Bigger Retirement Plan Needed to Sustain Officer Experience Levels
Jonn and Hondo posted about the current blended retirement, which had yet to affect service members. This stirred up a healthy debate with representation from both sides of the issue.
Arguments in favor included the reality that most didn’t do a full retirement. The blended retirement gave them something to build on should they leave the military before 20. Blended retirement related surveys, that many service members completed, indicated that many wanted this plan.
It was also mentioned that the survey was slanted. The questions “canalized” the one taking the survey into choosing the options favorable to the blended retirement.
Arguments against included statements on long term retention. With service members being able to start this while in service, then carry it with them elsewhere, why even stay in? Instead of dealing with the sacrifices that regular service demanded, service members could go elsewhere and still accumulate for retirement.
From Stars and Stripes:
Under one scenario that leaves continuation pay at their minimums, fewer active duty officers complete 20 years of service; meanwhile, officer participation in the Reserve and the National Guard rise by 7.2% and 2.1%, respectively.
There’s a chance that this would also increase among the enlisted, as well the other ranks not included in that quote.
They could still get the benefits of military experience while building their nest egg as they build their military career.
I remember when they still had REDUX. When those who came under the REDUX plan went over their 10-year mark, many didn’t have the incentive to do a full 20. Congress eventually changed things and gave those, who fell under REDUX, a choice. Accept $30,000.00 at 15 years active duty to remain at REDUX, or receive no incentive and be on the high three plan.
Unlike REDUX before the above change; however, the blended retirement has augmenting financial incentives. As Hondo’s article pointed out, they already had “buyer’s remorse” about aspects of this plan. Many of us weren’t surprised.
What remains to be seen is how those currently on the plan, who are on active duty, will see things starting at the end of the next decade. This is when those who came in last year, and those who are coming in now, will pass their halfway mark for 20 years of active duty… Assuming they’re still on active duty when that time comes around.
You can read more here.
Category: Politics
most soldiers don’t think about such things before they are faced with the “careerist” reenlistment. In any event, if you look at the actual money involved, like all “offers” from DoD, it is a sucker’s bet.
it’s not until the 10 year mark when most of them start thinking about that. Then, they start to feel the pull. Under the new system, it’s around here that most would start taking the investment portion seriously beyond what they had done the previous 10 years… If they stay in.
I am glad I retired when I did (Oct 2017). The blended plan only works if they pay into it, and how many E-1 through E-4 have money laying around to invest? Even Company Grade Officers don’t have excess money. Yes, 20 years is a long time, and with the 15 year limit to promote or get kicked out, I understand that some may need this, but that was what TSP was for. The military has become a corporation, (maybe it always was) and they are treating their entry level employees with a dangling carrot that will never satisfy those troops, but they will tout about how much they care about the future of these volunteers.
BennSue,
Ditto. I punched out in July of 17. Did my 20, went on terminal in May and had a job locked on in June for the county. Double dipped for a month and a half before retirement kicked in. I’m living fairly well now knowing I got that retirement check coming in monthly. Twenty years is not for everyone, but for those who do stick it out and walk out the door having helped influence policy and molded the next generation they should be able to have a modest pension to cushion that blow into retirement. Of course, on a county job now i’m playing catch up pumping into my 401K trying to ensure I can pull the pin at 20 years and age 58 with 2 vested pensions and a somewhat plump 401K. As with everyone else, YMMV
Ole Dawg here – DIEMS prior to Sept. 8, 1980 so my military retired pay is calculated on the Final Pay formula. Later retired as a civilian employee under FERS and know first hand the impact the TSP can have in achieving financial security. If you’re in military or civil service contribute at least enough to TSP to get the full government match. Slow n’ steady beats get rich quick schemes filled with risk.
What gruberment match?
I never got any match.
Is that active duty too?
You don’t get the TSP government match on active duty, only as a federal employee.
What’s the rationale behind that?
Life too easy in active duty? Civilians need mo’ money?
At one time, the TSP was offered to Soldiers during OEF/OIF around 2002/2003.
I think the max amount was $10,000.
If I am wrong, someone please correct me.
Just remember, Slow Joe, that the Army is not forever. You, too, will oneday become a Civilian. You also will be older, perhaps a bit wiser…
You will also find out your Army retirement pay will be alot less than your Active Duty pay…and that you will have to pay for your own Medical/Dental and Life insurance bills.
You may have to find another job to supplement your retirement pay. No more BAH. You are on your own when it comes to food and shelter for you and your family.
Most important, hopefully, after you retire from the Army, you will live for the present, for Today. Some folks just can’t let go of the past and continue to live that Army past instead of moving forward. They don’t understand why other folks do not care to dwell with them in their Army past. It is really sad.
Memories are just that. Memories. Experiences.Something we cherish if they are great. Nothing wrong with sharing one’s experience or swapping war stories. We learn from each other on those experiences and our Legacies benefit as well. But we live for Today in order to make new memories, new experiences for us to share.
timeformetofly
(Hops off Soapbox).
