CBSNews: Radical overhaul of military retirement eyed

[airborneskins]

Does anyone know if this is only applicable to new recruits and officers or to all presently serving? (I agree with sarcase,changing terms you already had in place is not good)

I read about this a couple of days ago, but for the life of me I cannot remember where I read it. The current servicemen would be grandfathered in and would continue to receive the same benefits that they are now. IMO, the timing sucks, but the concept may work out in the long run. Think about how many 38 yr olds are getting out of the military with a paycheck for life. What is the average life expectancy these days (70 ish)? Thats a paycheck for almost half there life guaranteed because they retired from the military. Dont get me wrong, I did my time and understand the struggles that a military family go through, but using a 401K as a retirement plan for military is not a bad idea. Most servicemen are not saving money these days, and will more than likely get a second career when they leave service.

[Rocky21]

Defense spending (including military pensions) is a HUGE part of the spending pie. If we are really serious about balancing the budget, this is a good place to start.

[zoony]

Defense spending (including military pensions) is a HUGE part of the spending pie. If we are really serious about balancing the budget, this is a good place to start.

Yah I don't necessarily have a problem with this, outright. I think any proposal should come from the Pentagon directly, however- and that's what this appears to be.

What is the incentive for someone to stay on 20 years? Everyone you talk to enlisted in the military is looking at that 20 years like it can't come soon enough- then they are out the door at the age of 38.

What does the military get in return? I would actually be more in favor of paying our military leadership a bit more, so that the incentive to stay is to make more money performing your job, not in retirement.

I don't really have an opinion one way or the other, but I do think it's worth taking a look at. And oh BTW, I also agree with Mike. Seeing a collection of lower middle-class people consistently carrying the rich man's torch is sad to me. It wouldn't be sad if they weren't being duped.

[Corcaigh]

Think about how many 38 yr olds are getting out of the military with a paycheck for life. What is the average life expectancy these days (70 ish)? Thats a paycheck for almost half there life guaranteed because they retired from the military.

It creates other problems. It actually depresses wages in communities with a strong military presence. Consulting services firms have difficulty serving the military with their expertise too because there are people there who can always undercut on price because of the retirement benefits they are drawing in their 40s.

[Pick6]

What I based that on was this statement in the article:

I didn't look too far into W's plan, but I thought that was the essence of the plan. The government would pay into a 401k style plan and expect the market to give returns that would equate to approximately the retirement amount that a soldier should receive. That's the way I figured W's plan would work out with SS. My issue is, as we all know, the market is a completely unpredictable beast. It is expected to give a moderate return over time, but that is far from a guarantee. The good thing about SS and military pensions is that each person is guaranteed a precise amount of money. That amount of money is documented and disclosed to the recipient. The uncertainty of a market dependent 401k style plan is what worries me.

Say I had a Bush 2 style 401k retirement plan... I'm ready to retire and have an account with $2M vested. Then, in an unfortunate event, the market tanks 6 months prior to my planned retirement. All the sudden my retirement plan plummets 20%. Now all I have is $1.6M to retire on. That is what worries me.

If you were 6 months from retirement you wouldn't have many funds in stocks at that point. Most of your funds should be in bonds. A 401K works well as long as it is managed well over the lifetime (20 or 30 years). As you get closer to retirement you would transition your funds into less aggressive options.

[Slateman]

So basically, military retirees are still getting their retirement, they just can't get it till they are 55?

Not really sure I see a problem with that. Also don't see how that helps the debt problem.

[Popeman38]

So basically, military retirees are still getting their retirement, they just can't get it till they are 55?

Not really sure I see a problem with that. Also don't see how that helps the debt problem.

Hooray, we will just have a **** ton of homeless vets aged 38-55! Good job!

[airborneskins]

Hooray, we will just have a **** ton of homeless vets aged 38-55! Good job!

I am not sure where you are going with this, Why would retired military be homeless?

[PCS]

Military pay scale as of this year for reference.

http://www.militaryfactory.com/military_pay_scale.asp

http://www.navycs.com/2012-military-pay-chart.html

[Slateman]

Hooray, we will just have a **** ton of homeless vets aged 38-55! Good job!

You do realize that 20 year retirement is 50% of base pay right? Most people who retire from the military go and get other jobs and use their retirement to augment their income. Very few actually live off of it. And those that do, they live somewhere cheap. Very, very cheap.

