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Nangulo

 

Retired Military contribute 7% to retirement  

 

So people believe military retirement is given to people yet those people are wrong it is a contribution system the same as SS.

 

I steamed in the USN from 1977 to 2006 and at no time did my LES reflect a mandatory deduction for my own retirement pay.  Are you thinking of voluntary TSP deductions?  That didn't start for the military until around 2000.  I contributed to it (basically, a 401(k)) but, again, it was voluntary, and had no bearing on retirement pay.

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That benefit sheet is just a congressionally mandated propaganda tool to attempt to educate military members on the value of the benefits they receive.Some kid fresh out of HD in the military sees his

I did 4 years in the Marine Corps. I got out in 1969 and never looked back - now I am 100% service connected, and on Social Security and have a small pension plan.  I don't loose any of my Disability

Got this in may email today - thought I would pass it on   http://capwiz.com/dav/issues/alert/?alertid=62354151&queueid=[capwiz:queue_id]         Important Legislation on Con

USMC-Retired

By Law military members every year are issued a mandatory benefit sheet.   This breaks down how much money you earn in real terms.  How much your your health care is worth, your commissary benefits are worth, and so on.  

 

This sheet gives you the total dollars that you actually earn.  Congress then uses this sheet to determine pay raises and benefits to the servicemen and women.  

 

On this sheet it states your retirement is a 7% deduction from your pay.  It changes with your pay grade and time in service.  So do not fool yourself into thinking that 7% is not discussed when they talk about pay raises and such for the military.  

 

Even military members to do not realize the dynamics of that little 7%.  Yet if it were not there then your retirement would be worth nothing.  However is calculated as a benefit by a 7% deduction per month for every year.   This is exactly how congress bean counters calculate it and you should also.  So why they say they are taking from your military retirement.  That benefit sheet says you paid into it and it is rightly not theirs to take. 

In the same fashion that SS would not be theirs to take either.  Yet if they did that you can already see how the huffing and puffing started.  

Edited by USMC-Retired
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Nangulo, don't confuse the LES (leave and earnings statement) with the annual mandatory benefits statement. The LES only has very basic information on it, and in no way gives all of your financial information.

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Nangulo

Nangulo, don't confuse the LES (leave and earnings statement) with the annual mandatory benefits statement. The LES only has very basic information on it, and in no way gives all of your financial information.

 

I'm not.  The way Tim stated it, it's like my military pay had a separate deduction for my own retirement.  It didn't.  There's a FICA deduction and a Medicare deduction and a Federal Income Tax deduction but nowhere on my LES was there a deduction for my own retirement.

 

The benefit statement was only a rough guide into what else you received in benefits, not what you were actually compensated for.  That is, you had to use it to benefit from it.  Many times I found Wal Mart had better prices than the NEX (BX/PX), so I shopped there, yet my benefit statement said I got an equivalent amount of money in benefits from having access to the NEX. 

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USMC-Retired

If you use or not is not the issue. Also it is not a rough guide it was congress deems you make as a military member.   The issue is Congress uses that 7% when they come to figure out military pay and if it is on par with the Civilian Sector.  Thus if they use it for that reason your pay was reduced by that amount in addition to all the other benefits, if you use them or not.  

 

Which is similar to the projected benefit sheet you receive for SS and your future retirements. 

 

It is a primary tool congress uses in calculating your pay by the weight of benefits you are receiving.   

 

So you can not say you are not paying for it otherwise then that sheet would be a lie of facts regarding what you are actually receiving, contributing or could receive. 

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SkyMan

That benefit sheet is just a congressionally mandated propaganda tool to attempt to educate military members on the value of the benefits they receive.Some kid fresh out of HD in the military sees his paycheck and says "Gee, this doesn't pay very well."  Do he gets out and gets a civilian job that pays more and says "Gee,  I have a bigger paycheck but I was living better in the military, what gives?"  I've seen and heard that many times.  That info sheet is just that though, info, and should have a warning label that it is for comparative purposes only.  The retirement may have been valued at 7% but it doesn't mean you or anyone else paid 7% into it.  It's worthless to the guy that plans to get out after 12 years or anything less than 20 years.  I've known a few guys that left after 18-19 years.  One was a Navy O-4.

 

With SS you pay a little your whole working life and earn the benefit to get that back and maybe more.  With military retirement it's moree like you put nothing into it until you reach 20 years and only then have you earned the benefit.

