Military retirement

[Just_A_Mom]

I found this at Military Times -
What do you think?
Talk it up folks - stay on topic and keep it civil! :

The congressionally chartered Commission on the National Guard and Reserve has recommended scrapping the current military retirement system, which pays out immediately after 20 years of service, and instead giving active-duty troops retirement benefits starting at 10 years of service, but making members wait to see any money -- age 62 for 10 years of service, age 60 for 20 years, and age 57 for 30 years. Is this a good idea?

Here is a link to the final report - published Jan 31, 2008
http://www.cngr.gov/Final%20Report/CNGR%20Final%20Report.pdf?bcsi_scan_25469ABAA7972E53=0&bcsi_scan_filename=CNGR%20Final%20Report.pdf

 

[Antoinette]

Uh-oh! I think getting retirement benefits after 20 years is one of the inducements for joining and then staying in the military.

 

[RetNavyHM]

Interesting report...

I agree with the government matching 5% into the thrift savings plan for military folks. It never made sense to me that they wouldn't match at all.

Having the military retirement pay not effective until age 57 (over 30 years of service), 60 (20 years of service) or 62 (10 years of service) with the option of pulling it early with a 5% decrease in benefits for each year its pulled out early is intriguing.

Not sure that I agree with it, but it would save a boatload of money, and most who retire ofter 20+ years of service do get jobs that pay equal if not more than when they were in.

Being eligible for benefits after 10 years of service is definitely a different concept. It might help to keep some folks around for 10 years, but I really don't know if it will make that much difference. I have to guess that after 10 years it'd be 25% of base pay for the past 3 years, and at 10 years for enlisted most are E-5/6 pay range, at the current pay rates, before taxes that would come to around $700 a month.

For a first-termer (first 4 years), or even someone on their second term, I don't know that the thought of getting an extra $700 a month 35 years from now would have enticed me to stay in an extra 2 years.

If that pay plan was in place when I hit my 12 year mark I'm positive I would have gotten out at that point in time and not stayed in for 20. I stayed for 20 since I was over the halfway point and it made no sense to get out at that point in time. I'm sure I could be making more than I am now.

Look at your kids, granted these are the best of the best and most have some sort of long term plan, but does their long term plan go out 40 years? Can they even imagine 40 years from now? I know when I was 20 I was only looking at next year, or maybe 5 years out, definitely not 40 years.

I'm not so sure that the plan will entice more people to stay in longer. I think more will leave after their first term than will elect to stay in.

Just my thoughts!!

 

[USNA69]

I would say that it would be disastrous. Let’s address this simply from the SA grad standpoint. They would be dumped on the civilian job market between the ages of 42 and 52. Remember these are our best and brightest. The ones had they gone to an elite civilian college would be at their peak earning years. The ones with children at the age of entering college. Many, if not most, will take pay cuts entering the private sector. They are, by the way, mostly, commencing anew. Is it right to ask these veterans who have served so honorably to begin anew? I don’t think so. It would cause fewer to want to enter the officer corps and of those who did, more would five and dive to begin their civilian careers earlier. Even if they remained for 10 years for some future promised retirement, the military would be losing them at the height of their productivity.

The promotion system commensurate with the billet structure works great the way it is presently constructed. The military is a young person’s organization. We don’t want a bunch of senile old grandpas fighting our wars. To introduce multiple incentives to cause members to stay on active duty would have one or two effects, possibly both. The promotion cycle would slow down causing the officer cadre of a unit to ‘age’. Or if promotions remained on present schedule in order to maintain current unit integrity, the entire officer corps would become top heavy in rank. Neither is acceptable

 

[bruno]

This is a solution in desperate search of a problem. There surely is no groundswell of demand from the ranks looking for a change like this. The reality is that the retirement system is a major factor in retention beyond the initial enlistment period and is far superior to any civilian plan out there. Why would we transplant the aspect of the civilian compensation model least loved (the loss of defined retiree pension plans) to the Military? To implement this plan would be to unilaterally dump the single most attractive benefit of a military career - and the upside would be?..... Undoubtedly this alternative would save money for the government- but at the cost of gutting the military. When Donald Rumsfeld retired- this approach should have gone with him.

 

[hornetguy]

The problem will then still be there, just a few years delayed. If this were to occur, I would probably have to do the minimum time then leave. While I love being in the military (so far), I can't risk sacrificing my future and betting on finding a good civilian job after 20 years while I wait for my retirement when I'm 60.

 

[raimius]

One of my parent's friends retired after 20. He had some trouble finding a fitting job (not a whole lot of positions for 707 mechanics, years out of practice, in the US...)
Fortunately, he used his retirement benefits to stay afloat, and now is doing fairly well.

If that system was instituted, I would look more seriously at getting out at the 10 year point. I can see the desire to save money, but I think the resulting change in incentives would negatively effect the force structure....IMO

 

[USNA69]

Fortunately, he used his retirement benefits to stay afloat, and now is doing fairly well.

That seems to be fairly common across the board. Additionally, prospective employers seem to all take the military retirement into account when initially negotiating salary. Before we condemn them, they are, in fact, taking a chance on an unknown, placing them somewhere above an entry level position. My opinion is that many employers would not offer a full salary to a recent retiree. Even the defense contractors most often take the retirement pay into account when offering employment. That this occurs during the family's period of requirement for college expenses could be disasteous.

Now for the second part of raimus' statement, most eventually do very well. The rise is often very swift. Military retirees bring a lot to the table. They just have to initially prove themselves. Often an employer change is necessary before they fully are compensated what they are truly worth.

 

[Bullet]

^^^

On behalf of the Service Academy Forums, I would like to extend a warm welcome to our first First Command representative (he says sarcastically)

Man, times must really be tough if they're cold-calling internet forums for kids not even in the military yet, trolling for new customers.

Let them at least actually get into the services BEFORE you start pestering them about "their futures" and life insurance needs. Geeesh

On a thread that has been dead for a year and 8 months, no less!