Military Retired benefits to be cut?

[samclem]

I don't feel sorry for her at all. In all the post 9-11 knee-jerk reactions, the families of each 9-11 victim were given $1,000,000 from the US taxpayers. IMO, that's what life insurance is for, not the gov't.

I feel sorry for her in that her husband was murdered.

In reading ERD50s post, I took the point to be that Ms Saracini wasn't well served by her husband's defined benefit plan, that she would have been better off, along with a lot of other folks with failed pension plans, if her husband's funds had been in a 401K.

I agree that the USG (i.e. you and I) shouldn't have paid victims $1 million each. But, just for "grins" --the $1million from the USG still didn't put her ahead, if we're gonna do the morbid math. At a 4% WD, that's $40K per year. Even with the govt payment, she would probably have been better off if he'd instead had (and used) a 401K plan, and gotten average investment results.

 

[ERD50]

I feel sorry for her in that her husband was murdered.

In reading ERD50s post, I took the point to be that Ms Saracini wasn't well served by her husband's defined benefit plan, that she would have been better off, along with a lot of other folks with failed pension plans, if her husband's funds had been in a 401K.

Yes, that is exactly what I meant - thank you.

I agree that the USG (i.e. you and I) shouldn't have paid victims $1 million each. But, just for "grins" --the $1million from the USG still didn't put her ahead, if we're gonna do the morbid math. At a 4% WD, that's $40K per year. Even with the govt payment, she would probably have been better off if he'd instead had (and used) a 401K plan, and gotten average investment results.

Interesting (and valid) point.

Many in retirement have seen health benefits reduced or removed. COLAs on pensions are also often targeted. But I agree that the biggest problems exist for current employees who see benefits continually reduced and have had pension accounts raided by corporations.

I don't know, I was under the impression that very little of this has happened to people already in retirment. Has it happened to the tune of billions? References please.

To the extent that it does happen, it goes to my point that I don't want promises. Give me the money and let me plan for my future (admittedly, some of this may need to be a 'forced' plan, as many will do the grasshopper/ant thing).

The raiding of pensions has happened at may successful corporations, what's their excuse?

Again, I'm not sure what time frame you are talking about. The PBGC sets some rules, I'm not sure a successful company can 'raid' a pension. Again, references?

If you mean they are cutting/eliminating the contributions to future benefits (not earned yet), yes, that is happening. IMO, they don't need an 'excuse'.

They don't need an 'excuse' anymore than most of us LBYM forum members need an excuse to pay as little for something as we can. Coupon clipping, comparative shopping, wait for sales, etc - most of us do some of that w/o excuse. Since most of us are 'successful', should we pay more than we need to, just to support the workers who make the products? I doubt you shop that way for products and services. Do as I say, not as I do? We are in a more global job market - we have to face the facts.


-ERD50

 

[Gumby]

The fortunes of the private sector working class need to turn somehow. Until that happens, I fear the working class will be effectively turned against itself.

"Workers of the world, unite! You have nothing to lose but your chains."

 

[nun]

"Workers of the world, unite! You have nothing to lose but your chains."

Derived from:

"The proletarians have nothing to lose but their chains. They have a world to win."
I like these:

"From each according to his abilities, to each according to his needs."

Jesus could have said that, I admire Marx because of his empathy and concern for people.

and

"History repeats itself, first as tragedy, second as farce."

 

[samclem]

"From each according to his abilities, to each according to his needs."

Jesus could have said that, I admire Marx because of his empathy and concern for people.

I think they might have differed in the mechanics of how the "from each" was to occur. These tiny details make all the difference . . .

 

[nun]

I think they might have differed in the mechanics of how the "from each" was to occur. These tiny details make all the difference . . .

So you agree that Jesus would have agreed with the concept.

Jesus wasn't big on money, but he did endorse taxation "render unto Caesar", not paying your landlord, and wasn't big on accumulation of wealth "eye of camel".

 

[samclem]

So you agree that Jesus would have agreed with the concept.

It all depends what concept we are talking about.
Anyway, let's avoid inviting Porky to our conversation here. The followers of both Marx and Jesus have put their ideas into practice on earth, the evaluation of the results is an exercise left to the reader.

 

[Nords]

Back on topic for a second:

I don't think the President made a speech detailing this. I think the details are probably located somewhere in a lengthy document describing the "debt reduction plan".

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/jointcommitteereport.pdf
This gets you the PDF of the document being waved about by assorted persons of a political bent.

Thanks again, guys. I pulled a bunch of links together for this post:
The military drawdown and benefits cuts | Military Retirement & Financial Independence

Scary headlines? Sure. However the only immediate changes are to Tricare subscription copays and to military retirees who are retiring over the next 12 months.

Everything else is either a "proposal" or a "committee". (Personally I think the Defense Business Board retirement-change proposal has been quietly shelved by the new SECDEF.) There's a lot of work ahead, just as there was for the BRAC base-closing process, but it should allow for plenty of feedback and shaping by veteran's groups.

 

[Bimmerbill]

I wonder what is in store for gray area retirees like myself? I don't get my pension (a modest $600 a month) and health benefits until I turn age 60, in 2026.

Too bad there isn't an option to take a buy out of my pension. I think I would go for the cash now. At least I'd get something and would have more control.

 

[ziggy29]

I wonder what is in store for gray area retirees like myself? I don't get my pension (a modest $600 a month) and health benefits until I turn age 60, in 2026.

Well, for one thing federal pension laws generally forbid reducing promised benefits for service already performed. The only questions will be about how COLAs are given out and how health care coverage is provided.

