Got my last US Navy paycheck deposited on the 30th, gratefully accompanied by my first significant civilian recompense. For a moment there I reflected upon my transitory fortune and considered the advantages of going off like any good sailor on a liberty spree, but no: For everything a time, and to each a purpose. And it isn’t like that mortgage paying itself, is it precious?
No, precious. It most certainly is not.
Got my baby blue retiree ID card on Wednesday. Hit up the personnel support detachment at North Island for to pick up my discharge certificate, and thought to economize on time. It was nigh on 1500 and the ID card clerk seem happily determined to run out the clock on my watch. Two weeks ago I might have sprinkled a little high dudgeon around.
Now?
I sit and quietly seethe.
We’ve excellent benefits in the service, although I often took them for granted being blessed with arrogant good health when I wasn’t madly flinging motorcycles into the gravel at high speed. They’re not bad after retirement, either. Medical is all but paid for on a system known as Tricare Prime. Covers yourself and your kin with military facilities or a participating physician of your choosing for a really quite nominal fee. Which my new company, good eggs that they are, make good.
Perhaps one of the better deals of the service life is the fiscal protection given through the Serviceman’s Group Life Insurance, or SGLI. Your average serviceman can smoke cigarettes ’til the cows come home, drink beer on Thursdays, drive NASCAR on weekends and eat cheeseburgers too, but nevertheless lock himself into $400k of term insurance for $28 to the month. You’d spend that in tips on an average night in Hong Kong, but it would pay a few bills, worse comes to worse and the ocean reaches up to grab you.
But it all dries up utterly once you cross the brow and go ashore. There’s a veteran’s group policy out there, but the prices for a policy we paid a pittance for last Tuesday start at $88 per month for a man of our superannuation and quickly rise to the truly ridiculous very shortly thereafter.
So your correspondent checked in with the provider of his car and property insurance to fill the gap, like. And was asked some pretty pointed questions: Did he use tobacco products? (He did not.) What was his height and weight? (A goodly bit, and more besides.) How long did he require guaranteed coverage?
Aye, that’s a good question.
Insurance companies make a profit by knowing the date of your dying to a fraction. Not you personally of course, but all of you in aggregation. When you sign on with any real money in play, you’re playing ducks and drakes with them that you’ll give over before they think you will. (It’s different for “whole life” coverage of course, but the payoff to premium ratio is so low that it amounts to what the company might find behind the cushions at the end of the month.)
For reasons just such as these I’ve always avoided paying the extended warranty costs when purchasing a vehicle. I figure that if a profit-oriented company is pushing the insurance on everyone – and they do – then it’s probably not a bargain for the guy in the middle of the risk curve. There’s no way of knowing whether you’re in the middle of that bell curve of course. But statistically speaking there’s a 68% chance that you are, your odds are equally good to find yourself be on the low risk tail as the lemon side, and after all, it’s only a car. You could walk away.
But we’re none of us young forever and if you decide to insure yourself after retirement on a sum that makes choices possible for those you’d leave behind, you’ve got some introspection to engage in. I could lock in a half a million choices for twenty-five years, paying nearly $40k along the way and gambling against the company that I won’t make it to 72. By that time, the Kat – my youngest – would be a lady of some 39 summers, and hopefully well embarked upon a life of her own, the house paid for and Hobbit guaranteed a the better part of my pension, come what may. On account of another good deal military benefit.
So: How long do you think you’ll make it?
I left the throttles in full blower as a youngster, caring little for what might come along the path, determined to leave it all out there upon the field, to leave nothing in the bag:
I did not wish to live what was not life, living is so dear; nor did I wish to practice resignation, unless it was quite necessary. I wanted to live deep and suck out all the marrow of life, to live so sturdily and Spartan-like as to put to rout all that was not life, to cut a broad swath and shave close, to drive life into a corner, and reduce it to its lowest terms… (Thoreau, Walden)
But that’s a young man’s game, the weight of which is an older man’s burden. And now I am left suddenly to ponder what time remains, how much it’s worth and what might reasonably be hacked out of it. What time has passed, and what works of good or evil was done with it.
