Defense Unveils Options to Overhaul Military Retirement System
This, over on Government Exec.com today:
Quote:
The Defense Department has outlined several possibilities for overhauling retirement benefits for military personnel, which could provide more cash up front to service members but limit overall compensation.
(snip)
The paper proposed creating a defined contribution benefit in which Defense would begin paying into a service member’s Thrift Savings Plan after two years of service. The department would contribute 5 percent of the member’s salary into the account; the member would not have to contribute anything, though he could choose to do so.
Military personnel now can participate in the TSP, though they must make their own paycheck-deducted contribution like any federal employee. Unlike civilian federal employees, however, not all service members receive matching agency contributions. About 40 percent of uniformed personnel participate in the current system.
More:
Defense Unveils Options to Overhaul Military Retirement System - Pay & Benefits - GovExec.com
Re: Defense Unveils Options to Overhaul Military Retirement System
Please, everyone, read that entire article before jumping to conclusions based on the one, small snippet James quoted.
Military Times has an article too:
Exclusive: DoD proposes revolutionary changes in retirement benefits | Military Times | militarytimes.com
This proposal sucks, IMHO, but it is just a proposal... lets see what the bozos in DC finally implement...
Re: Defense Unveils Options to Overhaul Military Retirement System
RMI,
Some of the 401(k) (TSP) proposal sucks. For example: Why wait for two years.
But, to me, a retirement that is not dependent on the whims of politicians is a good thing. A retirement fund that can be transferred to a civilian (or gubmint) employer retirement fund is a good thing. A retirement that one could invest properly (you know that your pension assets are all in the 'G Fund') is a good thing. Why should all those who put everything on the line for four years get nothing? Why should you - or anyone else in the military - count on future politicians to honor promises of past politicians.
5% without any contribution from the military person will not cut it, but it isn't as bad of a mistake as I made my first six years. If these young pups augment that 5% with another 5% or 10% (tax advantaged) and start early (guaranteed by the program) than these folks will do quite well. Much better than the pension. And, the assets would be transferable and outside the grasp of politicians.
To me, win win...
Re: Defense Unveils Options to Overhaul Military Retirement System
Quote:
Originally Posted by
Boghie
RMI,
Some of the 401(k) (TSP) proposal sucks. For example: Why wait for two years.
But, to me, a retirement that is not dependent on the whims of politicians is a good thing. A retirement fund that can be transferred to a civilian (or gubmint) employer retirement fund is a good thing. A retirement that one could invest properly (you know that your pension assets are all in the 'G Fund') is a good thing. Why should all those who put everything on the line for four years get nothing? Why should you - or anyone else in the military - count on future politicians to honor promises of past politicians.
5% without any contribution from the military person will not cut it, but it isn't as bad of a mistake as I made my first six years. If these young pups augment that 5% with another 5% or 10% (tax advantaged) and start early (guaranteed by the program) than these folks will do quite well. Much better than the pension. And, the assets would be transferable and outside the grasp of politicians.
To me, win win...
Its called commitment, if they want to incorporate full 5% matching like you get, then they are getting something... You are relying on future politicians to not change your benefits... we are in the same boat.
They won't and unless the G fund gets back up to 5-6%, then there won't be much more growth in the account beyond what was put in there.
