The Pentagon is backing the new retirement plan, which is similar to a 401K. What are your thoughts on the projected plan?

1SG Private RallyPoint Member — Mon, 20 Jul 2015 19:59:11 -0400

Pentagon is officially backing a "blended" system that would shrink the size of the current pension by about 20 percent yet supplement that benefit by offering government contributions to individual retirement investment accounts.

The Current Retirement plan does not require Soldiers to invest their own money in order to receive a guaranteed retirement at 20 years. Under the new program Service members will have to take a portion of their pay and invest it toward their retirement with government matching up to a certain percentage.

We currently have the TSP which is an investment opportunity for Soldiers to utilize as an addition to their retirement and can be a valuable investment tool for those not wishing to make a go at the 20 years required for the current 50% pay for the rest of your life retirement.

This will be very good for government finance reduction costs, but in this Soldier's opinion not good for the Service Members who risk their lives without hesitation for their country.

http://www.militarytimes.com/story/military/benefits/retirement/2015/06/10/dod-retirement-plan-details-approved/71011882/

New military retirement system gets Pentagon OK

After months of official silence, the Defense Department on Wednesday sent to Capitol Hill its formal recommendation for transforming military

Response by Capt Richard I P. made Apr 23 at 2015 7:35 PM

Capt Richard I P. — Thu, 23 Apr 2015 19:35:47 -0400

I think its all still theoretical, I don't think any of the recommended changes have been adopted yet.

Response by LTC Dom Dionne made Apr 23 at 2015 8:57 PM

LTC Dom Dionne — Thu, 23 Apr 2015 20:57:36 -0400

The proposal is still in Congress so it has not been signed into law. If you are currently in the military you will keep your current retirement plan unless you opt to switch to the new retirement proposal. I would not get too worked up until the "new retirement plan" makes it out of the House and Senate and enacted into law. Then we can all read it to see if it is better to keep what we currently are entitled to, or opt in to the new 401K type plan. Everyone will have a different take based on if you are an officer, warrant, NCO, or soldier and where you are in your career.

Response by LTC John Shaw made Apr 23 at 2015 9:06 PM

LTC John Shaw — Thu, 23 Apr 2015 21:06:27 -0400

SSG Joseph Geraci Joseph, this is one of worst kept secrets in Washington, the DoD is already counting on saving this money two years ago. We know that Congress would not take the action but to save money, so the bottom line is there will be a less generous pension plan. If you save your own money in TSP and the military matches you may have more in total retirement money. If you have no discipline or just are too strapped to save then you will have less.

As an Army Reservist, I don't get the pension until age 60. So I don't know the impact yet.

The government and large businesses are shifting the cost to workers because they can control costs. They also get rid of the risk of us living to 120 or 130 years old, which no company expected 20 years ago, but is being projected by some actuaries.

What get's me upset is the desire to cut the military benefits without cutting other government pensions and especially Congressional and Executive branch pensions. If we want to control cost, then let's have everyone share the pain.

Here is a link to a Washington Post article that is expressing some 'social venting', dated Dec, 2013. http://www.washingtonpost.com/business/economy/younger-veterans-outraged-by-budget-cuts-to-their-pension-benefits/2013/12/30/c43cbbec-6f02-11e3-b405-7e360f7e9fd2_story.html

Younger military veterans are angered by budget cuts to their pension benefits

The trims are the most controversial piece of the bipartisan plan signed into law by Obama last week.

Response by Sgt Aaron Kennedy, MS made Apr 24 at 2015 10:38 AM

Sgt Aaron Kennedy, MS — Fri, 24 Apr 2015 10:38:09 -0400

Generally speaking... based on previous iterations.

The plan you joined under is the plan you have, unless you change to the new one.

In this case (which doesn't exist yet), DO NOT CHANGE.

"Investment based" plans rely on "time" (lots of it) to be equivalent to percentage based plans (current system).

