1. FINANCIAL MANAGEMENT
ELEMENT 42
PG. 202

2. Learning Objectives Retirement Pay Military vs. Civilian Pay
Thrift Savings Plan (TSP)
Survivor Benefit Plan (SBP)

3. Retirement Pay
Members who accumulate 20 or more years of active service are eligible for retirement.
The basic retirement pay formula is:
Retired Pay Base X Multiplier %

5. Retirement Pay Years of Service 10 15 20 21 22 23 24 25 30 35 40 41
 Final Pay
25%
37.5%
50%
52.5%
55%
57.5%
60%
62.5%
75%
87.5%
100%
102.5%
 High-36
 25%
 REDUX*
N/A
40%
43.5%
47%
50.5%
54%

6. Retirement Pay Retirement Pay calculator:

10. Military vs. Civilian Pay
Regular Military Compensation is defined as the sum of basic pay, average basic allowance for housing, basic allowance for subsistence, and the federal income tax advantage because the allowances are not subject to federal income tax.

11. Military vs. Civilian Pay
Regular Military Compensation (RMC) Calculator

14. Thrift Savings Plan TSP is a retirement/savings plan.
The purpose of TSP is to provide supplemental retirement income.
Start deductions at age 59 ½ years of age
If you take a withdrawal payment before you reach the age of 59 ½ you will pay a 10% withdrawal penalty tax.

15. Thrift Savings Plan
Traditional TSP (pre-tax): you defer paying taxes on your contributions and earnings until you withdraw them.
Roth TSP (after-tax): you pay taxes on your contributions as you make them and get your earnings tax free at withdrawal.

16. Thrift Savings Plan
You choose how your account will be distributed one or any combination of the three withdrawal options available to you:
A single payment
A series of TSP monthly payments
A life annuity purchased for you by TSP

17. Thrift Savings Plan TSP Calculators

22. Survivor Benefit Plan
The SBP is a government-subsidized program that guarantees that a portion of a service members monthly retirement pay will continue to be paid to a spouse or other designated beneficiary after the service member’s death. SBP is guaranteed by the government and protected from inflation.
SBP payments provide survivors with 55% of the base amount as a monthly benefit and adjust with COLA.

23. Survivor Benefit Plan
Choose to cover any amount of your retirement pay from $300 up to full amount.
Spouse (current or former) can be covered for 6.5% of base amount chosen.
Cost are paid with pre tax dollars and deducted directly from your retired pay.
Premiums will change with cost of living adjustments (COLA)
Children can be covered (cost vary based on ages)

24. Survivor Benefit Plan Coverage Options
Spouse- payment made monthly to spouse until his/her death
Spouse and Child- payment is made to the spouse first, and in his or her absence, to the child via guardian
Child only- payment is made to the child until age 18 or to age 22 if enrolled in school (full-time)
Former Spouse or Former Spouse and Child- may be required by a divorce decree.
Insurable Interest- for those with no spouse or children.

25. Survivor Benefit Plan Coverage
SBP Calculator

29. Resources https://militarypay.defense.gov/ www.tsp.gov

30. Local Resources CFAY Fleet and Family Support Center
Base:
Phone:
Command Financial Specialist