The Redux plan sucks a big one! Career military men and women, both officers and enlisted, are being cheated out of the retirement pay that they've earned with their years of service to our country at a time when the United States, along with the rest of the world, is in economic free fall!!! What an egregious way to pay these people back for their years of faithful and dedicated service!!!!!
It is a choice, they don't have to take it. It's sad that they have to dumb down the soldiers like this. Aren't they old enough to make the decision on their own if it is right for them? Everyone is briefed on what it entails
I am sure (before this crisis) that someone could have taken that bonus, reinvested it, and come out way ahead of the 350,000 they would have made had they left it in.
Most soldiers that retire at 20 years are young enough and go out and start their second careers. They may not need that extra money at retirment but may need it to send children to college while they are in, pay off some bills, or use that as start up money for their own business.
And there are no guarantees that they will live a long life to enjoy the full benefits of their military retirement. That bonus could be the cushion that their family needs (if saved or invested) if an early death occurs and retirement benefits are stopped or reduced to SBB.
Sure there will still be those that blow it on something not considered practical, but that is their choice as an adult. If they are old enough to go over and fight for our country, they are old enough to make their own decisions about their money.
There are too many variables to say that everyone is losing and it it wrong for everyone. Every soldiers circumstances are different.
As for investing it and doing alright, that would have taken so high-risk / high-payoff to make up the differnce.
The normal rule on doubling your money uses 8 years, which is not a lot of risk. Lets say you take that $30k and invest it, taking the money at age 38 (20 year retirement) Age Value of investment 46 $60k 54 $120k 62 $240k 70 $480k 78 $960k - assuming you live to the median age AND do not tak ANY money out of your investments the entire time before you die.
The numbers look good on the surface, but are they realistic?
Given they numbers crunchers saying you lose about $300k under REDUX, you are living to age 64-65 WITHOUT any use of that 'retirement money'.
Given that most military start their families while in the military, the need to pull money out for the 'kid' starts at or shortly after that 20 year retirement.
Probably the biggest inequity in the Military Retirement system is that if you put 20 years of stress and hard living (even if you don't get shot at), if you die early your family loses that retirement that you invested.
As for the SBP, if the service member out lives their spouse, you don't get a refund for that either.
Maybe they shoudl adopt the congressional retirement plan for service members instead. That or put congress under the military retirement plan.
"Next week the Military Coalition, a consortium of 35 military and veterans associations, will urge Congress to repeal the Redux bonus offer as a bad deal for almost any careerist enticed to take it."
I hope it works, this is the craziest thing ever asked of any careerist, thats like asking them to stab themselves in the foot, or take money out of your pockets and give it back. $30,000 dollars will last just about as long as a F--t in high winds. Do yourself and your family a favor, do your twenty, retire and draw full pension.
In 1994 I applied for the VSI/SSB program to end my military service. Basically a compensation package to leave the service. I had been in the Army for 9 years. I was disapproved and was told it was because I was promotable. I was an E-5(P). There were also personnel in my unit at that time who took the 15 year early retirement. I am glad now that I was dissapproved even though I was just under the 10 year mark. Within 90 days I received a letter from the Department of the Army congratulating me for being selected to attend the United States Army Drill Sergeant School! I went on to serve 20 years and reach retirement. Being a Drill Sergeant was also pretty cool too! It's a choice, not a requirement. Sacrificing the future for the here and now; sound familiar? Anyone who has served for several years knows that the military always dangles a carrot whenever it's time to re-enlist, ETS, ect. The service-member has to make the best choice for themselves. If they regret their decision afterwards they need only look in the mirror...
While anyone who has served in the military for 15 years should be able to do simple financial calculations which reveal Redux is a horrible long-term investment, financial predators abound. While I wouldn't go so far as to say this option should be taken off the table, I believe members should be explicitly offered an opportunity to seek unbiased financial counseling before making this decision. Clearly those who accept this offer are, for whatever reason,are allowing emotions to cloud logic.
Admiral Mullen has been fed too well for too long and he lost touch with the very people he suppose to lead. Does he really understand what it's like to live on a enlisted salary or retirement?.I don't understand his logic or math. Common sense tells everyone else that the Redux plan is not in the best interest of man and women in the service. The adage, if it ain't broke don't fix it fits well here. The more you tinker with the retirement system the more it looks like you don't want a professional military service which works rather well. Admiral Mullen, whose side are you on? The people who make you look so well or the politicians who want everything for nothing?
It seems to me that Adm. Mullen has forgotten his military leadership training. My Navy leadership training included the basic and often qouted words of Adm. Tommy Truxton: "TAKE CARE OF YOUR MEN." It sounds like Adm. Mullen has forgotten that because Redux is NOT a good deal for his men. It may be a good deal for the military retirement budget since it will save money but it isn't taking care of the troops.
