Posted on 08/17/2011 5:43:05 AM PDT by shortstop
The large majority get out within 6 years. They’ve gained experience, maybe learned a trade (but not if infantry!), seen the world (if Afghanistan counts as the world) and should be a more employable 22-24 year old. Or they get help going to college, which helps set them up for future success.
They don’t need retirement. Their investment, at that point, is in themselves.
When I married at 28, I got serious about saving. Until then, I saw no great need. The large majority of the military - supply clerks, infantry, crew chiefs, etc - are at an age where saving for retirement is NOT a big goal. My two oldest kids are 25-30, and I can’t even get them to be serious about saving for tomorrow, let alone for when they are 60+. Given the way my wife and I squeezed pennies in our 30s, it is hard for me to relate to!
The current system errs in forcing people out too soon. The average guy of 45 is in better shape now than the average guy of 35 was in the 50s, particularly with regular fitness testing.
However, there are problems with stretching things out to 30 as well. Most of the guys I talked to were barely willing to put up with the deployments, remote tours and combat for 20. If you made 30 the minimum, you would also lose a large percentage of current lifers. There really does come a point in a man’s life where money just isn’t enough incentive for living in places where a ‘shit stick’ is used.
My theory is that someone who doesn’t know what the term ‘shit stick’ means probably shouldn’t be talking about how to keep people in the military. At a minimum, someone who hasn’t spent at least a year living in a tent probably doesn’t know enough to have a valid opinion. Those who haven’t lived the life don’t know what motivates someone to stay in, or for how long - but they will write the rules, and 10 years later will wonder why no one is staying in the military!
30 years at this optempo would destroy 90% of the marriages.
Sounds great for a recruiting poster, but is mostly BS when you’re looking down the road at the rest of your life. Good for correcting the ignorance and immaturity of youth, but not so much for teaching a specific trade. I’d hire a fellow vet in a second, but probably not for his job training.
Most people coming out of the military DO NOT join trades associated with their MOS. Not hardly.
And the fact that you state that saving for retirement is “NOT a big goal” is part of the problem. Name ANY other time in history when a person felt that they could just lay down and stop working for a living. Not even animals do that. Yet our government expects people to do this and doesn’t particularly prepare them for that future.
SO, if most get out within 6, they haven’t lost a large portion of their saving years, but earlier is ALWAYS better and it matters in the long run. There’s still no pension obligation for even ten years of service. TEN years without saving for retirement and you absolutely CAN NOT count on your military training to suffice for job/career training.
I do agree that the current system forces people out much too soon. Up or out doesn’t work at all levels of the pyramid.
And, yes, I know what a “shit stick” is and yes, I’ve lived in a tent.
The issue isn't that you were underpaid (which you probably were) but that there is no more money. It is the same reason that someone my age has no reason to expect any type of social security or Medicare. Such systems of guaranteed benefits only work as long as there are many more people paying in than pulling out. The reason that almost all private industry no longer has pensions is because they can not afford to.
Now, there is a lot of risk with a 401 K. The major one isn't the market, but the fact that the government will be increasingly tempted to seize those funds in the near future. But even if that doesn't happen, I think Mr Rogers nailed it when he said that once your start having a lot of people retire, the market will crash.
The stark fact is that you, and only you, are responsible for your retirement. That fact has been pounded into my generation since we were small, and it comes as quite a shock to those who were told that they would have a pension and planned on it.
The choice now is to either transition to a member managed fund, or have a total cut off of benefits in the future. John Deere is a big employer around here, and they told all their retirees a few years ago that they were cutting their health care and pensions. Why? If they didn't, they were at risk of a total default of the funds. The public sector is facing a similar situation, only worse in some ways. The John Deere employees knew that this coming. They knew that the contracts could be broken, and many tried to save for it. The military, cops, teachers, and others on state and federal pension plans are getting a rather nasty shock. The assumption that they are insulated from the economy has been proven false. There is no money, and soon many of those plans (which are often exposed to the stock market) will fail.
The issue is, how do you plan for it? Saying “I am owed this, you promised!” is a very dangerous thing. In private industry, I have personally seen companies die because of that type of thinking, leaving the retirees with nothing. I don't want to see that happen to the troops, or any one else.
“Sounds great for a recruiting poster, but is mostly BS when you’re looking down the road at the rest of your life. Good for correcting the ignorance and immaturity of youth, but not so much for teaching a specific trade. I’d hire a fellow vet in a second, but probably not for his job training.”
My nephew works supply. He has been told by two companies that they would like to hire him when he gets out. My son worked avionics, and got a job with Cessna when he got out. Now think about air traffic controllers, dental hygienists, network repair, etc - there are jobs that have direct impact.
Infantry, electronic warfare, dropping bombs, etc do not. But all other things being equal, would you hire an ex-infantry soldier, or a typical high school grad? Who is more likely to show up for work on time, and work until the shift is done?
