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Command Post What is this?
Posted on Nov 22, 2017
LTC Mark Overberg
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Responses: 40
1SG Infantryman
If this system is so damn great, give it to Congress and the Senate and tell them.to quit fucking with ours.
SGT Christopher Combs
SGT Christopher Combs
6 y
I agree our pay is a rollercoaster every year because they cannot decide on how little of a pay raise they want to give each year.
1SG Civil Affairs Specialist
Edited 6 y ago
After reviewing the new system thoroughly, I have come to some conclusions:
1. If you are planning on getting out after the current term, switch to BRS. You will at least leave with some retirement savings, albeit small.
2. If you are a mid-term Soldier, you need to consider if the continuation pay is enough to get you to stay for another term, but not until 20 years.
3. If you are anywhere over 5 years in service and planning to stay for 20 years, in almost every case it is a fool's choice to go to the BRS. Without getting too wonky, it takes more compounding than historical returns would give you to come out ahead. And it isn't a small difference, either. Smart people might disagree on this, but unless you think you are a smarter investor than the market will return, don't do it.
4. If you do opt in, do it on a Roth option. This is a complete no-brainer.
5. The up-front option in exchange for reduced retirement is a sucker bet, unless you plan on investing that money in a business. Even then, the tax implications are significant (pending legislation currently under consideration). You are also giving up the cost-of-living adjustments on the amount you receive up front, and that is a lot of money for someone getting out at age 40 or so.
6. If you do opt in, take every bit of that TSP match that you can get. It is the only part of your investment that is guaranteed. Do not leave free money on the table, ever when it comes to investing.

As an aside, I find it interesting that this change was pushed through with minimal controversy, considering that it is nearly an exact duplicate of the partial privatization of Social Security that was floated back in 2004. That plan was demagogued; this one is touted as great.
If someone were to offer me the opportunity to invest my payroll taxes, I would take it in a heartbeat. The current SS system is the equivalent of putting all of your money in the G fund.
1SG Military Police
1SG (Join to see)
>1 y
1SG (Join to see) Similar situation here. Hitting 18 years next month with over 3000 points (mostly ARNG but with 4 years Active and 2 deployments). This time last year the projection (retiring in two years with 20 total years in service) was $1340 a month at 58 years of age. I'm neither looking to lose money or push the envelope to 58 for 28 years of service, but like you said...time will tell.
MSgt Electrical Power Production
MSgt (Join to see)
>1 y
1SG (Join to see)
Great advice for those contemplating their options.
PO1 Fire Controlman
PO1 (Join to see)
>1 y
I'm glad I don't have to navigate this current minefield. I have a twinge of regret for taking the CSB back in 07-08.
LTC Mark Overberg
LTC Mark Overberg
>1 y
It looks like you’ve put a lot of thought into the options and financial variables, and know a great deal about investing, 1SG (Join to see). When you retire, you might want to consider applying to become a DOD Personal Financial Counselor or Personal Financial Manager working on a military installation or spread out among the Reserve Component units away from installations. Those are the financial experts that the Department of Defense is referring Service members to who need budgeting or financial advice. They have specialized BRS training and financial accreditations. On Army installations, you can find them in Army Community Service and the Family Life Centers. Another good resource is the MyArmyBenefits BRS calculator at http://myarmybenefits.us.army.mil/Home/Benefit_Calculators/Retirement.html . It compares BRS to the High 3 Retired Pay Plan for Soldiers trying to make a decision about which plan is better for them.
SFC Kenneth Hunnell
I really don't see the good in BRS.
It looks like a self building retirement plan.
The 401K, it's not a retirement plan. It's a tax law that allows you to take pretaxed income and invest it into the stock market. The only good parts is the thrift savings plan the IRA option and availability to draw from it if you don't do 20 yrs of service.
Soldiers are risking their lives already
Why doesn't the government say that they are fazing out the retirement system
LTC Mark Overberg
LTC Mark Overberg
>1 y
Hi MSgt (Join to see) - Under BRS, the government does offer a pension plan – we refer to it as a defined benefit – and it’s calculated just like the current High 3 Retired Pay Plan except it uses a 2.0% multiplier instead of the 2.5% under the High 3. Under BRS, no matter what the Service member does, the government will automatically put 1% of the member’s base pay into the member’s TSP account. Members can contribute to their TSP and after two years of service, the government will match the member’s contribution up to a point. For example, if a member puts in 5% of her base pay, the government will match with 4% plus the automatic 1% and the member will get a total of 10% of her base pay added to her TSP account. The matching offered to Service members under BRS is the same as federal civilian employees receive under the Federal Employees Retirement System, which started in 1984. So Service members will now be doing what other Federal employees have long been doing.
MSgt Nondestructive Inspection (NDI)
MSgt (Join to see)
>1 y
Yes sir I understand how it works similar to a 401k. Do you think this really makes sense for a reservist though? The math does not add up for a reservist given that the monthly contributions will be extremely low. Just saying. Do the math fellow reservists. I max out my civilian 401k and even putting in much more than my total monthly drill pay and earning over 6% ROI this year it still doesn’t add up as fast as you think.
LTC Stephen B.
LTC Stephen B.
>1 y
MSgt (Join to see) - "Why didn't they mess with the pension plans of the normal government workers first?" But they did, when they switched to FERS from CSRS several years (decades?) ago. This makes the military retirement very close to the FERS system. Some annuity combined with a joint contributions from the member and the government.
Maj Air Liaison Officer
Maj (Join to see)
6 y
Bottom line, this program is a very good deal for those who serve in the military and do not reach 20 years. The old system left them with nothing but the money they put into TSP or personal retirement savings. The new system at least provides a match for that TSP money.

This program is NOT as good for those who eventually reach retirement. It shifts the risk from the government to the retiree.

But, here is the thing. There were two goals. 1) Save the government money (which this does) and 2) Provide some retirement money to the majority of military veterans who separate before retirement (which this does, to the extent that the member takes advantage of it).

It was not meant to benefit the eventual military retiree other than to help assure that the government will be able to afford to continue to pay their pension in perpetuity.

It has the potential to positively impact FAR more veterans than it negatively impacts, though.

I am fortunate that I am ineligible to even make the decision. But, I have still made the effort to learn about it because my Airmen are eligible.

Join nearly 2 million former and current members of the US military, just like you.

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