Retire to Mount Olive, North Carolina

I have had the same book in my bed side nightstand since 1988. It is "Cash in on the American Dream: How to Retire at 35," by Paul Terhorst. The book, though no longer in print, has had a big influence in how I approach the idea of retiring on my Military retirement.

His idea is to reduce living expenses as much as possible and to invest in ultra-safe products once you reach a core retirement nest egg.

Instead of retiring to a ocean front condo in Miami, you could instead buy a modest home in a community like Mount Olive, NC. Mount Olive is just about perfect for a military retiree. It is just 15 miles from Seymour Johnson Air Force Base and 90 minutes from Fort Bragg. This gives you excellent access to commissary and exchange stores, as well as exceptional medical care. Seymour Johnson has all the best things that the Air Force has to offer, including a golf course, library, auto hobby shop, legal office, chapel, and bowling alley.

Mount Olive is just 60 minutes from Raleigh and the Research Triangle. NC has favorable tax treatment for military retiree.

First Command Class Action Law Suit

If you invested with First Command and paid a large front end fee, you might be getting a refund! For more details, check out this link.

2008 Military Pay Table

The proposed 2008 military pay table is available at Military.com.

Retiring from the military

If you think that an enlisted person can't become financially independent on their military income alone, take a look at this: http://money.cnn.com/galleries/2007/moneymag/0710/gallery.retirement_myths.moneymag/index.html

Savings Bond Calculator

If you own savings bonds, this site will tell you what they're worth: http://www.treasurydirect.gov/BC/SBCPrice.

Value of a military retirement

Simply put, the value of the retirement benefit depends on the life expectancy of the veteran. According to the Social Security Administration, a male retiree 45 years old will live for about another 32 years(http://www.ssa.gov/OACT/STATS/table4c6.html). If he retired from the military as an O-5 with 22 years of service, his retirement benefit would be $3686.50 before taxes an any deductions (including the survivor benefit plan).

So, what is the current value of an annuity that pays $3686.50 each month for 32 years? The problem is simplified because the monthly retirement amount is adjusted for inflation, unless the veteran selected the REDUX program. With the adjustments, you calculate the present value by multiplying the monthly benefit by the projected number of payments, in this case 384 monthly payments. When you do this math, you come up with the amount of money you'd need to put away to pay the benefit:

$1,415,616!

The military made this retiree a millionaire!

The enlisted retiree isn't that far behind. A retired E-7 with 22 years of service receives $1907.40 monthly. If he retired at age 40, he'll receive more than $844,000!

If you want to get an even better idea of what the value of a military retirement is, consider using the Vanguard Annuity Quote tool. Your retirement is a stream of guarenteed income just like an annuity.