Reservist

ISS2 2015

Reservist Magazine is the award-winning official publication of the United States Coast Guard Reserve. Quarterly issues include news and feature articles about the men and women who comprise America's premier national maritime safety and security

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relies on IRR members as a strategic force of trained individuals ready to mobilize should it be determined the number of SELRES are insufficient to meet mission demand. Non-participation in the IRR weakens the overall strength of the Coast Guard and is a large administrative burden on CG PSC RPM-3 that has significant costs in terms of time and tax payer dollars. The number of current IRR members determined not to be in compliance with participation standards totaled 1,199. Members were informed via e-mail and U.S. Postal Service of their deficiencies, using contact information listed in Direct Access (DA), and directed to come into compliance within 90 days. Affected members were advised that failure to comply would result in their transfer to the ISL. Two-hundred and forty-four members responded and came into compliance. Thirty-six officers and 919 enlisted members have since been transferred into the ISL. So, what happens to you once you are transferred to the ISL? A transfer to the ISL has a significant impact on the member. Members in the ISL are not authorized to train or drill for retirement points or pay, will not accrue 15 points for membership, and are no longer eligible for promotion or advancement. Service time in the ISL does not count toward determining retirement pay, entitlements or time in service. Enlisted members will be separated from the Service at the end of their enlistment. Officers in the ISL for more than 3 years will be reviewed by the Reserve Mobilization Disposition Board (MOB) to determine if the member has potential for useful military service and should be retained. Participation standards are required in order to ensure a ready force is available. Members who fail to comply may find themselves involuntarily recalled to active duty in order to come into compliance or transferred to the ISL and subject to discharge. Transferred members desiring to return to the Ready Reserve may do so through the Reserve Component Category (RCC) change process. More information on submitting a RCC request may be found at www.uscg.mil/rpm/rpm3/irr/IRR%20Member%20 Guide.pdf. � 10 Steps to Financial Freedom By Master Chief Kenneth King, PSU 308 Command Master Chief This article is reprinted from the The Wire, the Official Publication of Joint Task Force Guantanamo, where PSu 308 is currently deployed. One of the first books I read when I became interested in personal finance was, Your Money or Your Life by Vicki Robin and Joe Dominguez. The title of the book refers to the idea that we trade our most precious asset (our time) for money and we should not do so lightly. The book also asks us to consider how our lives could be different if we no longer had to work for a living. I believe we all dream of achieving financial independence. To do so, we must maximize savings and minimize debt. But most of us are not saving nearly enough – the average 401(k) balance of $90,000 would only generate only $3,600 of annual income at a 4% rate of return. I would like to share some concepts I wished I had learned earlier in life that are essential to achieving financial independence (FI): 1. Live Below Your Means – You must spend less than you make to pay off debt and save. 2. Needs vs. Wants – If you cannot live (survive) without something it is a need – air, food, water, shelter. Everything else is a want. 3. Delayed Gratifcation – If you desire something you don't have the cash for, wait and save for it. 4. Emergency Fund – Things will wrong. Have 3 – 6 months living expenses set aside so when crisis occurs you have a cushion. Otherwise you will be forced to borrow. Make this your first financial priority, even before saving for retirement or paying off debt early. 5. Pay Yourself First – Put money into savings (Thrift Savings Plan, 401K, IRA) before you receive it – through payroll deduction. When you get a raise, increase your savings. 6. Avoid Credit Cards – Use credit only for protection and convenience like online purchases or travel. Pay off the balance monthly. If you lack the discipline to use them - then don't. 7. Appreciating vs. Depreciating Assets– Never borrow money for something that goes down in value (depreciates) over time. A car for example. Homes are generally appreciating assets. 8. Compound Interest and Time Value of Money – Compound interest allows money to grow over time. The earlier you start, the more you will have at retirement since the interest for each dollar invested is added to the principal and both earn interest into the future. 9. Debt Snowball – When paying off debt, apply all extra money to the smallest debt first while making the minimum payment on the remainder. Once it's paid off, do the same to the next smallest debt. 10. 50/30/20 Budget – 50% of take-home pay for Fixed Costs – monthly expenses such as rent or mortgage, utilities, car payments (ugh!); 30% for Flexible Spending – day- to-day expenses that vary including groceries, eating out, shopping, and entertainment; 20% for Financial Goals including emergency fund, debt reduction, and retirement savings. � MCPO Kenneth King 44 RESERVIST � Issue 2 • 2015

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