Over 20 Years Served - Medical Vs. Regular Retikrement?

[vaf]

I was helping a veteran who was planning to retire very soon with over 20 years served, when we just found out he had a seizure of unknown origin which caused him to wreck his car and someone else's. He ended up waking up in the ambulance and crushed his L5 disc, and he's now in the hospital. He called my husband just now, asking about how this would affect his retirement plans for the immediate future.

My husband told him to put his retirement on hold. I'm wondering, once he has his surgery and is otherwise stabilized, is he better off pursuing a medical retirement, or should he just retire based on time served and let the VA handle the issues?

My gut says to tell him to pursue a medical retirement, but I don't know if that's the best option for him.

May I get your opinions, please?

[iraqx2]

My best suggestion would be to go for Medical Retirement. This may lead to more benefits, both from the military and VA. There may be benefits now or in the future that congress my pass. The VA will always be around. Military programs may come and go. In looking back at my 14 years in the Army, I wish I had gone out on medical chapter discharge versus the plain ETS. What happened to me was that I am at 100% with the VA. However, I will not receive anything from the Army because of my ETS. There is a program call CRSC, for combat injuries, that is separate program by each branch of the military. To be eligible, you must either be retired or chaptered out by medical reasons. I am either. If I was, I would be collecting additional benefits from the program along with my VA benefits. I am not sure about your case.

Good Luck.

[Pete53]

SS is taxable after you reach 32,000 income in any combination not counting your VA of course. They use a special formula but generally any SS Income they tax has a special way to compute it and it can only be on one half of the SS itself.

Like being married I think it can push you into a higher tax bracket if you have other income.

I don't have to worry about it but the truth is paying taxes is really not a bad problem to have.

[Commander Bob]

Concurrent Retirement and Disability Pay

http://www.military.com/benefits/military-...eceipt-overview

[Teac]

I do know that civilian federal employees who retire on disability pay have to pay tax on their annuity. I bet it is the same for military.

I am medically retired from civil service and don't pay one penny in federal income tax..... so what you know is not correct for all cases..

[Teac]

VAF

Well, I am no expert on the matter, but my VA benefits come tax free, and I am pretty sure retirement benefits are taxable...I know Social Security is taxable. They have a scale, depending upon how much other income you have that goes something like if you earn more than 44,000 in a year, then 85% of your Social Security is taxable. However, if you earn less than $44,000 per year, only 50% of your social security is taxable. (this assumes you are married filing jointly) More here:

http://www.ssa.gov/planners/taxes.htm

So, my advice would be to go medical unless the "regular" retirement was more because $30,000 per year non taxable is more than $30,000 per year minus taxes. JMHO.

I don't pay any income taxes on my social security either. IN fact the only reason I even firle my taxes is to get the credit for EIC usually $250.00 a year....

[12R3G]

vaf

He needs to do some research before making a decision. Since he is over 20 years, he can retire based on years of service. 100% of retirement pay is taxable (states vary).

Going the PEB route: Chap 61 (medically retired) Retired pay is based on % of disability from PEB. The base PEBLO can provide all the answers, but I believe it years of service is greater than the disability percentage, then you are paid that difference as taxable income (ex: 40% disability and 10% retirement pay = 50% at 20 years service)

VA compensation: Over 20 years service (whether chapter 61 or years of service reitiree), and 50% or greater disabled according to the VA then there is a declining offset thru 2014 when there will be full concurrent receipts of both retired pay and disability compensation.

Either way, he will ulimately retire. He should definantely stick around as long as possible and try to find out what is going on.