These questions are from a recent MCPON All Hands call on NAS Fallon, Nev – Speaking with Sailors
Master Chief Petty Officer of the Navy MCPON(SS/AW) Terry D. Scott
Q: I’m a first class petty officer, approaching the 15-year mark, and I’m confused about the High-3 or CSB/REDUX retirement options. How can I be sure which one is right for me?
A: The only way to be sure you make the right choice for you — and this applies to any financial decision — is to do your research!
I cannot over-emphasize the importance of discussing these alternatives with a financial advisor, or even just simply reading all the details of both plans on the www.staynavy.navy.mil Web site.
The CSB/REDUX option offers a $30,000 “bonus” payment now, in exchange for a reduced rate of retirement pay for the rest of your life. The High-3 plan is 50 percent of base pay after 20 years of service.
I recommend every Sailor visit the above Web site and click on the retirement calculator under the career tools section, to calculate your retirement pay with both plans.
What concerns me is that 48.5 percent of those enlisted Sailors who are eligible are taking the CSB/REDUX option. The Center for Naval Analysis suggests considering this program as an early cash-out “loan” with an implicit interest rate of 10.4 percent (for an E-6). This “loan” is paid back later by smaller retirement paychecks that, over time, could potentially lose $193,630 in after-tax retirement income.
If you have chosen CSB/REDUX, by law you have until you reach your CSB Election Effective Date, (the date of your 15th anniversary of active duty) to change your mind.
Again, I strongly encourage all Sailors to do research before making this important decision.
Q: Does the Navy force single parents to move out of housing for six months while they are on deployment?
A: Typically, the Navy permits dependent family members to be away from their housing unit for no longer than 90 days. However, the local housing authority may make an exception if a member is being deployed and chooses to send their dependents to a relative or guardian during deployment. In this situation, the member would not draw BAH since quarters are being provided, even though they are not in use. Sailors need to inform the housing office of their upcoming deployment and make arrangements to take care of their obligations, such as mowing the lawn.
In a similar situation, Navy housing policy (OPNAVINST 11101.13J) states that the housing authority may permit a live-in aid, if they are given guardian status. The aid could remain in the house with the dependents as their guardian.
Speaking with Sailors is a monthly column initiated by the Master Chief Petty Officer of the Navy as a way of reaching out to the men and women of the fleet, whether they are stationed just down the road or halfway around the world.
COPYRIGHT 2003 U.S. Navy
COPYRIGHT 2004 Gale Group