Military retirement under attack

[pawnman]

https://money.cnn.com/2013/12/12/news/economy/military-pensions-budget/index.html

CNN article about it. Doesn't say much we didn't already know.

"Current levels of military compensation are incompatible with the overall demands on the defense budget," according to a House Committee on the Budget Report.

Military groups say they're open to reforms, but they'd like such changes to go through the normal legislative process that allows time to review and "assess any recommendations that could significantly impact retention and readiness."

Edited December 13, 2013 by pawnman

[Magellan]

they've already done it twice.

Details? In the last 7 years I have only seen a good improvement with the TSP since it started allowing Roth contributions. $17,500 after taxes is a hell of a lot more than $17,500 before taxes.

[TreeA10]

https://freebeacon.com/report-budget-plan-could-cost-service-members-124000-in-retirement-pay/?print=1

[F15Edog]

Playing Devil's advocate, but if we want the govt to make cuts on Medicare, welfare, obamacare, and make tax and social security reforms, can we really be so entitled that they cannot touch 1% of our $1.5M military retirement?

Not sure we have a leg to stand on when you look at all the benefits. Especially when we give out BSMs to finance troops, and tops in blue are considered "warriors." It could be much worse.

Again, just bringing up a counterpoint. Talk amongst yourselves........

[Fuzz]

Playing Devil's advocate, but if we want the govt to make cuts on Medicare, welfare, obamacare, and make tax and social security reforms, can we really be so entitled that they cannot touch 1% of our $1.5M military retirement?

Not sure we have a leg to stand on when you look at all the benefits. Especially when we give out BSMs to finance troops, and tops in blue are considered "warriors." It could be much worse.

Again, just bringing up a counterpoint. Talk amongst yourselves........

I think Tony Carr lay's out a pretty good argument: https://www.businessinsider.com/tony-carr-pentagon-budget-vultures-target-personnel-2013-3

I think most of us understand cuts need to be made, however, the cuts should not started with those that were earned, they should be the last to be cut. Raise TriCare expenses? Ok, however, if you decide to continue to subsidize those on Medicaid and all the other wasteful healthcare programs but ask the guy missing both his legs to pay more for his healthcare, that is a huge foul. What about Congress's healthcare and retirements, yes a small drop in the bucket but if everyone has to sacrifice they should be leading the charge.

[Azimuth]

Written by a recently retired Chief/C-130 Loadmaster.

https://mickeyinthemiddle.blogspot.com/2013/12/an-open-letter-to-congressman-ryan-and.html?m=1

[FallingOsh]

Details? In the last 7 years I have only seen a good improvement with the TSP since it started allowing Roth contributions. $17,500 after taxes is a hell of a lot more than $17,500 before taxes.

.

The fed has quietly dipped into TSP funds several times in order to stay under the debt ceiling. They're using your retirement funds to float their overspending. Of course they promise to pay it all back.

Do not, under any circumstance, trust the government with handling money intelligently. If your retirement plan relies on any form of government money, you're wrong.

[AnimalMother]

.

The fed has quietly dipped into TSP funds several times in order to stay under the debt ceiling. They're using your retirement funds to float their overspending. Of course they promise to pay it all back.

Do not, under any circumstance, trust the government with handling money intelligently. If your retirement plan relies on any form of government money, you're wrong.

That's essentially the short of it. They actually explain it right on their website, albeit in rather cryptic terms.

The TSP is not a bad option, but I certainly wouldn't trust my entire retirement to it. Finally, the Roth option always sounds enticing, but in this environment, I'll take the tax break up front thanks. If the Roth style is still 100% tax free when I retire in 25 years, I'll eat my hat. After all, why would anyone need more than $200k? That's just absurd. You're playing their game here, and they get to change the rules whenever they want.

PM if you're interested in some good reading about how the financial system really works.

https://www.tsp.gov/investmentfunds/fundsheets/fundPerformance_G.shtml

https://www.heritage.org/research/reports/2013/05/obama-s-cap-on-defined-contribution-retirement-savings-plans

[go_cubbies22]

New article by Tony regarding the new budget deal.

https://www.jqpublic-blog.com/?p=569#more-569

Has a link to the MOAA website to email President Obama and your state Senators with a canned letter. Takes about a minute.

https://capwiz.com/moaa/issues/alert/?alertid=63028561&PROCESS=Take+Action

[daynightindicator]

out of curiousity, how many people on here are actually advocating scrapping the entire budget deal because of the COLA reduction?

i'm not happy about it either, and i totally understand the outrage/feeling that there are many other ways to drum up the cash that it will save, but do you really want to go through another year or more of reduced (or "tiered") readiness, flying hour cuts, no TDYs, cancelled Red Flags/WIC classes, and other serious cuts to O&M accounts?

i would love to see the Senate amend the proposal but if it comes down to yes/no on this, i will take what i consider to be a relatively minor hit to ensure our readiness.

it sucks, but life's not fair. i will certainly ask my representatives to modify this at a later date and try to restore the funding, but i'm not willing to fall on a sword that's going to cut DEEP into readiness b/c of a 1% COLA cut to a pension i won't see for another 10 years, if i even stay that long.

just curious how the rest feel...

