Military retirement under attack

[Guest]

The current pension system is unsustainable and there is no way anybody can argue that.

That statement is not correct. There are many ways it can be sustained. I take it you are not an economist?

It's a great deal and I understand the people who are currently serving being pissed if that option is taken away but there is a reason no businesses offer them anymore.

Ahem.

I now have a civilian job like you're talking about. I have a 401k with matching, an annual allocation of stock (safe harbor) and a pension. It is not a government job.

I get the feeling you don't get shot at. Once you've shared your personal bubble without your permission with a metal object moving in excess of 2500fps not in your control your perspective changes a bit.

People keep throwing up the examples of market fluctuations and what happens if the market crashes when you're at 18 years of service, etc. I hate to sound like a jerk but welcome to the rest of the world folks.

C'mon, the military is not "the rest of the world." That's like saying to every single civilian that they can be subject to the same thing a military member is subject to and then say "I hate to sound like a jerk but welcome to the military folks."

How much flexibility do people have with the TSP? Do you really have the option to protect your investment in any way you choose or are your investment options in the plan limited? Simplest question, can you go to cash?

This is not some new problem nobody has seen before, this is something all Americans face and is just the reality of any investment.

Uh, I'm guessing you haven't been keeping up with current events while you've been cobbling shoes, eating paste and kicking boxes for the Air Force.

This is new. People (civilians) are not invested properly in their retirement. It is a crisis for many individuals, the US Govt and the nation as a whole.

The average retirement savings for Americans 55-64 is less than $70k and fewer than 30% in that age bracket have some sort of employer sponsored pension. What do you think their plan is? You think they might've been depending on the govt to provide a bit for their retirement or do you think they have a sustainable retirement plan?

You think there might be a couple folks in "the rest of the world" who might be feeling like they might be fucked?

[zrooster99]

Truly ironic statement here. The ones who are willing to put up with the BS for 20 years are generally the ones who create all the BS. It's a self-licking ice cream cone.

I think it's the O-6s and above and E-9s. I don’t think most that do 20 and get out have much of a say in the BS creation department.

One plus for me on this whole thing is that it has made me reexamine my reasons for sticking around and whether/how long I would stick it out if the magic number of 20 lost its meaning. The fact of the matter is that there is nothing I wanted to do more than serve and I still can't think of anything I could do with my life that would give me more satisfaction. I can't believe I'm saying this, but I'm still having fun on the whole (STS) in spite of a lot of the bullshit. Maybe it has something to do with my multiple (including a fairly recent) career changes within the military. To be completely honest I am fed up with a lot of the bullshit. I’m so fed up that it makes me tired to even think about it. I do my share of the office work, but I don't focus on that (for now). As some have already said on here, I get off on being able to show up to work in the bag, step out to the plane and be one of the elite (relatively speaking). I dig that while most civilians are heading home from work, I'm headed in, and while they're getting ready for bed or already racked out I'm shooting AMP4 approaches. I’ve also tried to posture myself to do what I thought I would enjoy. I never went after a job or duty because I thought it would be good for my career.

So, yeah, I'm about to head out on my 8th deployment in a little over 12 years, the queep is getting worse, I'm tired of saying goodbye to the wife, I'm tired of them changing the rules on me. In the other column is the fun side of the job and the afore mentioned job satisfaction.

What's my point? I guess I get to put my money where my mouth is (was), but turns out it wasn't all about the retirement. And no, I'm NOT trying to tell anyone else they should stick around. It works me. Fuckem if they can't take a joke.

Edited August 18, 2011 by zrooster99

[spaw2001]

