4 members / 295 guests (24 hours)

An Interesting IDB update! And how IDB got even faster.  IDB is fast, reliable, and FREE to use. Just join and start posting!

Military retirement is about to get a lot more complex

Military retirement is about to get a lot more complex

More than 1 million members of the military will start 2018 needing to make an important financial decision, as the government rolls out the biggest change to military retirement since World War II.

Members of the US Army, Marines, Navy, Air Force and Coast Guard with fewer than 12 years of service will have to choose whether to stay on an all-or-nothing path toward a traditional pension after 20 years of service or to opt for a new "blended" retirement system that Congress approved as part of the 2016 National Defense Authorization Act.

The new system combines a 401(k)-style plan with a continuation bonus after 12 years of service and a traditional pension (albeit less generous than before) after 20 years. The upshot: Those who don't reach the 20-year milestone required to qualify for a pension -- which amounts to more than 80 percent of those who serve -- will no longer leave with nothing saved for retirement.

Under the new plan, those who do stay for 20 or more years will see a 20 percent cut in their pension payouts, though the difference should be offset in part by the contributions to the plan's 401(k)-style component. The changes, which amount to a test case for entitlement reform in the civilian world, are expected to save taxpayers billions and also boost recruitment efforts for millennials, who tend to change jobs more often but are reluctant about putting off saving for retirement.

Continued: https://www.cbsnews.com/news/military-retirement-plan/