All of which calculations can make a man ret pondersome.
Skipper, get a 20 year term to cover the mortgage and any large debts you may owe (like that Porsche you were looking at or college tuitions). When you reach retirement from civilian life, get what is known as a burial policy. Not knowing your age, but assuming that it’s near the half century mark, that should cover you to around 67. Then you just sit on the porch of your cottage by the sea, and count the waves and the memories…and think of that Gull Wing that would be so nice to ride around on
The purpose of insurance is to protect you against a financial disaster. We are getting better at the probability game of disaster – it’s not quite the same mathematics as the probability of normal events. However, we still can’t predict the occurrence of such events.
So turn the question around – what capability are you protecting, what does it cost (in nominal terms, today)? As you pay down the mortgage, the cost of protecting that decreases. As the kids get closer to college, the nominal cost today of that education increases (because time is not on your side). Pay yourself first (put money aside, in reasonably secure investments, not high-fliers), and as you protect yourself more, you need external protection (insurance) less.
And sign up at the Motley Fool and learn from folks who do personal finance with the same passion you feel in the cockpit.
Keep those throttles at full blower, in any case.
Thanks for your time in … and for the reflections!
Doesn’t the new company offer supplemental life insurance as part of the benefits package?
Lex, right there with you brother. In fact, this post seeded one of my own. Ain’t mortality a bitch.
Being but a young whelp still sucking at the gubmint teat, I’m still heartily in the full blower stage. This talk of life insurance is so far out of my radar interrogation area.
…but the writing in this post. Keeps me coming back. Sometimes I think OHS could write about seg faults and regular expressions and keep me interested.
Lex … if you have good genes, and you obviously do, don’t count on popping off into the Great Beyond at 72. That’s far too modest an expectation in these medical miracle times. You’re going to want to live much longer than that when you get to 72, always assuming your apparent good health persists.
My husband’s mother [a highly intelligent woman] lived until 98. He asked her, a few months before she died, how much longer she would be content to live. She answered something to the effect, “oh, at least another ten years.” We persist, and if we are lucky, continue our journey hopefully, having adjusted to various aches and pains.
I know it’s difficult for all of you hard-chargers to grasp right now, but sitting and thinking has its charms. And so does reading a lot. Take it from your 80-year old friend, who wishes that you have many more years to add to your store.
Don’t you want to see how things come out? I do.
Marianne
Okay, not to tell you what to do, but it’s freely offered, and probably worth what you paid for it.
Byron’s on the mark, you need a limited term life policy, and nothing else, unless you plan to play the market inside your policy in a VUL. Didn’t think so. Maybe ten years, really–enough to see all the younguns through college. Otherwise, keep your savings up, your expenses to a minimum, and carry no debt. Then the world will be your oyster.
I encourage you to check out the Armed Forces Benefits Association. I’m carrying some serious term coverage with them at nearly SGLI prices, bought before I went to Iraq the first time. No war zone nonsense, either. I checked them out, they had paid out and without delay to the families of the fallen.
Can add only a thought about my retirement.
As I approached full retirement at age 60,(Airline pilot forced retirement age.) I had it all mapped out. Live in a place where I could go rock climbing in the AM and trout fishing in the PM. Plan two or three big trips a year with lots of hiking, fishing, and the like.
It worked. Hiking trips in the Dolomites, Switzerland, Spain, and Austria; fishing in Yellowstone, British Columbia, and Alaska; viewing the brown bears at Brooks Lodge, Alaska, going on safari in Tanzania, etc. You get the picture. Memorable experiences that still warm the cockles when recalled.
Life, however, sometimes intervenes. A picture of health at 60 by 68 I had developed a chronic malady that is not fatal, but sometimes makes you wish it was.
The once ideal retirement has now become an endurance contest. We still take trips, mostly cruises, which would certainly not have been my choice before. Now they are the adventure of choice.
The lesson? Go, do those things you have dreamed of when and wherever you can. Each day is a gift as is our health.