😎
Another Pat.
Wise words. I see what you mean.
However, i do disagree with your last paragraph. I don’t believe in war storeys. Too many people embellish thhat shit.
All lessons I have learned in combat are incorporated into my training. I reinforce what works, i give alternatives to what doesn’t, making sure I meet my unit’s METL mission essential tasks list.
Other than that, agreed.
Oh, TSP is 18k per year these days.
Slow Joe wrote:
“All lessons I have learned in combat are incorporated into my training.”
Outstanding!
Those Soldiers whom you mentor and train will benefit from your incorporated combat experiences in your lesson plans.
pickupyourweaponandfollowme
😊👏👍
This is a question of when, not if.
Military pay and benefits, which includes funding for retirement, is about 34% of DoDs budget. People are living longer, so that along with TRICARE benefits will keep costing more and more in the long run. TRICARE for retirees, if you have not done any comparison shopping, is an absolutely amazing deal. Most civilians pay monthly what military retirees pay for a year.
This is also an accessions (officer and enlisted receuiting) issue. While the blended retirement may cause some mid-careerists to get out, the challenge now is to get enough Millenials and Gen Zers to join in the first place so we have experienced leaders 10 years from now. They do not see the world or military service the way Boomers and Gen X do. The younger generation is into flexible careers- many of them have 2 or 3 or even more income streams from different sources and therefore want flexible retirement planning.
So, we see the retirement plans differently. We saw a steady job for 20 years with a modest retirement at the end of the rainbow. Millenials and Gen Z see it as ’20 or nothing’ and a bad deal, so it turns them off from joining in the first place.
As far as personal financial planning and retirement investment for active duty folks, most officers and NCOs start investing in something early on. TSP is now a great option, but even back in the ’90s guys were investing in some form of IRA. That said, I still hear about guys retiring with a ton of debt but no savings and no marketable skills. For 20 years they assumed that their retirement check would pay the bills, and realize way too late that it might pay the mortgage.
People are living longer. On the other side of the coin, not as many are serving now as had served during the Cold War or before.
Unlike the civilian retirement, someone who retires from the military is still in the military, in a retired capacity. In fact, the retired reserve/fleet reserve are a part of the reserve component of the military. Depending on the condition affecting national security, retired reserve members up to a certain age could be liable or involuntary placed on active duty.
The increased age, and longevity, somewhat aids the availability of physically qualified retired reservists to be leveraged to backfill the ranks.
It would be interesting to see what happens starting in 2028, and increasingly in the years following that. As you mentioned, the younger generations see military service differently, and they also anticipate some different things regarding their careers then the older generations.
If the economy is doing well and blooming during that time, the temptation to bring what they built into the civilian sector would be all too great.
The military used a survey loaded with questions and answers designed to steer people to the answers they wanted? I’m shocked, really shocked. NOT! The Air Force Chief’s quality of life survey was so biased that way.
“Long term retention” is only a value if the people we are retaining are worth retaining. I understand the objections to blended retirement but I think it could have a huge beneficial effect on the force by allowing those who are past their prime to get out before 20 years and do something more productive with their lives, while at the same time freeing up promotion opportunities for younger hard-chargers.
Those of us who put in 20 or more have seen the “dead wood” or “ROAD (Retired On Active Duty)” mid-grade officers and senior noncoms who aren’t good enough to get much done but aren’t crappy enough to get booted. So they “mark time” in make-work jobs and generally make the people around them miserable.
You all know the type – the ones who take a month’s convalescent leave to recover from minor surgery and nobody notices because they didn’t have a real job anyway. The Major who is a “special projects officer” but who never seems to actually do anything special or complete any projects? The staff sergeant major who spends all his time looking for minor uniform infractions or making organization charts that nobody looks at while the operations sergeant actually does the work?
Most of those guys will tell you straight up that they’re just waiting for their 20 years so they can punch out. Why not let them punch out early, collect a different kind of retirement and let somebody else move into that slot who will actually do something?
Or if there’s not anything to actually do, then free up that salary for other things.
I’ve worked in both the private sector and the Army and I have to say I’ve never seen more make-work, feather-bedding* type jobs than in the military.
For those who aren’t familiar with the term:
https://en.wikipedia.org/wiki/Featherbedding
“Featherbedding is the practice of hiring more workers than are needed to perform a given job, or to adopt work procedures which appear pointless, complex and time-consuming merely to employ additional workers. The term “make-work” is sometimes used as a synonym for featherbedding.”