[Jaded]

I believe that the Senate could modify it and send it back to the house.

[Bobby]

out of curiousity, how many people on here are actually advocating scrapping the entire budget deal because of the COLA reduction?

i'm not happy about it either, and i totally understand the outrage/feeling that there are many other ways to drum up the cash that it will save, but do you really want to go through another year or more of reduced (or "tiered") readiness, flying hour cuts, no TDYs, cancelled Red Flags/WIC classes, and other serious cuts to O&M accounts?

i would love to see the Senate amend the proposal but if it comes down to yes/no on this, i will take what i consider to be a relatively minor hit to ensure our readiness.

it sucks, but life's not fair. i will certainly ask my representatives to modify this at a later date and try to restore the funding, but i'm not willing to fall on a sword that's going to cut DEEP into readiness b/c of a 1% COLA cut to a pension i won't see for another 10 years, if i even stay that long.

just curious how the rest feel...

You really think that this will keep "flying hour cuts, no TDYs, cancelled Red Flags/WIC classes, and other serious cuts to O&M accounts" from happening again? The roughly $6B proposed savings is a mere drop in the bucket. If we take this with no pushback do you really think that a further erosion of our benefits will not continue? This one is just the tip of the iceberg if it passes.

[Fuzz]

out of curiousity, how many people on here are actually advocating scrapping the entire budget deal because of the COLA reduction?

i'm not happy about it either, and i totally understand the outrage/feeling that there are many other ways to drum up the cash that it will save, but do you really want to go through another year or more of reduced (or "tiered") readiness, flying hour cuts, no TDYs, cancelled Red Flags/WIC classes, and other serious cuts to O&M accounts?

i would love to see the Senate amend the proposal but if it comes down to yes/no on this, i will take what i consider to be a relatively minor hit to ensure our readiness.

it sucks, but life's not fair. i will certainly ask my representatives to modify this at a later date and try to restore the funding, but i'm not willing to fall on a sword that's going to cut DEEP into readiness b/c of a 1% COLA cut to a pension i won't see for another 10 years, if i even stay that long.

just curious how the rest feel...

Considering this spends more and then promises to save money 10 years from now, we all know how this goes, and never mind the fact that this gets us a budget for two years! Does anyone honestly think getting rid of the caps on spending and promising to save money a decade from now and not looking at this for two years given our fiscal problems is a good thing? Yeah touching military retirement and the pain of sequester is a problem however, it is not the worst of the problems.

[Skitzo]

I side with you. I want to do our fair share but I don't feel like anyone else is willing to do so. They don't have the proper frame of reference. We have a force used to being used/abused more so than any other generation. On the same hand we have a general population that is completely out of phase with us.

Even if the COLA reduction could be used to prevent further reduction in military ability I don't trust it will be used that way. The different pot of money argument runs out at this point.

What if the earned income tax credit were reduced by 500? How much would we save?

At the end of the day we need a budget. The COLA argument is fair but until everyone in this country can stand up and do their fair share I won't agree. What exactly is a fair share? I don't know but I feel like my short tour return date earns me exactly the retirement we have now...

Sent from my iPhone using Tapatalk

[daynightindicator]

I believe that the Senate could modify it and send it back to the house.

Agree 100% - here's hoping that happens, although it's probably a long shot.

You really think that this will keep "flying hour cuts, no TDYs, cancelled Red Flags/WIC classes, and other serious cuts to O&M accounts" from happening again? The roughly $6B proposed savings is a mere drop in the bucket. If we take this with no pushback do you really think that a further erosion of our benefits will not continue? This one is just the tip of the iceberg if it passes.

The way I understand it, the budget deal restores the ~$63B in sequester cuts to this year's budget and whatever the cuts would have been for FY15 as well (not sure of the amount). I understand the $6B saved by the COLA adjustment will not be reinvested directly (it was just a part of making the overall deal) but I have been lead to believe we will definitely see relief from last year's battle-axe-style cuts that forced cancelled LFEs, WIC, and TDYs. The big win here is eliminating sequester for at least two years.

So, to answer your question I think flying hours will be cut, but minimally (i.e., no "tiered readiness" garbage), and that the purse strings will loosen slightly re: TDYs and LFEs.

