Which Retirement System Should I Choose?

When the Department of Defense (DoD) announced the Blended Retirement System (BRS), there were assurances that no member of the U.S. military would be automatically transferred to BRS from the legacy “High-3” retirement plan.

Service members are required to opt-in from High-3 to BRS if they qualify to do so, and were given the entire year of 2018 to choose. But which retirement plan is the best?

Like any retirement option, the answer depends greatly on a person’s financial needs and goals. The DoD has stated that there is no “official” preference for which retirement plan eligible one may choose, and with that philosophy in mind those affected are required to get mandatory training on options related to the Blended Retirement System including the procedures for opting in and what it takes to make a fully informed decision between High-3 and BRS.

There is an official benefits comparison calculator offered by the DoD that can help users see the options for both retirement plans side-by-side. The BRS calculator is intended for both active duty and reserve components.

To use this calculator, you will need to know your Pay Entry Base Date, which is described on the BRS calculator site as, “The date that denotes how much of an individual’s service is creditable towards longevity for pay purposes. This date can be adjusted based on breaks in service.” Your Pay Entry Base Date can be found on your Leave and Earnings Statement.

The BRS comparison calculator will also require you to estimate your life expectancy, your Thrift Savings Plan withdrawal age and contribution percentage as well as the TSP rate of return. There is also a question about your lump sum payment options.

Using all this information combined with estimated career progression data for time in grade and time in service, you’ll be given a comparison that breaks down total retirement benefit dollar amounts (based on the data you provide about life expectancy, contributions, etc.) as well as the “present value” of these plans.

This calculator can be quite helpful, but it is also important to keep in mind that the calculations are made using the current pay chart available at the time the calculations are made and that a baseline set of assumptions (including the pay chart) including COLA increases will affect the numbers you get at the end of the calculation process.

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Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News

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