No more military retirement..............

Big Al1Big Al1 Senior MemberPosts: 7,026 Senior Member
.....as we knew it!! The grandson goes in the army in about a month, and his group will be the last to get the 20 year retirement plan. Starting in January retirement will be a 401k through the thrift savings plan. You put money in and the government matches it up to 5% of base pay. The plan is optional, and not sure when you can start collecting. Our previous illustrious administration very quietly pushed this through in 2015. This is the first I heard of it!!
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Replies

  • VarmintmistVarmintmist Senior Member Posts: 6,492 Senior Member
    It goes on a points system. Once you hit X # points (4300????) then you collect, after that you add points until retirement.

    As it was explained to me by my supv who did 12 active and is in reserves now.
    It's boring, and your lack of creativity knows no bounds.
  • shotgunshooter3shotgunshooter3 Senior Member Posts: 5,389 Senior Member
    It's not quite that simple. If you do your full 20, there is still a (I think) 40% of base pay pension that comes with it as well. There's also bonuses for committing for a career at certain gates, 12 years comes to mind. Truth be told, if this had been offered when I first joined, and I'd known what I know now about investing, I would have been all over it. I love the idea of being able to walk away at any time and at least having what Uncle Sam matched into my TSP. It has the potential to serve the SMs that manage their contributions well, very very well.

    Honestly, I think they are banking on SMs not understanding investing in retirement just not contributing and then getting out after a single tour. If EVERY troop put 5% of their base pay into a TSP and Uncle Sam had to match it, I think more would be spent on retirement than they are currently.
    - I am a rifleman with a poorly chosen screen name. -
    "It's far easier to start out learning to be precise and then speeding up, than it is having never "mastered" the weapon, and trying to be precise." - Dan C
  • shotgunshooter3shotgunshooter3 Senior Member Posts: 5,389 Senior Member
    It goes on a points system. Once you hit X # points (4300????) then you collect, after that you add points until retirement.

    As it was explained to me by my supv who did 12 active and is in reserves now.

    The points think is Reserve Components specific and can be rather convoluted. I wouldn't judge the entire system based on a Reservist interpretation of it.
    - I am a rifleman with a poorly chosen screen name. -
    "It's far easier to start out learning to be precise and then speeding up, than it is having never "mastered" the weapon, and trying to be precise." - Dan C
  • NNNN Senior Member Posts: 23,940 Senior Member
    I just did a math exercise on that deal.
    Unless that 401K does extremely well in some form of interest or growth, it is a bad deal, real bad deal.
    A Veteran is someone that served in the Military, it does not matter where they served.
  • NNNN Senior Member Posts: 23,940 Senior Member
    The 40% retirement does change my thoughts some.

    Problem for many will be not participating during initial years of service as Gnat Driver said.
    A Veteran is someone that served in the Military, it does not matter where they served.
  • JayhawkerJayhawker Moderator Posts: 14,962 Senior Member
    The only was TSP is safe is to invest in Government bonds...they only accumulate 5%ish interest but they are safe in the event of a crash. If you dabble in the other "investment opportunities" you can easily lose your ass. I know...I woke up one day and 2/3 of my retirement was gone the only thing left was what I had in Government bonds....
    Sharps Model 1874 - "The rifle that made the west safe for Winchester"
  • Big ChiefBig Chief Senior Member Posts: 32,990 Senior Member
    They ought to leave it alone. They fiddled with it a couple times before I retired back in 96 for those who came in long after me. Then when they needed soldiers bad again, it went back to 50% fer 20 years and a % for every year over 20. So they are at it again. I thought fer awhile that TSP was optional and didn't change the retirement at all, just giving service-members a chance to add to their retirement.

    TSP was a good thing when I was in FERS as a DA civilian for about 15 years I socked away 15%. Mostly in Govt bonds, but what I did leave in the stock market paid off.