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Here is some info that might clarify a few things.  The following is from http://usmilitary.about.com/cs/generalpay/a/retirementpay.htm, there is several pages of explanation. To include military disability verses VA disability( there is a difference)  and retirement benefits as well as SS.  Might be a good read for those who want to know the scoop.

 


Understanding Military Retirement Pay

By Rod Powers, About.com Guide

.

See More About:
military retirement pay
military retainer pay
recall to active duty for retired members

 

 

 


The military retirement pay system used to be easy to understand: You put in 20 years, and you got 50 percent of your base pay immediately upon retirement. You put in more than 20 years and you got 2.5 percent more for each year of active duty after 20 years (up to 75 percent).

 

During the draw-down, Congress decided military retirement pay was too simple, and decided to complicate it. Congress started with small changes, moving the annual Cost-of-Living Allowance to January 1st, instead of October 1st, but then got serious and dug in to make some major changes. Here are some basics of the military retirement pay system that you should be aware of:

 

For Navy and Marine Corps members, you are considered to be a "retired member" for classification purposes if you are an enlisted member with over 30 years service, or a warrant or commissioned officer.

 

Enlisted Navy and Marine Corps members with less than 30 years service are transferred to the Fleet Reserve/Fleet Marine Corps Reserve and their pay is referred to as "retainer pay".

 

Air Force and Army members with over 20 years service are all classified as retired, and receive retired pay.

 

When a Navy or Marine Corps member completes 30 years, including time on the retired rolls in receipt of retainer pay, the Fleet Reserve status is changed to retired status, and they begin receiving retired pay.

 

Don't become confused. The above is for information purposes only. The law treats retired pay and retainer pay exactly the same way.

Military retirement pay is unlike civilian retirement pay systems. First and foremost, there is no "vesting" in the military retirement system. There is no special retirement accounts, no matching funds provision, no interest. You either qualify for retirement by honorably serving over 20 years in the military, or you do not. If you are discharged from the military with 19 years, 11 months, and 27 days of service, for example, you do not qualify for retirement pay (other than a few "early retirement" programs, which were designed to reduce the size of the armed forces).

 

Another significant difference between military retirement, and civilian retirement, is that a retired military member can be recalled to active duty. According to Department of Defense (DOD) Directive 1352.1:


•Involuntary Order to Active Duty. The Secretary of a Military Department may order any retired Regular member, retired Reserve member who has completed at least 20 years of active military service, or a member of the Fleet Reserve or Fleet Marine Corps Reserve to active duty without the member's consent at any time to perform duties deemed necessary in the interests of national defense in accordance with 10 U.S.C. 683 (reference (b)). This includes the authority to order a retired member who is subject to the Uniform Code of Military Justice (UCMJ) to active duty to facilitate the exercise of court-martial jurisdiction under Section 302(a) of reference (b). A retired member may not be involuntarily ordered to active duty solely for obtaining court-martial jurisdiction over the member.

 

In all honesty, however, the chances that a military retiree would be recalled to active duty after age 60, or who have been retired for more than five years, are slim. DOD categorizes retirees into three categories, with category I as the most likely to be recalled to active duty, and category III as the least likely. Individuals over the age of 60 are in category III, which is the same category as individuals with disabilities. Recall of category III retires is extremely unlikely. According to DOD, the categories are:


•Category I. Nondisability military retirees under age 60 who have been retired less than 5 years. E1.1.3.2.
•Category II. Nondisability military retirees under age 60 who have retired 5 years or more.
•Category III. Military retirees, including those retired for disability, other than categories I or II retirees (includes warrant officers and health care professionals who retire from active duty after age 60).


Pay Computation


For members who entered active duty or on prior to 8 September 1980, retired pay amounts are determined by multiplying your service factor (normally referred to as your "multiplier") by your active duty base pay at the time of retirement.

If you entered active duty after 8 September 1980, the base pay is the average of the highest 36 months of active duty base pay received. Additionally, your initial (first) cost-of-living adjustment will be reduced by 1 percent.

The "multiplier" for the above two plans is 2.5% (up to a maximum of 75%). For example, a person who entered active duty on or before 8 September 1980, and spent 22 years on active duty, would receive 55% of his/her base pay as retirement or retainer pay. A person who entered active duty after 8 September 1980, and spent 22 years on active duty, would receive 55% of the average of the highest 36 months of active duty base pay.

