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NDAA FY2016 Changes to Military Retirement
- Thread starter Maxillarious
- Start date
Different pots of money, different part so the budget. Savings can be made in all and it but little has been done to change fixed personnel costs in a very long time.
Of course he would say that, as any good solider [sailor] would do when told this is the policy by his or her bosses. But you also suggested that is was folks like CNP who came up with it, that was not the case. Uniformed personnel had a say but they are not the only folks, or the final ones.
Yes and no. Not willingly but personnel expenses are taking up more and more of the overall budget, putting pressure on the rest that they may not have had a choice to cut back on other things to fund personnel costs. Again, it makes little rational sense for us to be paying more for retirement than active personnel but that is where we are at now.
Question: How is the baby boomer generation affecting projections?
I've been watching this thread from the sidelines and have avoided the emotional arguements from the cheap seats. This whole argument is nothing to get worked up about in my opinion. When I joined almost 20 yrs ago we were still under the old/new 40% at 20 retirement. REDUX was the grandfather/choice option that we were given and it made zero difference in most of our calculus about career vs leaving. You either believe in your service being worth the sacrifice or you don't. The rules will change but the quality of your service won't. Congress will change the rules and only you will decide if it is worth it.
Military service is a calling and has value. If you are not prepared for the changes that our elected officals deem necessary than its time to vote with your feet and move on.
We can never predict the future. We can only make choices based on the current information that we are given
Military service is a calling and has value. If you are not prepared for the changes that our elected officals deem necessary than its time to vote with your feet and move on.
We can never predict the future. We can only make choices based on the current information that we are given
Yes there will always be career guys. The question lies with what kind of quality you'll be retaining when the juice isn't worth the squeeze to stay in for deployments and all of the other crap that goes along with being in the Navy. If you can roll out at 10 years and get some GS job or a job on the outside making more money with essentially the same 401k then why bother? If anything you'll be better off to get out, make more money, and put more of it away for later. Then the only people who stay will be the ones with nothing better to do (I.e. Lower quality senior enlisted and officer leadership).
I've grown tired of the assumption that "quality" people go only where the best money is. I see it in many of the arguments on AW regarding retirement, bonuses, etc. I would argue the exact opposite: people who go only where the best money is are people who only do the right thing when someone's looking and don't give a shit if it won't make the FITREP or in the best case, they are competent people but should be in another line of work because they're not fulfilled.
I do what I do primarily because it needs to be done well, I'm good at it, and it's fulfilling. I've never bothered calculating how much my pay would have to be cut for me to quit, but I can say O-3 pay is quite comfortable.
Ike has already said partly what I was going to type, but the "quality" argument implies that those of us choosing to stay in do so only for the money and are therefore of lesser quality than those who have chose to go somewhere else.
There is also an assumption in most of the comments I've seen about "quality" leaving is everyone who leaves gets a job making a lot more and doing so much better off. That's simply not true. For everyone leaving who lands a job at a Fortune 500 company, there's also someone who works at Home Depot (or Best Buy).
I guess my take on it all is, if a person is doing something just for the money then they probably aren't that happy with their job and will quickly jump ship. It doesn't build loyalty and it doesn't build excellence because of the high turnover. There is something to be said for those that stick it out, become experts at their job, instead of just trying to find the highest salary or benefit package.
My only counter is that, in aviation especially, toyr mid level enlisted can do the "same" job, get better bennies and still work on grey things for the Navy, sans deployments and work up schedules. I know many guys who loved the work, but the Marine Corps work ups and such weren't worth the squeeze, so they went to depot level maintenance.
Maybe a grunt doesn't have too many options, or a tank crewman, should they choose to leave. So if they "love what they do" they have to stay. But an airframer or a powerplants guy has a lot of options to do virtually the exact same thing, save interacting with aircrew, already. Diminishing the incentive to stick it out will back fire long term for the aviation community.
Using retirement as the benchmark, I could argue that those who stick it out after these changes are those that truly love the work and will therefore do a better job at it, thereby increasing the quality of work done.
I agree with you. I'm here for the same reason. And I happen to like my O3 pay too. But you and I arent the people in talking about. I'm talking about senior enlisted primarily. I've had numerous enlisted 'get out' under the current system having already had 8+ years of service under their belts because they got Substantially better job offers on the outside. I've got one leaving right now for that reason actually. Anyone with a mouth and a PowerPoint clicker can sell a shitty deal to someone who doesn't know what they're buying and claim that it won't make any difference in retention or quality of personnel but the real questions that need to be answered are the hard ones like:
-How much money is this ACTUALLY saving us after we are forced to A) pay out our asses in reenlistment bonuses and B) train the extra personnel to cope with higher turnover?
-How is this going to affect the quality of the personnel we end up with at the 20year mark?