    Leave it to the bean counters and congress to screw up a one car funeral.
    It's only true if it's on this forum where opinions are facts and facts are opinions
    Words of wisdom from Big Chief: Flush twice, it's a long way to the Mess Hall
    I'd rather have my sister work in a whorehouse than own another Taurus!
  • Big ChiefBig Chief Senior Member Posts: 32,990 Senior Member
    It's only true if it's on this forum where opinions are facts and facts are opinions
    Words of wisdom from Big Chief: Flush twice, it's a long way to the Mess Hall
    I'd rather have my sister work in a whorehouse than own another Taurus!
  • Big ChiefBig Chief Senior Member Posts: 32,990 Senior Member
    Well, something for those in the window to consider. It does offer something if they don't stay in long enough to retire, but will have to wait till they are almost 60 to withdraw it. Is tax deferred, until they withdraw it. Most will have to find a new career after they retire anyway and those eligible to make a decision need to think if the 10% in retirement loss is the best deal for them. Others, have no choice.
    It's only true if it's on this forum where opinions are facts and facts are opinions
    Words of wisdom from Big Chief: Flush twice, it's a long way to the Mess Hall
    I'd rather have my sister work in a whorehouse than own another Taurus!
  • Big ChiefBig Chief Senior Member Posts: 32,990 Senior Member
    Wait a minute, it ain't like the Gooberment to offer them anything if not fer a reason beneficial to Uncle Sam...........I think in the grand scheme it allows them to kick the can down the road (budget) on retirement benefits, what 5% matching and 5% out of their pay........I dunno how they crunch the numbers, but somehow even that 10% they can not pay for new members in retirement and those who take their deal and defer it for decades will look good on paper for future budgets.

    Do they really care all that much if someone gets out before retirement at 4-10-15 year mark or whatever, not like them to be altruistic................unless things have changed a whole lot.
    It's only true if it's on this forum where opinions are facts and facts are opinions
    Words of wisdom from Big Chief: Flush twice, it's a long way to the Mess Hall
    I'd rather have my sister work in a whorehouse than own another Taurus!
  • alphasigmookiealphasigmookie Senior Member Posts: 8,665 Senior Member
    Big Chief wrote: »
    Wait a minute, it ain't like the Gooberment to offer them anything if not fer a reason beneficial to Uncle Sam...........I think in the grand scheme it allows them to kick the can down the road (budget) on retirement benefits, what 5% matching and 5% out of their pay........I dunno how they crunch the numbers, but somehow even that 10% they can not pay for new members in retirement and those who take their deal and defer it for decades will look good on paper for future budgets.

    Do they really care all that much if someone gets out before retirement at 4-10-15 year mark or whatever, not like them to be altruistic................unless things have changed a whole lot.
    Ok I'll be the bad guy. The previous (I guess?) Program was the best deal in retirement anywhere in the world. Work 20 years and collect 50% of your max pay for the rest of your life. Considering most enlist at 18 or in the worst case 22-23 after college for officers we're talking 38-43 average retirement age. Your life expectancy at that point is 42-46 years where you'll collect from Uncle Sam so the average soldier will collect significantly more in retirement than they ever did in active duty pay. So with the new system they trade paying 10% for 40+ years at Max salary for 5% for 20 years at current salary. Difference is they have to pay for everyone vs. just those who make their 20 which evens things out a bit.
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • FisheadgibFisheadgib Senior Member Posts: 5,608 Senior Member
    Ok I'll be the bad guy. The previous (I guess?) Program was the best deal in retirement anywhere in the world. Work 20 years and collect 50% of your max pay for the rest of your life. Considering most enlist at 18 or in the worst case 22-23 after college for officers we're talking 38-43 average retirement age. Your life expectancy at that point is 42-46 years where you'll collect from Uncle Sam so the average soldier will collect significantly more in retirement than they ever did in active duty pay. So with the new system they trade paying 10% for 40+ years at Max salary for 5% for 20 years at current salary. Difference is they have to pay for everyone vs. just those who make their 20 which evens things out a bit.

    How about backing up your made up statistics? Especially the part where most retiree's have a life expectancy of 42 to 46 years after retiring. I had no idea that military retiree's lived longer than the rest of society.
    snake284 wrote: »
    For my point of view, cpj is a lot like me
    .
  • FisheadgibFisheadgib Senior Member Posts: 5,608 Senior Member
    After hunting around on the internet, I found that a retired veteran does live longer than a civilian in the same family and the same sex. On Military family.com, they point out that a female retiree may live up to 40 more years after retirement. That doesn't make it an average for all retiree's living 42 to 46 more years.
    snake284 wrote: »
    For my point of view, cpj is a lot like me
    .
  • alphasigmookiealphasigmookie Senior Member Posts: 8,665 Senior Member
    Fisheadgib wrote: »
    How about backing up your made up statistics? Especially the part where most retiree's have a life expectancy of 42 to 46 years after retiring. I had no idea that military retiree's lived longer than the rest of society.
    http://partners4prosperity.com/life-expectancy-in-america-live-longer

    Life expectancy tables. From birth it's like 79, but as you age your life expectancy increases.
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • BigDanSBigDanS Senior Member Posts: 6,797 Senior Member
    95% of mutual funds do not outperform the S&P 500. Investing in other products is literally a 20 -1 gamble that you might do better. I have come to the conclusion that the average person should invest in either the SPX, VOO, Berkshire B, or DOW . Yes, 5% might do better, but 95% will not.

