The calculator allows future retirees to determine how much they would earn under two competing retirement plans. The differing plans affect service members who joined the military after July 31, 1986 and must choose between the High-3 plan, which bases retirement pay on the highest average basic pay for three years of a career, or the REDUX plan, which provides a $30,000 upfront bonus with smaller retirement checks over time.
Using the calculator, service members can plug in the year they entered military service, how many years they will have served when they retire, their tax rate, and other information, and receive an instant estimate of which plan will best serve their financial needs.
According to the company, the calculator, developed as part of CNAC’s annual Retirement Choice study, would show that a service member who expects to retire as an E-7-a Chief Petty Officer in the Navy or a Platoon Sergeant in the Army- at age 38 after 20 years of service would ultimately earn $309,460 more in retirement benefits under the High-3 plan than if he or she chose the REDUX plan with its $30,000 bonus. This assumes the service member has a life expectancy of 79 years. If the service member lives to 90 years, the loss in retirement income would more than double, totaling $627,160.
The report, which updates a 2004 study, concludes that military pensions are generous and that their provisions are matched only by select private companies, the company said. For more information on the study, go to http://www.cna.org/nationalsecurity/rad/ .
« Court: Ex-Wife Improperly Denied Pension Share