Hoping to hear some opinions on the military's new blended retirement system. Run down of the basic differences:
However, this means those who leave the service get some retirement benefit. So it makes sense to anyone who thinks there's the slightest chance they may not make 20.
Thoughts?
The only numbers which matter are "1 out of 6": the percentage of servicemembers who qualify for a pension. Anyone who's comparing the High Three pension numbers to the BRS pension numbers is ignoring the probabilities & statistics-- or supremely overconfident in their likelihood of maintaining their morale (and their health) through at least one future drawdown.
Since we're all humans who are irresistibly attracted to number-crunching instead of statistical analysis, I'll point out that BRS Continuation Pay can do a lot of compounding to narrow the difference between BRS and High Three pensions. As the individual services get a handle on their retention numbers in 2018, we'll see higher multiples of CP for some skillsets. Asset allocation in the Thrift Savings Plan makes a difference over 2-3 decades, too.
BRS is designed to be revenue-neutral compared to High Three. Overall, I think it's much better to encourage servicemembers with short-term incentives (matching TSP contributions, GI Bill, bonuses, GI Bill transferability, Continuation Pay, other bonus contracts) instead of expecting people to cliff-vest at 20.
Kate Horrell has rounded up all the BRS calculators and posts, both from DoD and from eight other milbloggers (including me).
http://www.katehorrell.com/learn-about-the-militarys-new-blended-retirement-system/If anyone reads all 30+ links and still thinks High Three is the better choice, please post here.
