The changing terrain: Military retirement
Half of military families surveyed in the most recent First Command Financial Behaviors Index® are aware of the proposed modifications to the new military retirement in the president’s 2017 budget. These modifications are:
- Automatic and matching DoD contributions to individual Thrift Savings Plan (TSP) accounts of up to 6 percent of basic pay instead of 5 percent.
- Matching contributions to individual TSP accounts beginning at the start of the fifth year of service instead of the start of the third year of service.
- TSP matching contributions made until a service member retires, instead of being cut off after 26 years of service (YOS).
- Each service branch offering continuation pay bonuses based on need rather than an automatic payment at 12 YOS.
Among the military families who are aware of the president’s proposed modifications, 82 percent are anxious about yet another set of proposals to change military retirement, with 50 percent being extremely or very anxious. With military families ranking retirement pay as their #2 most important benefit (second only to basic pay), this level of anxiety is not unexpected.
Leave a Reply