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/
Posted in these groups: 
Retirement
Military Career
Retirement Military Career
Edited >1 y ago
Posted >1 y ago
Responses: 47
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You own it, this could be a great opportunity for those that are savvy investors.
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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.
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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.
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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?
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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.
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.
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1SG (Join to see)
Thank you for your thoughts Chief. I can't say that I agree with you, but you're not the only one who thinks this is going work. I do agree that time will be the determining factor if or when this goes into effect.
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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.
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.
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Suspended Profile
Concur sir....but most problems with implementation could be solved by simply only making brand new recruits fall under new plan...so they know what they are getting into when they join. Also allowing those already in the service the option to stay under current top-3 or move to new would be good....Biggest thing in my opinion is like you said...it's a shame folks like Kyle got out of the service with nothing but a handshake....thank should not happen.....we have been at war long enough that everyone who servers for any amount of time should leave with something for the future.
MAJ (Join to see)
It still won't keep our senior NCO's in the service, This is a good plan for the six and out career path. Our Army survives on it's backbone and the mid level NCO core is the retirement. This will end horribly if the NCO's are not given a significant uptick in pay to account for the loss of their retirement.
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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?
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Suspended Profile
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...
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...
1SG (Join to see)
Thank you for your 2 or 4 cents. I agree with the need for some revision and matching of investments for those that do not stay to 20 as a consideration, of course adding that and not taking away from the other would just cost more money and we know everything is about saving the money, not keeping the value. I would like to say also that personnel do still get something is they don't stay past an initial term or till retirement. For example 9/11 GI Bill has is worth a substantial amount of money and earned without putting any money into it. Hopefully they don't take that benefit next because it costs money as well.
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Suspended Profile
1SG (Join to see) - Concur....but alas college is not for everyone.....and I believe they have to stay 36 months to be eligible ...but yes it is a great perk for those who can and do use it.
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