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Proposal to not pay military retirement until 57!
Old 03-10-2008, 11:03 PM   #1
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Proposal to not pay military retirement until 57!

I was sent this today. This is one of the proposals Air Force Sergeants association is fighting. Military pay not being paid until 57. For those of you currently serving in the military like myself let's hope this never goes through! This would put a big dent in my ER plans.

No retirement pay before age 57?

Panel also recommends combining active, reserve retirement systems
By William H. McMichael - bmcmichael@militarytimes.com
Posted :
February 11, 2008
A congressionally chartered commission has called for scrapping the entire military retirement system and making active-duty troops wait until at least age 57 to begin drawing retired pay.
The proposal, which would spell the end of the current active-duty system that pays nondisability retirement immediately after a service member completes a minimum of 20 years of service, is among 95 recommendations in the final report of the Commission on the National Guard and Reserve, which went well beyond its original charter to review the structure and management of the reserve components and delved into personnel policies for active-duty members.
Under current retirement rules, an active-duty member is eligible for retired pay immediately after completing a minimum of 20 years of service, which can be as young as age 37. However, reservists must wait until age 60 to draw retired pay, although a law signed Jan. 28 by President Bush allows reservists to draw retired pay 90 days earlier than age 60 for every 90 days of mobilization in support of a contingency operation.
Under the commission’s plan, a revamped retired system would grant limited retirement benefits starting at 10 years of service, although payments would not begin until age 62. Those who serve at least 20 years could receive payments at age 60; those who serve 30 years could get them at age 57.
Under the plan, troops could begin drawing retirement pay at earlier ages, but the annuity would be reduced 5 percent for each year that a member is under the statutory minimum retirement age.
The commission said that would bring the military in line with the Federal Employees Retirement System.
The commission concluded that combining the training, promotion and management of active and reserve troops into one integrated manpower system is the only way the nation’s military can become a truly efficient operational force for the future.
“The increasing cost of personnel, and the challenges of recruiting and retaining qualified individuals, will, we believe, inevitably require reductions in the size of the active force,” states the 432-page report, released Jan. 31. “This shrinking active force will necessarily be accompanied by an increased reliance on reserve forces for operations, particularly for homeland missions. The overall effectiveness of those forces will depend on greater integration of the reserves with the active component.”
The commission argued that modifying the 20-year retirements would give the services an incentive to retain troops whom they want to keep for more than 10 years but for less than 20. Additional pay or bonuses would be needed to keep such troops in uniform beyond 10 years to maintain retention rates.
“As part of the reformed retirement system, retention would be encouraged by making service members eligible to receive ‘gate pay’ at pivotal years of service,” the report says. “Such pay would come in the form of a bonus equal to a percentage of annual basic pay at the end of the year of service, at the discretion of the services.”
Matching funds for TSP
In addition, the report says Congress should expand current law to permit all service members to receive up to 5 percent of annual basic pay in matching government contributions to the Thrift Savings Plan. Service members currently receive no government matching funds for TSP contributions.
“The government’s contribution would vest at 10 years of service, and the Thrift Savings Plan benefit would be portable and thus capable of being rolled over into a civilian 401(k) account,” the report says.
Among the report’s other recommendations:
• The military’s promotion system should be competency-based versus time-based.
• Active and reserve officer personnel management systems should be merged into a single system.
• The number of duty statuses should be reduced from 29 to two — on active duty or off.
• The Defense Department should implement a combined pay and personnel system to eliminate problems with incorrect pay, low data quality, multiple personnel files and inaccurate accounting of credit for service.
• The Guard and reserve should be given the clear lead in Defense Department homeland security missions within U.S. borders.
The recruiting and job market landscape has shifted in dramatic ways, the commission said, which means the Defense Department “must recruit, train and maintain a technologically advanced force in an era that will be characterized by ever-increasing competition for a shrinking pool of qualified individuals whose expectations about career paths and mobility are changing dramatically.”
“We need to look at our manpower assets with a totally integrated approach,” commission Chairman Arnold Punaro said.
For active and reserve service members, such a system would create a “seamless” transition to and from active duty — “on-ramps” and “offramps,” as Navy personnel officials have described the concept. Basing promotions on competency rather than time would keep troops competitive within the system.
Reserve reorganization
The 95 recommendations in the report also include a call for the reserves to be reorganized into two formal categories: operational and strategic reserve forces.
The operational reserve would consist of Selected Reserve units and individual mobilization augmentees who would deploy periodically. The strategic reserve would include Selected Reserve personnel and augmentees not scheduled for rotational active-duty tours and the “most ready, operationally current and willing members of the Individual Ready Reserve,” the report says.
The commission also calls for scrapping the Standby Reserve category and said members who are not “viable mobilization assets should be excluded from the total reserve force.”
The Defense Department would have to consistently provide the support needed to ensure the sustained viability of both forces, and Congress and the Pentagon would determine the missions each would perform.
“There used to be an understanding that if you were ready for the away game, you were ready for the home game,” Punaro said. “Most everyone admits that’s not the case anymore. We need a very ready force at home in peacetime, just like we need a ready force for the overseas mission.”
The reserves were conceived as a strategic force that would be called to active duty only in national emergencies. But they have morphed over the past 18 years, beginning with the 1991 Persian Gulf War and spurred by the military drawdown of the 1990s, into an operational reserve that is now regularly called upon to meet the demands of the wars in Iraq and Afghanistan.
“It’s clear that if you hadn’t had an operational Guard and reserve, you would have had to go back to the draft, which I think everyone agrees is ... pretty unacceptable,” Punaro said.
Punaro is “very bullish” on the prospects for the commission’s work to receive serious attention.
Half of the 95 recommendations “can be done immediately,” he said. About 40 will require congressional or presidential action, according to the report.
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Old 03-11-2008, 12:22 AM   #2
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Note that this would apply only to new enlistees/officers, not those in the current active-duty or reserve system. It wouldn't apply to gray-area or retirees either.

