The changing terrain: The New Military Retirement
Career service members and their families* are putting great store in the value of the traditional military retirement. Three out of four service members who say they are likely to serve to full retirement want to be grandfathered into the current retirement system rather than opt in to the new military retirement system that will go into effect Jan. 1, 2018. First Command asked these military families to share their thoughts on why they are not in favor of the retirement changes in its latest Financial Behaviors Index® survey.
- “The whole reason many people make the military a career is the 50% high-three [at retirement] that is available immediately. This new plan will cause a reduction in readiness and quality due to an inability to retain experienced service members.”
- “We already don’t get enough retirement and to reduce it will cost my family a lot of money.”
- “Congress assumes that all Soldiers are mature enough to invest the funds [one-time lump sum partial retirement pay]. Many would just spend the funds, leaving many with inadequate retirement resources.”
- “The tax rate on using that money [one-time lump sum partial retirement pay] for the purchase of a house would take 20 percent off the top and then put me in a high tax bracket for the year that I get that money. The loss of the money I would receive before I reach age 60 would be huge.”
What are your thoughts on the new blended retirement system?
*Commissioned officers and senior NCOs in pay grades E-5 and above with household incomes of at least $50,000 surveyed via the First Command Financial Behaviors Index®.
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