So, now that I have a truck and still no word on whether or not I will be working tomorrow, I decided that I wanted to write a little bit about some of the benefits the navy has for its retirees.

For all of you who think that we get full medical benefits for life, let me tell you that you are incorrect. We have to decide on an HMO type of plan; either Tricare Standrd or Tricare Prime. They both have their advantages and disadvantages, but they are both relatively inexpensive. Our Tricare Prime costs us $400 or so per year. So, all things considered, our insurance, while not free, is quite inexpensive. Yes there are co-pays and tons of rules and qualifications, blah, blah, blah, but what plan isn't complicated?

I will be able to get my prescriptions free or at a greatly reduced price, though. that may be quite valuable as I grow older and get more broken.

A benefit that I don't use nearly as often as I should is the commissary privilege. This is where military folk buy their groceries and sundries. There is no sales tax added (just a small surcharge to help pay the employees) and products are often cheaper than even Wally World (though, not always). I recommend the commissary for anyone that is buying bulk groceries and meat. Milk is less expensive there, too, but the commissary is usually too far to drive for a gallon of milk. The price is offset by the distance. Like I said, buying in bulk or enough for the entire month makes the commissary a good deal.

Another benefit that I have as a retiree is the use of the gym on base. Unfortunately for me, I am several miles from the nearest base, So unless I get a job on or near the base, the gym is not cost effective for me, even though it is free. Navy gymnasiums have come a very long way since I joined in 1989. They have always had decent weight room and exercise equipment, but in the 90's, they seemed to go through some transformation. The navy had a long tradition of fat, drunken and often slovenly appearances (something we struggle to overcome still). Sometime in the nineties, fitness was determined to be a quality of life issue and the facilities began to get much better. Upgraded equipment was added, programs were offered to help people with their weight, diet and exercise programs and even aerobics classes were offered for active duty, retired and dependents at little or no cost. Morale, Welfare and Recreation (MWR) was infused with more money to facilitate these programs. Quality of life pushed its way to the forefront of navy life and everyone attached to the navy felt the benefits. The benefits of a strong MWR program are too numerous to count, but sailors are encouraged to request any type of program addition they feel is important. Not everything is approved, of course, but the fact that you can fill out a request is testament to their dedication to the quality of life of sailors and their families.

A very important feature of navy retirees is the ability to insure a portion of your retired pay for a surviving spouse or family member. This benefit is called the Survivor Benefit Program (commonly referred to as SBP). It works like this:

You select an amount that you want to protect for your spouse (or qualifying child) and pay 6.5% of that amount for the insurance (I don't know if it is technically 'insurance' or not, but that's the way I picture it). Say you want to protect $2000 of your retired pay, should you expire before your spouse. It would cost you 6.5%, or $130 per month for this protection. If you die before your spouse, then they (the spouse ) are awarded 55% of the amount you insured. In this case, $1100/ month. Now, this sounds good, and it is in many circumstances: you find out that you have a terminal illness shortly before your retirement date, you are uninsurable otherwise (cancer survivor, etc), you are already approaching retirement age (60-65), just to name a few.

I have another plan that deserves some explanation. Realistically, most of us retirees are going to be finding another job when we leave the service. In many cases, we might be making less money than we did in the service, so our expenses are a great concern to us. I had thought that I would get $1000 worth of SBP for $65/ month. However, when I started looking a little more closely at the numbers, I realized that if I died before Sherry, she would get a whopping $550/ month! That adds up to $6600/ year. Not much in the greater scheme of things. So I decided that I would get a $250,000 term life insurance policy for only $43/ month. This is a 20 year policy, so I actually have some work to do before that 20 year term is up, the ultimate goal to be self insured at retirement. The payout for the insurance policy is $250,000, as I stated. That amount, correctly maintained in a good mutual fund, would net her- at a 4% per year withdrawal rate- $10,000 per year and would last her as long as she was alive. Some experts say that 8% is sustainable, but I think 4% is more conservative and more realistic. So, for $22 less per month, she would get an extra $3600 per year! For me, it was a no brainer. As I said, there are those who need SBP, and they should take advantage of it. However, in my case (everyone has to make this decision on their own) it was more cost effective to go term insurance. With the current economy, these numbers may not be accurate, and my heart goes out to those who are reaching retirement age this year, but for me, I have faith in the marketplace, and NO faith in the social security system to remain in place long enough for me to benefit, so I have to plan to take care of myself.