QS Community Board

Military Life February 14, 2018

Decisions, Decisions! Is the New Uniformed Services BRS Right for You?

Maggie K., Senior Editor

Saving for retirement is a top priority for many Service members. And thanks to the new Uniformed Services Blended Retirement System (BRS), many members can reap the benefits of investing in their post-military futures. Members who enter the military on or after January 1, 2018, will automatically be enrolled in the BRS, but some existing Service members will have the choice to opt into the new system.

Kick off Military Saves Week by helping those Service members with options understand the ins and outs of the BRS so they can choose the path that best suits their financial needs.

Who’s Eligible to Opt In?

Active-duty Service members with less than 12 years of service as of December 31, 2017, may choose to opt into the BRS. No one will be moved into the BRS unless they make this choice.

How Does the BRS Work?

The BRS blends a 20-year defined benefit annuity with a defined contribution plan that allows Service members to contribute to a Thrift Savings Plan (TSP) account, with Government automatic and matching contributions.

The BRS formula to compute the amount of retired pay after 20 years of service is:

2% x Years Served x High-3 Months of Basic Pay

The government automatically contributes 1% of your basic pay to your TSP and up to an additional 4% matching contribution. Your TSP is portable after two years of service. Continuation pay is offered mid-career for an additional service commitment.

What Are the BRS Benefits?

Some of the perks to contributing to the BRS include the following:

  • Allows for earlier investment in a retirement plan
  • No longer an all or nothing retirement plan
  • Covers more people
  • Greater portability of retirement benefits
  • Adds incentive to stay for full career, with continuation pay
  • Gives choices at retirement, with a lump sum option

What If I Don’t Opt In?

If you decide the BRS is not right you, you will be automatically grandfathered under the legacy retirement system, which is a defined benefit annuity that provides monthly retired pay after 20 years of service. The amount of retired pay after 20 years of service is calculated using the following formula:

2.5% x Years Served x High-3 Months of Basic Pay

You also have the freedom to explore other options such as the TSP and alternate investments to increase your retirement savings.

Interested in Opting In?

Service members with the option of enrolling into the new BRS, must take the mandatory online Opt-In Course to make an educated decision about managing their retirement money. They have some time to make up their minds, though. A final decision can be made anytime between January 1, 2018, and December 31, 2018.

Still Not Sure?

There are resources to help:

  • Take the Opt-In Course on the JKO website.
  • Make an appointment to speak with an Installation Personal Financial Manager or Counselor.
  • Visit Military OneSource and the Military Compensation websites for more information.

Making Sense of it All

Whether a Service member is automatically enrolled in the BRS or has the power to opt in, he or she needs to thoroughly grasp where his or her hard-earned money is going. By helping your Service members better understand the new retirement system, you are helping them make an educated decision and pave a better road to retirement.

For more information on various financial planning products available to purchase for your community, browse the QuickSeries® library of guides, including BRS & TSP – Invest in Your Future

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