“Most people coming out of the military DO NOT join trades associated with their MOS. Not hardly.”
Maybe. Maybe not. Lots are ready to try something different. I trained as a biologist in college, and worked intermittently at it for 4 years before entering the military. How does that differ, except most college grads will have debt?
“And the fact that you state that saving for retirement is “NOT a big goal” is part of the problem...”
I suspect in history, most folks 18-25 were focused on getting started and having a family. Only later do they think about retirement at 65. Of course, in most of history, retirement was a dream that few achieved.
“There’s still no pension obligation for even ten years of service.”
At ten years, a forward thinking enlistee in the military will have earned his BS degree on the government dime. He’ll be 28, have a degree, no debt and some money saved. That will put him ahead of most college graduates. Not a bad deal.
How many college students start saving for retirement at 18? Or 22? I’d guess about 0.001%. Maybe less.
“And, yes, I know what a “shit stick” is and yes, I’ve lived in a tent.
Good. What would it take for you to be willing to continue that life for 20+ years? A 401K? If so, you differ from almost everyone I’ve talked to about it.
I work in a building formerly occupied by the GUIDE division of GM. Many of the “new” hires here are former GUIDE people who got screwed by GUIDE, Delphi and GM, WITH THE HELP OF THE FEDERAL GOVERNMENT. All of them were counting on their PENSIONS and health care benefits. Not a single one of them would complain of their promised benefits weren’t backed by a volitile market. Not a one.
The only benefit of a fed pension is that it’s backed by the full faith and credit of people with guns. No matter what, the government gets its money. Period.
You are 100% correct in that I don’t look to a single person other than myself for retirement. My 401K requires me to put my faith in a “plan”, but I don’t plan on my company or the government being there for me.
The military retirement is one of the things in the budget that is entirely legitimate.
It is not the reason the nation is broke. The nation is broke because of extravagant spending elsewhere.
Here’s a question for you? When the “experts” say that we have a projected deficit of X trillions 10 years from now, are they including in that number the cost of the unconstitutional ObamaCare that IS the law of the land at the moment?
“The issue isn’t that you were underpaid (which you probably were) but that there is no more money.”
Odd. We had a balanced budget 10 years ago, and I doubt military retirement costs have gone up much since then.
GWB’s free prescriptions? Yeah. Obama’s stash? Yeah. Bailing out bad investors? You bet. 2 years of unemployment benefits? Yep.
Military retirement costs? Not hardly.
The budget since 2008 has gone up by 700 billion. How much of that additional spending is due to the military retirement system?
“In 1984 Congress ordered DoD to switch to “accrual accounting” for retirement accounts. The Treasury Department was given responsibility for the unfunded liability and established a military retirement trust fund. The services began to pay into that fund whatever amount was needed to cover retirement costs for the current active, Guard and Reserve forces.
So retirement obligations today are paid from two pots. Treasury pays roughly $50 billion a year to cover annuities of current retirees and survivors. The services pay more than $20 billion a year in accrual payments.”
http://www.military.com/features/0,15240,220567,00.html
Hmmm...so the current retirement system costs a TOTAL of $50 billion each year, while 20 billion is being set aside to pay for future retirees.
In fact, the requirement to pay in now for future retirees started the year after I entered the military.
So you want to explain again why we cannot afford the current military retirement system? Why is there no more money, if the services have been funding future retirement since 1984?
If total outlays for military retirement not previous funded runs $50 billion each year, and the budget has grown by 700 billion since 2008, and the current deficit is 1,600 billion, how much of the problem is military retirement? And how much of that 50 billion was already being paid for in the 2008 budget?
“Accrual accounting is a method of recording costs and setting aside funds in current budgets to pay the retirement annuities that eventually will be received by military personnel who are in current service. It would improve military personnel management by making the full cost of manpower more visible, as well as clarifying the full cost of any change in retirement benefits. It would not affect the amount of retirement benefits paid to an employee when he or she retires, nor would it affect the annual outlays paid by the federal government.” - From 1983!
http://www.cbo.gov/doc.cfm?index=5316&type=0
Having worked in both the combat arms and logistics, I can assure you that there’s practically nothing that military logistics has done to instill civilian technical skills. They don’t even operate on the same level or with the same mindset. Ditto for a ton of other jobs. Former servicemembers are being hired for their maturity, experience and ability to stick it out.
As I said earlier, I’d hire a fellow vet in a minute, but I’d laugh if a combat engineer wanted to build me a building or install my wiring. The real exception is the defense industry itself. Military avionics is a good one I missed and I agree there’s a lot of commonality, but the biggest civilian hire for such skills is to turn around and work for the contractor who did the OEM. I know an Apache technician that turned around and worked with Hughes providing contractor maintenance for the chain gun. Even then, most of the civilian-level work on such things is already done by civilians. I couldn’t count the number of Hughes, Boeing and Rockwell technicians on our base. They easily outnumbered the soldiers and MOST weren’t former military.