    D
    "A patriot is mocked, scorned and hated; yet when his cause succeeds, all men will join him, for then it costs nothing to be a patriot." Mark Twain
    Alcohol, Tobacco, Firearms and Explosives.... now who's bringing the hot wings? :jester:
  • Big ChiefBig Chief Senior Member Posts: 32,990 Senior Member
    So what? They just don't give away military retirement to every Tom, Richard and Harry that comes along, you have to give Honorable service to get it. Plus meet their standards the whole time like height/weight/physical fitness/promotions/performance in your job ect ect............................plus it is demanding on you and your family.

    The military is NOT like a civilian business it is an institution unlike any other. You put up with the service and all it entails to reach retirement you deserve everything they give you in retirement benefits.

    Besides that retirement is/was 50% of their BASE PAY ONLY, not the housing allowance BOQ/BAQ (which is considerable these days...enough to make a mortgage/rent payment) and other entitlements.

    So I retired before the big pay raises at 20 years and 50% back in 96..........my base pay was only $3200 bucks a month, thus my retirement was $1600 a month before deductions/taxes/Ins.............so after 20 years I got 1/2 half of that monthly base pay $1600X12= $19, 200 per year X 20 years in retirement $384,000 and base pay alone if I would have been in for 20 more years (not possible for age and/or at same rank) is $768,000 and at 40 more years my retirement would have caught up with my base pay back in 96 @ + 40 years of retirement.

    So it will take 40 years of retirement to get the same retirement pay as active duty basic every month at the amount/rank you retired at. Granted I have gotten retired pay raises over the years raising my retirement pay every year a little with 1-2 % or no raises every year, but that is much much less than active duty get with their housing allowances and so forth.

    You are sorta right, but remember you don't get something fer nuthin in this life and the military has you by the short hairs while you are serving. It is NOT a 9 to 5 job either.
    It's only true if it's on this forum where opinions are facts and facts are opinions
    Words of wisdom from Big Chief: Flush twice, it's a long way to the Mess Hall
    I'd rather have my sister work in a whorehouse than own another Taurus!
  • FisheadgibFisheadgib Senior Member Posts: 5,608 Senior Member
    http://partners4prosperity.com/life-expectancy-in-america-live-longer

    Life expectancy tables. From birth it's like 79, but as you age your life expectancy increases.

    According to your site, it's 76.3 for males and 81.1 for females, that 78.7 is an average of the two. Anything beyond that is projected and not hard data. Still not the 80 to 89 year old average that you want to base your claim on.
    snake284 wrote: »
    For my point of view, cpj is a lot like me
    .
  • Big Al1Big Al1 Senior Member Posts: 7,026 Senior Member
    It goes on a points system. Once you hit X # points (4300????) then you collect, after that you add points until retirement.

    As it was explained to me by my supv who did 12 active and is in reserves now.

    The point system is used for traditional guard and reserve, the week end warriors, and even if you retire at 20 years with enough points, you can't start collecting until you are 60.
  • BigDanSBigDanS Senior Member Posts: 6,797 Senior Member
    Fisheadgib wrote: »
    According to your site, it's 76.3 for males and 81.1 for females, that 78.7 is an average of the two. Anything beyond that is projected and not hard data. Still not the 80 to 89 year old average that you want to base your claim on.

    It's a curve, and that's average... there's bunch of people that will not make it to average, like 50%.... ;)

    D
    "A patriot is mocked, scorned and hated; yet when his cause succeeds, all men will join him, for then it costs nothing to be a patriot." Mark Twain
    Alcohol, Tobacco, Firearms and Explosives.... now who's bringing the hot wings? :jester:
  • Diver43Diver43 Senior Member Posts: 8,586 Senior Member
    http://partners4prosperity.com/life-expectancy-in-america-live-longer

    Life expectancy tables. From birth it's like 79, but as you age your life expectancy increases.