Response by MAJ Ken Landgren made Apr 24 at 2015 11:06 AM

MAJ Ken Landgren — Fri, 24 Apr 2015 11:06:39 -0400

1. You are right, veterans with many years under their belt will choose the current retirement.
2. Those who opt to withdraw from the TSP before 59 1/2 years are subjected to tax and penalties.
3. The blended plan will have different results to retirees due to the different investment funds.

Response by MSG Private RallyPoint Member made Jul 20 at 2015 8:01 PM

MSG Private RallyPoint Member — Mon, 20 Jul 2015 20:01:16 -0400

I hope that they will have a choice. I also hope it is not enforced with all but you know the government will choose the "best" way to save a dollar.

Response by SGM Matthew Quick made Jul 20 at 2015 8:03 PM

SGM Matthew Quick — Mon, 20 Jul 2015 20:03:23 -0400

Makes sense...places some financial responsibilities on the individual.

Response by Col Kyle Taylor made Jul 20 at 2015 8:14 PM

Col Kyle Taylor — Mon, 20 Jul 2015 20:14:47 -0400

I think it would be great to have a plan that a service member put into and is matched based on task so if deployed in combat you perhaps receive 3x or if deployed in support you receive 2x etc. if you take an overseas assignment you receive 1.25 times. This type of flexibility could all w someone to walk away after 4 deployments over 10 years with a significant savings. The current plan does nothing for one or two hitch folks and I believe would give more flexibility for manpower adjustments when needed. Can you imagine receiving a letter requesting you to return to active duty and you would receive 3x matching and if deployed would receive 4x matching? I'm not sure the all in at 20 years is the right way to go in the future

Response by SSgt Alex Robinson made Jul 20 at 2015 8:15 PM

SSgt Alex Robinson — Mon, 20 Jul 2015 20:15:31 -0400

Stop mucking with our benefits

Response by LCDR Rabbah Rona Matlow made Jul 20 at 2015 8:33 PM

LCDR Rabbah Rona Matlow — Mon, 20 Jul 2015 20:33:51 -0400

This is actually old news, but it's a hugely horrid mistake.

We have troops up to E7 on food stamps. The Pentagon is CUTTING Active Duty pay and allowances as we speak. These folks can IN NO WAY afford to contribute to any 401K type plan until reaching Senior Enlisted or Field Grad Officer status.

It is another cynical approach to destroying readiness, by ensuring that the best and brightest leave, rather than serving full careers.

The policy of the Obama administration and the Pentagon of putting all of the pain of Sequestration on the military personnel budgets is completely wrong, cold hearted, short sighted and ignorant. There are many other ways to cut the budget besides punishing those at the "Tip of the Spear".

#NoIncumbentsIn2016

Response by SSG (ret) William Martin made Jul 20 at 2015 9:00 PM

SSG (ret) William Martin — Mon, 20 Jul 2015 21:00:56 -0400

I came back into the military in 2007. I immediately started the TSP. I recently changed over to the ROTH. The good thing about this but I might be wrong is that for example, SM comes into the service and immediately started the investment programs. Let's say he or she is chaptered of the military on the 10th year of their career. With proper investing, they don't need to restart their path to retirement and the government can not take it away unless there is some crazy loop hole for the government to do so.

Response by LCDR Private RallyPoint Member made Jul 20 at 2015 9:11 PM

LCDR Private RallyPoint Member — Mon, 20 Jul 2015 21:11:24 -0400

This is actually a pretty well thought out plan that in the long term will benefit just about everyone.

In the near term it will cost the government more while they pay 50% retirements and begin to match contributions of those on the new plan. In the long run it will save money.

For service members that use the new plan there is an immediate obvious benefit to those who wouldn't stay 20 and a potential benefit to those that do if they utilize the matching contributions well.

Response by CW3 Private RallyPoint Member made Jul 20 at 2015 9:45 PM

CW3 Private RallyPoint Member — Mon, 20 Jul 2015 21:45:26 -0400

20 years in the military is not comparable to any other career. Because of this fact, I think this type of retirement plan is not comparable nor is it representative of the sacrifices service members make. If this plan does get approved, I hope all existing service members will be given the option of the traditional retirement they were promised when the entered the military.

