mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
The US military is floating out a new flexible retirement plan that seem to be quite different than the current scheme. You want options? You got it.
MOAA: Military Officers Association of AmericaObservation Post – A Deeply Discounted Retirement
This “flexible” plan is an economist’s dream, relying heavily on computer modeling informed by personal discount rates for military populations going back to 1990. Discount rates tell economists how individuals are willing to trade current dollars for future dollars. The QRMC model, developed by RAND, assumes a servicemember discount rate of 15 percent, which means $100 paid now will be as attractive as $115 next year.
Much was learned from discount rates measured during the post-Cold War drawdown. Given the choice of accepting a lump-sum cash payment or an annuity that would last twice the length of their time in service, 90 percent of careerists chose the lump sum, even though its cost to the government was a mere fraction of the annuity option.
Similarly, thousands of servicemembers today, as they enter their 15th year of service, are accepting a $30,000 bonus to shift voluntarily under the less generous Redux retirement plan. In pocketing the cash, they cut the lifetime value of their retirement by an average of more than $300,000.
MOAA: Military Officers Association of AmericaObservation Post – A Deeply Discounted Retirement