It's amazing how timely this article was. I'm not one to use the overused word "literally", so I'll forego it. Let's just say I was thinking through how to wisely invest a lump sum of dollars into my taxable brokerage account, debating the pros and cons of municipal bonds vs. a total bond market index fund. I couldn't come to a decision, so I decided to procrastinate and catch up on a few Humble Dollar articles. Yours was, perhaps divinely, the first I saw. Until now, all our bond funds have been in tax-advantaged accounts, so this investment was to be my first foray into bonds in a taxable account. Your article taught me how to do the math, and ultimately we went with the total bond market index fund over the munis. Thanks, Adam.
Mr. Quinn, I have similar memories of seemingly insignificant surprises during childhood that have stuck with me for years. But what I never experienced was a Jersey-ish surprise Italian hotdog. Now I'm intrigued . . .
I just re-verified that for an O-6 retiring with 24 years and 7 months (which I plan to have when I retire), the monthly SBP premium in today's dollars is $495.43. Thanks for factoring in the tax-adjusted "real" impact of the monthly premiums. That's a great point. I have to admit that all the comments by smart people on this thread are making me re-think it. I really appreciate your time and thoughtful post.
Mr. Clements is correct that if someone retires at 20 years, the monthly pension will be 50% of the average of the final 36 months of pay. For each additional year served beyond 20 years, the percentage will be 2.5% higher than 50%. So if someone retires at 21 years, the monthly pension will be 52.5% of the average of the final 36 months of pay. If someone retires at 30 years, the monthly pension will be 75% of the average of the final 36 months of pay. This system is slowly evolving to a lower multiplier percentage, i.e., the people joining the military today don't get so generous a pension. But they do get a 4% 401k match that my generation has never received.
Mr. Brennan, thank you for your service! Military dentists have definitely grown in their skill and technology over the years, and they are very much able to provide cutting edge care--and never at a cost to the patient. It is very comforting to tell any given patient that we can treat all their needs without regard to payment ability, so the patient never has to wonder if the dentist is over-treating and/or trying to make the next boat payment.
Thanks for your comment, and I fully agree that my wife has put as much into earning the pension as I have, and possibly more (as a homeschooling mom of five). Please see my new comment above which explains a bit of my rationale. I'm also slowly adjusting my asset allocation to 65/35 for the reasons you mentioned, and anticipate getting there in 5 or so years.
Comments
It's amazing how timely this article was. I'm not one to use the overused word "literally", so I'll forego it. Let's just say I was thinking through how to wisely invest a lump sum of dollars into my taxable brokerage account, debating the pros and cons of municipal bonds vs. a total bond market index fund. I couldn't come to a decision, so I decided to procrastinate and catch up on a few Humble Dollar articles. Yours was, perhaps divinely, the first I saw. Until now, all our bond funds have been in tax-advantaged accounts, so this investment was to be my first foray into bonds in a taxable account. Your article taught me how to do the math, and ultimately we went with the total bond market index fund over the munis. Thanks, Adam.
Post: Time to Change?
Link to comment from July 1, 2023
Mr. Quinn, I have similar memories of seemingly insignificant surprises during childhood that have stuck with me for years. But what I never experienced was a Jersey-ish surprise Italian hotdog. Now I'm intrigued . . .
Post: Looking Forward
Link to comment from June 20, 2023
I just re-verified that for an O-6 retiring with 24 years and 7 months (which I plan to have when I retire), the monthly SBP premium in today's dollars is $495.43. Thanks for factoring in the tax-adjusted "real" impact of the monthly premiums. That's a great point. I have to admit that all the comments by smart people on this thread are making me re-think it. I really appreciate your time and thoughtful post.
Post: A Job With Teeth
Link to comment from June 8, 2023
SCao, thank you for much for your kind words and without doubt it's a "family earn", and not just a "me" thing.
Post: A Job With Teeth
Link to comment from June 7, 2023
Thank you for your service, Curtis. It sounds like you made a very wise decision with your SBP.
Post: A Job With Teeth
Link to comment from June 7, 2023
Mr. Clements is correct that if someone retires at 20 years, the monthly pension will be 50% of the average of the final 36 months of pay. For each additional year served beyond 20 years, the percentage will be 2.5% higher than 50%. So if someone retires at 21 years, the monthly pension will be 52.5% of the average of the final 36 months of pay. If someone retires at 30 years, the monthly pension will be 75% of the average of the final 36 months of pay. This system is slowly evolving to a lower multiplier percentage, i.e., the people joining the military today don't get so generous a pension. But they do get a 4% 401k match that my generation has never received.
Post: A Job With Teeth
Link to comment from June 7, 2023
Ms. Lavin, thanks for your comment. Please see my new comment above which explains a bit of my rationale.
Post: A Job With Teeth
Link to comment from June 7, 2023
Mr. Brennan, thank you for your service! Military dentists have definitely grown in their skill and technology over the years, and they are very much able to provide cutting edge care--and never at a cost to the patient. It is very comforting to tell any given patient that we can treat all their needs without regard to payment ability, so the patient never has to wonder if the dentist is over-treating and/or trying to make the next boat payment.
Post: A Job With Teeth
Link to comment from June 7, 2023
David, thank you for your kind words. I feel the same, particularly for our youngest military enlisted folks.
Post: A Job With Teeth
Link to comment from June 7, 2023
Thanks for your comment, and I fully agree that my wife has put as much into earning the pension as I have, and possibly more (as a homeschooling mom of five). Please see my new comment above which explains a bit of my rationale. I'm also slowly adjusting my asset allocation to 65/35 for the reasons you mentioned, and anticipate getting there in 5 or so years.
Post: A Job With Teeth
Link to comment from June 7, 2023