{"id":4311,"date":"2017-07-11T10:49:36","date_gmt":"2017-07-11T14:49:36","guid":{"rendered":"https:\/\/www.afcpe.org\/?p=4311"},"modified":"2019-04-23T15:44:14","modified_gmt":"2019-04-23T19:44:14","slug":"its-time-to-break-out-the-blender","status":"publish","type":"post","link":"https:\/\/www.afcpe.org\/news-and-publications\/blog\/its-time-to-break-out-the-blender\/","title":{"rendered":"It’s Time to Break out the Blender!"},"content":{"rendered":"\t\t
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There is a big change coming for the men and women serving in our armed forces, and it\u00a0has\u00a0the potential tosignificantly\u00a0impact how they save and plan for retirement. This change is known as the Blended Retirement System or BRS. Beginning in January 2018, eligible service members, currently serving in any branch of the military, will have the option to sign up for the new BRS. This choice is available to service members serving on active duty as well as those serving in the National Guard and Reserves.<\/p>

Under the current\u00a0system,\u00a0a service member has the option to contribute funds into a Thrift Savings Plan (TSP) to supplement and save for retirement. Once the service member serves 20 years then he or she is eligible for a monthly pension check that is equivalent to 50% of his\/her monthly base pay. Under the current\u00a0system,\u00a0the government does not offer a match on funds contributed to the TSP.\u00a0This\u00a0will change if a service member opts into the BRS.<\/p>

Currently,\u00a0many service members do not serve\u00a0long\u00a0enough\u00a0to be eligible for a full pension. These service membersleave\u00a0the military with only what they put into their TSP, and\u00a0in\u00a0many cases far less, if they elected not to participate or were unaware of the program. There is education about retirement during basic training, but service members are on information overload and don\u2019t always process what is\u00a0being taught.<\/p>

As a\u00a0result,\u00a0the government decided to implement a matching component to the TSP. If a service member\u00a0hasserved 12 years or less or have less than 4320 points (on the reserve and guard\u00a0side),\u00a0then they may be\u00a0eligible\u00a0toopt-in. In January 2018,\u00a0qualified\u00a0service members will\u00a0be notified\u00a0through their branch pay site. How the match will work and how it could benefit service members in the long run:<\/p>

1)\u00a0\u00a0\u00a0\u00a0A service member opts into the BRS and receives an automatic 1% contribution into a TSP account.<\/p>

2)\u00a0\u00a0\u00a0\u00a0The service member\u00a0chooses\u00a0to contribute some of his or her funds to the account- the government will match up to 4% plus add in the 1%.\u00a0This\u00a0gives a total of up to 5% that the government will contribute on top of his or her contribution.<\/p>

3)\u00a0\u00a0\u00a0\u00a0The service member is vested from day one if they have already been serving for\u00a0two\u00a0years. If not they willbe vested\u00a0at the\u00a0two-year mark. New service members,\u00a0who\u00a0begin\u00a0their time of\u00a0service\u00a0after January\u00a01st<\/sup>2018, will be automatically enrolled\u00a0in\u00a0the new system, will begin receiving government contributions after 60 days, and will be vested after\u00a0two\u00a0years.<\/p>

The best part of the new system is that if service\u00a0members\u00a0do not serve a complete 20 years, they are still able to take\u00a0all<\/u>\u00a0contributed funds with them when they leave service, much like a 401K in the civilian world. The trade-off is a reduction in pension. With the new system, the government will reduce the amount of pension a service member receives after 20 years of service from 50% to 40%. The service member will still receive a pension if eligible, but at a reduced rate.<\/p>

Because there are many things to consider, it is imperative that service members receive as much education as possible around the new system. Once a service member makes the choice to opt in, that decision is irrevocable.<\/p>

There are Personal Financial Counselor\u2019s (PFCs) strategically placed all across the country whose primary purpose is to help support the service members of today\u2019s military and educate them. If you know of service members who need some assistance with making this very important decision, please refer them to a PFC in their area, encourage them to take the online course being offered through the military, and direct them to visithttp:\/\/www.militaryonesource.mil\/news\/1\/2016\/october?content_id=293958<\/span><\/a>\u00a0.<\/p>

\u00a0Guest Contributor:<\/strong>\u00a0Susan Pascoe, AFC\u00ae<\/sup><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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July 11, 2017
Let’s Talk Blended Retirement<\/span><\/h4>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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There is a big change coming for the men and women serving in our armed forces, and it\u00a0has\u00a0the potential tosignificantly\u00a0impact how they save and plan for retirement. This change is known as the Blended Retirement System or BRS. Beginning in January 2018, eligible service members, currently serving in any branch of the military, will have the option to sign up […]<\/p>\n","protected":false},"author":4,"featured_media":4312,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_cbd_carousel_blocks":"[]","_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","footnotes":""},"categories":[37],"tags":[23],"class_list":["post-4311","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-military","tag-financial-education"],"acf":[],"yoast_head":"\nIt's Time to Break out the Blender! - AFCPE<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.afcpe.org\/news-and-publications\/blog\/its-time-to-break-out-the-blender\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"It's Time to Break out the Blender! - AFCPE\" \/>\n<meta property=\"og:description\" content=\"There is a big change coming for the men and women serving in our armed forces, and it\u00a0has\u00a0the potential tosignificantly\u00a0impact how they save and plan for retirement. 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