Among the features of the Defense Department’s new
blended retirement system, military members can choose a 25- or 50-percent lump sum buyout of their retirement account instead of a full monthly benefit. But the lump sum option, which would require the service member to forfeit either a quarter or one half of his or her retirement pay until age 67 when full annuities would be restored, could leave retired members with less than half as much money as they would receive under the traditional monthly payments, according to First Command Financial Services, a military advocacy group. After crunching some numbers, First Command found that a lieutenant colonel who retired at age 42 would receive a 25 percent lump sum payout of $157,250 under BRS. The same officer, taking the monthly payments, would receive $372,978, or more than double the lump sum amount, over a 25-year period. First Command found a similar gap for enlisted members. A master sergeant would receive $81,622 in a 25-percent lump sum, but $193,600 over 25 years in monthly payments. “We support the new blended retirement system, but providing financial
training for airmen and their families is essential,” said AFA President Larry Spencer. “We should also
track implementation and execution very closely to determine how, if at
all, this new system affects retention." The new BRS system goes into effect on Jan. 1. —Wilson Brissett
Daily Report: Read the day's top news on the US Air Force, airpower, and national security issues.
Tweets by @AirForceMag