Besides, what about all the vets like me who didn't do 20 years and now can't get jobs?

[ThinkTwice]

They'd have to wait until normal retirement age. It would save $250 billion dollars over 20 years.

I'm for spending cuts everywhere but I'm not sure about this on. We can hold off on some new equipment and save this kind of money.

Keep in mind we spend 200 billion a year on Interest payments on debt.

Thats year after year after year and two trillion in twenty years.

[Jeeb]

It is often refreshing to hear my senile grandfather complaining about entitlements, gov't waste, etc., never mind the fact that he has been collecting an 80k+ pension (inflation notwithstanding) since 1972, yes he did 30 years and was very high ranked, but he is getting close to collecting a pension longer than he was actually serving in the military. That doesn't even begin to include the absurd amount of money in medical treatments that the government pays for. Not anti-military as I have just recently enlisted myself, but it does kind of rack my brain how he thinks like that.

EDIT: I am not insulting him or his service, he would probably have interesting thoughts on it about ten years ago, as he used to be an extremely intelligent man. I guess the old age and Fox News 20 hours a day has got to him.

[pointyfootball]

It is often refreshing to hear my senile grandfather complaining about entitlements, gov't waste, etc., never mind the fact that he has been collecting an 80k+ pension (inflation notwithstanding) since 1972, yes he did 30 years and was very high ranked, but he is getting close to collecting a pension longer than he was actually serving in the military. That doesn't even begin to include the absurd amount of money in medical treatments that the government pays for. Not anti-military as I have just recently enlisted myself, but it does kind of rack my brain how he thinks like that.

EDIT: I am not insulting him or his service, he would probably have interesting thoughts on it about ten years ago, as he used to be an extremely intelligent man. I guess the old age and Fox News 20 hours a day has got to him.

He's not alone. A lot of us (probably myself included) complain about people getting money/benefits from the but ignore the fact that they/we all make use of federal/state/local government money. Politicians know how to spread the wealth.

[Busch1724]

Two ways to solve this problem: get rid of the lifetime benefits for the politicians (medical and retirement) and cut back on welfare benefits a little bit. That way the people that deserve those benefits because the put something on the line defending our country so those idiots could live off of the taxpayers.

[Prosperity]

any thing important enough to be funded should be funded by all,we already have a very progressive tax structure with deductions for basic costs of living.

Yeah I guess I am stupid to believe everyone that can afford it should share the burden

a dirty little secret in developed countries of the world is that there is a shortage of jobs for the unskilled

not everyone is going to be the best or brightest, by definition... but the manufacturing jobs aren't there anymore, ALL basic labor is going to China and India unless it requires physical proximity to the wealth here (waiters, landscapers, DMV workers etc).

We don't have farms or factories for our unskilled labor... and what we do have goes to illegal immigrants. And yet it was thanks to the burdens of the unskilled laborers (thanks to innovation and capital from entrepanuers too) that got us where we are. Those w/ capital are well off, but those without find themselves in a society which won't employ them because they just aren't cheap enough.

Sharing burdens, hell, the structural burdens are on the "poor" to begin with because they were essential in creating a society that leaves no room for them, but plenty of room for the owner class... our country is basically becoming a play ground for the rich while the rest of us are spectators... (ok, a long way to go before that happens, but we've been going there rapidly)

[10fttall]

Check out the basic pay rates posted by PCS, and remember a couple things:

Don't picture a military retiree getting 50% of what you earn. Picture them getting 50% of 50% of what you earn. Remember that housing and other allowences make up a very large percentage of the money that comes in, and you only get half of just the basic pay part.

Very few people actually stay to retire, less than 15%.

If someone actually follows a path that leads to them being a high ranking officer, yes the retirement is pretty substantial, but those guys are NEVER 38, and I promise they have done things and been places, and sacrificed things most of you don't even want to think about, in doing so.

The plan does not grandfather anybody, or rather it does an abjectly horrible job of grandfathering. The plan will give you a percentage of the promised 50% based on how long you've been in now, and the CURRENT pay. (10 years in =25 percent of the CURRENT base pay) This means that people like me who have given 7, 9, 11, YEARS of the prime of their lives are going to end up with less than half of what we were promised, what we have planned on, and what we have worked for a decade toward. It will be necessary to get a full-fledged career type of job capable of supporting the entire family instead of getting to take it easy at Home depot or pursue dreams of starting a business, etc.