Response by SSG James Arlington made Jul 20 at 2015 10:32 PM

SSG James Arlington — Mon, 20 Jul 2015 22:32:38 -0400

It's always curious to me that so many military personnel and vets are so-called conservatives, yet when it comes to their pensions, why are they afraid of the system most Americans belong to, the free economic, no guaranteed retirement system? Why do they scream about some politicans trying to revise or eliminate their socialist pension system? Its like Social Security, which most Republicans tried to kill so many times back in the 1930's and 40's. Yes, it even went to the Supreme Court which upheld it as a tax, much like so-called Obamacare.

Response by MSgt Alan H made Jul 20 at 2015 10:45 PM

MSgt Alan H — Mon, 20 Jul 2015 22:45:53 -0400

You are exactly right soldier, some are wanting active duty members to take all the risk for their own retirement, you could end up with nothing! If current active duty don't voice fowl on this program they are sadly mistaken. For the pentagon to even seriously consider this new program is a slap in the face to their people! It's going to seriously degrade recruitment as well even when recruiters sugar coat it and only tell you the maximum it could benefit and not the minimum.

Response by PO1 Jason Taylor made Jul 20 at 2015 11:01 PM

PO1 Jason Taylor — Mon, 20 Jul 2015 23:01:53 -0400

That's all fine as long congress don't get there 2 year equals 250k a year for life deal!

Response by LCDR Private RallyPoint Member made Jul 20 at 2015 11:23 PM

LCDR Private RallyPoint Member — Mon, 20 Jul 2015 23:23:02 -0400

I decided to run some numbers so that I could have a more educated response:

To start with I took the Army's average times per pay grade (easiest to find and usually more round numbers) so this would be different by service. Next I took the pay scale and included time in service to calculate pay at each month in a 20 year career. I then took the amount contributed at 1% (zero service member contribution), 3%(1% and matching), 5%, 7%, 9%, and 11%(max matching). I compounded interest monthly at 1%, 2%, 3%, 4%, and 5%. Sure interest could be much higher but it could also be lower. The results are summarized below for the amount saved for a retired enlisted soldier who promoted at the average rate for the army as of 2015 and based on 2015 pay scales with no inflation. In parenthesis next to each amount is what that same amount would be 20 years later (age 60 if retiring at 40) with no more contributions after retirement and sustaining the same interest rate.

1% (Government automatic contribution)
1% interest - $8,616.42 ($10,523.24)
2% interest - $9,413.50 ($14,038.61)
3% interest - $10,315.94 ($18,782.80)
4% interest - $11,339.91 ($25,203.88)
5% interest - $12,504.27 ($33,919.59)

3% (1% individual contribution)
1% interest - $25,849.25 ($31,569.71)
2% interest - $28,240.49 ($42,115.84)
3% interest - $30,947.82 ($56,348.39)
4% interest - $34,019.73 ($75,611.64)
5% interest - $37,512.81 ($101,758.80)

5% (2% member contribution)
1% interest - $43,082.08 ($52,616.19)
2% interest - $47,067.49 ($70,193.07)
3% interest - $51,579.69 ($93,913.99)
4% interest - $56,699.55 ($126,019.40)
5% interest - $62,521.35 ($169,597.90)

7% (3% member contribution)
1% interest - $60,314.91 ($73,662.66)
2% interest - $65,894.49 ($98,270.30)
3% interest - $72,211.57 ($131,479.60)
4% interest - $79,379.37 ($176,427.20)
5% interest - $87,529.89 ($237,437.10)

9% (4% member contribution)
1% interest - $77,547.74 ($94,709.14)
2% interest - $84,721.48 ($126,347.50)
3% interest - $92,843.45 ($169,045.20)
4% interest - $102,059.20 ($226,834.90)
5% interest - $112,538.40 ($305,276.30)

11% (5% member contribution (max matched))
1% interest - $94,780.57 ($115,755.60)
2% interest - $103,548.50 ($154,424.80)
3% interest - $113,475.30 ($206,610.80)
4% interest - $124,739 ($277,242.70)
5% interest - $137,547 ($373,115.4)

These amounts may seem absurdly high at first (especially those after 20 more years of interest) but keep in mind that compounding interest does wondrous things and the earlier an investment is made the better. Forcing a 3% contribution until counseling is done would hopefully keep most members at or above the 7% margin.

