America's #1 Online Cigar Auction
first, best, biggest!

Last post 9 years ago by Burner02. 14 replies replies.
Obama Signing Onto 20% Reduction of Military Retirement Pay
Jump to Bottom | Previous Topic | Next Topic
jackconrad Offline
#1 Posted: Mon, Mar 30 2015, 7:59 PM EST
Joined: 06-09-2003
Posts: 67,461

Obama Signing Onto 20% Reduction of Military Retirement Pay
Warner Todd Huston
30 Mar, 2015 by Warner Todd Huston




Even as he continues to ramp up military action in various parts of the world, President Obama has announced that he wants to cut the retirement pay of our soldiers.

Obama has now said that he will accept the recommendations of a commission set to review soldier benefits.

President Obama said Monday he supports the recommendations of a military commission that would reduce the size of traditional military retirement pay by about 20 percent and offer a new defined-contribution benefit for troops who leave before 20 years of service.

In a letter to congressional leaders, Mr. Obama said the proposals are “an important step forward in protecting the long-term viability of the all-volunteer force, improving quality-of-life for service members and their families, and ensuring the fiscal sustainability of the military compensation and retirement systems.”

Mr. Obama said he has directed his advisers to refine some recommendations, and that the White House will report to Congress on any proposed changes by April 30.

The Military Compensation and Retirement Modernization Commission issued a report in January report calling for shrinking the size of traditional military retirement pay by about 20 percent and offering a defined-contribution benefit for troops who separate before 20 years of service. Lawmakers of both parties raised sharp questions about the panel’s stated belief that the changes will satisfy service members while also saving money for the Treasury.

The commission’s proposal include decreasing the “multiplier” that the Pentagon uses to calculate traditional retirement pensions from 2.5 to 2.0, lowering the initial value of retirement checks by 20 percent.

MACS Offline
#2 Posted: Mon, Mar 30 2015, 8:53 PM EST
Joined: 02-26-2004
Posts: 79,809
It's not that much to begin with. You get 50% of your base pay... which is about 60% of what your monthly pay is each month: try living on 30%. Cut it and you'll be hard pressed to keep good people.

The real benefit for retirees isn't the money. It's the health care. After retirement, health care is the biggest expense most people have. Retirees don't have monstrous premiums or copays.
Speyside Offline
#3 Posted: Tue, Mar 31 2015, 8:08 AM EST
Joined: 03-16-2015
Posts: 13,106
Obama has lost the ability to shock me. If you are not part of the extreme far left look out, you do not matter.
DrafterX Offline
#4 Posted: Tue, Mar 31 2015, 8:19 AM EST
Joined: 10-18-2005
Posts: 98,559
Sounds like Bloody's work... Think
teedubbya Offline
#5 Posted: Tue, Mar 31 2015, 8:30 AM EST
Joined: 08-14-2003
Posts: 95,637
Poor poor chicken
dstieger Offline
#6 Posted: Tue, Mar 31 2015, 8:41 AM EST
Joined: 06-22-2007
Posts: 10,889
If they make sure to also cut the half my ex gets, I'm all in favor....in fact, I'll sign up for 30% cut, if that's the case.

MACS is right. It isn't all that much anyway. I'm more worried about health care premiums going up....or commissaries going away. Current calculations are probably unsustainable. I'd also consider looking at delaying retirement payments. A young 38 year old can retire from the military now and collect 50% of base pay for life. Something is going to have to change, but it is nearly impossible to have a logical conversation about it. It is too easy to attack any position that might be characterized as not supporting the troops.
Gene363 Offline
#7 Posted: Tue, Mar 31 2015, 9:53 AM EST
Joined: 01-24-2003
Posts: 30,834

It's a chicken sh|t move, there are some many insanely wasteful Pentagon projects that could be cut. This is a personal attack on our service men and women.