Rainman,

I am just trying to track what you are saying because I am not in the civilian world? In your opinion, do you think most people that don't have a retirement is a result of self-induced retirement saving/planning procrastination or is it because companies are literally F'ing them out of retirement? I am pretty read-up in the financial planning/finance area and my perception is the majority of folks tend to overspend/drive up debt relying on a company or government organization to bail them out in the end. Essentially, folks spend a lifetime paying banks interest. Further, while most military members seem to behave fairly well with regards to consumer debt (except for airmen with the AAFES star card haha), many have this proclivity to buy a house with a white picket fence every time they PCS, accounting for zero risk and essentially "renting" the property with 0 down, 30 year loans. The common argument is why rent when you can buy with a lower payment?? This seems logical in a vacuum but does not account for risk and being stuck with a house at PCS time either because the market didn't appreciate, or they are upside down in their 0 down loan. The only thing that saves them is signing up to be an absentee landlords with leveraged houses scattered across the country. I bring this up because I feel like people make certain decisions, but then get all high and mighty when an organization doesn't flop out the supple benefits teet. At the end of the day, military members making 60-80K have no business being in 300K homes and then renting it out and buying another one at another PCS location. I bring this up essentially to say that saving for retirement is not quite as difficult as many make it out to be. But, this requires foresight and a shift in the consumption/"have to own a home" culture many Americans (military included) have. At 9% interest saving 850 bucks a month (roughly 15% for a Capt) into an index fund, an individual will have $1.5+ million at age 56 (if the person starts at 26). See Dave Ramsey's calculator: (https://www.daveramsey.com/articles/article/articleID/investing%2Dcalculator/category/lifeandmoney%5Finvesting/) This is a conservative rate considering the market has been closer to 10% since its inception. Further, this assumes no raise throughout your life. Pretty realistic numbers if you ask me!

Common naysayer arguments:

Oh but 850 is a lot of money per month! My response: May seem that way but total up all house mx, realtor fees, interest, etc.. and most will be surprised with what you come up with. Trust me: I have a rental property in a good real estate market, and it is still expensive..Many tend to just focus on appreciation and seem to discount all the trickling-in/recurring costs associated with a home.

What about inflation? My response: No investment is safe from this.

What if the stock market crashes? My response: Well, what if the government arbitrarily decides to stop your pension (i.e. Pritchard, AL (https://www.cbsnews.com/stories/2011/02/20/sunday/main20034120.shtml)? What if all your real estate investments go under water and you can't rent them? What if all the gold people buy up in this hyper-fad crashes in half when the slight bit of confidence is restored in the stock market? No investment is 100% safe.

Look, like I said before, military folks sacrifice and deserve some compensation plan, but I think many people make reckless decisions based on some expected savior pension plan and then make risky decisions. I am included in this. Hell, I LEASED a 45K BMW as a 2LT! I am just saying, perhaps, we need to tighten our belts a bit so we are not so reliant on gov offerings.

[Hacker]

The ones who are willing to put up with the BS for 20 years are generally the ones who create all the BS. It's a self-licking ice cream cone.

That's a fucking idiotic generalization.

Yes, the upper level idiots are included in the entire group of people who stay until 20 and beyond. However, to say that the entire group is 'generally' comprised of those idiots is phenomenally ignorant.

There are a shitload of passed-over Captains, Majs, and Lt Cols who remained in those ranks for years because they didn't suck dick and sell out to the man. In fact, many of them use those extra years to do battle with the morons to try and keep some sanity in the process.

[epsilon]

Rainman,

I am just trying to track what you are saying because I am not in the civilian world? In your opinion, do you think most people that don't have a retirement is a result of self-induced retirement saving/planning procrastination or is it because companies are literally F'ing them out of retirement? I am pretty read-up in the financial planning/finance area and my perception is the majority of folks tend to overspend/drive up debt relying on a company or government organization to bail them out in the end. Essentially, folks spend a lifetime paying banks interest. Further, while most military members seem to behave fairly well with regards to consumer debt (except for airmen with the AAFES star card haha), many have this proclivity to buy a house with a white picket fence every time they PCS, accounting for zero risk and essentially "renting" the property with 0 down, 30 year loans. The common argument is why rent when you can buy with a lower payment?? This seems logical in a vacuum but does not account for risk and being stuck with a house at PCS time either because the market didn't appreciate, or they are upside down in their 0 down loan. The only thing that saves them is signing up to be an absentee landlords with leveraged houses scattered across the country. I bring this up because I feel like people make certain decisions, but then get all high and mighty when an organization doesn't flop out the supple benefits teet. At the end of the day, military members making 60-80K have no business being in 300K homes and then renting it out and buying another one at another PCS location. I bring this up essentially to say that saving for retirement is not quite as difficult as many make it out to be. But, this requires foresight and a shift in the consumption/"have to own a home" culture many Americans (military included) have. At 9% interest saving 850 bucks a month (roughly 15% for a Capt) into an index fund, an individual will have $1.5+ million at age 56 (if the person starts at 26). See Dave Ramsey's calculator: (https://www.daveramsey.com/articles/article/articleID/investing%2Dcalculator/category/lifeandmoney%5Finvesting/) This is a conservative rate considering the market has been closer to 10% since its inception. Further, this assumes no raise throughout your life. Pretty realistic numbers if you ask me!