For added comparison, the money lost per year for an E8 retiring at 20 years under the same scenario (40% down from 50%) would be $5,675.76 (this is giving him credit for all 3 years as an E8 as well, 1 year at the 16-18 pay rate and 2 at the 18-20) .

When you look at it that way it's really not bad. The plus side that isn't even considered is it forces our service members to save. We are a lot less likely to pay a penalty to take money out of TSP early than we are to NOT save some of our retirement check.

I personally 100% endorse this plan the way I understand it. I could be wrong but things look good to me.

Response by SPC Private RallyPoint Member made Jul 20 at 2015 11:51 PM

SPC Private RallyPoint Member — Mon, 20 Jul 2015 23:51:19 -0400

This change saves the government money in the long run by reducing the lifetime payments of those who do make it to 20 years service while also offering a safety net to those who don't make it to that cliff for whatever reason. This is a great plan that forces SM's to take charge of their own retirement in the way that civilians do and allows some to walk away with more than a DD-214 when their careers are cut short.

Response by TSgt Private RallyPoint Member made Jul 21 at 2015 12:18 AM

TSgt Private RallyPoint Member — Tue, 21 Jul 2015 00:18:37 -0400

Good for people who do less than 20, bad for those who do 20...the only way it works is if you max all the contributions the whole time. I feel like there's more bad than good.

Response by SGM Steve Wettstein made Jul 21 at 2015 5:07 AM

SGM Steve Wettstein — Tue, 21 Jul 2015 05:07:48 -0400

1SG Private RallyPoint Member All I can say is that I am glad I am retired now and yes I know that people in now are supposed to be grandfathered in for the 20 year plan. Congress seems to want to keep taking away from the 1% that actually defends the country.

Response by LTC Jason Strickland made Jul 21 at 2015 8:34 AM

LTC Jason Strickland — Tue, 21 Jul 2015 08:34:57 -0400

I understand the Pentagon's rationale for this recommendation. I object to it in theory and the potential impact on retention for career military leaders; however, I understand that DOD must be creative in looking at ways to reduce costs. Overall, I believe this is an acceptable compromise to what we already have in place.

Response by MSgt Alex Taylor made Jul 21 at 2015 9:27 AM

MSgt Alex Taylor — Tue, 21 Jul 2015 09:27:05 -0400

I believe this is a horrible idea. Starting with the fact that we can't even educate our members enough to stop people from taking the REDUX, how will we give them a better look at the future outside of the military. Most lower level enlisted members will not be putting much, if anything into this retirement plan. They are young, full of life, and want to enjoy it.

Furthermore, given how Wall Street currently acts, this seems like a backhanded way to put more money into their hands from the government. The plans require people to maintain them and look for emerging opportunities, and we have seen how well this goes over. I know the TSP has been managed well over time, but this will increase the numbers big. That might lead to somebody trying to do something out of line with other people's money, mainly our SM's money.

Response by MSgt Private RallyPoint Member made Jul 21 at 2015 12:24 PM

MSgt Private RallyPoint Member — Tue, 21 Jul 2015 12:24:14 -0400

Good.....retirement needed revision....I don't agree with all of this but it is step in right direction....i've had to many good Airman leave with nothing after going to the sand box 2,3, or even 4 times.....we have been at war for 15 plus years and have folks getting out at 8 years with a handshake and a thank you.....that's a damn shame......part of taking care of veterans is starting with taking care of them while they are active. In today's world there is no reason someone should be leaving the military after even 4 years without something in the bank for retirement.

