No Social Security taken, but what about retirement?

Discussion in 'ROTC' started by Inquiring_Parent, Jan 21, 2014.

  1. Inquiring_Parent

    Inquiring_Parent Member

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    I noticed that on my daughters' W-2 no Social Security was taken out of their stipends. How does that affect their Soc. Sec. retirement benefit if they do not do the full 20 years? That is, if they are not paying into Soc. Sec. and only do the 5 years after college, they will have zero 's on their Soc. Security Retirement Statement for all those years, thus have an adverse affect on their Soc. Sec. Retirement payments - am I correct?
     
  2. kinnem

    kinnem Moderator

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    According to all the documentation I have read, the stipend is not pay and is therefore not subject to social security. It's also why it isn't reported as income for income tax purposes. While your child is in actual military service, she will pay Social Security taxes just as civilian employees do.
     
  3. VMI82

    VMI82 Room 131

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    1) Ms. Inquire Parent:, why are you worrying about your daughter's retirement? If she is to be an Officer in US Military shouldn't she do so?

    2) Do you really think Social Security will be around in 20 years given every estimate of its under-funding? this is not a political statement - but an actuarial one

    3) The trend is to promise benefits now and not pay them later - witness 1% haircut from COLA for retirees under age 62 (?) ( 60?)

    4) read Marine Corps Times and you will see a CBO proposal to strip young retirees of Tricare. This is the trend line.

    5) so back to #1. Your daughter was granted a position of trust and leadership as witnessed by her ROTC scholarship. I know it is hard to see our children in this light - yet I urge you, for her sake, to let her take the point on these issues as it is her life, her career, her future.

    Trust her to figure all of this out - and understand it will all change over the next 20+ years.

    Respectfully submitted with true well wishes
     
  4. Pima

    Pima Parent

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    Their ROTC pay is non-taxable, thus no SS will be taken out, nor federal, state, or anything else.

    When she gets commissioned her pay will also have some portions that are taxable, and some that are not. The easiest way to determine of it is taxable is the word Allowance. For example:
    Basic Allowance for Housing.....BAH....money for living off base.
    basic Allowance for Subsidiary...BAS....money for uniform replacements
    Temporary Living Allowance... TLA....money for living in a hotel once arriving at a new base
    Dislocation Allowance....money for incidentals to set up a new home at a new base, and the costs associated with getting there.

    All of these payments are not-taxable. Meanwhile, their base pay, flight pay, jump pay sea pay are taxable, along with any temporary duty pay.

    Trust me, once AD SS will be taken out, and the tax man will cometh. They will come especially hard if they get bonuses like the AF pilot bonus.
     
  5. Inquiring_Parent

    Inquiring_Parent Member

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    VMI82 I am a business owner pursuing Financial Planning Certification and as I near retirement I am fully aware how every year counts. I did not know the different classifications as Pima explained (Pima, thank you).
     
  6. VMI82

    VMI82 Room 131

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    I was one of the world's top financial advisors, wrote a best selling book on the subject and spoke to over 100+ financial planning/advisor conferences. I sold that business in 2004 for a record sale. I think I know the topic well.

    So well that I know how to read financials and see the handwriting on the wall that Soc Security is insolvent because the same politicians that raided it are the same ones that cut 1% from COLA.

    Knowing the time value of money does not a substitute make for letting an Officer-in-the-making take responsibility for their results.

    It robs them of an opportunity to take ownership of all aspects of their future and in my mind - begs the question: How strong a leader is the Military getting if the training wheels are not off?

    No one wants to think THEY are Helicopter parents. The term of art is 'cognitive dissonance.'

    But this forum is full of such behavior - and I have to point the finger at myself too by my very presence here. Mea Culpa.

    It is hard to 'let go' and in truth - we never do as parents. BUT we can transition to mentoring as our children age up & out.

    I know you perceive what I am suggesting as an attack (and so will many others) when in truth I am arguing for a course of action that will strengthen your child.

    You cannot see the expression on my face or my genuine concern that nascent Lieutenants and Ensigns build the muscle of self reliance without parental oversight of matters like their retirement from an insolvent system.

    I honestly believe they are in College or a SMC to build exactly those muscles, to grow and mature and will continue to do so when they enter the Fleet or Big Green or Blue.

    We are still their parents ... but their results are now theirs and we don't have control, a vote or a say.

    Besides (huge grin as I say this) they will not think we know a damn thing until they are 30 anyway. :smile:

    So, please, if I can underline my tone of genuine concern and empathy: I am arguing for your child's/all of our children's best interest in saying we can all do a better job of letting go.

    We are still here for them ... but we can no longer do it for them.
     
  7. txpotato

    txpotato Member

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    I slept at a Holiday Inn Express last night....




    _____________________________________

    Uva Uvam Vivendo Varia Fit
     
  8. VMI82

    VMI82 Room 131

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  9. Inquiring_Parent

    Inquiring_Parent Member

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    VMI82, wow, I simply asked a curiosity question! What is YOUR issue that you need to blast me about my parenting (of which you know nothing!) and go on a rant when I asked a simple question because I just wanted to understand something?
     
  10. Jcleppe

    Jcleppe Member

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    Am I missing something or did the OP just ask whether SS is taken out of the stipend payment?

    I'm trying to figure out where that translates into someone doing everything for their kid.

    Please don't turn a simple question into another debate on parenting. Looks like Pima answered the question very well.
     
  11. soccmomer

    soccmomer Member

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    I also like the question Inquiring asked. I am curious about that for my DS, just as I am curious about whether or not my sister who works for the federal government gets social security taken out of her pay (we had that discussion several months ago). Mostly, I am a curious person and like to find out answers. Trying to understand something does not a helicopter parent make!
     

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