Has anyone used the 15 Year REDUX option to receive the 30K payout? Pros & Cons?

SSG Private RallyPoint Member — Fri, 29 May 2015 23:13:14 -0400

Response by CPT Ahmed Faried made May 29 at 2015 11:16 PM

CPT Ahmed Faried — Fri, 29 May 2015 23:16:28 -0400

I haven't but the obvious con is that you lose a lot more than you gain. There is a reason why it is being offered.

Response by CSM Private RallyPoint Member made May 30 at 2015 12:49 AM

CSM Private RallyPoint Member — Sat, 30 May 2015 00:49:39 -0400

I wouldn't necessarily say the cons outweigh the pros. If you think you are going to live to be 100+ years old then yeah, the cons have a slight advantage.

I took the REDUX however, I was deployed at the time so received the full $30,000. I in turn invested that money 15 years ago and it is still growing, significantly. I am also retiring at 30 years so I will receive 75% just like someone who didn't take the REDUX. Sure, I won't receive the cost of living increase until the one time catch up but, that significantly growing $30,000 well exceeds the difference.

It really depends on what you do with the CSB. Truthfully, I probably wouldn't have done it if I would have had to pay taxes on the $30,000. Do the math and factor in what you plan on doing with the $30,000, you would be surprised how the pros may outweigh the cons.

Response by MSG Private RallyPoint Member made May 30 at 2015 1:41 AM

MSG Private RallyPoint Member — Sat, 30 May 2015 01:41:24 -0400

I know of 2 Soldiers, close friends of mine, that did the REDUX. It does have some advantages, but you have to have a clear (and realistic) goal on how to invest the money. Unfortunately, my friends purchased cars, electronics, clothes, etc., so there money is now gone and they can only look forward to a 40% retirement check with no COLA adjustments. The lack of COLA adjustment, which is an increase in retirement to adjust for inflation, is the greatest Con in my opinion. The time value of money will exponentially decrease your retirement check as the years pass by. Think of it this way, how much more are paying for gas, groceries, homes (rentals), phone service, and internet as compared to 20 years ago (1995)? Imagine if you retired in 1995 with a 40% check and there was no increase to your pension check. That $1.00 cost per gallon of gas average $3.00 dollars now. That's more than tripled the cost. Bottom line: Have a goal, make a plan and invest wisely if you choose the REDUX.

Response by SPC Todd Hanson made May 30 at 2015 12:07 PM

SPC Todd Hanson — Sat, 30 May 2015 12:07:45 -0400

From a finance (36b) stand point the only time I see doing it is if you plan on doing over 20 years of service and can sign for it down range tax free.

Response by TSgt Joshua Copeland made May 30 at 2015 2:24 PM

TSgt Joshua Copeland — Sat, 30 May 2015 14:24:54 -0400

Only if you get it tax free and then have a sound and somewhat aggressive investment program to grow that money and plan on staying till 30.

Response by CW4 Private RallyPoint Member made May 30 at 2015 5:07 PM

CW4 Private RallyPoint Member — Sat, 30 May 2015 17:07:48 -0400

I remember getting an email last year explaining to me that I had the option but that wasn't something that I was interested in. I actually can't recall any of my battle buddies taking this option.

Response by SSG Private RallyPoint Member made May 30 at 2015 10:47 PM

SSG Private RallyPoint Member — Sat, 30 May 2015 22:47:04 -0400

I want to thank everyone for the feedback! It was good to receive all angles.

Response by LTC Paul Labrador made May 31 at 2015 12:58 AM

LTC Paul Labrador — Sun, 31 May 2015 00:58:23 -0400

Pro is you get a nice chunk of money up front. Nice if you need a nice chunk of money immediately (i.e. down payment on a house).

Con is that if you calculate it out over the rest of your life, you will get significantly less money than if you took High 3.