Military Retirement Questions

[Rafiki Rafiki Rafiki]

My husband is retiring from the Air Force next year and I have lots of questions that I know will eventually be answered, but if anyone knows in advance, it would be great!

--I know the military moves you once after retirement, but hubby is thinking that move is only as far as the place where you initially entered the military. What's the rule on final moves?

--Other than the terminal leave you take or leave you have paid out to you, are there other cash benefits the military pays out to you at retirement time?

--I'm guessing that military retirement pay is taxed the same way as standard pay...would you tell me if that is correct?

I'm sure I have a million more questions, but if anyone could help me with these now, I would feel more comfortable with the decisions we have to make....

 

[jsmith]

cant answer them all-but heres a shot at a couple-i think they only move you back to your Home of Record-but im not 100% sure.

Taxes-some states do not put income taxes on military retirment pay-Colorado does not.

 

[Sleepy]

Answers to household shipment...

http://www.militarypay.com/TypesofMovesandBasicEntitlements.html

Wanted to add that my dad retired in 78. His home residence was VA, but we moved to Washington upon retirement and the military moved us.

Taxes.....as someone else said....check with the state you will be residing. Some take taxes and some don't. I know Va was a no taxes state years ago, but I think my dad said they now take taxes, which is better at tax time so you don't owe (as much).

Cash benefits? On a lighter side.....Are you serious If anything, they will audit your pay and find YOU owe THEM! Honestly, I don't know the answer to your question. I think basic pay and any left over leave is all you get. Wouldn't it be nice if they gave a nice severence bonus for those who stuck with the military for 20 years instead of giving bonuses to people who have only been in a few years and extend for a few more? We could use $20,000 or $30,000 right about now! I'd even take it in installments.

Hubby is retiring next year too and I have concerns with insurances.

 

[jckdisneybound]

From my understanding about the move, is the military will move you the same distance as your home of residence. Ex. If you reside 500 miles from where he initially entered the military they will pay to move you 500 miles.

Congratulations and hope that helps. As for your other questions, hope you get answers. For taxes, it's taxed federally, for state it based on the states requirements you become residents in. The only thing that would affect the taxable portion is if he is listed at a percentage of disability, but that is up for the VA to decide.

 

[Rafiki Rafiki Rafiki]

OK, so far I can tell from the Military Pay site that the military will pay to move you anywhere in the US including Alaska and Hawaii and that you have up to 1 year to store your household goods from your retirement date.

Taxes. I'm guessing that we pay at the regular federal rate. Our home will probably be Texas, so we won't have state income tax on that pay.

 

[Sleepy]

From my understanding about the move, is the military will move you the same distance as your home of residence. Ex. If you reside 500 miles from where he initially entered the military they will pay to move you 500 miles.

I'm so glad this is NOT the way it works. So unfair in more ways than I can write.

 

[Rafiki Rafiki Rafiki]

I know Sleepy. That thought was freakin' me out--we moved 60 miles away from his family where he originally entered the military but want to move back to either one of our last two bases. We didn't choose this military base!

 

[Sleepy]

Yeah, like the fact that if my husband had been on sea duty, we would have been stationed in Norfolk, Va (no other location to choose). My husband's "home" residence was Va when he joined the military. Whoopie! According to the above thought, we would have been allowed to move our household goods only within the state of VA Looking at where we live now and were able to choose this duty station, according to the above thought, we would be able to move just about anywhere in the world...lol. That is where it would be unfair.

 

[J/T Gramdma]

As far as taxes from military pay, they automatically take out federal. they do not take out state unless you set up a certain amt to be given to state. This has to be requested by the military member. your military rep for retirement will answer all the question as the military member has to attend a meeting before he is separated.

 

[jckdisneybound]

But that doesn't mean it isn't taxable income.

OK than what about those of us whose Home of Record isn't CONUS, Hawaii or Alaska? Do they not pay to move us home if that's where we want to retire?

 

[SeeDisney]

We're a military retired family too. Been so since "99. Husband is on second career.


Depending on the state where you live, it's taxable.

On the Federal, I clearly remember asking the Fed. to take out a specific amount every month.

Good luck.

 

[katerkat]

I know Sleepy. That thought was freakin' me out--we moved 60 miles away from his family where he originally entered the military but want to move back to either one of our last two bases. We didn't choose this military base!

What, you mean you wouldn't choose to live there? (We actually just started to talk about going back... Scary! But being there means less deployments.)