Common naysayer arguments:

Oh but 850 is a lot of money per month! My response: May seem that way but total up all house mx, realtor fees, interest, etc.. and most will be surprised with what you come up with. Trust me: I have a rental property in a good real estate market, and it is still expensive..Many tend to just focus on appreciation and seem to discount all the trickling-in/recurring costs associated with a home.

What about inflation? My response: No investment is safe from this.

What if the stock market crashes? My response: Well, what if the government arbitrarily decides to stop your pension (i.e. Pritchard, AL (https://www.cbsnews.com/stories/2011/02/20/sunday/main20034120.shtml)? What if all your real estate investments go under water and you can't rent them? What if all the gold people buy up in this hyper-fad crashes in half when the slight bit of confidence is restored in the stock market? No investment is 100% safe.

Look, like I said before, military folks sacrifice and deserve some compensation plan, but I think many people make reckless decisions based on some expected savior pension plan and then make risky decisions. I am included in this. Hell, I LEASED a 45K BMW as a 2LT! I am just saying, perhaps, we need to tighten our belts a bit so we are not so reliant on gov offerings.

Well said. I am a Maj with 11 years and have never bought a house and will not until I'm out of the AD. Because, as you said, risk has to be factored in....and people don't seem to do that. A lot of my peers have the 300K+ house you speak of because they feel like that is appropriate to their current age, etc....however, they really don't make enough, or have anywhere near enough stability in the military to do it (unless they were to pay cash and I haven't seen anyone do that yet). I have saved between 15-18% towards retirement since a 2nd LT, already have 6 figures in TSP/Roths alone and live very comfortably with our spending plan. You mentioned Dave Ramsey.....he also advises military members to NOT buy a house for the very same reasons.

I do hope this 20 year retirement holds because I have sort of planned on it. However, if they drop it I'll start piling up money in my savings account and be ready to bail to airlines in 2013/14.

[tac airlifter]

Rainman,

I am just trying to track what you are saying because I am not in the civilian world?

I'm Ron Burgundy?

[Vetter]

That's a fucking idiotic generalization.

Yes, the upper level idiots are included in the entire group of people who stay until 20 and beyond. However, to say that the entire group is 'generally' comprised of those idiots is phenomenally ignorant.

There are a shitload of passed-over Captains, Majs, and Lt Cols who remained in those ranks for years because they didn't suck dick and sell out to the man. In fact, many of them use those extra years to do battle with the morons to try and keep some sanity in the process.

I don't know a hell of a lot of passed over Captains and Major and Lt Cols, for that matter, who have more than 20 years. Most of them reach the 20 year milestone and get the fuck out. How many people who actually make the decisions at the O-6 and above level have less than 20 years? For that matter, how many O-6's and above can you really relate to? I can count them on about 3 fingers. You don't make it into the upper echelons by getting passed over and fighting the system. They are the product of the system, they have endured all the BS just to get to the point where they can create it like the ones who came before them.

Probably should have said those who "willingly put up with the bullshit"...but in the end, it's your fucking choice whether or not you wanna stay. There are a shit load of O-5s here whose only purpose is to create more queep for everyone. Seems like they need to do it justify their existence.

[Guest]

do you think most people that don't have a retirement is a result of self-induced retirement saving/planning procrastination

Yes, kind of.

Here are my sweeping genrealizations:

Most people don't understand money.

Most people spend more than they should.

Most people are too lazy to do math.

Most people are stupid.

[Carpetbagger]

[Trial balloon...]

If the military retirement has got to change... why not make it more like a current federal retirement system that INCLUDES a pension AND a matching TSP, instead of ditching the entire program for a Wal Mart plan. Doesn't make sense to take away the guaranteed annuity for the military, but leave everyone from Congress down to your local postal employee with a guaranteed annuity (for a minimum of 5 years federal service no less) in place. For starters...

What if the military retirement system was modified to be more like the Federal Law Enforcement/ATC/Firefighter/CBP etc. plan AS A COMPROMISE TO PREVENT THE TRAINWRECK DBB PLAN FROM BEING VOTED IN.

Bare Basics:

Matching TSP up to 5%...