Or even worse the guy or gal that comes back from the dessert has medical issues and then starts having PT issues.....as of right now you can be administratively at 18 years and get nothing. Least under this plan folks would have something set aside for retirement.

Anyway just my two or four cents...

Response by MSgt Dave Burke made Jul 21 at 2015 1:27 PM

MSgt Dave Burke — Tue, 21 Jul 2015 13:27:10 -0400

Unless the payroll increases greatly there should NOT be any plan that forces the military person to contribute. It simply would not be affordable. Doing the TSP by choice is good and shoujld be encouraged but not forced.

Response by CDR Terry Boles made Jul 21 at 2015 4:54 PM

CDR Terry Boles — Tue, 21 Jul 2015 16:54:24 -0400

First let me say that I am not in favor of any more social re-engineering programs on the backs of the military by people who have never served or long forgotten what it is like to be in the trenches. This retirement plan is simply for those 82% who decide not to make a career of the military, no one else just as Congress states. I do not believe DoD will go broke on the pension plan for the 18% who stay and make a career as people do roll off the pension when they stop breathing.

If we look at today's retired E-9 at 20-years and without any assumptions for future pay-raises, future TSP contribution limits, tax-free contributions that not every service member can contribute during their career, and this E-9 retires at age 40 and lives until age 85 the breakdown is interesting. So, just a 20-year contribution of $18,000 per 2015 TSP basic limits. If you could save the MAX TSP of $18,000 every year for 20-years it would grow to $360,000 and it would give you a lifetime benefit of $8,000 per year (assuming you live to age 85 and the fund did not grow). That same $360,000 might grow to $500,000 or $750,000 or even more and it would give you an annual lifetime benefit of $11,111 and $16,600 respectively.

Now for that E-9 who retires today at 20-years of service with their 50% retirement pay it would be $2865 per month for life (age 40 to 85) which would pay them over a life time of $1,547,100. Don’t forget, this same E-9 can contribute to TSP and add another $360,000 or more to their life time 50% pay.

That same E-9 at 40% retirement pay would receive $2292 per month which would pay them over a lifetime $1,237,680 plus their TSP of $360,000 or more plus the matching funds.

Now here’s the kicker as the results are interesting……How many people can afford to contribute the MAX OUT the TSP each year for 20-years ($18,000) and for that E-9 today who has an annual base pay of $68,670 before taxes it might be a bit easier than that E-3 today under 2-years who makes $21,876 before taxes. That’s where the disparity is, early in your career one is not able to max out their TSP contributions and quite possibly not until they meet the 10-year career mark which places them well behind the retirement TSP curve.

Thus in the long run, that 50% retiree who can also MAX contributes to their TSP (just like the 40% retiree) will be ahead by $310,000 in lifetime earnings before the TSP is even factored into their retirement pay (see above E-9 scenario).

So, a lot to simply say this TSP retirement plan is for those 82% who move on while the 20-year retiree takes the financial retirement hit, once again!! And that’s before we start a conversation about who sacrificed more, the 82% or the 18% who made a career.

Response by TSgt Private RallyPoint Member made Jul 21 at 2015 5:17 PM

TSgt Private RallyPoint Member — Tue, 21 Jul 2015 17:17:58 -0400

Not a chance. If they are suggesting it, it means it will save them money in the long run. Many are not able to save as is, especially since we are funds low and benefit rich. I would rather keep my 50% when I retire, you know, what was promised to me for 20 years of service. We are expected to have integrity and keep out word, it's time they do the same.

Response by MSG Ronnie Snider made Jul 22 at 2015 8:42 AM

MSG Ronnie Snider — Wed, 22 Jul 2015 08:42:42 -0400

Retirement should stay the same. Please tell me what soldier can save money when you and your spouse PCS every 2 1/2 to 3 years and they keep losing their jobs each time. Starting over each time. You are crazy if you think this will work. People on the outside complain about our benefits let them do what we go through and see if they think anything should be cut.