As I become creakier and less agile I have fortunately learned what Marianne has. Sitting and thinking has its charms. As well as reading and writing.
Jimmy J. has it right. My dad worked hard owning his own business; he was a success all on his own. He provided a lovely and privileged life to his family. He saved as he should, in anticipation of a robust retirement with my mom, after selling his business.
He got halfway thru a 3 year transition of the business to the new owner, was diagnosed with cancer and died in 3 months, at the age of 63. They never got to travel they way they wanted; my dad never got to enjoy the fruits of his life’s work.
Doesn’t mean you have to spend, spend, spend. But enjoy it in the here and now, don’t wait. As my family’s motto says: We’re not here for a long time, we’re here for a good time.
Save, yes. Plan, yes. Make sure your family will be provided for in your absence, yes.
But make sure you make time to enjoy it all, now.
…I’ve always thought that the Gummit would make a fortune if it extended SGLI to retired military folks at, say, about $35 a month. I had 100K worth with the first company I worked with after my retirement, but that went away when I got downsized. I’m now 3 jobs past that (and looking for the 4th – long story) and have only been able to get and keep insurance through those jobs. The reason for that is that I’m a 48-year-old diabetic – ain’t NOBODY gonna give me insurance, as my ex discovered to her chagrin when she tried to demand a 500K policy made out to her during our first hearing. But regarding how long I intend to last – well, my grandparents, both far worse diabetics for far longer than I’ve been, made it to their late 80s.
Mike
Although I’m the ‘insurance person’ at my job (along with all the other ‘persons’ I am), I don’t understand much about their thinking. Our very small company pays for a $15,000 life policy on each of the employees, of which we’re the owners, not the company. I was chagrined when the next month’s billing after my 65th birthday, showed that suddenly my life is only worth $7000 at the same premium. Got my attention, I’ll tell you. Unlike wine, I guess we just get older, not better.
Working hard to follow good suggestions (planning, not stressing; saving, but living; etc.).
First gig: moved from AD SGLI to 500k 20 year term (wife & two young boys). Second gig with a healthy increase in compensation package I doubled it (although I had to move from USAA which had been great). Like everything else, a little effort shopping pays off quite a bit.
I did as the others above did and got a term policy. My gig was just to make sure my family was taken care of if I die. Once the kids are out of the house, my husband won’t need the cash. Its there to help him out if I kick off while we still have kids.
As for his, his is term as well, but since he owns his own business it gets complicated. However, we both know, that we’ve invested properly and after the kids are gone, I earn enough to be able to care for myself. With our investments, my retirement will be fine.
Before we had kids, neither of us had life insurance, both having good jobs.
I’m all about term insurance. I only need it if I have a family in which to take care.
BTW, we used the company in which you write. It was a very fair deal.
Not being of the military background, I’ve got a whole life + critical illness rider as well as a health insurance plan (two plans in all, and health insurance is better termed disability insurance)
If you read anything into Insty’s ‘life extension trials’ posts, we may be living well into our sixth-score year, which does tend to play havoc with any kind of current long-term planning.
I am licensed to sell the “L” word and very strongly concur with Byron. Get a twenty year term policy. Check to make sure the premium is guaranteed to not go up during the term.
Talk with an insurance pro that you can trust who has your interests in mind. They aren’t all snake oil salesmen!
Surprised to see you’re just checking out term now. just weeks after retirement. Perhaps you have whole life purchased earlier? VGLI offerings will come every couple months until the deadline as a backup. One good thing is your last medical is available for getting term. .
How much, how long? Up to you. What BC signed up to is because he probably didn’t elect SBP. How much do you need balanced against everything else, including that yearly SS notice ya get. I have AFBA like Zane. Seems to be a good company but right I want to avoid their direct services! Plus don’t forget-your company’s life insurance just covers a years pay or less. And your wife should have term, too. Sometimes they can bundle both. As far as that car insurance company, we all have had forever..I gotta tell ya I ain’t happy with them or the direction they have been going….