And we all know what a raging success REDUX turned out to be for retention.

These studies come along every few years and are enthusiastically opposed or endorsed as appropriate by their coalitions & associations. Servicemembers also vote with their feet and the recruiters know right away what works or what doesn't. In general (so to speak) I think Congress is better at listening to their constituents and the service chiefs than they are at DoD's whining feedback.

Unlike their constituents, DoD doesn't get to vote for their Congressmen-- they have to buy them on the open market like any other lobbyist.
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Old 03-11-2008, 07:47 AM   #3
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Unlike their constituents, DoD doesn't get to vote for their Congressmen-- they have to buy them on the open market like any other lobbyist.
You're right about that.

I remember the flurry of retirement proposals in the 70s - or was it the 80s, or the 90s? I guess it was in all of those decades. Still waiting for the big changes that were proposed.

Hey, one thing that does bother me is the proposal to change the tricare system by making it comparable to the civilian systems -- I guess they mean, the civilian system is broken, so why should ours work? The latest MOAA magazine was wrapped in some coupons you could cut out and send to your congressmen about it.
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Old 03-11-2008, 12:24 PM   #4
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Considering one of the biggest draws of the military is pulling a retirement check after 20 years, I doubt many people would do 20-30 if the pay didn't come in until 57. For a normal enlisted person their is a massive difference between 38-57.
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Old 03-11-2008, 01:58 PM   #5
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Originally Posted by SoonToRetire View Post
The latest MOAA magazine was wrapped in some coupons you could cut out and send to your congressmen about it.
That magazine is even scarier than AARP-- by the time I saw the fourth step-in tub ad (and the gazillionth continuing-care facility ad) I'd had enough.

Apparently us 40-somethings (and 50-somethings and 60-somethings) contribute nothing to MOAA's advertising budget.

