Posted on May 18, 2015
What do you think of the Congressional proposed retirement changes?
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http://www.govexec.com/defense/2015/05/house-passes-major-bill-overhauling-military-retirement/112954/?oref=govexec_today_nl
Some say not enough is being done to overhaul the retirement system in place, some say it is not enough to allow servicemembers to live on following retirement. Will this backfire and affect recruitment of top qualified individuals? Will this work and interest capable young people? ..interested in the community's opinion.
Some say not enough is being done to overhaul the retirement system in place, some say it is not enough to allow servicemembers to live on following retirement. Will this backfire and affect recruitment of top qualified individuals? Will this work and interest capable young people? ..interested in the community's opinion.
Retirement
Military Pay
Recruiting
Posted >1 y ago
Responses: 7
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The majority of people do not sign up for 20 years so I do not think this will be a retention issue. Also, this will apply only to new recruits so everyone will know what they are getting into when they sign up.
In the end, pension (or deferred compensation) plans are unsustainable when you consider a person can enlist at 18 and retire at 38 and live on into their 90s. That's over 50 years of half pay while still paying another person to fill the slot after you retire.
In the end, pension (or deferred compensation) plans are unsustainable when you consider a person can enlist at 18 and retire at 38 and live on into their 90s. That's over 50 years of half pay while still paying another person to fill the slot after you retire.
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MAJ (Join to see)
agreed--the current retirement plan is unsustainable.
Disagreed---hose grandfathered in will have a choice to switch to the new system. Will you be switching?
Disagreed---hose grandfathered in will have a choice to switch to the new system. Will you be switching?
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CW5 (Join to see)
Since I am at retirement eligibility now, it would be stupid since I cannot go back and contribute and receive matching contributions for all the time in. Even if they had a buyback option, there is no way to realize the gains I would have made from investing since the 90 in such a system.
Any new retirement system is for the benefit of the government, not the retiree. A great example is REDUX. Some took it for down-payment on a home or to get those rims for that Escalade. Either way, it was a poor choice unless your plan is to retire from the military at age 62 and only live a few more years after that.
Any new retirement system is for the benefit of the government, not the retiree. A great example is REDUX. Some took it for down-payment on a home or to get those rims for that Escalade. Either way, it was a poor choice unless your plan is to retire from the military at age 62 and only live a few more years after that.
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MAJ (Join to see)
It will have a huge impact on recruits, if only in that they will most likely have some benefits accrued even after just two years of service and that there will be an enormous responsibility for them (and their immediate supervisors) to make smart investment decisions. I see this as one of the major challenges with the current reform proposal--it places an extreme burden on the individual to manage their benefits well. Most of us aren't trained financial managers, and most junior Servicemembers are not we'll grounded in concepts like aggressive savings plans, budgeting, selecting appropriate fund distributions, and etc.
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I am conflicted on this one. I like the concept of the 401K TSP option for all with DoD providing some funding. What I don't like is that the current TSP funds are not that great from an investment standpoint or for those who would like to chose their portfolio, two financial managers told me that. I converted mine over to an IRA with more options after retiring. And the commission tried to use an example of an average 7% profit for the 401K in reality it's been 3 - 5% the last few years so they have based their study on overly optimistic profits. I don't agree with reducing the 20 year retirement payout. You cannot take money out of the 401K before your 60 unless you want to pay a hefty penalty fee for early withdrawal. The commission tries to counter with you can make up for the reduced retirement when you turn 60. You can't make up for the money you didn't get for the years prior to turning 60. I am retired after almost 22 years of Service and I have found out my body is falling apart from the physical beating of lugging around heavy rucksacks and duffel bags for years. It bothers me that their were no Senior Enlisted personnel on this Commission. I believe a Senior Enlisted rep would have more knowledge on the real impact to the Enlisted personnel who does 20+. I don't think the 20 year retirement is an incentive for staying in, that's not why I did 20+ years. If it was an incentive more than 15% of the personnel who sign up would hang around for 20+ years.
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MAJ (Join to see)
I, too, find the overly optimistic data used to sell these recommendations to be a concern.
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