Posted on Jul 20, 2015
The Pentagon is backing the new retirement plan, which is similar to a 401K. What are your thoughts on the projected plan?
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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/
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/
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Military Career
Retirement Military Career
Edited >1 y ago
Posted >1 y ago
Responses: 47
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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.
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1SG (Join to see)
Sir, Thank you for your input. I'm not to sure this is an acceptable compromise. I think they can do better. I'm thinking they need to go back to the drawing board and do more analysis on this, savings verses value.
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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.
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Suspended Profile
Concur....most military members and retiree think they are conservative....but in reality they are socialist.....they just don't realize it until its to late.
After all where else will day care cost you more just because you make more.
After all where else will community housing cost you more just because you make more.
Hell even Holiday Party tickets cost more based on rank.
Dues to "professional" societies are based on income.
Anyway......guess i'm saying great point.....and I concur
After all where else will day care cost you more just because you make more.
After all where else will community housing cost you more just because you make more.
Hell even Holiday Party tickets cost more based on rank.
Dues to "professional" societies are based on income.
Anyway......guess i'm saying great point.....and I concur
1SG (Join to see)
MSgt Ronald Stacy - Are you hearing yourself. Working for 20 plus years and getting a retirement isn't a hand out. Are you willing to give back your retirement? If you are so unhappy with the system then why are you in it. You sound very disgruntled.
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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.
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.
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1SG (Join to see)
Sir, I concur with the fact that this will save the government money in the long run. My contention is everybody keeps mentioning the best case scenario, without looking at the most common scenario. For it to work for those that do stay for the 20 years they will have had to put into that fund part of their pay check, from the beginning, to get that equivalent retirement, which is not the case right now. Essentially each Soldier will be taking a pay cut to get the retirement, most of us get now.
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LCDR (Join to see)
1SG (Join to see) I made a second reply after doing some math and you may be surprised at how well some of the different scenarios work out for the retiring service member. That said I agree it does depend on how much is contributed to a very large extent, but I also think it should. We need to give a little of the onus back to the members.
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1SG (Join to see)
I don't disagree with the fact, that if a Service Member invests the right amount of his pay check and then the government matches it, that individual could receive a retirement amount similar to or possibly slightly better than the current 50%. I have crunched the numbers as well. My point is, they should not have to give up part of their pay to receive that 50%. Current system does not require a service member to risk a portion of their pay toward retirement, currently they only have to risk their lives. I am all for service members investing money. Proper investment along with your 50+% retirement (years of service depending) could enable a service member great flexibility upon retirement, possibly even full retirement at a much younger age. I can say I have invested heavily and 2008 thru 2011 were very painful for my investments. What happens when this occurs to a Service Members retirement fund. They won't have that other guaranteed check coming in to help buffer that loss and stabilize them thru the rough patch. Markets go up and markets go down. Enlisted Soldiers already have a tougher time storing away retirement money out of their pay. Now we are going to mandate it, if they want anything after 20 plus years of service. An O4 with 15yrs of service already makes more than the Senior Enlisted advisor in any of the branches. There are just so many negatives to this plan, I am baffled at how it is even being considered. There has to be better ways to make cuts.
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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.
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LCDR (Join to see)
MSG (Join to see) at least right now it looks like there will be a choice for those already in. And I completely agree it would be grossly unfair to not have that part. Considering how much time current members would have lost for the matching contributions.
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Suspended Profile
They will allow those with X amount time in service to be grandfathered in.....just like they do ever time there is a significant change. ......those already vested in top 3 will be allowed to finish out as such. The interesting part will be where they draw the line. Me I think anyone in service before effective date should have to opt in to new program or stay Top 3......otherwise I think after the initial shock it may actually have a positive impact on the service in that it should decrease those retired on active duty folks who are just "hanging on till retirement" because they will be able to cut bait at any time and still have a retirement nest egg to take with them.
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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.
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.
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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).
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).
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Sgt Aaron Kennedy, MS
SSG Joseph Geraci It reads badly. But "generally" that would apply to anyone who joins after the plan goes into effect, as opposed to those who are in now.
THere may be some caveats which allow "buy ups" (increased TSP contributions) for those currently serving, but it's unlikely to affect anyone currently in.
THere may be some caveats which allow "buy ups" (increased TSP contributions) for those currently serving, but it's unlikely to affect anyone currently in.
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I think its all still theoretical, I don't think any of the recommended changes have been adopted yet.
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