MILITARY RETIREMENT

saluting-military-woman-24222714 (1)The traditional military retirement is considered a “defined benefit” plan as it does not have an individualized cash balance that is detailed in a statement each month to the military member. The retirement pays monthly benefits from the time of retirement for life in an amount that is dependent on the service member’s rank and length of service  (The reserve unit has a different system as discussed in other blogs).    Members can take some type of early retirement which is detailed on the military members’ Leave and Earning Statement (LES – or paycheck stub) and that information if very important when dividing military retirement.   The Military Retirement will have cost of living adjustments (COLAs) which also need to be taken into consideration on any division.    Military members as federal employees also have an opportunity to have a Thrift Savings Plan (TSP) which resembles a 401(k) plan and allows the members to divert pre-tax money into a retirement savings account that does have a cash balance and detailed statements of the value.    I hear a lot of confusion about  the “Ten Year Rule”  where many people believe that the military pension is not divisible upon divorce unless the marriage lasted ten years.  This is incorrect.  The “Ten Year Rule” means that a court order that divides military retired pay as property may only be paid directly to the former spouse from the military pay center (DFAS) if the parties were married for at least ten years during military service.  This means the military service has to overlap at least ten years of the marriage.

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