Retirement Planning Template
Retirement Planning Template for Military
One retirement planning template you set up around a military career: a pension start age you choose rather than one fixed in your sixties, savings entered as a single balance, and a horizon that can run fifty years.
In Depth
Military Pensions, the TSP, and Second-Career Planning
Military retirement differs from civilian retirement in ways that create both advantages and unique planning challenges. A service member who retires after 20 years under the legacy High-3 system receives 50% of the average of their highest 36 months of base pay - not total compensation (BAH and BAS are excluded from the pension calculation). An O-5 retiring at 20 years with a High-3 average of $10,000/month receives a $5,000/month pension. Under the Blended Retirement System (BRS), the multiplier is 40% at 20 years instead of 50%, but the government TSP match (up to 5% of base pay) and a possible continuation pay bonus partially offset the difference. Understanding which system applies and modeling the pension alongside TSP projections and second-career income is essential for realistic planning.
TSP management for military retirees parallels 401(k) planning in many ways but has distinctive features. The TSP's expense ratios are among the lowest available (roughly 0.04-0.06%), making it an exceptionally cost-effective accumulation vehicle. However, TSP withdrawals before age 59 and a half generally trigger a 10% early withdrawal penalty unless the member separated from service during or after the year they turned 55. For a service member retiring at 42, that creates a 13-year gap where TSP funds are not penalty-free accessible. Some retirees bridge this gap with pension income and second-career earnings, while others explore substantially equal periodic payments (72(t) distributions) to access TSP funds earlier. The Roth TSP option adds another dimension - contributions were taxed going in, so qualified withdrawals in retirement are tax-free.
VA disability compensation is a factor in military retirement planning that has no civilian parallel. A 50% disability rating provides roughly $1,075/month tax-free (2024 rate for a single veteran), while a 100% rating provides approximately $3,737/month. Because this income is not subject to federal or state income tax, its after-tax value is significantly higher than the face amount. For a retiree in the 22% federal bracket, $3,000/month in VA disability has the same purchasing power as roughly $3,850/month in taxable income. This tax-free income stream affects everything from withdrawal strategies for taxable accounts to Social Security claiming timing to Roth conversion planning.
The Challenge
Why Military Retirement Planning Has Unique Considerations
Military retirement can happen at 38 or 42, not 62 or 65. That creates a uniquely long retirement window with income sources and benefits that civilian planning tools do not address.
Pension starts decades before traditional retirement
A military pension at 40 is a powerful asset, but it may not cover full living expenses for 40+ years. Planning the gap between pension income and total needs is essential.
TSP needs a long-term strategy
The Thrift Savings Plan is a significant accumulation tool, but withdrawal timing, Roth versus traditional balance, and coordination with pension income requires deliberate planning.
VA benefits affect the financial picture
Disability compensation, healthcare benefits, education benefits, and home loan advantages all have financial value. Incorporating them into the retirement plan gives a more complete picture.
Second careers change the math
Most military retirees work a second career. Planning for this income, its duration, level and eventual end, adds a layer that standard retirement planning misses.
Ready to take control of your military finances?
What You Get
Retirement Planning Tools for Military Careers
Pension income with a start age you set
Total monthly pension income and the age it begins are two plain fields. Work the amount out from your years of service, pay grade and system first, then enter the result.
Savings projected to your retirement age
Total current savings and annual savings are two fields covering every account together, TSP included. The projected value at retirement grows them at the pre-retirement return you set.
Other income from day one
A single monthly other income field covers anything paying from the first year, disability compensation among them. It counts during the bridge years as well as after the pension starts.
Second-career years in the projection
Setting the target retirement age to the end of a second career keeps annual savings running until then. Two what-if cards also report what one more year of work and an extra 500 a month of savings do.
Bridge and post-pension phases
The projection separates the bridge years before pension income starts from the years after it, labels each checkpoint year with its phase, and shades the bridge on every chart.
What-if scenarios
Twelve cards recalculate from your inputs, among them a one-year delay, retiring now, stopping saving, no pension, a 50% pension cut and the minimum return the plan needs to hold.
See It In Action
What the template looks like
Browse through the template to see how it handles retirement projections, milestone tracking, and income planning.
- Retirement overview dashboard
- Savings growth projections
- Retirement milestone tracking
- Income vs expenses analysis
- Year-by-year projection
Complete retirement overview with projections
Project your retirement savings growth
Track progress toward retirement goals
Plan your retirement income against expenses
Detailed year-by-year retirement projection
Getting Started
Start Your Military Retirement Plan
Enter your ages and your pension
Current age, target retirement age, life expectancy and pension start age are four fields. Total monthly pension income is a fifth, worked out from your years of service and system before it goes in.
Add savings as one total
There is no per-account split. Add TSP, Roth TSP and anything else together, enter the combined balance, then enter how much new money you add each year.
Handle the second career through the dates
Second-career pay is not an income line. Set the target retirement age to the year that career ends, and enter what you save out of it each year as annual savings.
Add tax-free income as other income
Disability compensation goes into the monthly other income field alongside anything else paying from day one. There is no rating field and no separate tax treatment, so enter the amount you actually receive.
Read the projection
The year by year table reports the portfolio, income, expenses, the amount drawn from the portfolio and the withdrawal rate at every age it covers, out to your life expectancy.
Common Questions
Retirement Planning for Military- FAQ
Does this handle the BRS versus legacy pension system?
Neither system is built in. The template takes one monthly pension figure, so work the amount out under your system and enter the result. BRS pays a lower multiplier with government TSP matching, and that matching shows up in your savings balance rather than the pension line.
What about COLA adjustments on military pension?
Military pensions receive cost-of-living adjustments. There is a pension annual increase field, described in the sheet as cost of living adjusted, and whatever percentage you enter compounds the pension income across the projection.
How do I handle VA disability compensation?
Enter the amount in the monthly other income field. The template has no tax logic, so a tax-free payment and a taxable one look identical to the projection, and any adjustment for that belongs in the figures you enter.
Should I include the GI Bill?
There is no education benefit field. Anything that lowers what you spend can come off the total annual expenses figure, and anything that pays out monthly can go into other income.
What about military pension division in divorce?
If your pension is divided, enter only your portion. The template works with whatever amount you will actually receive.
Can this plan for retiring at 20 versus 30 years?
Run it once per option. Change the target retirement age, the pension figure and the years of saving, then compare the projected value at retirement and the end balance from each run.
How do I account for the difference between High-3 and BRS pension calculations?
The High-3 system provides 2.5% of the average of your highest 36 months of base pay per year of service (50% at 20 years). BRS provides 2.0% per year (40% at 20 years) but adds government TSP matching up to 5% of base pay. The template does not calculate either one, so work the monthly figure out for your system and enter it as total pension income.
How do I model the gap between military retirement and TSP penalty-free access?
If retiring before age 55, TSP withdrawals generally carry a 10% early withdrawal penalty until age 59 and a half. The template has no account rules and no penalty logic. Its bridge period is the gap between your retirement age and the pension start age, so a TSP access gap is something to work out alongside the projection rather than inside it.
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