Thank you for your patience
First, let me stress that the difference between your two proposals (retire and then go to the VA or medically retire and then go to the VA) will not likely amount to much of a difference monetarily.
But I believe that it is in your interest to pursue, if you can, a medical retirement from the military.
There are a few reasons for this
1. If you are medically retired from the military, your retirement (the portion that is attributed to your disability) you receive tax free. So, for example, if the military retired you at 100% disability, you get that retired pension tax free.
That is a good thing....you get that tax break up front (no need to rely on a VA disability rating and tax free VA compensation)
And regardless of what Congress may do to our VA benefits, you would have that military retired pay rating.
2. It makes the VA application process simpler. If you are retired medically from the military, that process (called the MEB/PEB or Medical Evaluation Board/Physical Evaluation Board) will provide the evidence to support your VA claim. In theory your VA claim will be approved more quickly (since you have the evidence to support it all laid out in the MEB/PEB)
So while it may take some time to go through the MEB/PEB, you will likely have an easier experience with the VA.
I will explain below how the current law will likely operate to not give you much of a financial advantage at the end of the day, if you are rated at 100%...but laws can and do change. So it would be a good idea, to have the military rate you as disabled. This way regardless of what the VA does, you have that rating from the military (and, as I explain, that tax free income)
Now...lets talk about how this will likely play out.
If you are rated by the VA as disabled at 50% or more, and you have 20 or more years of service, then under current law you are entitled to keep BOTH your VA compensation and your military retired pay. VA compensation is tax free. If your rating from the VA was less than 50% you would have to waive military pay to get the VA compensation. Most folks do this since VA compensation is tax free and military retired pay is taxed...but again, if the rating is over 50% you get both.
So for you, if your rating is 50% or more (from the VA) you get to keep both.
Now...you do not get the double tax break...so if you get 100% rating from the military and 100% rating from the VA you get the VA money tax free but they will tax you on the military retirement...so in this instance, there is not a great monetary incentive to press for military medical retirement. Since you get the same if you retire medically are are rated over 50% from the VA or you are medically retired and are rated over 50% by the VA.
But what if the VA rates you less than 50%?
Could happen...they make mistakes. And while you are on appeal, it would be better if you are getting that entire military retirement tax free.
Even this may not be a large difference (the difference between your entire retired check tax free and only a portion, effectively tax free.
A few more reasons to consider MEB/PEB from the military
One is DIC
DIC is dependents indemnity compensation.
If you are married when you die, and your death is caused by or contributed to by your service related disabilities? Your widow is eligible for a good number of benefits from the VA, including health care, and a stipend of $1300/mo from the VA. This a a great benefit. If you have a military retirement for medical reasons, this makes a DIC claim for the widow much easier to process
And finally...time. If you apply for a MEB that process can take a year....this adds to your retirement multiple (it is 2.5% per year I believe for every year past 20). It all adds up...
BotXXXXX XXXXXne: If you have a choice? And do not mind taking the time for the MEB/PEB? Then it is a "no brainer" Go through the MEB...make sure they see it all...get that high rating...it can only help.
Let me know if you have more questions...happy to help if I can...I am in and out for the next few hours but will respond when I can