Just to clarify: normal retirement still happens at 20 years, but the payout is 40% if you took redux when you hit 15. With the current drawdowns in personnel some prorated retirements are happening between 15-20 years.
Ah 15 years was 40%...that makes sense.
There is serious discussion of revamping the military retirement system. I'm ambivalent at this point because I'm so far into my career if I make it to 20 years I'll get the current 50% pension. I also max out my TSP contributions. The basic jist of the reform plan is to more heavily rely on the TSP and give service members a match and give them a smaller pension at 20 years. It's something like a 5% match and 40% pension at 20 years. One of the military-themed Facebook groups I subscribe to posted the latest reports from WaPo to start the discusssion. Half the comments were internet rage screaming "they're stealing from us!" and "the stock market is too dangerous to use!" It hurts my head when I correct some of these people with easily researchable facts about the stock market. They either don't know how the TSP works "It's government run so they can just take your money when they want!" or "There aren't enough variety of funds, they're shortchanging us!" or think using the TSP means just sticking with low-yield bonds. Another popular comment was "you're taking money out of their pockets by making them fund their own retirement!"Hm, that's interesting. I got in in 1992, and I swear they already changed the retirement to 40% at 20 years by then. But maybe not? (I got out in 1997, so it wasn't part of my long term planning.)
The 20-year retirement is still 50% at 20 years, and 2.5% more for every 2 years after that. It drops to 40% if you're an NCO who took the $30k redux cash payout at 15 years.
A little more historical clarification for mm1970:
You were in the military during the years when REDUX was the retirement plan. It started in 1986 and was changed in 1999-2001. During your time, the pension started at 40% of base pay for 20 years of service (instead of 50%), and rose to 75% by 30 years.
REDUX was a bust. The post-Cold War drawdown reduced the military by 25% and the rise of the Web economy made it a lot easier to make the transition to a civilian career. The result was that the "wrong" servicemembers were getting out of the military and the "wrong" ones were staying in. (I applied for TERA three times but was turned down every time. The submarine force cut too deeply.) In 1999 the Joint Chiefs testified to Congress that retention was going to get steadily worse unless REDUX was ended.
The result is the High Three pension (50% of the average of the highest 36 months of pay) for 20 years of service, rising to 75% at 30 years of service. However servicemembers could still elect the "Career Status Bonus" at 15 years of service. $30K cash at that anniversary meant that you'd be on the REDUX retirement. Today the bonus is still $30K, despite 15 years of inflation erosion.http://the-military-guide.com/2012/08/16/over-a-decade-later-redux-still-sucks/
Because the military pension system needs to be more complicated ([/sarcasm]), there's also the Temporary Early Retirement Authority. That was used during the 1990s drawdown and it's been brought back (in very limited scope) for this drawdown. The minimum length of service is 15 years. The calculation is a PITA, but essentially a TERA retirement is 2.5%/year of the High Three base pay, minus 1% (not a percentage point but a one-percent reduction) for every year short of 20. At 15 years of service, this works out to 35.625% of the High Three average of base pay. The detailed calculation is on page 3-37 of the DoD Financial Management Regulation at this PDF link:http://comptroller.defense.gov/Portals/45/documents/fmr/Volume_07b.pdf
That kind of shit is one of the most irritating aspects of military culture to me. The DoD is full of people who are politically/fiscally conservative and rage on and on about the advance of socialism in 'Murica, but expect their finite term of service to translate to essentially infinite benefits (and feel it's the government's job to lower the price of gas). Most don't know a got-dam thing about personal finance, economics or fiscal policy beyond some partisan talking points they heard on TV, but feel qualified (and constantly compelled) to offer incessant commentary on all of the above. Many have never lived outside small towns in the South but glibly prescribe socioeconomic policy solutions for urban areas because it worked in their village of 25,000. Or even worse, they actually went to some of those places and still think their perspective and life strategy is the only valid one.Government bureaucracy and wasteful... unless we are talking about keeping an inflated number of people on payroll and make them do drills to keep them busy between wars.
I should stop ranting... I could go all day tho :P
Yup, I can imagine that many of these military men and women would howl with hackles should there be a proposed move to lower our standing army.
The US military has shrunk about 15% in the last 4 years.
The drawdowns after WWII, Vietnam, the Cold War, and Afghanistan/Iraq are four completely different types of drawdowns.
For example, the first two drawdowns included servicemembers who were drafted and wanted to quit as soon as possible. After Vietnam, the military reorganized the Reserve/Guard forces to support the all-volunteer active-duty services. (Some cynics claim that this was done to keep the President & Congress from going to war without them.) The Cold War's "peace dividend" eliminated a huge number of manpower-intensive legacy platforms and weapons systems, as well as most of the crews and technicians who used them.
The current drawdown differs from the other three. It's being artificially forced by sequestration but it's also seen as an opportunity to automate or outsource a number of tasks that used to be done by uniformed military.
I'm skeptical that a numerically smaller and more automated military can accomplish as much as the larger forces. (However I'd prefer to have a military so small that Congress hesitates to use it and the State Department actually has to do their job.) Because of the automation and outsourcing, there's still a huge difference between the military after today's drawdown versus the military that was left after the Cold War drawdown. I don't think we can compare the two.
be compared is the cost of healthcare and veteran's benefits after each drawdown. Because so many more servicemembers of this generation survived wounds that would have killed them even in the 1990s, the VA's budget is going to keep rising for another 30-40 years.