By Jarid Watson
Men and women in the military can now elect to enroll in a new retirement program — the Blended Retirement System, which combines the Thrift Savings Plan with matched government contributions.
It also allows anyone separating before the standard 20-year retirement mark to get a pension check. The new program could add up to real career flexibility for anyone who switches to the program now, or anyone who joins the military after Dec. 31, 2017.
“Under the new system, we’re going to be able to provide retirement benefits to up to about 85 percent of the entire force,” says Andrew Corso, assistant director of the military compensation at the Department of Defense. “Right now, the retirement system only covers about 19 percent of the force.”
He also says there are about 12 different variables they have to consider – from when you joined the military, the day you were born, to when you anticipate retiring or separating from service. All of which can be plugged into a newly-released BRS calculator.
“And then we give them a calculation: a comparison of how they would do under the traditional system and how they would do under the blended system,” Corso says.
“They can play with some of those variables – increase the TSP contribution, decrease the TSP contribution. Maybe they’re thinking of retiring before the traditional retirement age and they can adjust that and see the impact.”
Try it yourself with this comparison calculator.
So now, instead of leaving after six, eight, or 14 years and missing out on a full retirement pension, you can separate at any time and take home a mix between money you invested in yourself and matched government contributions.
The BRS also adds up to long-term savings for the Department of Defense.
Below are some BRS program highlights provided by the Department of Defense:
- The new system, effective January 1, 2018, blends the traditional legacy retirement pension with a service members’ Thrift Savings Plan account.
- All members serving as of December 31, 2017, are grandfathered under the legacy retirement system. No one currently serving will be automatically switched to the Blended Retirement System.
- Military members with less than 12 years of service will have the option to remain on the legacy retirement program or switch to the new BRS.
- All Service members entering the military on or after January 1, 2018, automatically get enrolled into the BRS.
Watch the video below for a tutorial on the program and comparison calculator: