‘Money Matters’

02/22/2020  |  By Col. Paul Sanders Brigade Commander, 2nd Brigade, 104th Training Division (LT)
The Griffon

As a Soldier and leader for over 30 years I am constantly asked about the benefits of serving this nation. Many of these questions come from young adults deciding on their future or from Soldiers considering their options when re-enlisting or deciding to leave the Service. There are a number of reasons and benefits for serving to include protecting your country’s liberty and freedom, improving yourself and learning new skills, and giving back to a country that has given us so much.

According to a new study of enlisted Soldiers, however, a core motivation is relatively simple: money and benefits. A recent RAND Corporation survey suggests that the choice to enlist in today’s Army is influenced by two overlapping factors: family and duty, and job stability. In fact, a full 46% of the Soldiers surveyed stated that economic reasons was the primary reason for joining up; for most recent enlistees, it seems military service is a job first and a calling second. A significant number of these surveyed called military benefits a major motivation for enlisting: health care, tuition assistance, and post-service support structures like the GI Bill. Military service is a “lifeline” for some Americans, the researchers note, citing one single mother who joined “just because I had my son and I needed the benefits, I guess you could say.”

In 2018 the Army fell thousands of troops short of its recruiting goals for the first time since the height of the Iraq war 13 years ago. Because of this shortfall and with the economy improving the Army has sweetened the deal for prospective Soldiers with bonuses and other benefits. Many of the Soldiers joining the Army Reserves today are still unaware of the many financial benefits that they qualify for and as leaders we must be able to explain these to your Soldiers. Here are just a few:

  1. Retirement
    Members who accumulate 20 or more years of qualifying service are eligible for a reserve retirement when they reach age 60 or, in some cases, a lesser qualifying age. Here are some guidelines for accumulating “Qualifying Service”:
    Minimum requirement is 50 points in a year
    — Maximum IDT points in a year
     - 60 point rule July 1949 – 22 Sep 1996
     - 75 point rule 23 Sep 1996 – 29 Oct 2000
     - 90 point rule 30 Oct 2000 – 29 Oct 2007
     - 130 point rule 30 Oct 2007 – Present

    Retirement Points are not lost if not enough are accrued within a year for a good year but if a Soldier does not reach the 50 point minimum he/she will not get credit for a “Qualifying” year and may have to serve beyond the 20 year minimum. The more points you have at retirement the more retirement pay you get and here are some examples:

    Example #1:
    A Captain that has served 26 years and has accumulated 4,500 points would receive the following – 4,500 Points X .482 (FY19 Retirement Ratio Table) = $2,169.00 per month

    Example #2:
    A CSM that has served 26 years and has accumulated 4,900 points would receive the following – 4,900 Points X .496 (FY19 Retirement Ration Table) = $2,430.40 per month

    Example #3:
    A SFC has served 26 years and has accumulated 5,300 points would receive the following – 5,300 Points X .378 (FY19 Retirement Ratio Table) = $2,003.40 per month

    Once a Soldier receives their 20-year letter, eligibility for retired pay based on non-regular service may not be denied or revoked on the basis of any error, miscalculation, misinformation, or administrative determination of years of service performed, unless it resulted directly from fraud or misrepresentation. In addition, upon reaching 59 years of age the Army Human Resources Command (HRC) will mail a retirement packet to the address on record for each Soldier and it must be completed/mailed back within 90 days. After receiving the Soldier’s packet HRC will certify their record and notify DFAS-CL to establish a retired pay account.
  2. Medical
    Reserve retirees and their families become eligible for TRICARE benefits when they reach age 60 and begin receiving retirement pay. TRICARE eligibility remains in force until age 65. Upon reaching age 65, TRICARE ends, and you become eligible for Medicare and TRICARE For Life. In addition, as a Drilling Reservists you are eligible to purchase TRICARE Reserve Select (TRS) for $42.83 (changing to $44.17 on 1 Jan 20) or $218.01 (changing to $228.27 on 1 Jan 20) for a family. TRS offers comprehensive health care coverage that includes prescription drug coverage. Beneficiaries are able to visit any TRICARE-authorized provider and pay fewer out-of-pocket costs when choosing a provider in the TRICARE network.
  3. Thrift Savings Plan (TSP)
    Army Reserve Soldiers on drill status are eligible to contribute to the TSP. The TSP is a Federal Government-sponsored retirement savings and tax benefit that private corporations offer their employees under “401(k)” plans. TSP contributions are “tax-deferred” from taxable pay, meaning that they are deducted before Federal and, in almost all cases, state income taxes are withheld. Therefore, taxable income is smaller and less is paid in taxes. In addition, Federal taxes are not paid on the money contributed until it is withdrawn from the TSP account. Money earned over the years is also tax deferred and the longer money is invested, the greater the benefit of tax-deferred earnings.

    In closing, the Soldier serving today still wants to give back and be part of something “larger than themselves”. The reasons for serving this nation are different from Soldier to Soldier but financial incentives are becoming one of the primary drivers in today’s generation. A successful leader will know and understand these benefits so he can successfully recruit, retain, and communicate the many benefits offered for Soldiers serving in today’s Army Reserve.
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