Hadn’t been commented on here but good choice on taking the SBP. I congratulate you. Based on what I’ve read about your family history in here you were wise man to elect coverage and I ain’t an actuary. I did it too, cause my kids were real young when I retired. Diversification with the government paying part is always sweet. Not that I hope I win. Just getting to the point where you get to stop paying in is, in itself, something to shoot for., right? ; -)
Marianne, Miss B.L. and JimmyJ- those are true words of wisdom coming from some wise folks. Thanks.
b2
I’ll bite. When I left the Navy I too was on terminal leave for an extended period (sea duty will do that for ya, build up leave that is). So, during that period I started my first job as a civilian since I was in high school. On that first pay-day, with my first payroll check in hand and hand written instructions from my Wife as to how to conduct banking in a civilian facility I strode up to a PSFS Bank (Philadelphia Savings Fund Society) in my nice new civilian clothes replete with sport coat and my first ever pair of Rockport shoes (still buy them today – very comfortable). I had that stride that you get from knowing where you are going, busy man with a purpose, anyway I scanned ahead into the bank lobby to check out the crowd and establish what kind of time I would be spending in line. Low and behold there was nary a customer but one in the lobby. I am thinking that this civilian banking stuff will be a breeze if I don’t have to wait a short lifetime in line, unlike the many federal credit unions I had endured over the years.
Well, low and behold as I strode up to take my place behind that lone customer, he turned around and put a nice shinny 30 caliber automatic (5 groves in a left hand twist) into my face and said “Get down on your face you motherferrrrr” or words mostly to that affect. I promptly melted into the carpet and studied his sneakers (Slazenger, black runners with white piping and a gold puma on the outside, 7 eyelets and flat white laces).
So, you see, I had in that 60 or 90 seconds while I was “resting” on my stomach a long evaluation of my insurance plan and have always had way more than one needed for a person in my leg of the actuarial tables. Also, years later I would become a one-man company and have to pay out of pocket all the insurance one thinks you need. Term and Life, Health and short/long term disability (the most often skipped over), good thing these kinds of business expenses are deductible cause they are real expensive for a pool of one.
They never did catch the two robbers despite my most acurate description of their footwear and the one gun. Funny I could not remember anything about the guy holding it, save those shoes. And the bank eventually went out of business, I guess they couldn’t hold onto enough money seeing as they let it run out the doors.
BT: Jimmy T sends.
Lex, be thankful. At least you’re going to be getting retired pay as an Active-Duty retiree.
I have a reserve retirement (after 23.5 yrs of service, of which 11 was AD) that I can’t collect for another 18 years (age 60). I figured it out a while back. The government cheats me out of approx. $250k over the course of 20 years.
Of course by doing that, they’re banking on never having to pay me anything at all…
thebronze: i’m in the exact same boat as you, just sitting 3 years further ahead (same parameters, but 24 total years).
check recent legislation: if some of that AD time was spent down range, month for month that brings retirement pay draw date come in earlier.
thebronze, RetRsvMike,
I’m a Retired Reserve too. 13 active duty and 8 active Reserve. The Navy pay began at the same time as my airline retirement.
Hey, don’t knock it. When my old airline went Chapter 11 they dumped the pension and benies. The Navy pay and Tri Care are real life savers at this point. Add Navy Exchange, commisary, Navy Lodge, and military space A to the benies and it’s not a bad gig.
Yeah, you’ve got to wait a few years for it, but it’s sitting there waiting for you like money in the bank.
Yeah, I know guys, but it really pisses me off that the Gov’t pisses on us to save a buck. They’re counting on us dying before we collect and that’s the worst part.
Thanks for serving.
Yeah right…
re “The government cheats me out of approx. $250k over the course of 20 years.”
Don’t agree. As an AD retiree I think reserve retirements are more than generous.Especially Navy. And even more so before 9-11….
I’m concerned the active duty contingent in here might think it a lousy deal from your description.
b2
thebronze, Re your comment # 19 above… your creative and painfully self-serving accounting practices notwithstanding… the government didn’t cheat you out of anything… retirement pay and benefits at sixty was in my time and is still , as far as I know, the reserve deal… if you’d stayed on AD for another eight years you’d be collecting now…but you didn’t… so stop grousing and deal with it. Best
thebronze, I’m assumin’ you’re just b!tching to b!tch, which is an admirable pastime.
