Posted on Apr 28, 2015
Is the new proposal for military retirement going to help or hurt the military?
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http://www.ncosupport.com/military-benefits/military-retirement-changes.html
The DOD is radically changing longstanding benefits with an angle to target short-term and mid-term enlistees, as opposed to the traditional pension paid out only after 20 years of service.
The DOD is radically changing longstanding benefits with an angle to target short-term and mid-term enlistees, as opposed to the traditional pension paid out only after 20 years of service.
Retirement
Career Advice
Military Pay
Posted >1 y ago
Responses: 1
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First, This is a HUGE change. To this, there is going to be a lot of resistance. However, my intuition tells me this is going to be an improvement in the way the DoD addresses retirement.
Second, I believe this puts our service members into a better spot --especially for those who do not retire. Please entertain this example: Under the current plan, should a SSgt puts in 10 years and gets out, he gets nothing but a DD-214. Given the opportunity to contribute to a 401K (or similar retirement plan), that member now has a tangible "nest egg" that can be rolled over into another retirement plan with his/her next employer.
At the end of the day, the new retirement plan, whatever it looks like, represents a movement to fiscal responsibility. I'm not sure that the average taxpayer (or military members, for that matter) understands the financial burden that a pension plan weighs into budgeting... I don't. The bottom line: Pensions are quite literally a dinosaur in the current civilian work force. This antiquated model rewards those who could "do 20" but, fails to support anyone who served less.
Ultimately, I believe the new retirement plan will benefit more service members --regardless of their time in. Yes, it will put additional responsibility upon those heading to the recruiters offices today: They will have to manage their retirement accounts, save their money, and plan for their future --which is what the rest of their fellow Americans have been doing all along.
Will this hurt the military? It might... might not. When I was a youngster, the recruiter repeated told me that I had to wait 'til I was 18 to join. I'm willing to wager that there a lot of other young men & women that, like us, will use the military as a starting point. If they don't serve for 20-years, they should be in a better financial position to transition into the civilian world.
Second, I believe this puts our service members into a better spot --especially for those who do not retire. Please entertain this example: Under the current plan, should a SSgt puts in 10 years and gets out, he gets nothing but a DD-214. Given the opportunity to contribute to a 401K (or similar retirement plan), that member now has a tangible "nest egg" that can be rolled over into another retirement plan with his/her next employer.
At the end of the day, the new retirement plan, whatever it looks like, represents a movement to fiscal responsibility. I'm not sure that the average taxpayer (or military members, for that matter) understands the financial burden that a pension plan weighs into budgeting... I don't. The bottom line: Pensions are quite literally a dinosaur in the current civilian work force. This antiquated model rewards those who could "do 20" but, fails to support anyone who served less.
Ultimately, I believe the new retirement plan will benefit more service members --regardless of their time in. Yes, it will put additional responsibility upon those heading to the recruiters offices today: They will have to manage their retirement accounts, save their money, and plan for their future --which is what the rest of their fellow Americans have been doing all along.
Will this hurt the military? It might... might not. When I was a youngster, the recruiter repeated told me that I had to wait 'til I was 18 to join. I'm willing to wager that there a lot of other young men & women that, like us, will use the military as a starting point. If they don't serve for 20-years, they should be in a better financial position to transition into the civilian world.
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Some argue that you cannot replace the experience of "lifers". Moreover, they so greatly contribute to the senior leadership of the military, that to lose personnel who would go past 20 years may have devastating consequences on the developing a military capable of changing to a dynamic global environment.
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