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Considering one of the biggest draws of the military is pulling a retirement check after 20 years, I doubt many people would do 20-30 if the pay didn't come in until 57.
We call those people "Reserves" and "National Guard"!

Right now DoD is also telling Congress that James Webb's proposal to boost post-service GI Bill benefits is so generous that no one would re-enlist-- everyone would bail for college on the "Webb Plan". But let's peer into the mind of a 20-something infantry soldier for a second and see how that's perceived today: "Gee, if I re-enlist I'll get to make my third deployment to Iraq, or I could get out now for three years of Montgomery GI Bill benefits. Gosh, it's so hard to make up my mind, so I think I'll stay in."
Or your typical post-JO shore tour submarine officer: "Lessee, the assignment officer sent me to this cushy two-year NROTC billet with the understanding that I'd spend half of it on a one-year IA to Iraq. And then I get to go to department head school followed by more sea duty. I wonder why I even bothered with my night MBA program-- an engineer's tour would be so much more fulfilling!"

I don't know what the Army's retention is with first-tour infantry grunts, but for post-JO shore tour submarine officers it's somewhere between 6-7%-- despite annual bonuses of up to $25K for a three-year commitment.

Somehow I don't think a more tempting GI Bill will tip the retention balance either way. If DoD has to point fingers and raise alarms at James Webb for "ruining" their retention numbers while continuing to bust OPTEMPO in just about every direction, then perhaps DoD's retention credibility is a bit lacking.

Maybe they need to bring Spike Lee back to make some of those cool recruiting commercials. I liked the garage band jamming on the carrier's flight deck-- so realistic!
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Old 03-11-2008, 07:27 PM   #6
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"The commission argued that modifying the 20-year retirements would give the services an incentive to retain troops whom they want to keep for more than 10 years but for less than 20. Additional pay or bonuses would be needed to keep such troops in uniform beyond 10 years to maintain retention rates."

I'm no army recruiter or HR expert, but if you were satisfied with the job someone did for the first ten years, why wouldn't you want to keep them for twenty? Is there really a huge drop off in retention after the first ten years? Seems like everyone who really wanted to bail would have done so by then.
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Old 03-11-2008, 07:29 PM   #7
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I had written this reply about all FERS employees doing 15 month combat tours and then changed my mind and decided to be nice.....

I thought I'd read that same article, but I had read something similar -doing more than 20 years would have an increasing benefit. At any rate, I agree with Nords that this wouldn't be imposed on those already in - which is cool - because in the corporate world, pension benefits get switched around all the time, regardless of the amount of time you have in. If anything, if there were a benefit for staying in longer, and taking pay later, it might be offered and not required of those already in.

A bigger GI bill won't get anyone to stay in. Even high retention bonuses are stretching limits these days. People want time at home.
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Old 03-12-2008, 04:36 PM   #8
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For a second there I had hope of collecting at 57, but its active duty only. I guess I still have to wait till age 60...

Only 18 years 5 months to go!
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Old 03-12-2008, 05:15 PM   #9
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Originally Posted by Retireinmy40s View Post
I was sent this today. This is one of the proposals Air Force Sergeants association is fighting. Military pay not being paid until 57. For those of you currently serving in the military like myself let's hope this never goes through! This would put a big dent in my ER plans.

No retirement pay before age 57?
I don't pretend to know all the details on this, but I did read what you posted. Given the retirement challenges we're all facing, frankly it sounded reasonable to me. My only concern was rollout, but if the plan is "this would apply only to new enlistees/officers, not those in the current active-duty or reserve system. It wouldn't apply to gray-area or retirees either." as another poster said, that would seem more than fair IMHO.

Many of us have had to make serious adjustments to our plans over the past several decades too. When I joined the MegaCorp I have worked for all my life they provided a nice pension and generous retiree health care (equiv to active employees). Retiree health care was eliminated (not reduced) about 20 years ago. And my pension was frozen after 16 years (no longer growing), about 15 years ago. I don't feel sorry for me, my point is that we've all had to accept changes we didn't like or plan on.

