Hunter Rose

So how many folks are planning on working until 65? I plan on sipping Mai Tais on the beach NLT 55 personally. How many years does it take until you’re earning $200K at a Legacy?

No, you're not working for 2/3s pay either. That''s the same incorrect logic as the working for 50% pay argument. It's fallacious reasoning based on retirement being only 50% of base pay and discounting what the 2.5% increase means in real dollar terms because 2.5% is a very small number. In simplest financial terms, at 20 years you're working for: (100% pay + any bonuses) + (2.5% added retirement) - $54K. The $54K is what a Lt Col would get if they retired at 20 and you forgo by continuing to work. The 2.5% retirement increase for a Lt Col averages about $3K per year past 20. It's also almost zero risk. Using a conservative 4% rate of return, you's have to earn $75K net to generate the same annual income stream increase. However, you're giving up the $54K in retirement income, so you subtract that from $75K to get $21K. This $21K net would get added to your full Lt Col pay when making a comparison to a civilian job. So what you're really working for in that 21st year is Lt Col salary + any bonuses + $21K. This would be a base income number that you would compare to a civilian job to see if you would do better or worse financially by leaving at 20 years. You'd also have to add in extra money to account for your tax free BAH/BAS pay. Granted there's tons of other factors that go into the decision of when to retire: QoL, you prefer money in the bank as opposed to a gov't pension/annuity that goes away when you die, risk tolerance, etc.

Completely agree. The "once you hit 20 years you're working for half pay" is another line of reasoning that gets thrown around a lot but is based on incorrect reasoning IMO.

To me it always seems the majority of folks write off a military pension without really understanding how much money it takes to generate the same guaranteed income stream. People scoff because it's only $54K a year for a 20 year-O-5, but don't realize it's also pretty much zero risk. Using a low risk 4% rate of return for an equivalent investment, the day you retire as an O-5 it's like the government just deposited a $1.35 million check in your investment account.

My suspicion is also that big AF uses my thought process/calculations in thinking a $35K bonus is sufficient. My math is much like the "statement of military compensation" that DFAS gives you to assign dollar values to military benefits like tax free pay, commissary privileges, etc. I can easily see a budget officer doing roughly the same thought process that got me to $187K, adding $35K to that and saying: "We're offering these pilots the equivalent of $222K annually and they are still leaving! We'll never be able to pay their greedy asses enough so we should increase UPT production ASAP!"

If a Lt Col retires at 20 years and gets a civilian job at $187K +$52K pension he would absolutely be way ahead. Got links to any jobs that are going to pay me $187K year one? if so, send them my way! Again, I'm not arguing you don't do better in the long run if a Lt Col retires at 20 and works for the airlines for 23 years. I'm just pointing out that people often don't factor in realistic dollar values when making the decision. Folks always seem to undervalue the actual value of military pay/pension increases and disregard the fact that for the first year in the airlines you're losing about $80K in salary. I think of it as calculating a break-even point much like if you were doing a mortgage refinance. In reality it's about 3-5 years in the airlines before you've accounted for the lost income/pension increases and start being better off in pure dollar terms. Granted this completely disregards QoL differences. Just offering s different perspective.

The "huge financial disincentive" for working past 20 years gets thrown around a lot, but I don't think people really look at it correctly. The math isn't just "work get 50K/don't work get 150K". For a Lt Col making $150K a year, you have to compensate for tax free BAH/BAS as well as account for the 2.5% pension increase when comparing it to a civilian salary. I make $29.5K tax free, so you'd have to add in an extra $9K to account for civilian taxes to get to the same take home money. The 2.5% pension increase for a Lt Col is roughly $3.5K extra per year to the pension. That's zero risk, so using a conservative 4.5% rate of return I'd need to save $78K to equal the extra same $3.5K passive income stream. So an extra $28K ($78K - $50K pension ) needs to get added to the civilian salary to be equivalent to staying in the military an extra year. Thus, a more accurate comparison is a Lt Col retiring at 20 years would need to earn a civilian salary of $187K to break even. I'm not saying you don't make more money in the long run switching to the airlines, but you will have to account for a reduced salary for a few years even at a Legacy airline until you equal your military pay. I'd gladly stay in the military an extra 4 years if they let me fly at the FTU and I was guaranteed in writing per my contract not to be PCS'd or deployed.