Response by LCDR Private RallyPoint Member made Jul 22 at 2015 1:58 PM

LCDR Private RallyPoint Member — Wed, 22 Jul 2015 13:58:40 -0400

There's the plus. Members that spend 4 years in will still have a retirement plan from the 401K. If you leave before 20, there's nothing for your service. The negative is that for people who retire, they are guaranteed less money. 20 years in the military is equivalent to 30+ years elsewhere

Response by MAJ Ken Landgren made Jul 22 at 2015 9:09 PM

MAJ Ken Landgren — Wed, 22 Jul 2015 21:09:36 -0400

Surely there will be investment training-NOT!

Response by SFC Private RallyPoint Member made Jul 22 at 2015 10:10 PM

SFC Private RallyPoint Member — Wed, 22 Jul 2015 22:10:31 -0400

There is already a system to obtain a return for responsible young service members to get a return on their service if they do not do 20 years that is fulfilled to an extent by the TSP program. Further, I do not think that acquiring a free four year degree such as with the post 9/11 GI Bill, VA loans, and other benefits that are obtained after 90 days of AD service is walking away with nothing if you do not do 20 years. I think this is a terrible plan that is estimated not only to save money even if it was practical to contribute the maximum for 20 years that I am certain numbers have been crunched and the expected contribution has already been calculated and will be far less. In my opinion this is a poor plan and is not a benefit to future men and women who enlist. Short story long and long story short I feel that I am glad that I will be grandfathered in and will not be forced into this contributory program that seems to be dependent on a lot of "ifs" for it to be rewarding.

Response by SPC Private RallyPoint Member made Jul 23 at 2015 12:36 AM

SPC Private RallyPoint Member — Thu, 23 Jul 2015 00:36:42 -0400

Just another reason on a growing list to GTFO after my initial contract is complete. From the time I enlisted, programs I joined up for have been tweaked or gutted. Why should I expect any different if I remain?

Response by PO1 John Miller made Jul 23 at 2015 4:07 AM

PO1 John Miller — Thu, 23 Jul 2015 04:07:26 -0400

The first question I would like to ask of the Pentagon (who will most likely retire from the military once their Pentagon tour is up) and all members of Congress who are currently receiving a military pension is: "Are you willing to put your money where your mouth is? I'm sure a person of your experience and contacts has made some very good investments over the years and your stock portfolio, 401(k) and IRA's are doing very well. So are you willing to give up your military pensions and TRICARE benefits to set the example?"

Response by MAJ Private RallyPoint Member made Jul 23 at 2015 11:42 AM

MAJ Private RallyPoint Member — Thu, 23 Jul 2015 11:42:58 -0400

The cash system is much better than the current accrual system. Let's face it Chris Kyle not getting anything out of his years in service aside from a disability claim is pathetic.
The real problem with this implementation is the motivation, a 20% cut in retirement pay after the longest war in our history is a significant attack on combat veterans and a significant slap in the face. Let alone the retirement is the bread and butter of our mid grade NCO corps. without the 20 immediate retirement a significant number of our best troops will be rethinking their career choices.

Response by CW5 Private RallyPoint Member made Jul 23 at 2015 12:07 PM

CW5 Private RallyPoint Member — Thu, 23 Jul 2015 12:07:50 -0400

With the fact that we now make a lot more than 20 years ago, this is a feasible plan. We need to ensure that we are providing the education to new troops better than what I received (sign up for savings bonds!). The good news is that we will all know the day that this becomes the new standard for new recruits. You know what you are getting into.
And don't think it will hurt recruiting. I am comfortable saying that most of us joined without the intention of staying for 20 in the first place. With that mindset the portability of the retirement will be a selling point. Only time will tell. Free pensions from age 38 until death are fiscally unsustainable, especially after the pay gaps were narrowed.

