NDAA FY2016 Changes to Military Retirement

[ssnspoon]

Under the current system, the TSP contribution isn't matched by the government, it's really not a benefit at all. 5% matching is a huge benefit (that I believe is) offered pretty commonly in the private sector which we don't get under the old system (because a 50% non-contributory pension is such a good deal and very expensive to the government all by itself).

One benefit I haven't really seen discussed (didn't read all comments) is the very cheap expense ratios for all the TSP funds AND the fact that you can put 18K into your ROTH and STILL fully fund your 5500 for each of you and your spouse in a ROTH IRA. $29,000 a year into a tax advantaged ROTH growth situation that can REMAIN in at the low expense rates until you choose to move it or use it...pretty good in MY book. 4% and do that over 5 years and you have $160K+...obviously not applicable at these levels for the E-3, but very doable for the O-3+

 

[Hair Warrior]

Huh? Are they going to set up toll booths on airways?

Maybe. Who knows? When you go deer hunting, do you buy a deer license? Sure, you could fake one and carry it around. Or you could just flaunt the law. But the state dept. keeps a record on file. If a game warden sees you in the woods, he could easily check your license against what's on file in the state dept. Buying a license is easier and cheaper than the consequences.

Similarly, China could start small by requiring a fishing license or cargo license to traverse its trumped-up artificial island zones, just like many nations do for fishing rights off their coasts. Maybe at first, PLA(N) just makes you identify yourself over radio for free, like the ADIZ is now. Maybe they change it to $10. Then $100. Then $1,000. This is over decades. A thousand bucks per ship adds up. Also, it could later mean control, inspections/VBSS, tariffs, embargoes, etc.

P.S. Sorry for the threadjacking. I'll stop now.

 

[Randy Daytona]

In order to secure their energy supply, they are now a massive importer of oil, they need a Navy that will reach beyond their near shores. If not, they remain vulnerable to a blockade that will quickly cripple their economy.

And those islands, they are simply fixed targets.

China is importing oil, which is why they have contracted with Russia to build pipelines (oil and natural gas). China is also using this period of extremely low oil prices to build a strategic petroleum reserve like we have.

As for islands, they may be fixed targets - but islands don't sink and islands have longer runways.

 

[Knightsnation]

In the article about Obama signing this awful new retirement plan, it's talks about not going into affect till after 2018. Does this mean that since I'll be in by 2016 that I'll be able to have a traditional military retirement plan?

 

[Recovering LSO]

what is this thread even about anymore?

 

[Flash]

In the article about Obama signing this awful new retirement plan, it's talks about not going into affect till after 2018. Does this mean that since I'll be in by 2016 that I'll be able to have a traditional military retirement plan?

Yes, or you will have the option to opt into the new one if you so desire.

 

[Knightsnation]

Yes, or you will have the option to opt into the new one if you so desire.

This makes me a lot happier. As a Navy beat I've always looked forward to serving 20plus years and earring that fantastic retirement. I have no desire to opt into this new 401k retirement plan.

 

[zippy]

For those who haven't seen this yet:

 

[HH-60H]

For those who haven't seen this yet:

View attachment 15358

Can you provide a link to the original? I would like to forward it to the office.

 

[Hair Warrior]

I am applying for DCO this January. Although 20 yrs under the "old" system would be a dream, the TSP enrollment isn't terrible if I choose to opt in. I already have ~$9K in my TSP from 3 yrs as a Federal civilian early in my career.

 

[insanebikerboy]

Also, anyone who says "it'll take a LITTLE more coaching at the divo and chief level to get enlisted to invest" comes off as EXTREMELY out of touch with what goes on at the junior enlisted level. I have about 45-50 enlisted for work for me at any given time. I don't have time to be everyone's financial counselor and my chiefs don't either so thinking that I have time to sit down with 40+ 18-25 year old young men and women and preach to them about their own finances is a bit of a stretch to say the least.

Just to clarify, just because something will take a lot of hard work isn't a reason to not do it, especially when your job as a division chief or a div-o is to, well, take care of your junior enlisted.

Not everyone will buy into the TSP, and yes there are junior enlisted with 10 kids and a wife that doesn't work that won't even bother, the same as it's usually hard to get those types to even PT. That's not an excuse to not try and help them though.

In the end, I'm not saying you'll get everyone to fully fund a TSP and choose the military as a career. Early and frequent education will at least help those guys that do get out after 4, 6, 8 years be set up even better than they would be these days and the added benefit is that there is a chance that with a burgeoning nest egg they may realize that they want to stick around.

 

[villanelle]

What about making at least some % automatic, unless one opts out? So 3% of your salary automatically goes in, plus you get the match, unless you fill out paperwork to decline. That creates an opportunity to catch those who are opting out, and provide them with some information before they do so. Thoughts?

 

[MIDNJAC]

So I am guessing the rest of us get grandfathered into the old 20 yr benefits system?

 

[azguy]

What about making at least some % automatic, unless one opts out? So 3% of your salary automatically goes in, plus you get the match, unless you fill out paperwork to decline. That creates an opportunity to catch those who are opting out, and provide them with some information before they do so. Thoughts?

Not a bad idea but the brutal truth is that this new plan has one, and only one, goal: to save the DOD money. They hope and pray that as few people as possible contribute and get the matching contribution and I don't envision them doing anything to incentivize members to contribute. The opposite goes for the current system's 15-year lump sum REDUX; terrible deal for the member, great deal for DOD.

 

[azguy]

So I am guessing the rest of us get grandfathered into the old 20 yr benefits system?

Yep, if you joined in 2006-2018, you have the option of either.