Obama is already wrecking the present military, now he is trying to ruin the future as well.
banderl Offline
#8 Posted: Tue, Mar 31 2015, 11:48 AM EST
Joined: 09-09-2008
Posts: 10,153
If I'm not mistaken. if you serve 19 years now and quit the military, you get nothing.
Under the new system these guys would at least have 401K savings.
dstieger Offline
#9 Posted: Tue, Mar 31 2015, 11:59 AM EST
Joined: 06-22-2007
Posts: 10,889
if you serve 19 years and quit the military, you're almost certainly a fool...and deserve what you get
Bur Offline
#10 Posted: Tue, Mar 31 2015, 5:26 PM EST
Joined: 07-31-2012
Posts: 5,638
banderl wrote:
If I'm not mistaken. if you serve 19 years now and quit the military, you get nothing.
Under the new system these guys would at least have 401K savings.


The military does have a 401K like system, it's called the Thrift Savings Plan (TSP) and it was built off of the same funds and TSP program federal employees get. These are very low cost index funds and lifecycle funds made up of allocations to the low cost index funds. The only difference between military members and some civil servants is the military members don't get a match since they are eligible for the military's defined benefit retirement.

All the articles that act like the military will be getting a NEW defined contribution option are misinformed at best, disingenuous at worst. And any change to the defined benefit plan will likely go over as well as the REDUX retirement plan, which failed horribly and ends up either being rejected or costing a large buyout at the 15 year point.

Yeah, that post sounds like a "know it all" post, cause I do, at least in this realm:

22 year Navy EOD Officer, retired in 2010 with 55% of BASE pay (not special pays, housing, etc) and disability pay that offsets some of my pension-not high enough rated to get the double pay. Add in California taxes since I no longer got exemption, and while generous the pension doesn't go very far.

Financial planner with various licenses and clientele including military families since 1998.

Burner02 Offline
#11 Posted: Tue, Mar 31 2015, 5:50 PM EST
Joined: 12-21-2010
Posts: 12,884
banderl wrote:
If I'm not mistaken. if you serve 19 years now and quit the military, you get nothing.
Under the new system these guys would at least have 401K savings.




That is why it is called a twenty year retirement.
banderl Offline
#12 Posted: Tue, Mar 31 2015, 6:09 PM EST
Joined: 09-09-2008
Posts: 10,153
Burner02 wrote:
That is why it is called a twenty year retirement.



If you work in a private industry which offers pension benefits, you are vested after 5 yrs. Used to be 10.
Now guys who don't get 20 yrs, will be building up some kind of nest egg.
At least you get something for your time.
Bur Offline
#13 Posted: Tue, Mar 31 2015, 6:30 PM EST
Joined: 07-31-2012
Posts: 5,638
banderl wrote:
If you work in a private industry which offers pension benefits, you are vested after 5 yrs. Used to be 10.
Now guys, who don't get 20 yrs, will be building up some kind of nest egg.
At least you get something for your time.


If they contribute to TSP, they are immediately vested since it is their contribution.

Does anyone here that used to have a defined benefit pension think they got a better deal with a defined contribution pension with match?

I didn't think so. The 401(K) was never designed to replace the defined benefit retirement system-it was thought of as a way to help high income individuals defer compensation like executives did. 60 Minutes did a good expose' a few years ago:

https://www.youtube.com/watch?v=q8C1ZUrYhC0

it's about 13 minutes long.

Even the big brain who thought them up realized the current usage of 401Ks is putting most Americans at risk of never having enough for retirement between low participation rates, too many/too costly fund choices and fees, and market losses of 50% or so twice since 2001.
Burner02 Offline
#14 Posted: Tue, Mar 31 2015, 6:31 PM EST
Joined: 12-21-2010
Posts: 12,884
banderl wrote:
If you work in a private industry which offers pension benefits, you are vested after 5 yrs. Used to be 10.
Now guys, who don't get 20 yrs, will be building up some kind of nest egg.
At least you get something for your time.



I was just screwing with you and I do do understand about the private sector.
Users browsing this topic
Guest
Back to Top