But this budget deal negatively impacts current and future military retirees. This part of the budget deal affects the COLA (cost of living allowance annual raises to keep up with inflation) for military retirees under the age of 62. As of right now, retirees receive a portion of their retirement pay in COLA; this deal will have those 62 and under receiving 1% less in COLA each year of retirement until age 62.
While 1% doesn't seem like much it ends up being almost 20% of retirement pay over 20 years. An enlisted military member who is, on average, age 40 and retires with 20+ years of service will stand to lose $83K over 20 years. A typical officer retiring at age 42 would lose $124K. How quickly that 1% adds up.
Military members depend on, and factor in, the full COLA as part of their retirement pay when they are planning for their future. Losing 20% of their retirement pay will negatively impact thousands of military families.
What makes this frustrating is Congress previously set up the Military Compensation and Retirement Modernization Commission last year. Promises were made that any changes to retirement would be 'grandfathered' in; current retirees and actively serving members were to be protected.
This budget deal allows no provisions for grandfathering in current retired and active military members.
As the spouse of a military member who just hit his 21-year anniversary and can retire at any time, I'm very concerned about how this deal is going to affect our future retirement savings. Joe has served honorably for 21 years and he, like all other military retirees, deserves his full pension.
Balancing the budget should not affect military retiree pay when there are other places that the budget could be trimmed. What about all the overseas spending support we give to other countries? What about the U.S. bomber planes coming in at $87 billion - 47% more than estimated?
You can read more in the following articles: Budget Deal Hits Military Retirees With Pension Cuts and Military Retirees: You Betrayed Us Congress.
According to this article, the $7 billion in savings over the next 10 years wouldn't even go to deficit reduction or paying down debt, but instead to finance increased government spending! You can read this article Fact vs Fiction on Military Personnel Costs and The Truth About Military Personnel Costs to refute the false claims about the military personnel spending accounts in relation to the budget/deficit.
A Legislative Action has been set up through the Military Officer's Association of America to easily contact your state reps and let them know you don't agree with cutting military retiree pay. This form is so easy to use; just put in your name and address and hit send - it will automatically send to your state reps and the form is pre-filled (although you can change it to write what you want as well).
If you are a Twitter user you can can tweet about this using #keepyourpromise to spread the word. There is also a "Twitter Town Hall" online event tonight, Mon Dec 16, at 9pm EST.
2 comments:
Though my husband is not and has never been in the military, we've felt the pain of retirement through PERS (Public Employee Retirement System.) Because of decreases and whatnot, my husband's retirement has lost so much value that in 14+ years of money going in, what he has in there is equal to a little over two years worth of pay. Yup. Two years. Never mind that we have faithfully placed money in that account each pay, with it being matched by the park district he was serving at. There is the 1% pay increase every year that we're to be so incredibly grateful for (and we are thankful that it isn't a decrease) but that 1% works out to be about $1200 before taxes PER YEAR. By the time you tax the crap out of it and divide it by 12, it doesn't even come close to covering the increase of cost of living. We've decided that retirement is not an option. Sad.
We also felt the pain on it. It's really sad.
Military spouse education
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