 

[Rafiki Rafiki Rafiki]

We live in Mississippi. The base we're at is largely made up of young couples and single Air Force officers who are just starting out, as it is an undergraduate pilot training base. Yeah, there are by and large no deployments, but the guys might as well be deployed for the 12 hour days 5 days a week plus work when they get home. That doesn't count the cross-country weekends where they are gone for weekend nights.
Oh, and then there is the call once every month or two saying you're on the list for a deployment. These guys aren't immune to deployments.

My problem is that the locals are so gosh-darned strange!

 

[BuckNaked]

DH retired from the AF last year, and though we didn't use his move, it would have only covered the distance from where we are now (DC) to where he entered the AF (Detroit, Michigan). We could have moved anywhere, but the AF would have only paid for the distance from here to MI.

As for final payments, it's just any leave that you want to sell back. As for cash bonuses at retirement, nope, and I see no reason why there should be. Drawing 50% pay every month for the rest of his life is his "bonus" for staying in 20 years. Bonuses are for retention - no need to pay them to someone that is on their way out the door.

Retirement pay is taxable as earned income for federal income tax, but states vary. DC taxes military retirement pay as regular income, Alabama doesn't tax it at all, so check with the state where you'll be living after retirement.

Congrats on the upcoming retirement - I'm looking forward to it myself!!

 

[Rafiki Rafiki Rafiki]

DH retired from the AF last year, and though we didn't use his move, it would have only covered the distance from where we are now (DC) to where he entered the AF (Detroit, Michigan). We could have moved anywhere, but the AF would have only paid for the distance from here to MI.

I read that as long as you entered the AF after 1981 the AF would pay for 1 conus move anywhere in the US including Alaska and Hawaii. Did he enter before that time?

 

[katerkat]

We live in Mississippi. The base we're at is largely made up of young couples and single Air Force officers who are just starting out, as it is an undergraduate pilot training base. Yeah, there are by and large no deployments, but the guys might as well be deployed for the 12 hour days 5 days a week plus work when they get home. That doesn't count the cross-country weekends where they are gone for weekend nights.
Oh, and then there is the call once every month or two saying you're on the list for a deployment. These guys aren't immune to deployments.

My problem is that the locals are so gosh-darned strange!

My husband did his UPT there and I worked in town. And compared to this deployment schedule, I'd take pilot training any day!

The locals are....interesting! Did you know the mayor was on A Wedding Story?

 

[BuckNaked]

I read that as long as you entered the AF after 1981 the AF would pay for 1 conus move anywhere in the US including Alaska and Hawaii. Did he enter before that time?

No, he entered in 1984.

 

[Lumber Joe]

--I'm guessing that military retirement pay is taxed the same way as standard pay...would you tell me if that is correct?

I guess it's taxed

 

[traviesojmt]

I copied this from a 2007 article from Army Times:

http://www.armytimes.com/careers/retirement/military_retirement_moving_2007hbml/

Retirees: Moving and Storage

Service members who retire from the military can move anywhere in the continental U.S. at government expense; they do not have to be going to their official home of record.

However, certain restrictions apply for retirees intending to live in Alaska and Hawaii. For those states, as for other locations outside the continental U.S., the government will pay moving expenses only if the location is listed as a retiree’s official home of record or is where the retiree initially was called or ordered to active duty. Filing a final travel settlement voucher with a military finance office constitutes selection of a home.

Retirees do not receive advance pay and allowances, dislocation allowance, move-in allowance or temporary lodging allowances. However, they can get mileage and per diem allowances for the expenses of their move.

Household goods can be shipped from the retiree’s last duty station, any previous stateside duty station or storage area, or any combination of the three. In most cases, retirees have a year from their retirement date to finish moving.

Entitlements, weight allowances and travel allowances are computed the same as in an active-duty, permanent change-of-station move. Retirees can ask to put all or some of their household goods into storage for a year after leaving active duty. The government pays for shipment to the storage site, storage costs and subsequent shipment to the selected home.

Base officials responsible for shipping personal goods choose the storage site, which can be a government or commercial facility. A 12-month limit applies to government-paid storage. It can be extended in exceptional circumstances, such as illness.

 

[JDinCO]

cant answer them all-but heres a shot at a couple-i think they only move you back to your Home of Record-but im not 100% sure.

Taxes-some states do not put income taxes on military retirment pay-Colorado does not.

Colorado does tax a pecentage of retirement.

TAXATION OF MILITARY
RETIREMENT BENEFITS
Persons who were 55-64 years of age as of
Dec. 31 may exclude up to $20,000 of
their military retirement benefits received
during the calendar year. Persons
who were 65 years of age or older as of
Dec. 31, may exclude up to $24,000 of
their military retirement benefits received
during the calendar year.