Posted on Dec 30, 2013
Given the controversial fight over retirement benefits, what is the take-away for a Soldier looking to make a career?
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I've served for over 5 years and I am leaning towards a full 20 year career. Given the very real possibility of reduced benefits, what should a young officer be considering when long term planning? Can I count on solid retirement benefits anymore?
Posted 12 y ago
Responses: 5
Sir, I would say use the Thrift Savings Plan if you plan to make it a career. It's getting weary here having to worry if my VA pay or Veteran's Pay will be cut. I'd rather stock up and have enough to survive on when I leave the army. As for my shortcomings, I wasn't prepared and now I'm left with worrying about my financial status everyday.
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Great question because at least during the Reagan era we had his love for the military and it was he who reconstructed much of what was lost during Vietnam.
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I have two schools of thought here:
First would be that you should take care of your retirement despite any other plans that you may have. This means that someone should prepare like they have no retirement coming and make the appropriate financial decisions to support this.
Second would be that any changes to the military retirement should be only valid for those that enter after the change. Those who have made their financial plan based on what the retirement benefit was/is when they were recruited are hurt by any negative changes which happen after the fact. They are counting on a certain benefit and can only plan based on the information that they are provided. To change the benefit on them is just irresponsible. You can send those who have retired back into the workforce through marginal changes in there retirement funding. An example would be someone who contributed marginally to the TSP, expecting a certain percentage of retirement based on TIS and base pay. If you drop their retirement benefit after the fact, you have essentially lied to them over their career by telling them that they would receive a certain benefit and then revoking a portion of it. This would make retirement planning a moving object which would be unpredictable and challenging.
I will admit that the recent changes in military retirement have almost changed my opinion on staying for a career considering my earning potential in the civilian world. However, this is what I want for my life. I am going to make adjustments to my TSP and other funds that I invest in to ensure that I can absorb reductions in my retirement fund. I think that it is criminal to change it on anyone mid-career....but the administration saw fit to bait and switch those who have served.....so I will hope for the best and plan for the worst that I can afford.
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