The Department of Defense’s new Blended Retirement System (BRS) is being rolled out to troops and will go into effect January 1, 2018.
New military members will be automatically enrolled in the new retirement plan while others will be able to choose between the old retirement plan and new.
There’s a lot of information to weigh, but USAA has done a great job providing a free, personalized online retirement calculator tool to help weigh your options.
The Military Retirement Comparison Tool includes personalization based on five factors:
- Active duty vs. National Guard / Reserve
- Pay grade: Officer / Enlisted / Warrant Officer
- Years of service
- Years remaining until separation or retirement from the military
- Anticipated number of credited military points at the time of National Guard / Reserve retirement
“The Department of Defense has called this the most significant change to military retirement to date and estimates that more than 1 million active-duty, Guard and Reserve members will be affected by this change,” said retired Vice Adm. John Bird, USAA’s senior vice president of military affairs. “We estimate that 650,000 USAA members will be impacted by this change, and our research indicates that 70 percent of our members recognize saving for retirement as a personal financial goal. We stand ready to help educate and discuss BRS information with all service members so they may make informed decisions about their financial future.”
If you’d like more information and advice, check out the Money Matters Blog on USAA for more in-depth information. There USAA Rep Josh Andrews delves into which plans he thinks military members will benefit from the most and breaks it down for easy understanding.
According to USAA’s survey, nearly half (49 percent) of eligible service members are planning to remain on the military’s current retirement plan, which benefits those who will retire after 20 years of military service. USAA suggests military members consider the benefits of the BRS, as DOD research finds only 19 percent of service members are likely to retire from service.
Military service members can engage with the MRCT, learn more about the retirement changes, and how to better prepare for their financial security by visiting usaa.com.