Annuity at age 55 based on 1.7% of highest 3 years pay x 20 years = 34% of base pay (numbers change for year groups, but this is after all a trial balloon)

Modifications could be made for the military, such as 2% per year in an annuity + more matching TSP + a healthcare plan, etc...

Thoughts?

[/Trial balloon]

[dawgfan]

https://www.foxnews.com/politics/2011/08/19/are-military-pensions-too-generous/?test=latestnews

[Hacker]

I don't know a hell of a lot of passed over Captains and Major and Lt Cols, for that matter, who have more than 20 years. Most of them reach the 20 year milestone and get the fuck out.

Absolutely they do. Unless I completely misread your original post, that's exactly who you were railing against, not the miscreants who stay in beyond 20:

Truly ironic statement here. The ones who are willing to put up with the BS for 20 years are generally the ones who create all the BS. It's a self-licking ice cream cone.

[Guest]

Get a handle on shit like thisbefore you go after retirement.

[HU&W]

Thoughts?

I like it. Here's a few thoughts.

1. Give people already in the option of staying with the current system or converting to the new system up until retirement.

2. Make the new system 1.5% of average top three years times years of service with vestment at five years (because that makes it more fair). Begin paying immediately upon separation like retirement with eligibility for BX, commissary, etc... Also to incentivize the swap, offer TSP contribution matching up to 5% of base pay. TSP payout is at normal retirement age without penalty.

Under this, let's assume Capt Snuffy does his 6 years and gets out. His pension would be about $466 per month. His total in TSP would be about $35K with half of that contributed by the govt.

I think it may work, but they might have to delay paying of pension/TSP to 55 or 62.

[spaw2001]

I don't know a hell of a lot of passed over Captains and Major and Lt Cols, for that matter, who have more than 20 years. Most of them reach the 20 year milestone and get the ###### out. How many people who actually make the decisions at the O-6 and above level have less than 20 years? For that matter, how many O-6's and above can you really relate to? I can count them on about 3 fingers. You don't make it into the upper echelons by getting passed over and fighting the system. They are the product of the system, they have endured all the BS just to get to the point where they can create it like the ones who came before them.

Probably should have said those who "willingly put up with the bullshit"...but in the end, it's your ######ing choice whether or not you wanna stay. There are a shit load of O-5s here whose only purpose is to create more queep for everyone. Seems like they need to do it justify their existence.

I just have a difficult time buying the direct correlation between serving more than 20 yrs and being a douchebag/"the man." I've said it before, but it is very easy to make sweeping generalizations on this forum. A general theme or assumption I read a lot here is if you get passed over, then you are some kind of cult hero. This tragic figure fought the man and won a moral victory sacrificing promotion to be with the people. Then, we have the 0-6 that played every move perfectly...stepping on as many toes up the ziggurat of success. Then, after 20 years, this person stays in and gets to make decisions such as how many reflective belts we wear and how can we make PT uniforms as uncomfortable as possible. In reality, I find quite a mix in the "real world." There are plenty of really awesome high ranking dudes and some jackasses as well. Then, for the passed over people, there are some really good dudes that get screwed. The more common story, however, is they failed to do something that the Air Force specifically outlines is required for promotion (whether it is bullshit or not). This doesn't make them bad people, but they simply didn't take care of business. Then, of course, you have some wastes of space that deservedly don't get promoted. These seem to be fairly rare, however. As I said in the other post, I think there are a variety of factors that keep people in and out of the force. While anecdotal, I find most Lt Cols that aren't going to make 0-6 typically stick around a couple past 20 and choose to stay or go based on assignments and whether good deals present themselves.

While I am not for getting rid of the pension because I think there should be a unique, good deal for the high quality people that choose to serve their country long-term, I do think that the 401K plan will naturally force shape the service to where retirement becomes less of an all or nothing deal. As a result, there will be a more gradual winnowing effect of its members. People that stick around, get deservedly rewarded more, but people will also have the option to leave early with some compensation. Further, it does inherently force people to be more responsible with personal finances as mentioned in my last post. This is a valuable life lesson that under the current system, we don't really have to learn

Edited August 20, 2011 by spaw2001

[AmpXLZH]

Panetta: Any retirement changes won't affect serving military

"People who have come into the service, who have put their lives on the line, who have been deployed to the war zones, who fought for this country, who have been promised certain benefits for that -- I'm not going to break faith with what's been promised to them," Panetta said

[Boxhead]

Panetta: Any retirement changes won't affect serving military

"People who have come into the service, who have put their lives on the line, who have been deployed to the war zones, who fought for this country, who have been promised certain benefits for that -- I'm not going to break faith with what's been promised to them," Panetta said

That just means he will be replaced with someone who will be willing to break that faith.