[pcola]

Playing Devil's advocate, but if we want the govt to make cuts on Medicare, welfare, obamacare, and make tax and social security reforms, can we really be so entitled that they cannot touch 1% of our $1.5M military retirement?

Not sure we have a leg to stand on when you look at all the benefits. Especially when we give out BSMs to finance troops, and tops in blue are considered "warriors." It could be much worse

"Medicare, welfare, obamacare are unearned entitlements. Tax and social security are cash-out-of-pocket. Military retirement is an earned benefit. See the difference yet? Yes, we have "a leg to stand on," and no, they can not touch my earned retirement without opposition.

And who gives two fucks about BSMs and TIB? Yes, it could be much worse, and that is what we'd like to prevent. You suck at "playing devil's advocate" because your arguments are irrelevant.

out of curiousity, how many people on here are actually advocating scrapping the entire budget deal because of the COLA reduction?

i'm not happy about it either, and i totally understand the outrage/feeling that there are many other ways to drum up the cash that it will save, but do you really want to go through another year or more of reduced (or "tiered") readiness, flying hour cuts, no TDYs, cancelled Red Flags/WIC classes, and other serious cuts to O&M accounts?

i would love to see the Senate amend the proposal but if it comes down to yes/no on this, i will take what i consider to be a relatively minor hit to ensure our readiness.

it sucks, but life's not fair. i will certainly ask my representatives to modify this at a later date and try to restore the funding, but i'm not willing to fall on a sword that's going to cut DEEP into readiness b/c of a 1% COLA cut to a pension i won't see for another 10 years, if i even stay that long.

just curious how the rest feel...

I advocate scrapping the whole thing. Yes, I want to go through another year of "reduced" readiness, flying hour cuts, no TDYs, cx'd Red Flags/WICs, etc. The gov't is wasteful, and the USAF is not immune. We have a metric shit-ton of waste that can be slashed. To include many of the pieces you mentioned. We are not good at "thinking outside of the box", no matter how much we pride ourselves in our ability to do so. But we are stocked with an equivalent metric shit-ton of talent and really fucking smart people. We just have to use it. As the age-old saying goes, "necessity is the mother of invention." I, for one, am not completely opposed to sequestration. The impacts have been and will be felt, but we will weather it, and we will come out leaner. That, IMHO, is better than giving up my retirement to continue to fund our wasteful enterprise.

ETA: I'm drunk and fired up.

Edited December 14, 2013 by pcola

[TMFan]

It seems most of us are willing to do our share to come up with savings during these tight fiscal times. However, if each retiree is absorbing tens of thousands of dollars of these cuts (over $100K for a retired O-5), we are making a sacrifice wildly disproportionate to our numbers in the US population. Skitzo suggests cutting EITC by $500. Hell, even the $20 suggested by the Chief will get us to the same place.

Even though this one may inevitably pass, if we allow it to do so silently, it will only hasten further cuts. Make Congress and the President work for this. MOAA has it set up to quickly and easily be able to send a note to your senators: https://www.capwiz.com/moaa/issues/alert/?alertid=63026006

If you're a retiree or planning to retire from the military and do not take a few minutes to act on this, you are wrong.

[HU&W]

Playing Devil's advocate, but if we want the govt to make cuts on Medicare, welfare, obamacare, and make tax and social security reforms, can we really be so entitled that they cannot touch 1% of our $1.5M military retirement?

Not sure we have a leg to stand on when you look at all the benefits. Especially when we give out BSMs to finance troops, and tops in blue are considered "warriors." It could be much worse.

Again, just bringing up a counterpoint. Talk amongst yourselves........

Here is the site to run your own numbers. Calculating my own tentative retirement plan, gross cumulative retirement income before taxes at age 62 is $1.71M (conservative). Under the new plan with all the same parameters it becomes $1.53M. This comes to a loss of a little over 10% of my planned income during my post military service years, not 1% as you stated.

ETA: numbers are between 10-11% for anyone who retires close to 20 yrs both on the E and the O side. They go down to 5-6% for folks who retire around the 30 year mark. This is mainly because the closer you are to 62 when you retire, the less money you will lose.

Edited December 14, 2013 by HU&W

[clouseau]

Perhaps those at the GS level schould endure the same cuts to their retirement as well .

Edited December 14, 2013 by clouseau

[matmacwc]

I just saw a GS-13 retire with something like 26 years of service. His GS retirement is 2700 a month. His medical if he wants it, 700 a month. Not much to cut.

