One problem is that the actual case against this pension provision is diluted and drown out by endless bleeding heart, Toby Keith song lyric, overly emotive, USAA commercial, "laid down my life at the foot of uncle sam" rhetoric/talking points. Valid, sure, who cares, not an effective way to make the case. Kind of a tough sell to the mainstream to color it by saying you are all about selfless service but only at a certain level of compensation befitting your rank. If activists would stick to the material issues, more important people would listen. This proposal is fraudulent. Obviously. I have now lied to literally hundreds of enlisted about what they are guaranteed in retirement by staying in, doing that next cruise, IA, UA orders, etc. But I think it has been overly dramatic (judging by the email forwards/facebook/etc that I've seen) and they went to the heart strings too early, turning it up to level 11 injustice. I probably speak for many when I don't have the energy to weed through all of the emotion on other social issues where I just want details of the material concerns and not a greek tragedy.
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Army "Right Sizing"
- Thread starter picklesuit
- Start date
If you like your pension, you can keep it...
"...The new White House plan notes that “any major military retirement reforms should include grandfathering provisions that ensure that the country does not break faith with military personnel now serving, including those serving in Afghanistan and Iraq...” 9/16/13
"...The new White House plan notes that “any major military retirement reforms should include grandfathering provisions that ensure that the country does not break faith with military personnel now serving, including those serving in Afghanistan and Iraq...” 9/16/13
Just to be clear, I'm not talking about what "matters" to you, to me, or to some cosmic sense of justice and morality. I'm speaking strictly about what matters, when the knives are out and the votes are counted, to the members of our legislature. And I stand by my belief that money is what matters to them.
You made another interesting statement, though, about having better uses for your money. What about uses for my money?
If this budget becomes law, then my retirement benefits would stand to lose a significant amount over my lifetime. Just to use round numbers, let's say $100k total. If I, and 10,000 other military officers who stand to be affected by this budget, each donated $2,000 to an advocacy group that would then hire the PR folk, the copywriters, the marketers...You can make a hell of a dent in a niche issue for $20 million. And it would be an EXCELLENT use of my $2,000.
That's how the game is played. But we in the military like to think of ourselves as being above politics and most of all, above money in politics. That's why we lose.
So we should cut $54B from somewhere else? JSF?
It takes well north of $1M annuity to match a military pension for a non-military retiree. Even with the cola drop - the military pension will still be worth well over $1M. Wonder what the public who scramble for good jobs with no pension would think about the military complaining about being 'less of a millionaire'?
It takes well north of $1M annuity to match a military pension for a non-military retiree. Even with the cola drop - the military pension will still be worth well over $1M. Wonder what the public who scramble for good jobs with no pension would think about the military complaining about being 'less of a millionaire'?
Spekkio
He bowls overhand.
That's why PR needs to make them understand that military members get an early pension because they are told "thanks for your service, now go do something completely different" after 20-30 years no matter what (except for flag officers and generals). The people who have 401ks and whatnot can work at their jobs indefinitely, and even if their company goes out of business they can stay in the same career market, thus maintaining their earning potential.
Until they are unemployed and using their 401k to get by.....Any PR guy wouldn't touch this issue.
Absolutely you should do with it what you think is best.
I've probably earned a million dollars in my employed adulthood - that does not make me a millionaire.
I think what HSCS is saying is that if we were allowed to take our retirement to an open exchange and sell it as an investment vehicle, like an annuity or a bunch of savings bonds, it would essentially be worth about $1mil.
As someone with 6 years of service (or better yet, someone with 6 years of deferred compensation paid into this retirement system already) this 1% cut to cola adjustments doesn't really bug me all that much. At least not in dollar value. It's like taking our $1.1 mil annuity and making it $1.07 mil.
What really scares me is the willingness to break faith with people who have already earned this compensation. It really sets a bad precedent for future changes.
That being said, didn't the last change in the retirement system end pretty bad for the DOD?
Ask a business minor!
Assume I retire in 20 years at the ripe old age of 43, and I get $40,000 annually until I die (let's say 73 so it's a nice round 30 years). Assume a discount rate of 7%, and that pension will be worth just under $500,000 on the day I retire.
Let's keep going! Consider the fact that I won't retire for another twenty years. What's it worth to me today? Using the same discount rate, and still assuming I get out at 43 and die at 73, my pension is worth $128,269.27. Just over an eighth of a million dollars.
All this to say, a million-dollar pension does not cost the government a million dollars.
Yeah, except life expectancy is more like 83 not 73. They may not pay YOU for 40 years, but on average they're paying everyone for 40 years. Using a 7% discount rate is inaccurate. It's a federal government security, not common stock and therefore "risk free" ( except when it's not). An accurate discount rate is the historical 30 year Treasury, which is about 3.5%. You would also want to value it at the day you retire, the day it starts paying out.
Anyways, none of that has anything to do with the real problem.
This is the real problem. Congress has put me into a position where every recruiter I dealt with, every LPO and Chief that talked me into staying in, and even the BOL StayNavy retirement calculator has lied to me. And how do I even trust my own words while giving a brief on finances to my sailors in the future?
This is the real problem. Congress has put me into a position where every recruiter I dealt with, every LPO and Chief that talked me into staying in, and even the BOL StayNavy retirement calculator has lied to me. And how do I even trust my own words while giving a brief on finances to my sailors in the future?
Spekkio
He bowls overhand.
Eh, I didn't word it the best. That's what PR guys are for. Point is, the military (similar to police, firemen, etc) will tell you at the the bright bold age of about 45 years old "you can't work here anymore. You're too old for this shit." And then you have to hope that your service experience has given you something to transition to another career (sometimes it does, sometimes it doesn't). Banking firms, tech firms, retail, restaurants, whatever aren't going to kick their workers out of the industry entirely at 40-50 years old. They also don't make you relocate your spouse, thus crushing their earning potential, too.
Military retirement is in line with similar careers that force a person to leave at a relatively young age, so I take issue with Obama's quote linked above.
If they're not going to compensate people for the forced career transition, if they can make one at all, then there's little reason to stay in that long. Might as well get started on the inevitable at an age where you are most marketable.
It's a lot better argument than shoving images of wounded veterans into the public's faces.
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