Response by SPC David S. made Jul 23 at 2015 10:19 PM

SPC David S. — Thu, 23 Jul 2015 22:19:11 -0400

As an ad hoc financial planner I'm not so sure this is a good deal as I see the equity market getting stressed down the road. As a majority of the 76 million baby boomers have grossly under funded their retirement plans and the ever growing unfunded liabilities it might not be wise to lock up you investments into a vehicle that imposes a 10% penalty plus taxes on money until your 59.5 years of age. Publicly traded companies are legally required to account for “explicit” and “implicit” future obligations such as employee pensions and retirement benefits. However the federal budget, which is the “federal government’s primary financial planning and control tool,” is not bound by this rule. In fact if the federal government were to actually balance the books we are indeed a bit more in the red than the stated 17.3 trillion that we had to borrowed - its really 75.94 trillion ($6.5 trillion for federal employee retirement and veterans’ benefits, $18.5 trillion short in the Social Security program, $33.5 trillion in projected shortfalls in the Medicare program, $140 billion in projected shortfalls in other “social insurance” programs, and then the 17.3 trillion that was due). What does this all have to do with the Thrift Saving Plan? Many of the baby boomers are going to need to "cash in" their investments - 401ks, stock and bonds to cover their shortages. We are talking a lot of people - 10,000 a day until around 2030. On top of this as I stated earlier the under funded problem will manifest its self in a decrease in benefits. One example is social security. In 2024 social security is only 75% funded - this will results in a 25% drop in benefits paid. This means baby boomers will not only need to sell their investments they will more than likely also need to keep working into their 80's and or adjust their standard of living. This trading in of stocks and bonds will decrease their value - no demand equals low price. So imagine an individual squirrelling away their money into a 401k plan that they can't pull out of without losing 10% plus taxes and the stock market starts to take a nose dive due to all the selling of stocks. While this is only a part of the aggregate (mutual funds, bonds and money market accounts) of the 401k it still matters as you will need to lose a good chunk in value of the 401k before it makes sense to take the hit and seek better performing investments. However this makes complete sense to the federal government as it helps to reduce the unfunded entitlements as well helps push money into the stock market - however the outflow is a torrent and the inflow will be a trickle. If your retiring in 15 years the TSP might backfire on you - investments that can be transferred into other markets with little cost might be a better approach. Also with 73 million people leaving the work force the economy will contract and our GDP will drop - making it harder to borrow to cover our debt. When the federal government starts to welch on its obligations our credit rating will also be affected. Not to be a downer just that one needs to have a balanced portfolio. Putting all your eggs in the TSP basket is not a good investment strategy regardless of the potential risk of the equity market.

Response by MSgt Alan H made Jul 23 at 2015 10:35 PM

MSgt Alan H — Thu, 23 Jul 2015 22:35:43 -0400

Exactly correct!

Response by MSG Tony Hodge made Jul 27 at 2015 1:00 PM

MSG Tony Hodge — Mon, 27 Jul 2015 13:00:16 -0400

It seems that a change to our retirement is ineveitable (but congress and the president still get a very hardy retirment for a single term in office).
Maybe Congress and the Presidents Retirement should be tied to ours, one enlistment/term X% and it increases with each contract/term until 20 years and then you do not get anymore % for anyting beyond that only the pay you are earning?
Just something to think about not a hard stand for me.

http://warontherocks.com/2015/03/military-retirement-too-sweet-a-deal/?singlepage=1

Military Retirement: Too Sweet a Deal? - War on the Rocks

Retiring from the U.S. military is a sweet deal for the 17 percent of veterans who are allowed to serve for twenty years on active duty. Too sweet. For dec

Response by MAJ Ken Landgren made Jul 27 at 2015 7:18 PM

MAJ Ken Landgren — Mon, 27 Jul 2015 19:18:52 -0400

Did I miss the part of what does a 20 year retirement mean excluding TSP? Who will teach the military about the principles of investing?

