I think this is a great idea. The current military retirement system is complete BS. If you serve anything short of 20 years you get nothing...zero, zilch, nada. Very few actually make it to twenty years so basically the non-retirees get nothing for their service in terms of building a retirement. They have to start from scratch in the civilian world, putting them well behind their peers.
Under the proposed changes everyone who serves and leaves before retirement age takes with them a head start on building a retirement.
I say do it and I wish I was offered such a plan when I raised my right hand.
“I think this is a great idea. The current military retirement system is complete BS. If you serve anything short of 20 years you get nothing...zero, zilch, nada. Very few actually make it to twenty years so basically the non-retirees get nothing for their service in terms of building a retirement. They have to start from scratch in the civilian world, putting them well behind their peers.”
Wrong, every service member has the option to contribute to a Thrift Savings Plan. If they leave with nothing after serving less than 20 years it’s on them. Look, 20 years of military service is not easy on a person physicaly or mentaly. I did 22 years in the Marine Corps. I left with a bad right shoulder, bad knees, hearing loss, and back issues. I earned every damn penny I recieve in my monthly pension check, and I would do it all over again. Leave the military pension system alone. It’s not the problem.
Under the proposed changes everyone who serves and leaves before retirement age takes with them a head start on building a retirement.
I say do it and I wish I was offered such a plan when I raised my right hand.
Back in the 1980's when I was a West Point cadet, my econ professor told us about a scheme to give every service member an IRA instead of a traditional retirement account. Based upon the assumptions of growth in "your account" as a soldier--you were getting ripped off. And besides, you aren't vested until 20 years. And if you serve 26 years as an officer, it didn't pay to stay in longer unless you made general on average because of life expectancy.
The Econ Dept. at USMA proposed this change--and a lot of colonels reportedly loved the plan and wished that they could have avoided being grandfathered. Les Aspin, then chairman of the House Armed Services Committee killed the plan in favor of cutting the assumed rate of growth of your account.
I think that this sort of idea, if well conceived, can do better for both the taxpayer and our serving men and women. So I won't throw stones until I learn the details.
At first, I recoiled from your position, but you do make some very valid points.
I served in peacetime,two enlistments, and observed a lot of ROAD warriors “milking it” through to retirement at twenty.Those that were not ROAD would have stayed active for 30 or more, if given the chance.(some did)
OTOH, my young Marine friend served one enlistment, in two combat war zones.
I count his service much higher and harder than mine.
We have had an all volunteer military force for over twenty years now, and I think it works better than the old draft force.
I think some changes in “retirement pensions” might be a good thing.It deserves more than an automatic negative knee jerk reaction from us old timers, who have no recent combat experience.
The current military retirement system is complete BS. If you serve anything short of 20 years you get nothing zero, zilch, nada. Very few actually make it to twenty years
Don’t completely agree with the first sentence, as I am one of few who managed to survive 20 years, however, I do agree there ought to be perhaps a combination plan to assist those who do not make it to retirement, but consider this:
Those in the military, thinking ahead, have always had the option for a traditional IRA. The tax deduction alone should inspire everyone, including those able to make it to retirement to have a traditional IRA with the full 2,000 dollar contribution.
After that, very few of the younger enlisted force would be able to save even more for a 401K contribution.
Just considering the IRA contribution, someone leaving the service after ten years, would have approximately 20,000 dollars, plus interest, plus reenlistment bonuses saved, for a nest egg.