But before I jump to stupid conclusions, what exactly is unfair about what you posted in your view?

If it matters to you, I grew up an Army brat, and my Dad retired from the Army about 26 years ago after 38 years service. He would be the first to tell you that he's lived better ($) in retirement than he lived while on active duty.
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Old 03-12-2008, 08:47 PM   #10
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Is there really a huge drop off in retention after the first ten years? Seems like everyone who really wanted to bail would have done so by then.
By the time I hit my 10-year point I'd finished my second sea tour, and I realized that my department-head tour had been the same junior-officer watchbill with more accountability, more overtime, and 25% more pay. The hassles dwarfed the benefits and the XOs didn't seem to be having much more fun than the DHs. Luckily (or unluckily as it seemed at the time) I wasn't in a position to decide whether or not I got an XO tour.

Everyone expects a large percentage of first-term enlisted/officers to leave because it's a chance to see how you like the lifestyle and a chance to pay for college/job experience. But second-term retention is an indicator of the cultural health of the organization-- people realize that the things that were supposed to get fixed are still broken. People start families after their first enlistment and suddenly their priorities are realigned while the employer seems even less sympathetic. Officers pick up additional service obligations after their first tour (especially if the military pays for their graduate degree) and they're not paid off until after the 10-year point.

And while it's relatively easy to keep enough recruits in the pipeline to handle first-term retention, it's darn hard to do so with second-term retention. The ensigns who entered the submarine force in 1996 are virtually guaranteed to command a submarine if they avoid DUIs, child pornography, and running aground... negotiably two out of three and in that priority, too.
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Old 03-12-2008, 11:06 PM   #11
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But before I jump to stupid conclusions, what exactly is unfair about what you posted in your view?

Midpack,

Since it would only apply to new enlistees/officers if passed it is not as unfair as I was thinking. I originally thought it would be applied to everyone. It is ok to start with new enlistees because they would know beforehand what to expect and their options. To do it to current members would be wrong and unfair because they have been promised pension and health care after 20 years of service not at 57. I realize that companies do this all the time cut healthcare, stop pensions etc. but in the military once a person has done 1 or 2 enlistments their decision to stay is largely based on the pension and healthcare after doing only 20 years. In the military we deal with certain things that people don't have to deal with in civilian jobs like deployments, family seperation, moving every couple years, overtime w/o pay, etc. and for enlisted when things get tough we can't just leave or quit we have to finish our enlistement. So I was just saying it would be unfair to change things on people already serving which won't happen.
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Old 03-13-2008, 06:40 AM   #12
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I've often wondered if we shouldn't have a three-tiered system of enlisted military personnel.

1. One term young single volunteer enlistees -
3 to 5 year enlistments - low pay, no benefits for family members, one year of full post-military educational benefit paid for at any State university for each year of military service - (pregancy, marriage, or non-service-related medical problem qualifies for an automatic early-out w/appropriate cuts in post-service educatonal benefit)

2. A small core cadre of NCO career soldiers, sailors, airmen
to receive significantly better pay, personal & family benefits; more time-off; in-service educational benefits; various other privileges; 20 to 30 year retirement comparable to FERS Law Enforcement; periodic paid sabbaticals (say a few months every 5 years) to help make up for the strain of deployments, field duty, overtime; greater protections re: job security, reduction in grade, etc under UCMJ

3. Conscripts
two year (extendable) conscriptions only in time of war/natl emergency - minimal pay/benefits during & after service
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Old 03-13-2008, 06:52 AM   #13
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Unlike their constituents, DoD doesn't get to vote for their Congressmen-- they have to buy them on the open market like any other lobbyist.
Most come pretty cheap....
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Old 03-13-2008, 06:57 AM   #14
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As a taxpayer.... it does seem like a problem..