Good on him for standing up through, and I hope there is no one to fulfill my overly cynical prophesy. I just went over 18yrs... I am too close for this type of madness!

[nsplayr]

I like it. Here's a few thoughts.

1. Give people already in the option of staying with the current system or converting to the new system up until retirement.

2. Make the new system 1.5% of average top three years times years of service with vestment at five years (because that makes it more fair). Begin paying immediately upon separation like retirement with eligibility for BX, commissary, etc... Also to incentivize the swap, offer TSP contribution matching up to 5% of base pay. TSP payout is at normal retirement age without penalty.

Under this, let's assume Capt Snuffy does his 6 years and gets out. His pension would be about $466 per month. His total in TSP would be about $35K with half of that contributed by the govt.

I think it may work, but they might have to delay paying of pension/TSP to 55 or 62.

Sounds about right. The only part of the SECDEF's comments I didn't like was an acknowledgement that many current service members would benefit from a change. If they grandfather people in (and they damn well better), it should be optional so those who know they're getting out can switch programs and get something out of the deal. Good thoughts all around though

[DeHavilland]

Panetta: Any retirement changes won't affect serving military

"People who have come into the service, who have put their lives on the line, who have been deployed to the war zones, who fought for this country, who have been promised certain benefits for that -- I'm not going to break faith with what's been promised to them," Panetta said

My rose colored glasses version of "I am not going to break faith with what has been promised to them", is a 100% grandfathering to all currenty serving. That means if you have 10 years in now, you can do another 10 and have an immediate high 3 monthly check coming your way for life. Or if so desire, you have a one time opportunity to convert to the "new" system.

I already know guys that have moved their approved retirement dates up hoping to lock in a retirement under the "old" high 3 system.

[JarheadBoom]

Right or wrong, smart or stupid.. categorize it however you'd like.

In 4 days here at my new location, I've heard several good dudes/dudettes, both O and E, say they'll pull chocks ASAP if this new retirement plan gets put in place with no grandfathering.

If I were still AD, I'd be seriously considering it, too.

[fire4effect]

Right or wrong, smart or stupid.. categorize it however you'd like.

In 4 days here at my new location, I've heard several good dudes/dudettes, both O and E, say they'll pull chocks ASAP if this new retirement plan gets put in place with no grandfathering.

If I were still AD, I'd be seriously considering it, too.

I'm sure Panetta was thinking the same thing when he made his speech. Regardless of what actually comes to pass the echelons above reality have to know that people will bail if they perceive the current system has become essentially use or lose.

[BFM this]

For the FB crowd. A lot of good discussion, information sharing, and ideas:

Here

And Here

[Guest F-15E]

One thing a lot of folks arent looking at is the fact that the military won't let you serve past a certain age. If you kick me out of the military before I'm 59 1/2, but dont give me retirement until Im that age, what do I do? On the other hand, civilians can work until they choose to retire, not having to start over at age 40.

[Guest]

One thing a lot of folks arent looking at is the fact that the military won't let you serve past a certain age. If you kick me out of the military before I'm 59 1/2, but dont give me retirement until Im that age, what do I do? On the other hand, civilians can work until they choose to retire, not having to start over at age 40.

Are you saying you are unemployable after 20 years of military service?

[AEWingsMN]

No... he's saying that in the civillian world, you aren't always forced to search for a new career half way through (with the exception of the few who are able to make it to a high enough rank to last that long). In a civilian career, you can, with the right attitude in most situations, work the whole time in one career field. It's not as common anymore, but definitely more common than in the military.

I know you're just being a bit of a devil's advocate in a few of these threads, but come on man.... His point was a valid one which is not brought up frequently, and you are certainly intelligent enough to understand what he meant.

Edited August 24, 2011 by AEWingsMN

[Horde187]

Another brilliant NYT piece:

Retiree Benefits for the Military Could Face Cuts

And as long as they're comparing us to the folks who retire early and get a lot more in benefits than is their fare share have a read at this article.

https://www.chicagotribune.com/news/local/ct-met-pensions-legislation-watchdog-20110921,0,50695,full.story