As far as military goes, I fully expect that anyone who is already retired or currently actively serving won't be impacted -- could be wrong, though. Benefits for new hires, especially health care, may very well be watered down.

Too bad there isn't an option to take a buy out of my pension. I think I would go for the cash now. At least I'd get something and would have more control.

I become eligible for my tiny pension from a previous employer in 2020, and I suspect they will offer me a buyout just before then -- but I could be wrong. At this time I don't plan to take it unless it's an offer I can't refuse. I have a lot of 401K and not a lot of pension now, and I'd like to have at least some "secure income stream" baseline besides whatever SS decides to give me.

 

[Nords]

I wonder what is in store for gray area retirees like myself? I don't get my pension (a modest $600 a month) and health benefits until I turn age 60, in 2026.

I think you'll be on Medicare before anyone is subject to the "new" retirement plan.

Using REDUX as an example, it'll only affect new recruits-- and no matter how generous it is I'm sure the recruiters will dread being on the front lines of the educational marketing.

BTW you're calculating that $600 at today's dollars with the maximum pay scale for your rank, regardless of your actual years of service in that rank, right?

Too bad there isn't an option to take a buy out of my pension. I think I would go for the cash now. At least I'd get something and would have more control.

I'm not a big fan of annuity sales tactics, but an annuity is a wonderful tool for keeping us from doing something really stupid with more than a portion of our money...

 

[Bimmerbill]

Oh yeah Nords, I know I've already gotten many pay raises since I retired in 2007. The $600 was in 2007 dollars, so with decent COLAs over the next 15 years it should provide equivilent purchasing power (I expect some slight erosion). I consider it beer and pizza money.

As an O3 with 22 years I was already maxed out on the pay scale!

 

[Nords]

Oh yeah Nords, I know I've already gotten many pay raises since I retired in 2007. The $600 was in 2007 dollars, so with decent COLAs over the next 15 years it should provide equivilent purchasing power (I expect some slight erosion). I consider it beer and pizza money.
As an O3 with 22 years I was already maxed out on the pay scale!

I was surprised when I learned about that "at your max pay scale for that rank" provision. I thought it had to be a mistake.

But yeah, you're lookin' kinda topped out there. Your only improvement would be if they started handing out targeted pay raises to O-3s for retention and included you by [-]unintended consequences[/-] accident. I got a 5.8% targeted pay raise six months before I retired, which I regarded as belated recognition of my true value...

 

[jimnjana]

I wonder what is in store for gray area retirees like myself? I don't get my pension (a modest $600 a month) and health benefits until I turn age 60, in 2026.

Too bad there isn't an option to take a buy out of my pension. I think I would go for the cash now. At least I'd get something and would have more control.

Bimmerbill,

Won't your'e retirement be based on the existing pay table for an 03 in 2026? I thought the only way retirement pay was stuck at your pay when you hit 20 qualifying years(or stopped participating in the RC after you attained 20 qualifying years) was if you quit the reserves and not move into the "retired reserve"?

Ok, I see where you will be receiving the annual increases between now and 2026.

 

[Bimmerbill]

Yes, retirement pay will be based on military pay tables in effect in 2026. Since they typically get a COLA or adjustment yearly, it's like I am getting a COLA as well, even tho I am retired and not drawing my pension.

I am in the retired reserve for that very reason.

 

[haha]

We can cure this pension problem immediately.

Just fire all private sector workers, and then have the governemnt rehire everyone with federal or state pay scales and retirement provisions.

Voilá- problem solved. Also, with the higher government pay scale there should be better income tax collections, and with thoughtful early retirement provisions of government work we should cut down on unemployment and open up jobs for more young people and minorities.

Ha

 

[oldtrig]

My dad retired in 1979. He had $100,000.00 in bank Cd's yielding about 15%. With his SS and those high rates on Cd's he lived pretty good. I think those days are gone and us mid 60 people will never see anything like that in our life. The storm is just starting to brew.

 

[haha]

My dad retired in 1979. He had $100,000.00 in bank Cd's yielding about 15%. With his SS and those high rates on Cd's he lived pretty good. I think those days are gone and us mid 60 people will never see anything like that in our life. The storm is just starting to brew.

Those 15% rates were there because a storm had already hit. And because Paul Volcker was a realist who wanted to put the country back on a solid footing.

In 1979 inflation was still boiling, but after a few years as disinflation took hold under Volcker, anyone who bought long term treasuries at those high rates was set for a very nice retirement.

Many people did not see these long term treasuries as gifts from heaven, they thought that inflation would continue up forever. They wanted gold, T-bills, famland etc.

Ha

 

[harley]

Those 15% rates were there because a storm had already hit. And because Paul Volcker was a realist who wanted to put the country back on a solid footing.

In 1979 inflation was still boiling, but after a few years as disinflation took hold under Volcker, anyone who bought long term treasuries at those high rates was set for a very nice retirement.

Many people did not see these long term treasuries as gifts from heaven, they thought that inflation would continue up forever. They wanted gold, T-bills, famland etc.

Ha

That's what I'm waiting for again. I got my first start as a financial wizard investing in 17% CDs, while only paying 15.75% on my mortgage. This time I'm going to be ready for them. I'll load up on T-bills and CDs when we get interest rates in the teens, and I'll be holding my ~4% (depending on the next refi) mortgage. Then I'll tuck in and quit buying stuff, live on my dehydrated food and dry beans until the economy recovers, and live happily ever after! I love it when a plan comes together! What could go wrong?