[ThreeHoler]

Here is the site to run your own numbers. Calculating my own tentative retirement plan, gross cumulative retirement income before taxes at age 62 is $1.71M (conservative). Under the new plan with all the same parameters it becomes $1.53M. This comes to a loss of a little over 10% of my planned income during my post military service years, not 1% as you stated.

ETA: numbers are between 10-11% for anyone who retires close to 20 yrs both on the E and the O side. They go down to 5-6% for folks who retire around the 30 year mark. This is mainly because the closer you are to 62 when you retire, the less money you will lose.

Don't use that site. They haven't updated it since 2010.

This is a much better calculator (it also shows you how bad of a deal REDUX is): https://www.cna.org/centers/resource-analysis/retirement-calculator

Based on my own calculator, an O-5 retiring at 20 years of service in 2016 would earn approximately $3,289,791 before taxes between retirement and death at 79. Under the new plan, the same O-5 would earn $3,161,876 for a total reduction in retirement pay of $127,915 or 3.9%. These numbers are based on a 1% AD pay raise per year from 2013 to 2016, CPI-U of 3.0% per year until death at 79 (historical CPI-U for the last 100 years is 2.97%), they also are pretty close to the MOAA numbers.

[clouseau]

This is just low hanging fruit and can you imagine the outcry by the populace if a similar idea was introduced in regards to either welfare or social security ?

[nsplayr]

Perhaps those at the GS level schould endure the same cuts to their retirement as well .

You're kidding right?

In addition to lengthy pay freezes and furloughs, all of which we've avoided on active duty, federal civilians have already been asked to contribute significantly more to their retirement in recent years and this new budget deal has piled on to that effort.

Most current government employees pay 0.8% of their annual salary as the cost of the FERS annuity. Those who were hired after Dec 31, 2012 now contribute 3.1% for the exact same benefit, i.e. congrats new guy, you just took an annual pay cut of 2.3% for the exact same benefit each and every year of your employment.

Now, not 1 year later, any employees hired recently (less than 5 years of service) will have to pay an additional 1.3% each and every working year for the exact same retirement. End result: dude hired 5 years ago is contributing 0.8%, dude hired 4.9 years ago is contributing 4.4%. On, say a $95K salary, that's an immediate $3,420 difference per year and those guys are getting the same benefit on the back end.

So while military retirees are getting 1% less per year until age 62 (about 24 years at the most if an 18 year old enlistee retired at 20 years of service), recently hired federal civilians are paying 3.6% more every year they work, which on the civilian side is usually at least that long and possibly longer i.e. 30+ working career before reaching the minimum retirement age which is at most age 57.

I'm not a fan whatsoever of either the military or federal civilians picking up the slack in the national budget, but the civilians are getting a much worse deal than the military retirees. And the negative effects hit immediately rather than the reductions in benefits being deferred until retirement.

Edited December 14, 2013 by nsplayr

[clouseau]

You're kidding right?

In addition to lengthy pay freezes and furloughs, all of which we've avoided on active duty, federal civilians have already been asked to contribute significantly more to their retirement in recent years and this new budget deal has piled on to that effort.

Most current government employees pay 0.8% of their annual salary as the cost of the FERS annuity. Those who were hired after Dec 31, 2012 now contribute 3.1% for the exact same benefit, i.e. congrats new guy, you just took an annual pay cut of 2.3% for the exact same benefit each and every year of your employment.

Now, not 1 year later, any employees hired recently (less than 5 years of service) will have to pay an additional 1.3% each and every working year for the exact same retirement. End result: dude hired 5 years ago is contributing 0.8%, dude hired 4.9 years ago is contributing 4.4%. On, say a $95K salary, that's an immediate $3,420 difference per year and those guys are getting the same benefit on the back end.

So while military retirees are getting 1% less per year until age 62 (about 24 years at the most if an 18 year old enlistee retired at 20 years of service), recently hired federal civilians are paying 3.6% more every year they work, which on the civilian side is usually at least that long and possibly longer i.e. 30+ working career before reaching the minimum retirement age which is at most age 57.

I'm not a fan whatsoever of either the military or federal civilians picking up the slack in the national budget, but the civilians are getting a much worse deal than the military retirees. And the negative effects hit immediately rather than the reductions in benefits being deferred until retirement.

Look I,m not a fan of this crap sandwich either but at some point something had to give.

Like I said earlier this is all low hanging fruit except some will take the hit for it and the better idea which would have taken some stones would have been going after waste with a vengeance and cuts across the board and that includes welfare and social security as well .

What part of this country is going broke don't people get ?

Interesting article on Mil.retirement numbers.

https://www.central-view.com/past.asp?number=1543

Edited December 14, 2013 by clouseau

[TarHeelPilot]

How long have civilians had TSP matching?