Comments on: Is REDUX Retirement Worth it?

By: Ryan Guina

Ryan Guina — Thu, 12 Jan 2012 04:40:14 +0000

Aaron, the catchup at age 62 is a one time adjustment, then the COLA goes back to the old level of the Consumer Price Index – 1. Over the course of a retirement (especially a long retirement as you describe), electing to take the REDUX option will cost the retiree hundreds of thousands of dollars (or potentially in the 7 figures, depending on retirement rank). The only way to make up for that difference is to invest the Career Service Bonus and earn enough to bridge the gap. Unfortunately, most people don’t have the skill or discipline to invest in a manner that would beat the market and bridge the gap. Additionally, the stock markets aren’t predictable enough to recommend that course of action. With retirement, it’s almost always better to take the guaranteed money, then invest for greater returns with other investments, such as in your Thrift Savings Plan, IRA, or other investments.

By: Aaron Robinson

Aaron Robinson — Thu, 12 Jan 2012 01:30:55 +0000

If you hit the 20 year mark in the Army and joined the Army at age 18-20, you begin your, “retirement” at age 38-40. How many in the civilian world retire at 38-40? The REDUX is not a, “bad” decision taking that into consideration. Yes you would take a hit down the line, but eventually when you hit actual retirement age, “bam” your caught back up. Unless you plan on doing nothing, or getting a mediocre job after the military the REDUX may be a poor decision. Noone that I know of who ,”retired” from the military at after 20-22 years stopped working. It’s not as terrible as the press and everyone makes it out to be.

By: Ryan Guina

Ryan Guina — Tue, 27 Dec 2011 14:56:16 +0000

You should receive a notice from your personnel department stating your eligibility sometime around the 14 1/2 year mark. You will need to make your decision before you reach your 15 year anniversary. The decision is irrevocable, and becomes official on your 15 year mark, so make sure you are 100% certain when you make your decision.

Best of luck, and thanks for your service.

By: Joseph Grant III

Joseph Grant III — Tue, 27 Dec 2011 12:56:00 +0000

How do you designate which choice you want to make? Do you contact DFAS or some other office? Please advise.

By: James

James — Mon, 05 Dec 2011 20:42:17 +0000

Ryan, Thx for the advice. My Dave Ramsey starter kit should be here by the end of the week. I have been terrible with my money all of my life. I always had the mind set that as long as all of my bills were paid then I was okay and saving wasn’t that important. I’m now in the process of trying to re-trian my brain so to speak to save more and spend less. I have spent some time on Dave’s website and listening to his archived audio shows this past week and I think I’m getting on the right path now.

By: Ryan Guina

Ryan Guina — Mon, 05 Dec 2011 17:47:27 +0000

James, I have taken the Dave Ramsey program, and I would highly recommend it, especially if you take it with a group, such as at a local church or other organization. There is a lot o great information in there and following those steps can help you turn your financial life around. I can’t tell you whether or not to take REDUX,but I can say that in most situations, it isn’t worth it. I would try the Financial Peace University program, give it a few month, and see where you are at that time. You may find that you won’t need to take the REDUX option if you can change the way you think about and handle money.

By: James

James — Mon, 05 Dec 2011 17:22:07 +0000

Mike,

I’m at the point where I have been offered the REDUX. I’m in the same boat as Mike stated above. I just ordered the Dave Ramsey start up kit this weekend but I came here to see if anyone who took the REDUX had anything positive to say about it. I’m 95-5% against taking the money but am willing to listen to both sides. How was your overall experience with the Dave Ramsey program?

By: Mike

Mike — Sat, 03 Dec 2011 16:50:58 +0000

Rob,

I would follow the advice of Dave Ramsey and work towards paying these cards off. You did not mention other debt. Is the $20 grand the only debt you owe? I personally would not risk paying of those cards at once unless you and your wife are 100% sure that you will not accrue more debt. There are financial calculators out there that can help you work out how long it will take you to pay of your CC. Snowballing the debt worked for my wife and I. Look into it before you make a decision on the redux.

By: oa

oa — Tue, 25 Oct 2011 13:48:46 +0000

AF Kid, can you please elaborate on your premise; you are the only one I saw that simplified the whole thing. Please take into account the tax hit you take in the beginning, staying in 24 years, and assume that you would invest the difference later on, once the payments equled outincluding the $30K plus growth. Looks like in the LONG run, it doesn’t make sense, unless you are real savvy and invest in dependable blue chip companies, which is never guaranteed. Let me know if I am missing anything. Just playing devil’s advocate.

By: Rob

Rob — Sat, 08 Oct 2011 01:43:18 +0000

My wife and I owe approx. $20,000 in credit cards. Due to our monthly payout on these cards, I wouldn’t say were struggling, but we are living pay check to pay check. This is one thing we are tired of doing. I am an E-7 select Active Duty Air Force. Would you say the redux retirement option is a good one for us to consider? Please advise…Thank you.