You mention “biology”, which really isn’t practiced in the military, so let’s go straight to the practice, not the theory: Medican and dental. Most professionals in this field are lured to the military by “pro-pay”, which are basically bonuses added to their specialty in order to get them into the military. Make no mistake, these guys are mainly civilians who jumped rank to Captain because they were paid to do so. They were already civilian technicians, not the other way around.
The retirement strategy of a nation cannot be focused on the .001%, because they’re gonna be taking care of the other 99.999%. It sucks, but unfortunately that’s the way we’re headed.
As I said before, my #1 concern is that our military remains the most motivated and capable. If any adjustment to the retirement system jeopardizes that, I’d back off in a heartbeat. I just think there’s a better system that an “all-in, betting on 20” attitude which rewards a few and offers no consideration to the rest.
Certainly there should be a greater reward to those who stick it out, but as the cameraman told Matt Damon, “In any given job, there’s 10% who suck at their jobs.” Like teaching, the military has them and the pension system clearly induces such individuals to forego current pay for deferred benefits.
“How the Retirement Fund Works
When Congress established the retirement fund, it shifted responsibility for service rendered before October 1, 1984 to the Department of the Treasury; DoD has responsibility to fund service rendered after that date. At the time of the transfer, Treasury accepted an unfunded liability estimated at $529 billion, which was to amortize over 60 years.[2] Annually the services transfer an amount equal to a percentage of their basic pay accounts for the active and reserve components. The percentage differs by component, but it is identical within components for all services. In FY95, fund transfers equaled 33.5 percent of the active duty basic pay and 9.7 percent of the selected reserves. The Board of Actuaries annually calculates the liability for the pre-1984 service, adjusted for changes in assumptions and experience, and transfers an amount equal to one year’s amortized payment. The money in the fund is invested in nonnegotiable government securities, and it draws interest...
http://www.rand.org/pubs/research_briefs/RB3005/index1.html
It looks to me like I have one year of service whose retirement costs come from the general budget. All the rest of my retirement pay should be coming from payments made since 1984 into a trust fund adjusted annually.
The services are complaining that they currently need to cough up 20 billion each year to fund future retirements - out of a DoD budget of over 600 billion? Sounds like a bargain to me...
Good point, how these will be managed is another question. Hopefully we won’t get that far!
but military pay may start out low, but it actually is BETTER than civilian counterparts....the benefits are SUPERIOR and the who the heck is getting a DEFINED PENSION anymore, except the govt workers and the military....
20 yrs is NOTHING.....and even with that, they should not be collecting before age 60 minimum....
I know too many who had comfy jobs....heck, my husband had one....I know too many who could not do anything else except do something in the military...their lost without that system....I know too many who have "injuries" from a car crash in Spain or some such, not involved in any war, who took lifetime disability from the military and never looked back....their got their pot of gold....
if we are to be a sustainable nation, we need to move away from awarding pensions at 20 yrs, even 30 yrs, but at least we need to stop paying it out so early....you can't pay a 38 yro a big pension starting at that age and expect to have a solvent system....
okay....send in the flak...the truth is the truth.....I've had parents both in the military, 3 brothers, 2 brothers inlaw and one husband....
The guy who gets out with six years in has 14 years to go if he stays in the reserves, some level of veterans preference, a GI Bill, etc. What other company worries about the pensions of empolyees who only stay 6 years? As for keeping the older guys, as I understand it, after 40 problems with everything from the heart disease to asthma soar in the military. Combat is still a young man’s game and keep in mind that we’ve have the luxury of some very inept enemies. Fighting a tough, well equipped and determined enemy (China? North Korea backed by China?) is a completely different ballgame we haven’t seen since the 1970’s.
just because the military by and large is a great organization with patriotic people in it does not mean that they deserve a pension after 20 yrs, paid immediately....
at least change it to what the Guard pays....at age 60...
ALCON,
The Defense Business Board is the body proposing to gut the military by eliminating our pension benefits in any recognizable form. Rumsfeld pulled these jokers together in 2001, under Bush. The corporate board is made up of defense contrator/wall street insiders more likely to support republicans than democrats any day. This isn’t a partisan issue as no one in Washington is looking out for us as the wars wind down and the debt ceiling remains the soundbite issue of the day. Take a look at the website and see who these people really are http://dbb.defense.gov/index.shtml. I think they want to eliminate our pensions so we will have more money to pay them as consultants and to buy more equipment from their companies. Finally go to MOAA and send e-mails no matter what side of the isle you find yourself on. Just thought the readers of FR would want to know. DBB has been around longer than Obama and will continue to come after us no matter who is elected next.
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