    I guess your numbers do not reflect those that get killed, get sick from things like agent orange, or injured in ways that people like you can not imagine and live shorter or less productive lifetimes. If Military life was/is so easy with such an easy life and retirement, why didnt you do it?
    There is a reason those veterans and retirees are such a small percentage of the population.
    Logistics cannot win a war, but its absence or inadequacy can cause defeat. FM100-5
  • alphasigmookiealphasigmookie Senior Member Posts: 8,665 Senior Member
    Fisheadgib wrote: »
    According to your site, it's 76.3 for males and 81.1 for females, that 78.7 is an average of the two. Anything beyond that is projected and not hard data. Still not the 80 to 89 year old average that you want to base your claim on.
    Any life expectancy is projected. It's all about averages and statistics. But the trends have always been increasing. Also the way it works is that your total life expectancy increases every year you live. So in the charts at 40 you're expected to make it to 81 (male) at 60 you're expected to make it to 84. At 80 you're expected to make it to 91. At 90 you're expected to make it to 94 etc.

    I will admit that I accidentally used the female numbers so the male numbers are 43-39 years for typical male miliary retirees. Any way you slice it it's a lot of years collect a retirement check.
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • Big ChiefBig Chief Senior Member Posts: 32,990 Senior Member
    "Any way you slice it it's a lot of years collect a retirement check."

    So what do you suggest .................a Death Panel to terminate military retirees after 20-25 years to save money? Or just cutting off our retirement checks because you think it cost too much?
    It's only true if it's on this forum where opinions are facts and facts are opinions
    Words of wisdom from Big Chief: Flush twice, it's a long way to the Mess Hall
    I'd rather have my sister work in a whorehouse than own another Taurus!
  • alphasigmookiealphasigmookie Senior Member Posts: 8,665 Senior Member
    Big Chief wrote: »
    "Any way you slice it it's a lot of years collect a retirement check."

    So what do you suggest .................a Death Panel to terminate military retirees after 20-25 years to save money? Or just cutting off our retirement checks because you think it cost too much?
    Or maybe letting them earn retirement but not start paying it until 62 or 65 or something like most jobs. You could even up the % then. Say give 70% at 60 or 80% at 65. It would still be cheaper on net for the government. The idea of the government cutting retirement checks for 38 year olds just seems wierd to me.
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • FisheadgibFisheadgib Senior Member Posts: 5,608 Senior Member
    Or maybe letting them earn retirement but not start paying it until 62 or 65 or something like most jobs. You could even up the % then. Say give 70% at 60 or 80% at 65. It would still be cheaper on net for the government. The idea of the government cutting retirement checks for 38 year olds just seems wierd to me.

    Since you think it's such a great deal and a huge burden on the government, I'm shocked that there aren't more millennials like yourself lined up to enlist and take advantage of such a great deal. On top of the great retirement, they'll even pay all of your tuition to go to school and you get 30 days of vacation a year on the very first year! I just don't get why the general public isn't falling all over themselves to take advantage of such an awesome life with such great benefits. Maybe there's a little more to the job than you can learn on the internet.
    snake284 wrote: »
    For my point of view, cpj is a lot like me
    .
  • Big ChiefBig Chief Senior Member Posts: 32,990 Senior Member
    Well if your jealous of a 20 year retirement, sign up for a 3-4 year stint and get a feel for military life, better yet do 20 and then come back and tell me you should wait until you are 60 to get a retirement check and don't deserve it at retirement at whatever age.
    It's only true if it's on this forum where opinions are facts and facts are opinions
    Words of wisdom from Big Chief: Flush twice, it's a long way to the Mess Hall
    I'd rather have my sister work in a whorehouse than own another Taurus!
  • DanChamberlainDanChamberlain Senior Member Posts: 3,365 Senior Member
    Or maybe letting them earn retirement but not start paying it until 62 or 65 or something like most jobs. You could even up the % then. Say give 70% at 60 or 80% at 65. It would still be cheaper on net for the government. The idea of the government cutting retirement checks for 38 year olds just seems wierd to me.

    Spoken like a true liberal. The "Military" isn't like "most jobs." After 20 years, I can say I had to move 10 times, set up house keeping 10 times, lose a ton of money there...leave my family many times, miss 18 Christmases, Thanksgivings, New Years, uncounted birthdays, family reunions...

    And, I had to say to Uncle Sam, "If you want to put me in harm's way...here I am." Uncle didn't hesitate to tell me where and when to go and what to do once I got there. As for my family, my wife, whose career was just as important as mine, had to make similar sacrifices. I had to do an unaccompanied tour to forestall having to move her from her lucrative job. That's another year not getting to pick up my infant daughter who was 3 months old when I left!

    So, yes, I knew what I signed up for. What I don't need is someone who hasn't a clue, telling me that my 20 years was just like any other job.