This may sound like whining to some of you, but it is a slap in the face to those already in. Actually much worse than a slap in the face, it's f-ing with our lives and our hard work.

[The Evil Genius]

Check out the basic pay rates posted by PCS, and remember a couple things:

Don't picture a military retiree getting 50% of what you earn. Picture them getting 50% of 50% of what you earn. Remember that housing and other allowences make up a very large percentage of the money that comes in, and you only get half of just the basic pay part.

I thought the basic housing allowance scale was seperate from what PCS posted?

http://www.military.com/benefits/military-pay/basic-allowance-for-housing-rates

Additionally - isn't free healthcare (as substandard as Tricare might be) a perk for the rest of your life? That needs to be factored into the benefits side.

As an aside - isn't the basic pay rate (that one's retirement is based on) subjective to increases over your retirement life? In other words if what you retired at is lower than what someone at the same rank would make right now, you would get 50% of the current pay scale, right?

[zoony]

Check out the basic pay rates posted by PCS, and remember a couple things:

Don't picture a military retiree getting 50% of what you earn. Picture them getting 50% of 50% of what you earn. Remember that housing and other allowences make up a very large percentage of the money that comes in, and you only get half of just the basic pay part.

Very few people actually stay to retire, less than 15%.

If someone actually follows a path that leads to them being a high ranking officer, yes the retirement is pretty substantial, but those guys are NEVER 38, and I promise they have done things and been places, and sacrificed things most of you don't even want to think about, in doing so.

The plan does not grandfather anybody, or rather it does an abjectly horrible job of grandfathering. The plan will give you a percentage of the promised 50% based on how long you've been in now, and the CURRENT pay. (10 years in =25 percent of the CURRENT base pay) This means that people like me who have given 7, 9, 11, YEARS of the prime of their lives are going to end up with less than half of what we were promised, what we have planned on, and what we have worked for a decade toward. It will be necessary to get a full-fledged career type of job capable of supporting the entire family instead of getting to take it easy at Home depot or pursue dreams of starting a business, etc.

This may sound like whining to some of you, but it is a slap in the face to those already in. Actually much worse than a slap in the face, it's f-ing with our lives and our hard work.

I do agree that there should be a grandfathering in... that's not right to pull the carpet out from underneath vets who signed on for that promise.

But, again, I also don't see why military pensions should be a holy grail that cannot be touched. I have firsthand, direct knowledge of a retired Navy Officer who gets $78,000 annual from the government and made $150k as a defense consultant working for 12 years after he retired. So for that period of time he's making a quarter million, plus now that he is retired he has 2 pensions and social security. His annual income is well over six figures and will be until his death.

Now what do you suppose the Admirals get?

I really do appreciate sentiments like the you've expressed above, but at the same time, I dislike the notion that something just shouldn't be looked at whatsoever, especially in times like these.

[Lombardi's_kid_brother]

What is the number of soldiers who reach their 20 years and out between 38 and 45. Because you are basically talking about providing a very serious subsidy to people who are more than likely going to be in the job market for 20 to 25 more years. And - as others have noted - it's a great way to undercut salaries because employers are basically being subsidized.

PS The guys who clean up under the current system are Academy grads.

[10fttall]

But, again, I also don't see why military pensions should be a holy grail that cannot be touched.

I agree with this entirely. I think that all the veterans associations and pro-military lobbying groups are supportive of some sort of overhaul, but not one that changes anything for people who have already signed on.

Again very a very small percentage actually stay to retire, but to do so means they are dedicated. This needs to continue to be rewarded in some way, or most people will run like the wind to establish training, experience and a career while they are still of a viable job market age. I mean who wants to go get a career type job and the training for it when they're 40? Unless you're in IT networks or something, there's a miniscule market (contractors, pilots) that actually use military job skills.

It would be interesting to look up how many retirees are out at age 38. Just by sheer guess, I'd think it's not many. People who hop in right after high school might be less inclined to have planned out staying in for 20.

[The Evil Genius]

I always thought that most military retirees go into government (at whatever level) service. Especially since the hiring process (veterans preference) is so heavily in their favor.