6 Financial Reasons to Consider Continued Service in the Reserve or Guard

| By J.J. Montanaro, CFP

One weekend a month and two weeks in the summer.

That doesn’t capture the true experience of serving in the Guard or Reserve since 9/11.  Just ask the more than a million reserve component servicemembers that have been mobilized since 9/11 … and don’t forget to check in with their families. Serving in the Guard or Reserve is a much larger commitment. However, it’s also service that comes with a unique set of benefits. Here, I’ll focus on the financial.

If you’re leaving active service and considering a move to the Guard or Reserve, there are some definite financial incentives. Here are six:

  1. Reserve retirement. Generally, you must wait until age 60 for the retirement checks to start, but reserve retirement can provide a powerful boost to your financial security. For example, with 6 years of active duty and 14 years in the Guard or Reserve a retired E-7 that turned 60 this year would receive a monthly retirement check of roughly $1,200. That’s valuable. It’s like having an additional $250,000 of retirement nest egg! And that’s not even considering the value of the health care benefits that are part of the retirement package.
     
  2. Healthcare, part I. Speaking of health care, continuing to serve can open your eligibility for TRICARE Reserve Select. This premium-based health care option is available to members of the active Guard and Reserve and it’s a fantastic deal. In 2018, you can get coverage for your entire family for $221/month and individual coverage is less than $50/month. You won’t find that type of value in the civilian sector. Whether you’re buying coverage on your own or through your civilian employer, it will likely cost substantially more than TRS.
     
  3. Healthcare, part 2. As I mentioned earlier, at age 60 your TRICARE retiree health care benefits begin. If you’re still working at that point, it might offer you an opportunity to save big money by opting out of your civilian employer’s health coverage. If not, you can rest easy knowing that even without having reached Medicare-age you have very affordable and comprehensive health care coverage – something your civilian counterparts are probably not able to say. Furthermore, once you sign up for Medicare, you’ll switch to TRICARE for Life and won’t need to purchase Medicare Supplemental Insurance.
     
  4. Life insurance. As a drilling member of the Reserve Component, you’ll continue to be eligible for $400,000 of quality Servicemembers Group Life Insurance coverage. Typically, the $29/month premium will be deducted from your drill pay.
     
  5. Additional income. Continuing to serve also affords you the opportunity to earn monthly drill pay along with active duty pay for annual training. If you’re making ends meet with your civilian pay alone, this “extra” income can be used to save, invest or pay down debt.
     
  6. Access to installation services. You’ll still have an ID card that will allow you to tap into a nearby installation’s PX/BX, commissary, MWR and other money-saving services.

As a financial planner, I know I can get caught up in the money component of any decision. When weighing whether or not to continue to serve, it’s not only about the money. However, a move to the Reserve Component may be a financially rewarding endeavor.