    This is why discussing things with liberals is so confounding. Go on thinking whatever you'd like to think. But sometimes, "think" a little.
    It's a source of great pride for me, that when my name is googled, one finds book titles and not mug shots. Daniel C. Chamberlain
  • bisleybisley Senior Member Posts: 10,614 Senior Member
    You guys are too hard on Alf. Liberals do not understand the concept of 'service.'

    They cannot allow themselves to believe that some people have a devotion to serving others, or the country in general - it's too much like organized religion, in their minds, which is to say, of course, little different than believing in witchcraft, UFO's, and the abominable snow man. Individuals simply cannot be trusted to be charitable. The government must confiscate a major portion of whatever the 'producers' have accumulated in their avaricious pursuits , so that properly trained government functionaries, appointed by a select few superior intellects, can determine who deserves to be endowed with which free gifts, based on weighted actuarial tables that have been adjusted according to race, gender, and sexual orientation. Naturally, a small administration fee, say 70%, must also be collected.
  • VarmintmistVarmintmist Senior Member Posts: 6,492 Senior Member
    After reading the article, it is not a bad deal. In fact it looks pretty good. The difference is its up to you. Like going from a defined pension plan to a 401K plan at a regular job. If you are in the current annuity is going from 2.5% to 2%, and you can contribute. After a date certain, you will no longer be eligible for the annuity AKA defined pension plan. The great part is the matching. 100% match to 5% is where this leaves civilian plans in the dirt. EG mine is a pretty good plan as compared to others in the real world. It is matched at .25 on the dollar for the first 3%.

    It is styled as a traditional 401K. No matter what, the govt is investing 1% from day 1 and you are vested after 2 years. So a guy goes in and does 4, he puts nothing in and gets out he has something. Now at that point can it be rolled into a traditional IRA? I dont know, but I am guessing yes because if not, then the govt would have to retain PW for the life of the former enlisted.

    Lets say a body goes in and actually listens to people who are not broke and he puts 5% in. He gets 1%, puts in 5% and gets matched 4%. Median pay for a E3 is 1994.65. that means he puts in 1196/year, the govt puts in 1196/yr for a total of 2632. Lets call that the avg and he makes a avg 10% in the market, To the naysayers, it is very doable and not hard to do over time. Anyway, after 4 years that puts Joe Schmuckatelli at 13K in a investment IAW my pencil and a compound interest calc http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php Assuming he is 18, avg's E3 wages and puts in the max, and the acct is only compounded yearly, at age 22 he is pretty well set to retire at normal retirement age as long as he doesnt mess with it ever. If he leaves that sit and doesnt touch it, never adding a dime and the market runs its avg, Joe will have approx 700K at 62 outside of whatever he saves at whatever company he works at after. 9% a half mil, 5%, something less than 100K

    Now lets say the market sucks and is 50% off the historical avg and he earns 5%. Its still 10K after 4

    If Joe does NOTHING, he will still have 500 in a retirement plan at the end of 4 years.

    Ok, so Joe plans on doing 20, but he gets riffed at 12 because he is a slacker and is a E3 over 11 yet he continues to put the max in. He ends up with 43K at age 30 in a tax deffered plan IF the market sucks and he gets 5%. If it avgs its historical 10%ish then he has 61K.
    If he is a e3 at 20 he has 168K, just fyi.

    It is a pretty good deal. If you dont jump on it, not my fault.
    It's boring, and your lack of creativity knows no bounds.
  • DanChamberlainDanChamberlain Senior Member Posts: 3,365 Senior Member
    Technically, it's not a bad deal for the non-lifers. For the lifers, it "could" result in less. At the same time, I feel that people sign up at the time, for the benefits they get at the time. Not too many actually start out with the intention of doing 20 or 30.

    My goat gets got, when I hear people comparing military service to a job at Staples.
    It's a source of great pride for me, that when my name is googled, one finds book titles and not mug shots. Daniel C. Chamberlain
  • JermanatorJermanator Senior Member Posts: 15,110 Senior Member
    Diver43 wrote: »
    I guess your numbers do not reflect those that get killed, get sick from things like agent orange, or injured in ways that people like you can not imagine and live shorter or less productive lifetimes. If Military life was/is so easy with such an easy life and retirement, why didnt you do it?
    There is a reason those veterans and retirees are such a small percentage of the population.
    I didn't because they wouldn't take me. I tried like hell to get in. Little did I know that being born with a heart murmur made me morally inferior of the self righteous. It must have been nice being born that way.
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