You and I can sit here and talk about how we live our O3 pay and do this because we love our country and all that jazz but you're lying to yourself if you don't think you'd give serious thought to running off to the airlines at the 10 year mark if they were throwing 6 figure salaries at you with an equal or better retirement plan. God knows I'd give a good thought of I knew that I could live a "normal" life (no deployments, work ups, be home with the kids, etc...) and still get my 120,000k salary and 401k. There's more to this business than the numbers. There's the people. And human nature is the variable no one likes to think about. When you make all else equal, staying home with kids and wife and making the same amount of money/retirement is a pretty damn appealing gig.
You're living in a dream world of you think that quality people are going to stick around purely for the hell of it. That whole "yut yut" / "I'm gonna be popeye the sailor man" bullshit thing wears off about 5 minutes into boot camp for about 90% of recruits and within the first 12 months in the Navy for the other 10%.
There's a reason that the expensive lawyer, doctor, mechanic, etc... Is the best. It's because, as AC/DC put it: MONEY TALKS!
You're living in a dream world if you think everyone does everything purely for money. There are folks in every walk of life that do the job they love even at the expense of a higher paycheck. An anecdotal example, a friend of mine gave up a $100k a year engineering job and moved back home to Rhinelander, Wisconsin, so he could trap and hunt all he wanted, and would work construction to earn money. He was (and still is) one of the happiest guys I know. Folks in the military are no different.
A 401k's value is largely dependant on the individual taking care of it through continual funding, and that applies in both the military and civilian world. The 401k style retirement won't ever be as lucrative as the previous 20 year retirement, but the decision has been made and it's time to move forward.
Bottom line, this change makes it the member's responsibility to prepare themselves for retirement. The 20 year retirement system removed any planning responsibility whatsoever from the member for a retirement, make 20 and bam, you get a check. That's hard for a lot of us to swallow that are currently in but if that's all a person knows, then what do they have to compare it to?
Early in this thread I advocated a lot of leadership and mentorship on the chief and div-o for the junior guys to teach them how to prepare their money. The military will always have guys who stick around because they love what they do, and I'm one of those guys. But, through proper education and actual leadership of our folks, people who may be on the fence may actually stick around because they have set themselves up for financial success.
The sky, it's not falling.
The only caveat is that for most of your enlisted maintainers, they can do a very similar job (if not exactly the same) on the outside. In Beaufort, it is pretty common to have a guy who loves working on jets, but hates the work up cycle, never ending night crew shifts and missing out on family events. Couple that with ththe fact that he will be up for recruiting duty or drill instructor orders if he stays in and working Depot level maintenance starts to look really good. No more moving his family around and he still works in grey things that fly, hell, he even recognizes the bunos coming in. Not to mention, if he stays late he gets overtime pay, he'll start out at $27/hour and he doesn't even have to move the family. That's the guy you are going to lose.
As it is, getting first term guys to set up anything other than a payment plan for the 2015 F350 King Ranch they buy is rough.
Now add in the married guys will have BAH cover less of thier expenses once it drops to 95%, Tricare will start costing more out of pocket if they continue those cuts and the commissary may or may not be as good of a deal as it is now. Asking a guy to set aside another 5% of his pay so "when ever you decide to get out you can have a little nest egg going" will be a hard sell. Obviously, that conversation needs to happen, because what other choice will they have?
Spekkio
He bowls overhand.
If there a civilian analogue to what their military job is, the talented guys (and even not so talented guys) will leave for better pay. I see it with enlisted nuke retention, they can't throw enough bonuses at them to compete with utilities (nuke or otherwise) and industrial maintenance jobs with union hours, overtime pay, and yes, sometimes even pensions. There are also civil service jobs on the outside that will pay pensions after 20-25 years, why wait to get started if the mil cuts theirs?
So then you raise bonuses to keep people and it still can't compete. I mentioned it before - you want to pay a guy $90,000 to reenlist? That's only $18,000 more than the GI bill will pay them to leave so you have to do better than that. You want them to stay in 20 and put off transitioning to a civilian career so they can make $20,000 in retirement? That's not going to pay the bills.
Yes O-3 pay is quite comfortable. E-5 pay not as much. Money doesn't matter to you because you make enough where unless you mismanage your funds you really don't have to think about what you can and can't afford. An E-5 living paycheck-to-paycheck on roughly half what we make is definitely considering money when making his career decisions.
You have to compare apples to apples. If an MA who enjoys his line of work can get better pay and retirement by transitioning to a LEO then he will leave for more money. If your engineer buddy liked engineering and company X paid more than company Y he would leave company Y. You see this in pro sports with free agency - players will almost always go to the highest bidder.
Now yes if the person is unhappy being an engineer he might seek a different career for less money. But the pay scale has to compete to retain people who like their line of work, not with people who don't.
Roughly half the Chiefs I've encountered are pretty bad with money/divorces/child support, etc. Then you want a JO who is fresh out of college trying to teach guys who might be married and have kids how to manage money? Yea, that'll go over about as well as the 24 year old nurse who tried to teach my wife to breast feed her third child. Not to mention that other JO's I've worked with have also run the full spectrum of financial responsibility.
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