My sister works for a group that does computer work for the DOD... and they have a number of former military people... pulling in a full pension...

One guy was a colonel, then worked for the govmt for 20 more years and now has two full pensions and working on his third... (they work at a state university and are under a state program)...

It does seem REASONABLE to think that a normal pension plan actually pays you what is considered 'normal'ish retirement age... (I know... this is an EARLY retirement board....)..
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Old 03-13-2008, 07:11 AM   #15
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As a taxpayer.... it does seem like a problem..

My sister works for a group that does computer work for the DOD... and they have a number of former military people... pulling in a full pension...

One guy was a colonel, then worked for the govmt for 20 more years and now has two full pensions and working on his third... (they work at a state university and are under a state program)...

It does seem REASONABLE to think that a normal pension plan actually pays you what is considered 'normal'ish retirement age... (I know... this is an EARLY retirement board....)..
Someone in the company hired the retired Colonel and must have thought he had something to add to the company or are you saying it is "crony ism" that gets these types hired?
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Old 03-13-2008, 07:24 AM   #16
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Originally Posted by Texarkandy View Post
I've often wondered if we shouldn't have a three-tiered system of enlisted military personnel.

1. One term young single volunteer enlistees -
3 to 5 year enlistments - low pay, no benefits for family members, one year of full post-military educational benefit paid for at any State university for each year of military service - (pregancy, marriage, or non-service-related medical problem qualifies for an automatic early-out w/appropriate cuts in post-service educatonal benefit)

2. A small core cadre of NCO career soldiers, sailors, airmen
to receive significantly better pay, personal & family benefits; more time-off; in-service educational benefits; various other privileges; 20 to 30 year retirement comparable to FERS Law Enforcement; periodic paid sabbaticals (say a few months every 5 years) to help make up for the strain of deployments, field duty, overtime; greater protections re: job security, reduction in grade, etc under UCMJ

3. Conscripts
two year (extendable) conscriptions only in time of war/natl emergency - minimal pay/benefits during & after service
With the exception of #3 Conscripts (this was tried and, for some reason, done away with about 35 years ago) but with this exception, this is, to a great extent, what you have in the military today (with the exception of most of the modifiers you mention) on a macro basis. I am reading a book right now called "The Coldest Winter" by Halberstam, completed shortly before his death (2007 in a car accident) which really points out what can happen to "conscripts". Seems when the North Koreans came across the 38th Par in 1950 they sent entire US units from Japan (at the time they were part of the occupation force (gosh we had one of those then)) to fight in Korea and lost entire units. 800 man units (no women except nurses at that time) and after a fight have about 50 men come back. Wouldn't something like that look good today - 95% casualties. You can argue training and/or lack of training, technology or lack of technology but Korea was about as level a playing field there was, at the time, but these men would have probably have met the criteria of "conscripts" as you imply".

You make some good points about the #2 level of military service however, the problem as I see it, would in the management of such a system. Additionally, I do not see the comparison to FERS or civilian type workforce to a military career. I have no idea, well maybe a small one, about active duty military service today but in my 20+ years of AD in the Army I went on 5 "hardship" tours (Army's definition, not mine), one of which I really liked the challenge of trying to be invisible to the other guys, not to mention a couple of 3 month trips of "grab a bag we are sending you to "X" for a short period; hope to get you back real soon now"; 17 moves, about 6 of which were "with family" and 2 of these were where the family went in one direction and I went in another. I did not include another 45 month tour in Alaska (which I enjoyed very much). I do not know how you could compare Civil Service - where some State Department employees recently REFUSED to go to Iraq to work in our embassy - inside the safest area in Iraq - the Green Zone - to Military Service.
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Old 03-13-2008, 05:23 PM   #17
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But before I jump to stupid conclusions, what exactly is unfair about what you posted in your view?

