According to the non-partisan Pentagon Advisory Board only 17% of military veterans ever collect a pension for their military service. This small but vocal group is screaming to ensure that the current system is left untouched.
As a military member with more than 20 years of service, I am glad that they’re fighting for the current benefits, but I also appreciate the great cost to the Nation for this plan, and the fact that many who have served, and some who have faced combat, only have basic veterans benefits and no retirement contributions. Fortunately we did gain access to the Thrift Savings plan about ten years ago, but before that we were completely left out.
So, do you think we should throw out the current system and install the system that the board recommended? This would have the government contribute about 16% of your base pay to a TSP account for each year of service. You would likely not be required to contribute, but would have to opt out formally with automatic enrollments deducting about 3% of your base pay to add to the government contribution.
While you would not be able to withdraw this money until you are 59 1/2 without paying a penalty, you would be able to borrow 1/2 of the value of the account, up to a limit of $50,000 with a pay-back period of 5 years, or as much as 15 years for the purchase of a home.
I see great value in giving all veterans a benefit for their service, particularly if it installs a habit of savings right from the very beginning of their careers. On the other hand, this move fails to account for the fact that military members pay a high personal price for serving, and we are unlikely to be able to continue to work into our 60’s as military members.
What do you think we should do?