Nobody promised any of us a rose garden OR immediate retirement bennies when we traded AD for the USNR. The deal back in the day was “grey area” until you reach 60, then collect the retirement. Same deal today, as I hear it. DW promised to keep me on the machines till 60 (whew, never needed), and now it’s all good.
Sleep well & stay healthy; you’ll make it to 60. Nobody owes you nuthin’ & the guv’mint isn’t playing the acturarial tables to screw you…
Look at the bright side-by my count I am getting screwed out of 720,000 dollars over a normal life span by my ex-wife.
At least with reserve retirement an ex gets screwed back for half that amount.
Now that is something to think about.
S-San, I strongly suggest that we all strive to keep the personal out of this important discussion and eschew unseemly crotch centric allusions. Best
Snake eater, what is creative or self-serving about missing out on $250k+ in money for serving your country?
Yeah, that’s the way it is (Pay after age 60) and we all know it when we sign on the line. Does that make it right? Or fair? No, it doesn’t.
West lake Rd, you’re an idiot if you think the government isn’t playing the numbers to screw you. Why do you think that they don’t pay you until after age 60, because somehow you DESERVE not to get paid until you’re 60? That’s utterly ridiculous. They’re counting on you dying before collecting, so they don’t have to pay out. What is the reason that they always give for not lowering the age? Because it will cost too much! Your denial of the reason shows you’re either not smart or not serious.
Hey thebronze, just wondering if you think the government should bail you out of your loan because of the predatory lenders?
Because your argument is about as stupid as the people who claim that their impending foreclosure is not their fault.
Why should the government pay you a retirement for part time work? I’d love to get paid now for my reserve retirement, but if the government paid me now, I’d think they were even stupider than I think they are. (I think.)
I knew the rules, you knew the rules, and as B2 said – pre 9-11 the Navy Reserve was nothing more than a rod and gun club. When I was on active duty, I thought USNR was pretty much a joke – but I didn’t realize how bad it was until I went to the USNR (and I was in a “hardware unit” we really did stuff).
As an officer, getting ahead in the USNR has nothing to do with leadership or warfighting, it is all about going to the right seminars and schools. (Sounds a bit Air-Forcish to me)
Even the active duty Navy leadership thinks USNR is a joke. Want proof? How many “units” have been activated in the past 5 years? Not many. They just use individuals for their particular skills or for the fact that they usually maintain a body temp of 98.6. I’m not saying that reservists don’t contribute – they do, a tremendous amount. But the Reserves don’t do much at all.
Stop whining. You are getting exactly what you were promised. If you don’t like it, write your congressman.
What’s crotch centric about losing money you earned?
That’s pocketbook centric if you ask me-and either way the law is an abomination. I’m with the bronze. Pay me!
BRONZE SEZ, “West lake Rd, you’re an idiot if you think the government isn’t playing the numbers to screw you. Why do you think that they don’t pay you until after age 60, because somehow you DESERVE not to get paid until you’re 60? That’s utterly ridiculous. They’re counting on you dying before collecting, so they don’t have to pay out. What is the reason that they always give for not lowering the age? Because it will cost too much! Your denial of the reason shows you’re either not smart or not serious.”
SNIFF; WHIMPER; SIGH; WHEEZE; TEARS; I’M A VICTIM.
Yawn.
You guys are funny. You sound just like the types that say “If the military wanted you to have a wife, they’d have issued you one”.
You get what you get, move along…
Nose,
While I think the folks in NOLA couldn’t poor water out of a bucket, you are wrong about the Navy Reserve. In my community we are mobilizing a squadron for its third middle east tour and we’ve maintained roughly 2 squadrons there continuously since before the war began. We started the war as a community that was 100% reserve but we now have 4 AC squadrons and 6 RC squadrons. When I left a couple of months ago were still at 100% utilization and I think you’ll find the same thing or worse is going on with the reserve SeaBee battalions.