Midpack,

Since it would only apply to new enlistees/officers if passed it is not as unfair as I was thinking. I originally thought it would be applied to everyone. It is ok to start with new enlistees because they would know beforehand what to expect and their options. To do it to current members would be wrong and unfair because they have been promised pension and health care after 20 years of service not at 57. I realize that companies do this all the time cut healthcare, stop pensions etc. but in the military once a person has done 1 or 2 enlistments their decision to stay is largely based on the pension and healthcare after doing only 20 years. In the military we deal with certain things that people don't have to deal with in civilian jobs like deployments, family seperation, moving every couple years, overtime w/o pay, etc. and for enlisted when things get tough we can't just leave or quit we have to finish our enlistement. So I was just saying it would be unfair to change things on people already serving which won't happen.
I understand and agree. I would be completely against making a change like this to active military unless they were far from retirement age. To make it effective only for new enlistees is more than fair, a better deal than many of us in the civilian world have gotten. But I'm a grateful citizen and I appreciate those who have served, so I'm fine with the plan.
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Old 03-13-2008, 06:08 PM   #18
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Reserve reorganization
The 95 recommendations in the report also include a call for the reserves to be reorganized into two formal categories: operational and strategic reserve forces.
The operational reserve would consist of Selected Reserve units and individual mobilization augmentees who would deploy periodically. The strategic reserve would include Selected Reserve personnel and augmentees not scheduled for rotational active-duty tours and the “most ready, operationally current and willing members of the Individual Ready Reserve,” the report says.
The commission also calls for scrapping the Standby Reserve category and said members who are not “viable mobilization assets should be excluded from the total reserve force.”
The Defense Department would have to consistently provide the support needed to ensure the sustained viability of both forces, and Congress and the Pentagon would determine the missions each would perform.
“There used to be an understanding that if you were ready for the away game, you were ready for the home game,” Punaro said. “Most everyone admits that’s not the case anymore. We need a very ready force at home in peacetime, just like we need a ready force for the overseas mission.”
The reserves were conceived as a strategic force that would be called to active duty only in national emergencies. But they have morphed over the past 18 years, beginning with the 1991 Persian Gulf War and spurred by the military drawdown of the 1990s, into an operational reserve that is now regularly called upon to meet the demands of the wars in Iraq and Afghanistan.
“It’s clear that if you hadn’t had an operational Guard and reserve, you would have had to go back to the draft, which I think everyone agrees is ... pretty unacceptable,” Punaro said.
Punaro is “very bullish” on the prospects for the commission’s work to receive serious attention.
Half of the 95 recommendations “can be done immediately,” he said. About 40 will require congressional or presidential action, according to the report.

Ahh so true about that 'operational Reserve.' As Nords said above, the restructure being proposed for the active is similar to the Reserve force now - they certainly are getting a heck of a lot more out of me than a weekend a month and 2 weeks a year. I won't see anything until age 60, but I will ave given approximately close to 75% of an active duty amount of time.

As for comparisons to civilian jobs - when one is in the military, they *own* you 24 X 7 - they don't in my civilian job although they like to think they do - UCMJ and a few other things make it a very different environment. Plus, the risks of death and other 'fun' activities/outcomes are much higher in the military.



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Old 03-13-2008, 06:24 PM   #19
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In my limited experience it seems that there are 3 main reasons people stay in the military:

1. For the retirement pay.
2. For the medical coverage.
3. The predictability.

You mess with any of the above 3 and many people will simply get out.
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Old 03-13-2008, 07:18 PM   #20
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Originally Posted by trixs View Post
In my limited experience it seems that there are 3 main reasons people stay in the military:

1. For the retirement pay.
2. For the medical coverage.
3. The predictability.

You mess with any of the above 3 and many people will simply get out.
Bet that could have been said by/about MegaCorp employees many years ago too...and look what happened (is happening). Yet MegaCorp goes on.
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Retired Jun 2011 at age 57

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