I remember we use to call them “Road Scholars”…
😉
The blended retirement may look good on paper, and may be something that the younger generations want… But when the rubber hits the road with regards to what the younger generations want, and what is available in the market should the economy be going strong, we risk a retention crisis like what we saw in the 1990s. Back then, we had the Baby Boom and Generation X in the ranks. They pushed the thrift savings plan to us back in those days. Many took advantage of it. This helped contributed to many a decision to not continue on to 20 years. This resulted in the government losing more people than what they wanted to lose. With the younger generations having a different outlook on life, as well as with regards to military service, and with regards to how they see their careers, too many could very well decide to steer clear of the sacrifices of a full career in exchange for taking what they have and moving it over to the private sector. If the economy is doing real good by then, that becomes reality just like it did during the 1990s. Again, we’re going to potentially see a hemorrhage of people, in the above scenario, that could cause the military to lose more from the ranks than what they would like to lose. The problems mentioned, with regards to many people finding slots just to sit on their butts? One of the things that I noticed, with regards to the younger generations, is that many expect to do that within the first enlistment. I’ve seen it. Too many are coming in, from among the younger generation, expecting to just “fill up a space” and to “do the bare minimum”, only seeing the benefits that they expect to enjoy after their enlistment. The problems that you mentioned in your post above would still exist, but this time not just among those ready to retire at the 20-year mark. The legacy retirement system is an echo of a retirement system that had worked for centuries. Even the ancient Romans offered what… Read more »
In my day, we called them “Lifers” and spit after we said it. They clogged up the system, got in the way of anything relevant which needed to be done and were generally horses’ asses. The reason horses’ asses outnumber horses 10 to 1. The biggest problem was they blocked up the promotion system in MOS and AFSC in my two branches by holding onto rank slots that good troops could not get to.
In my time there was not any blended retirement. Only 20 to 30 and out. There was the TOPS program in the Air Force which forced some out if they did not make rank in time. But these were too high up to affect the door blocking Lifers down below. My AFSC was so top heavy with do-nothings it helped make my decision to leave at 8 years. I loved the job but the chance of making E-7 before 20 years was near impossible when looking at Air Force-wide rank stats. There were E-7s in “Special (Fill In the Name) Projects”, “Job Control ANALYSIS”! “Supply Auditing Inspections” “Career Development”. Every one of them was a useless waste of a rank slot, time and effort.
I am glad thing changed later, where troops could choose to invest in something they could take with them. It might have made some difference to me, but overall, without changing career fields it was a crap shoot.
Went in for a 4 year gig. Stayed 25 years. When I hit 20 I fully understood I was working for 50% but really still was loving what I was doing and who is was doing it with. At 23 was Pcs’d to the Pentagon – never wanted to see how that particular sausage was made. That’s the only reason I didn’t stay 30. In hindsight, and after taking a GS gig, glad I retired when I did.
I suspect many career officers decide to do the short career of less then 20 years service because of what I call the asshole factor. It is the fact that, anyway back in my day, the higher up the command structure you ascend the more assholes you have to deal with. At some point, job satisfaction goes down to zero. Also, if you like to lead troops, once promoted to O-4, the opportunities for that in the combat arms goes to zero.
If someone wants a great retirement after 20 to 25 years, become a police officer in a department with a strong pension plan. Many retired police officers are pulling down over $70,000 a year in retirement. Free medical also. Add a second career and bingo. Low six figure retirement.
A 20 year military retirement is solid, however it can’t compare to a police officer’s retirement.
“If I could turn back the hands of time.” Don’t know how to put the little music icons around that one, but I know some Boomers here remember that tune.
Shoulda, coulda, woulda, had oughta stayed my happy ass in back yonder. Woulda retired with 30 full years 18 years ago and still only been 48 yo. Was offered re-up bonus $, another stripe, my choice of school, duty station, and another stripe if I successfully completed the chosen school. Young wife quote “you re-enlist and I’ll divorce you. I don’t want to move every coupla years.” Still ended up moving every coupla years (her choice) and she filed for divorce 8 years later. Also had several senior NCOs and Field grade officers tell me I could do much more better on the outside because “my Army is changing for the worse” and “the lifers will impede advancement.” Saw the same kind of attitude, “lifer”, make work deadbeats in the civilian world as I saw in the military. They’re out there everywhere, sitting on their asses, wasting oxygen, and taking up space. (anybody notice the proper use of the T words, you don’t see that too often anymore, Sister Mary Grace would be proud)
I have encouraged a number hard charging young’uns to consider a Military Career. It is way yonder more confusing for them now than it was back when.
Most troops, be they Os or Es, just don’t have the financial literacy or the resources to make informed decisions when confronted with various plans. What they thought they signed up for may in fact not be what they get.
For TSP/IRA type plans, look for them to be subject to some form of privatization beyond the scope of what is safe or rational. Wall Street wins, as they get free money, with the retiree as the loser. What this sort of thing does well, -and is the only thing guaranteed to work- is that what ever government agency gets to shed pension liabilities. I predict that affected troops will only find out this has happened after the fact, but that the decision will be spun as a really good deal.
And that’s pretty much what it’s all about: DOD finding creative ways to shed pension and healthcare liabilities going into the future. In this fashion, DOD is no different than Ford or GM, looking to screw over the workforce in deference to the shareholders.