Kind of need to release the PDSM and ctually offer a bonus first to see what the 5K bump does. I wonder how long HAF will sit on this. Hopefully we see it offered sometime in June.

The problem to me is that the GOs who are the actual decision makers on things like the bonus seem to be perpetually years behind the issue. The bonus structure above should have been offered 3-4 years ago. $35K then might have gotten some contract expired folks (experienced IPs/EPs) to sign on until 22 YAS, but now it won't affect anyone. Even with 17.5 years in, it still amazes me the hesitancy HAF has for trying to retain pilots and previous bonus takers. They'd rather spend millions per UPT student and wreck the Air Force for 5-7 years while they "ramp up production" and train brand new inexperienced pilots than lobby to pay experienced pilots/IPs/EPs $55K-$65K extra a year of retention money (yet have no issues doing that for doctors or lawyers). It's as if they don't view your service as pure enough if money affects your decision matrix. They only seem to want the folks willing to sacrifice for peanuts.

Unfortunately I think you are wrong this time. The verbiage in the draft that someone posted on Facebook looks the same as last year. What it means is for contract expired folks, you can sign a second contract to either 22, 23, or 24 YAS but it must be a 3-year minimum. So if you are at 20 YAS, you’d have to sign until 23 YAS. I’d love to be able to sign another bonus contract for 3 years only, but sadly I don’t think that will happen. That being said, the draft I saw also had verbiage that lumped the 1-yr contract in with the initial eligible folks and then explained their options So I don’t think they won your guys will get screwed. Just got a wait until it’s actually released since they like to make last-minute changes.

Welcome to the world of those who took a bonus only to see subsequent year groups get better deals for more money. It’s the gamble you take. Is anyone really surprised that the USAF still thinks they can get 6-9 year ADSC’s for peanuts in bonus money?

Read that this morning. I think the O-6 coordinating it was trying to be subtle, but I still interpreted the preface as "we're not really going to try and improve compensation, just work on additional duties. " The AF would rather spend $20M and waste years to create a new IP than spend $100K to retain one. My prediction is we'll see no increase to flight pay or an introduced professional pay like docs. The bonus amounts/structures will essentially go unchanged.

Must be my memory slipping in my old age. Could have sworn they offered fighter guys $50K/yr a year or two after I took my bonus, but maybe they had the option for 50% up front or could sign twice as long. Don't let my mistatement derail the thread. Bottom line bonus needs needs to be $50-65K this year. The other thing AF needs to realize is they have to get rid of the service commitments associated with the bonus too. Just offer $50-65K extra per year when your UPT ADSC expires. Even if a pilot only stays for 1-2 more years it's money well spent. In the last year I've sat in on more than one brief with GOs who were convinced it's SOLELY QoL and money plays no factor whatsoever. With the amount of surveys I've gotten dealing with pay and bonuses hopefully that is starting to change. Money's the only fix to help stem the outflow for the next 3-5 years until QoL cultural changes can start having an effect.

AF is not going to get to $100K bonus any time soon, but seems they could easily offer $50-65K this year since we were just at $50K per year for fighter guys a couple years ago. Offer $65K annual bonus without long commitments (1-2 years max) and I think you'd get enough takers to at least stem the bleeding. It wouldn't reverse the trend but at least it would slow it down and buy AF some time. The $35K bonus is a joke . The AF waited too long and missed it's window to fix culture. Now they need to throw money at the problem in the short term. That's what I've put on everyone of of the 4 aircrew retention crisis surveys I've taken in the last month.

That was an interesting read. The take rates are abysmal. Especially for the folks eligible for a second bonus. AF is not going to shore up their pilot numbers with that idea unless they start offering A LOT more money.

The PDSM says 22-24 YAS for 2nd bonus takers. Acronyms on SURFs is not my strength, does YAS = Years Aviation Service or Years Active Service? If aviation service that means 22 years of flying min calculated from when you started UPT so you'd have to serve beyond just 22 years.

My bonus expires next year so I'll look at it again then, but my choice will likely be the same as yours. AF should also factor in 365s and forced PCS movements late in careers as well. These drive separations a whole lot for the crowd that would potentially stay in my opinion. In my 40s I have little desire to be gone from my wife for a year or have to move. If they guaranteed no 365s (I'd be OK with one 179) and guaranteed I wouldn't have to move I'd likely sign on when eligible next year.