Response by PO1 Glenn Boucher made Jul 27 at 2015 9:31 PM

PO1 Glenn Boucher — Mon, 27 Jul 2015 21:31:56 -0400

They need to adjust their own retirement plans and see how they like it before screwing around with ours. Let them cut their own benefits and then see if they still want to cut ours.

Response by CAPT Kevin B. made Jul 28 at 2015 10:24 AM

CAPT Kevin B. — Tue, 28 Jul 2015 10:24:24 -0400

The current vs. new plan can both be good or bad depending on what you do, i.e. do you go 5-10% into TSP/401 or not. If you don't invest into your own retirement, stop your bitching now. Neither will carry you long term. The new plan becomes more like FERS for civil servants which is a combination of fixed annuity and TSP. I did see an "adviser" bemoan what's going on with the baby boomers. That's what not investing in yourself gets. Mil types have to get past the "hand me money" syndrome and get on with investing in yourself. If you are not doing 5% TSP minimum, you're throwing money away as the first 5% makes a 100% return that payday with the current matching program. Always do the matching at least, 10% is better.

Response by MAJ Ken Landgren made Aug 1 at 2015 7:23 PM

MAJ Ken Landgren — Sat, 01 Aug 2015 19:23:34 -0400

They will adopt this like they did DTS, like crap.

Response by MAJ Byron Oyler made Aug 12 at 2015 10:30 AM

MAJ Byron Oyler — Wed, 12 Aug 2015 10:30:14 -0400

I think it will be a wonderful plan for the Fortune 500 companies to get our best and brightest unless Uncle Sam pays some giant bonuses to senior enlisted and officers. If the bonuses do not come, anyone that could make CSM or O-6 will be out at 15years and fully vested. I fear it will sound great like BRAC and in the end cost the government a lot more money. Take an MI officer that is fluent in Arabic, at 15yrs the CIA comes calling, who do you think under this new plan they will be working for at year 16? Here comes a giant bonus and traditional retirement at 20yrs-nothing saved by the government.

Response by MAJ Ken Landgren made Aug 18 at 2015 12:10 PM

MAJ Ken Landgren — Tue, 18 Aug 2015 12:10:36 -0400

I would never remember all the rules and the transparency of the open seasons. I love how the government a plan that saves its money, or proposes a lump sum for retirement much to the detriment to the troops. This tells me the planners are on the government side.

Response by Maj Private RallyPoint Member made Oct 6 at 2015 5:50 PM

Maj Private RallyPoint Member — Tue, 06 Oct 2015 17:50:31 -0400

*I saw

Response by MSgt Curtis Ellis made Oct 6 at 2015 5:53 PM

MSgt Curtis Ellis — Tue, 06 Oct 2015 17:53:27 -0400

All I can say is that I'm glad that I have already retired... There's quite a few issues with this program that will not be beneficial to many in the future...

Response by Sgt Aaron Kennedy, MS made Oct 6 at 2015 6:03 PM

Sgt Aaron Kennedy, MS — Tue, 06 Oct 2015 18:03:41 -0400

Simply put, my issue is whether the current system is "Sustainable" or not. If it was sustainable, then there was no need to change. If it was not sustainable, then will this change make it sustainable in the future.

As this change does not affect current members, we will not know the full ramifications for probably about 12~15 years.

For those currently serving DO NOT CHANGE. Not worth it. There are a few outliers where it "might be worth it" but, for the vast majority, NOT WORTH IT. For all others, the current system is better, because it is a "fire & forget" system and doesn't rely on "reinvestment of longevity bonuses" which the new system does.

That's the trick the new system has. You "break even" in the new system by taking the reenlistment bonuses at 12, 16, etc and putting them back in your retirement fund, and gaining interest on them. Without doing that, you lose money.

Response by CSM Michael J. Uhlig made Oct 6 at 2015 7:13 PM

CSM Michael J. Uhlig — Tue, 06 Oct 2015 19:13:44 -0400

You own it, this could be a great opportunity for those that are savvy investors.