Do you think there is anyway the Gov't would offer you that if it wasn't benificial to them? Don't even consider it if you are not within a week of having to file bankruptcy. Spend a couple of hundred bucks, get an hour with an PROFESSIONAL finanial advisor who know the system. It is a loose, loose more or loose even more situation. It would take the skills of Warren Buffet to make it a profitable choice!
It's not a "bonus." It's a loan. A nightmare loan.
It's a loan you receive at fifteen years of service and then spend the rest of your life paying back.
That $30,000 (or less after taxes) will cost you perhaps $200,000 to $300,000 in reduced pension and COLA payments.
Do some serious searching for information and seek out professional input as the poster above stated.
You'll be hard pressed to find anyone who has invested the money wisely. Most have blown it, and then have a lifetime of payments for something that is long gone.
Something Brian said above reminded me of an important add on. Even if you stay to 30, which is where most people incorrectly assume the two programs achieve parity, you will still loose money. If you take the CSB, you yearly COLA raise will be 1 percentage point less than if you didn't. That doesn't mean you only get 99 cents for every dollar the 'other guy' gets. It means if COLA is 2%, you only get 1%, or 50 cents on the dollar. The following year if COLA is 3%, you only get 2%. The other guy has now recieved raises equal to a nickel for every dollar in retirement money. You only have moved up 3 cents for evey dollar. Very soon, he will have TWICE the raises that you got! This continues 'til you hit 62, when you get a huge raise to catch up to the other guy. The next year - you start sliding back again with that lower COLA.
My opinion is not to elect it for a few simple reasons:
1. You will need the difference in retirement pay and COLA later at an older age then the pay off now at 15 years of service.
2. You never quite catch up as previously stated above. If you took out a loan with a bank, at least you could pay it off, and not continue to be penalized.
3. If you save $500.00 a month for the next five years, you'll have $30,000.00 at your 20 year mark. If you need $30K, I would advise setting a goal now to save for that amount and chose the higher retirement percentage/average for your future after the Coast Guard.
Thanks for all your info. It does sound to good to be true. After talking with a few friends and reading the info here, there is no chance I will take the $30,000 (21,000 after taxes) Thanks again
