How to use questions for a military financial advisor to test pension advice

What should an advisor ask about your retired pay before showing a portfolio?

An advisor should ask how your retired pay, VA disability pay and Social Security add up to monthly income before showing any portfolio. Each question below comes with a weak answer to listen for, because a firm that opens with a fund list has skipped the part that sets your tax bill.

Before Edgepoint Wealth Management discusses any fund, it writes down the monthly income from pension, VA pay and Social Security and sizes the gap your savings must fill. That order matters. A fund list tells you nothing until you know how big the gap is.

Put these to the advisor:

Then take two questions to your CPA and a few to the plan administrators. Ask the CPA whether SBP premiums reduce your taxable retired pay (they come out before tax), and how much of your Social Security becomes taxable at the claiming age you're weighing. Ask the TSP and your 403(b) provider which payout options exist after separation, what the minimum partial payout is, and how tax withholding is set on each.

Last, ask for Form CRS, the short relationship summary every firm must hand you, and read it before the second meeting. Then search the advisor's name on the SEC's Investment Adviser Public Disclosure site and on FINRA BrokerCheck. Ten minutes there can end an interview early.

Questions for the advisor

Questions for your CPA and plan administrators

• How do you count VA disability pay? Weak: "it's income like any other." Strong: it's tax-free and left out of MAGI.
• How does High-3 or BRS retired pay change the amount I need from the TSP? Weak: a fund list before any income number.
• What do you check on SBP after a spouse dies? Weak: a blank look. Strong: confirm DFAS stopped the premiums.
• How does the age-63 lookback affect Part B once TRICARE For Life starts? Weak: "Medicare is later."

At 63, one income spike can cost $5,355 in Part B

Start with the ages. At age 59½ the 10 percent early-payout penalty ends. Social Security can start from age 62 to 70, and full retirement age is 67 if you were born in 1960 or later. Required minimum distributions (RMDs, the forced yearly payouts from traditional accounts) start at age 73, or age 75 if you were born in 1960 or later.

The age that gets missed is 63. Medicare sets your Part B premium from your tax return two years earlier, so your MAGI (adjusted gross income plus a few add-backs) at age 63 decides what you pay at 65. Single IRMAA tiers start at $109,000, and joint tiers start at $218,000. Medicare's 2026 standard Part B premium is $202.90 a month. Above $205,000 single it is $649.20.

Two errors have a price. Claiming at 62 while still drawing a $70,000 salary triggers the Social Security earnings test, which is $24,480 a year for 2026 under the SSA rules. SSA holds back $1 for every $2 over it, about $22,760 in a year. And SBP premiums that keep coming out after a spouse dies can run for months if no one reports the death to DFAS.

Think about who comes after you, too. Full SBP costs 6.5 percent of the elected base amount, and a surviving spouse receives 55 percent of that base. A retiree who remarries can elect SBP for the new spouse within the first year of marriage. Adult children who inherit a traditional TSP or 403(b) owe ordinary income tax on it, and most non-spouse heirs have 10 years to withdraw the full balance.

Now run your own accounts. First, find the gross and net pay on the DFAS Retiree Account Statement. Then confirm your SBP status and beneficiary on myPay. Next, check the beneficiary forms on the TSP and the 403(b), and pull your my Social Security estimates at 62, 67 and 70. Last, add up the income you expect in the year you turn 63.

Ages and thresholds that place you

Mistakes with a price tag

How much does waiting until 67 cost Faye, and what would tip it?

Waiting until 67 costs Faye $74,880 of early benefits she never collects, and pays her $520 more every month for life. The $74,880 is $2,080 a month for 36 months. Her break-even is 144 months, about age 79, and her health history and survivor options decide which side is better.

Faye (hypothetical) is a widowed, retired Army warrant officer, age 63, earning $70,000 as a school district logistics manager. She gets a $3,000 a month pension and about $1,000 a month in tax-free VA pay. Her age-63 MAGI is $70,000 + $36,000 = $106,000, under the $109,000 tier, so Part B at 65 is $202.90. She plans to stop work at age 64 with $650,000 split between the TSP and a 403(b). Then $4,000 a month covers $6,000 of spending, leaving a $2,000 gap. What does each claiming age cost her?

Look at the Part B row. It is the same in both columns, so the choice comes down to $74,880 collected early against $520 a month more for life. Claiming at 64 pays $2,080, which is 80 percent of her $2,600 age-67 amount, and leaves the $650,000 untouched. Waiting means she draws $2,000 a month, $72,000 over 3 years. Then $74,880 ÷ $520 = 144 months.

The tax angle favors waiting a little. Her taxable income at ages 64 to 66 is about $60,000 ($36,000 pension plus $24,000 of income draws; VA pay isn't counted). That is a low-income window, and it trims her traditional balance before RMDs at 75. If she claims instead, part of the benefit can become taxable.

The choice stays open. Her health history would tip it, and so would any survivor benefit on her late husband's record. Those amounts are illustrative. Her real numbers come from her my Social Security statement, and SSA has to confirm any survivor benefit. Our calculator can rerun this with your own figures.

Timing can also hurt. Suppose she takes $100,000 from the 403(b) in her last working year to clear the mortgage. On top of $70,000 of salary and $36,000 of pension, that puts her age-63 MAGI at $206,000. Part B at 65 then jumps from $202.90 to $649.20 a month, $5,355.60 more for that year. Moving the payoff past 63 doesn't erase the lookback. Each withdrawal at 64, 65 or 66 sets her Part B two years later. Splitting the payoff into pieces that keep each year's MAGI under the $109,000 single tier is what actually avoids the surcharge.

The cost lines side by side

What the tax view adds

How much slack should the playbook keep for markets, health and new tax law?

Keep three years of gap money outside stocks, about $72,000 if Faye waits. Edgepoint Wealth Management would rather hold it in cash and short-term bonds, because selling stock funds in a down year to cover the gap does lasting damage.

Investments can fall and stay down for years, health can shorten the payoff period for waiting, and Congress can change tax rates or IRMAA rules. So the playbook is checked every January, when the DFAS and TSP 1099-Rs arrive.

Which advisor questions can you run alone, and which need a conversation?

You can pull the statements, look up records on the SEC's Investment Adviser Public Disclosure site and FINRA BrokerCheck, read each Form CRS and run the checklist yourself in an evening. This page doesn't vet any particular advisor. Pricing the claiming age against income draws, age-63 MAGI and survivor benefits is the part worth a first conversation with Edgepoint Wealth Management, ideally in the year before your last paycheck.