USAA has made its Military Retirement Comparison Tool available to all service members, following changes to the Department of Defense's retirement plan, according to a USAA press release.
The aim of the new tool is to help military families make informed financial decisions based upon their retirement plan. The current military retirement plan will transition to the Blended Retirement System effective Jan. 1, 2018.
The MRCT allows users to calculate their finances with five personalized categories. The categories are: active duty vs. National Guard or Reserve; pay grade based on status as officer, enlisted or warrant officer; years of service; years remaining until separation or retirement from the military; anticipated number of credited military points at the time of National Guard or Reserve retirement.
A survey conducted by USAA found that while three out of four service members were aware that DoD is offering a new retirement plan, one in four surveyed did not believe they have enough information in order to select the right retirement plan.
"The Department of Defense has called this the most significant change to military retirement to date and estimates that more than 1 million active-duty, Guard and Reserve members will be affected by this change," said retired Vice Adm. John Bird, USAA's senior vice president of military affairs. "We estimate that 650,000 USAA members will be impacted by this change, and our research indicates that 70 percent of our members recognize saving for retirement as a personal financial goal," he added.
49 percent of eligible service members are planning to remain on the military's current retirement plan, according to USAA's survey. The current plan benefits those who will retire after 20 years of military service.
"USAA suggests military members consider the benefits of the BRS, as DOD research finds only 19 percent of service members are likely to retire from service," the press release stated.
USAA's website offers military service members information on the retirement changes, in addition to tips to help ensure financial security. The MCRT is now live on the site and can be used to further assist with financial planning.