Another look at the military's REDUX pension

[Nords]

The recent quadrennial review has put military pensions under the spotlight again, and I think journalists are mining their archives for updates on related subjects.

Tom Philpott has been writing about military money for over three decades, though, and I think he's the Military.com equivalent of Scott Burns. This REDUX analysis has been kicking around ever since the retirement was "fixed", but it's worth an encore:
http://www.military.com/features/0,15240,173719,00.html?wh=benefits

While the bonus has been frozen at $30,000 since it was introduced in 2001, individuals who take it today forfeit, on average, nearly $100,000 more in lifetime retired pay than bonus takers did seven years ago, Quester said. She attributes that to a string of above-average basic pay raises that have boosted the relative value of the High-3 retirement plan, which bonus takers turn down, compared to Redux, which they accept.

The government's goal in offering the CRB/Redux combination is to save hundreds of millions of dollars a year in future retirement obligations. It works well but at service members' expense. Indeed, it might be argued that no payday lender outside a military base ever ripped off a member as severely as the government has done with this bonus offer.

Quester likes to remind Marines who have home mortgages that, on signing those contracts, over 30 years they typically will pay the mortgage lender two-and-a-half times the loan's value. In accepting the Redux bonus, she said, careerists typically agree "to pay back 12 times the amount of money they borrowed," whether they know it or not.

 

[Milton]

Nords, you're retired. Stop worrying about that stuff and enjoy yourself!

 

[Nords]

Nords, you're retired. Stop worrying about that stuff and enjoy yourself!

No worries, it's what I do. Keep in mind that I have a nephew in the Army and a kid considering NROTC, so I expect to be discussing this stuff for another generation.

Too stretched out & tired to go surfing today, especially with taekwondo tonight.

 

[Milton]

Keep in mind that I have a nephew in the Army and a kid considering NROTC, so I expect to be discussing this stuff for another generation.

Perhaps. But keep in mind that they have to lead their own lives and make their own [-]mistakes[/-] decisions. You don't want to be a boring old Colonel Blimp who trots out tired 'war stories' from many decades ago.

Hope you're feeling better and can enjoy the surfing today.

 

[Notmuchlonger]

Thanks Nords,

I have a relative who will find this interesting.

 

[Boxkicker]

CSB is a big joke and those that take it are STU-----PID!!!

When my DEIMS date (15 year mark) came up, I just ignored the message offering me the CSB.

I was staying in no matter if I got the 40% I signed up for or the REDUX benefit of 50%.

I am looking forward to 01Feb09 when my first check shows up!!!

 

[stoutboy]

the problem is most soldiers, especially enlisted, are woefully ignorant about financial matters, so I think a lot of them will fall for this scam. I still remember my platoon sergeants and other people in my unit blowing their re-up bonuses on used IROQs or stereos.