receive the full cost of living adjustment each year. For every year you serve past 20 years, you will receive 2.5 percent more of your base pay. For example, 25 years of service equals 62.5 percent of your base pay. This is capped at 75 percent for 30 years.
CSB/Redux: At your 15 year mark you can elect to take a $30,000 "bonus," for which you promise to complete the next five years of service. After your 20 year mark, you will then receive 40 percent of your last highest three years of base pay. You will receive 1 percent less of the COLA rate each year. After 20 years of service, your retirement benefit will increase by 3.5 percent until you max out at 75 percent cap for 30 years of service. When you reach the age of 62, for that year, you will receive the High 3 retirement plan of 50 percent of your active-duty pay and full COLA. After that year you will then go back to receiving 1 percent less in COLA.
As you can see, you have a tough choice ahead of you when you reach this point in your career. It is highly recommended that you take the time to carefully research and consider which retirement plan works best for you and your family.
If you are coming to this point in your career and need more information on this, please use the following website which provides calculators for you to see which one works the best for you:
http://militarypay.defense.gov/Tools/csb.reduxcal.html.
If after this you still need more information on retirements please contact me at 963-2768, and I will be more than willing to help you make the best decision.