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USMC-Retired

So how is that different if you earn 39 social security credits you get zero.  It is earn 40 or nothing.   Same here you do 20 years or get nothing.  Just the system does social security give your 7.5% back if you only earned 39 credits?  The answer is no they do not.  Same here do 19 years they are not going to give you crap either.  

 

So please explain how a person with 39 SS credits is different then a military service member with 19 years.  

 


 


 

The number of work credits you need to get retirement benefits depends on your date of birth.

If you were born in 1929 or later, you need 40 credits (10 years of work). People born before 1929 need fewer than 40 credits (39 credits if born in 1928; 38 credits if born in 1927; etc.)

 

 

 

It may be a propaganda tool to keep people retained yet they use that number when they calculate your pay raises based on  civilian sector.   Additionally they say your time is worth 7% each month and that is an added benefit each and every month. Towards an ultimate goal of retirement.  Mine in 2007 before I retired said 7% when it was actually 0%.  That and the 5 years leading up.   So physically you may not contribute but they (Congress)  that each month your retirement is worth that.   Congress then withholds pay raises based on that also.  It goes into the huge pot of benefits that equal your total pay.

Edited by USMC-Retired
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SkyMan

So please explain how a person with 39 SS credits is different then a military service member with 19 years.

Well, the service member with 19 years does qualify for SS having worked the 40 quarters in the military and there is some boost to the SS amount due to military service.

 

 

It may be a propaganda tool to keep people retained

Retention is a motivation but it's also an attempt to raise moral by reminding you of all the wonderful benefits you receive in the military so you don't focus solely on your dismal paycheck.  The first termer may not see any value to the retirement program as they plan to get out or just consider it too far down the road to worry about.  Not sure where they came up with the 7% number but it's probably an average of all military members including 1 termers all the way up to those that go to full retirement.  Now telling a guy with 1 or 2 years the retirement system is worth 7% of his pay is pretty hard to swallow and the guy with 19 years is looking at it as a pretty large percentage of his pay but they just average it out for each year as if the 1st term guy is already planning to stay in 20 years or more.  I actually did know an E-8 with about 22 years that was married when he first enlisted and told his wife that if he signs up he might as well enlist for 30 years because he's going to stay the full term.  Most, however, make up their mind as they go along.

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Nangulo

The 7% is a made up number, just like the rest of the benefits sheet.  If you're a one-termer, you do't get shit.  Where is that 7%?  It's not contributed to any retirement fund.  You go home with nothing.  Just like the commissary and exchange benefits.  They're made up numbers from some algorithm that was invented based on your DEERS info.  I have a wife and one kid, so my exchange benefits mean THIS much to me, when I don't even shop at the exchange.  What kind of benefit is that?  Where does the 7% come from?  Not my paycheck, unlike SS and Medicare.

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USMC-Retired

It is not made up.  Have your read any of you the congressional pay raises discussions?   Each and every single one they talk about the benefit of retirement.  They throw that single number around.   It is a calculated number and they calculate it when they discuss your pay raises.  You dismiss the number if you like yet now they are talking about doing away with the retirement system entirely.  If you think that is not deducted from your pay check your are very narrow in thinking.  You have to move your thought from your pay check to how congress discusses your pay check in real value.  They do not see you or your paycheck just numbers and your retirement has a number 7%. If that number was zero they could then afford more pay raises.

 

19 years is a joke they can not force you out after 18 years.  Unless you commit some crime.   However 39 social security credits get you exactly nothing.  

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Nangulo

They are talking about going to a 401(k) system, not doing away with retirement.  It only means you don't get your money until your 59 1/2.  You still get your money, only later.  And even the one-termers would get their money, which they don't get now.

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USMC-Retired

Do you know the number they are using?  (hint it comes after 6) See by moving the 20 year guys to 59 that affords them to let everyone in on the pie. 

Edited by USMC-Retired
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Nangulo

i

See by moving the 20 year guys to 59 that affords them to let everyone in on the pie. 

 

Being a Marine of 20 years, taking care of your troops, wouldn't you want that?  Even the one-termers would get a piece of their 7%.  Right now, they get squat.  I'd prefer my sailors got something for their service because even the single-termers earned something for their service.

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