Future Military Retirees Stand To Lose Hundreds of Thousands of Dollars in Retirement Money if Changes Happen
So how much will military retirees lose if the current retirement system is replaced with what is basically a 401k? Well the Military Officer’s Association of America has done the analysis and it will be hundreds of thousands of dollars:
For example, critics of the current system say it’s unfair the 83 percent of entrants who leave before 20 years of service receive no retirement benefits. The commission’s hybrid retirement package with a vesting 401(k) and government match would be attractive to those who are uncertain of or do not intend to make the military a career.
However, we’ve got serious concerns whether this proposal will draw people to 20 years of service and our analysis shows these changes come at the price of reducing the overall pension value to those that stay beyond 20 years of service — and it only gets worse the longer you stay in service. Our conservative estimates show an E-7 retiring with 20 years of service under the new proposal could lose $262,000 in lifetime retirement value. However, if the same E-7 stays for 30 years and is promoted to E-9, the lifetime loss in retirement rises to $740,000. That’s assuming a 5-percent government match and a 5-percent rate of return in the Thrift Savings Plan. [MOAA]
You can read more at the link and remember this analysis is assuming growth in the servicemember’s retirement investment when they retire. What happens to those who retire during a financial crisis like we saw in 2008 and have their 401k hammered? Also this loss in retirement money would also come on top of other proposed cuts to health care and commissary benefits.
If these same cuts were recommended to for Social Security and Medicare there would be an absolute up roar.
“Future Military Retirees Stand To Lose Hundreds of Thousands of Dollars in Retirement Money if Changes Happen”
…or…
Future Savings Expected To Be Squandered On Welfare For Slackers, Services For Illegal Aliens, Bloated Defense Contracts For Questionable Weapons Systems if Changes Happen
Future Military Retirees Gladly Take What They Are Offered And Are Happy To Have An Income Instead Of Being Little People Just Getting By On Subsistence Welfare Like The Rest Of The 99%
Future Military Retirees Stand To Lose Hundreds of Thousands of Dollars in Retirement Money if Forced To Invest In Some Crony-Controlled Variable Annuity 401(k) Instead Of Receiving Fixed Retirement Pay
With all of the social justice being forced on the military, I would still say that military service should be sought out by America’s youth, but to stay as a career? You must be crazy…if enough first-term personnel get out, then the DOD will eventually be forced to start hiring former military members as civilians to come in & run things, the military will have no excuse NOT to re-organize & streamline, & the huge fraud, waste, & abuse division of the federal government will start to resemble a military that can actually win wars, & not just brag that they can…
Republicans won’t touch SS or Medicare because seniors are their core base.
…the DOD will eventually be forced to start hiring former military members as civilians to come in & run things.
This started years ago but it wasn’t because of losing first termers, it’s because of the loss of mid-termers who would have been careerists but got out for various reasons (MOS mismanagement, “draw downs,” the organizational denial that boys and girls are different, or a combination thereof).
Yet they have plenty excuse NOT to steamline as you mention. One of the biggies is no counts civilian body bags. Another is with civilians you can sidestep many regs which soldiers fall under. Also, outside the US many labor law protections do no apply to civilian contractors. It’s a win-win! Then, the green suiters can sit back and bad mouth having to use civilians and spread the (in most cases) myth of how exorbitant their pay is.