Career Status Bonus vs. Non-continuation possibilities?

[Catbox]

I just received an email from finance that because of my entry date I am

eligible for a $30,000 Career Status Bonus (CSB) because I am entering my

15th year and I entered the service during the REDUX years (40%x High3)

I have the choice to turn down the Bonus and be on the High 3 plan

(50%xHigh3).

Ordinarily, I would opt for the High 3 plan and reject the bonus...that

said...

If the AF decides to non-continue twice passed over Majors like they did in

2011, (which I think is about a 30% possibility in 2013-an educated guess

only, I have nothing to back this up) and I reject the CSB then I am

basically giving up 30000 that I could use for any number of things (almost

100% savings for now). Plus I would not have any retirement to look forward

to in 5+ years. There would be the severance package of roughly $100,000 if

I'm not continued and 30% on top of that sounds like a pretty good deal.

Thoughts? Anyone ever take the CSB?

Edited February 26, 2013 by Catbox

[HU&W]

I already don't like that idea, but the prorated refund if you don't complete 20 really kills it for me. Essentially, you're taking on lots of risk for just an additional $500 per month over 5 years.

[Jughead]

Risky. If you do get promoted, now they can force you to stay to retirement (that's what the bonus is for, right?)--and that retirement will be significantly reduced. Same holds true for continuation (if you accept it, which your post implies you might be inclined to do if it's offered).

That said, if you're "sure" you won't get promoted and are ready to decline continuation (foregoing the separation pay you mention), I can see the logic....

(BTW, I'm assuming that the CSB commitment doesn't somehow trump separation for non-promotion rules--but I don't really know; if I were in your shoes, I'd make damn sure of that answer before pressing to test....)

[Catbox]

Thanks for the inputs...

To clarify:

I already met the the in zone board so my chances of making O5 are 0.69%.

If offered continuation I will gladly accept it.

[Termy]

Don't even consider it. Even if you end up non-continued, you are likely going to try to at least go the guard or reserves, right? There is more than one way to end up with an active duty retirement and you would be foolish to risk a ton of potential future money for $30K.

[ThreeHoler]

https://www.cna.org/research/2012/retirement-choice-2012

Not a great idea.

[nsplayr]

https://www.cna.org/r...ent-choice-2012

Great link...I may or may not have worked at CNA before the AF.

[Day Man]

we may or may not care.

[airlifter39]

I suggest that you look at the decision from a different perspective i.e. one of minimizing regret. You're giving yourself a 70% chance of being offered continuation. Rejecting the CSB is clearly the better choice in this outcome -- you'll reasonably expect to live a long, healthy life and will be money ahead under High-3 50% (as opposed to REDUX). You run a less than likely (30%), but not insignificant, chance of non-continuation - in which case you would be given $100K separation pay. (I'd verify the number). The reserves and guard, to the best of my knowledge, would not be a reasonable expectation as they typically only take passed over O-3's. (I'd verify this as well). I assume you don't need the money today (i.e. can't put it to immediate use which would increase future cash flow). Additionally, it sounds like you might have to pay back a significant amount of the $30K if you seperate before 20 (for whatever reason -- again verify w/ MPC).

As an 80yr old, which would you regret more? 1). Not getting the higher amount in retirement or 2) passing up the oppurtunity to get a little more than $100K leading up to seperation instead of a baseline of $100K (expected amount of seperaton without the CSB portion). While $100k won't come close to replacing the value of a 20 yr retirement, would $1XX (the 100k plus the pro-rated portion of CSB) really put you on your feet that much better? If you see the delta making a significant difference in your life (such as paying for law school or not), then take it. Otherwise reject and take your 70% chance of getting a 50% retirement at 20.

[Catbox]

very cool, airlifter...thanks for laying it out like that. exactly the logic I was looking for.

[skinny]

Got the CSB email today and would like some inputs. 10 year prior E, just put on Capt and currently a CSO. Plan has always been to make it to at least 20 and retire. I also just dropped my AD UPT board application. Best case scenario, I get picked up, incur the 10 year ADSC starting sometime in 2016 which takes me to 2026, totaling 26 years TIS. With the High-3/50% plan, you accrue 2.5% for every year over 20 and with the High-3/40% you accrue 3.5% for every year over 20. So if I took the 50%, best case scenario, I retire with 75%. With the 40% retirement, it would be 61%. Since math in public is hard, a difference of 4%.....again, best case scenario.

I'm in no way assuming I'll be picked up for UPT, so worst case, I don't get picked up, serve out my 20 as a CSO and punch. That would leave me with the retirement as advertised, either 40% or 50% depending what I decide on.

It should be noted that I'm headed back to the shit soon so should I decide to take the $30K, I would hope to do it while deployed and making tax free.

Thoughts?

[Learjetter]

https://www.dfas.mil/retiredmilitary/plan/estimate.html

Just do the math. AFPC site also has good calculators. It's almost NEVER a good idea to take the CSB.

[ThreeHoler]

That 30K is essentially a loan with roughly a 400K payback...and the day you finish paying it off is the day you die.

There are other things that matter in the decision, like CPI vs CPI-1%.

If you think you can make in excess of 15% per year on that 30K ip until the day you die, then you will be ahead by taking the CSB. Otherwise, it is only a good deal for the government.

[Herk Driver]

Very little of that 30K would end up tax free.

[HeyEng]

Even the U.S. Army handbook on retirement (good luck finding the AF one) advises against it. See pp. 12

https://www.bamc.amedd.army.mil/wtb/docs/us-military-retired-handbook.pdf

[General Chang]

DON'T DO IT!! Biggest scam in the world used by personnelists...trust me on this one...I would know. You will NEVER regret NOT taking the money. Herk/3-Hole/Lear/39 all correct.

Officers should not only be convicted of this truth and never doubt, but they should be counseling their NCOs/SNCOs as well.

[addict]

In 2000, E-6 base pay was $2277.

By 2020, O-4 base pay might be $8000.

Edited December 7, 2014 by addict

[Butters]

In 2000, E-6 base pay was $2277.

By 2020, O-4 base pay might be $8000.

Is that good or bad?

[Butters]

Ok, so the fact that E-6 base pay was $2277 in 2000 and by 2020 O-4 base pay might be $8000 is good!

Not sure I am following you.

[11F]

In 2000, E-6 base pay was $2277.

By 2020, O-4 base pay might be $8000.

In 2000, apples weren't too bad.

By 2020, oranges might be delicious.

Just sayin'.

[HeyEng]

By 2020 we will be fighting killer cyborgs from Skynet!

Sent from my SAMSUNG-SGH-I337 using Tapatalk

[addict]

In 2000, apples weren't too bad.

By 2020, oranges might be delicious.

Just sayin'.

Comparison was made in USD so you could get through the fruit aisle.

CSB is obsolete. It has remained the same value since introduction, while the cost has increased.

Consider this: 6 year flight pay has been the same since about 1991. Since then base pay has doubled.