Will Your Family Stay for 20 if Retirement Changes?


Before the magic ten year mark, military retirement is so far away it doesn’t make any difference in a couple’s decision to leave the military.

After the magic ten year mark, leaving the military on purpose before retirement seems like throwing money away. Substantial money. Money that would last you the rest of your life.

That formula may change for new generations of military families.

The Pentagon this month released a new proposal to get rid of the current retirement plan in which service members get nothing if they leave the service before the 20-year mark.

The new proposal offers three incentive pays:

1. A 401(k) style contribution to all troops starting at the two year point.

2. A retention bonus at the 12 year mark equal to two month’s pay for enlisted and six month’s pay for officers

3. A “potentially large” lump sum at the 20 year retirement.

The proposal also suggests two options for retirement pay at the 20 year mark -- both of which result in lower monthly checks. One of the options offers “partial monthly payments” capped at 25 percent of the service member’s basic pay.

And it's unclear whether or not such a proposal would impact current service members, or only those who join after any changes to the system are made.

While this is just a proposal and not a done deal, I can’t help but wonder how changes in the retirement pay will affect the way families make their decision to stay in or leave the military?

That mid-career point is the moment at which the demands of the family and the demands of the job are so great that service members are stretched to an unraveling.

Under the current system, the lure of retirement keeps the service member with 10 plus years of experience in place. No matter how competitive or deployment-laden or PCS-pocked or grinding or meaningless the service member’s job might be at that moment, the all-or-nothing retirement pay keeps service members in their jobs during the years the civilian world wants them most.

As the research shows, the promise of retirement also allows the military spouse to keep supporting the decision to stay military -- an important retention tool.

So will a bonus be incentive enough to take on three or four more deployments when you have already done three or four deployments?

Will the proposed “partial” benefits be lucrative enough to give up the spouse’s job or incite you to move your teenagers more than once?

Will the prospect of a little extra income years from now be enough to keep the service member working at a job at the level where you fix stuff that goes wrong all day, every day?

Will any of it be enough to agree to that unaccompanied overseas tour during your daughter’s senior year of high school?

Or will it all start seeming very small and very far away -- as far away as a wattle? As distant as a heart attack? As unlikely as assisted living?

I know all the arguments for retirement reform. But while we are debating this, we need to keep in mind that there is competition for these mid-level service members.

We need their on-the-job experience in the military. We need their hard-won professional knowledge. We need their forbearance.  We need their commitment.

Will these new systems be enough to keep the people we need the most? I’m just not sure. And when it comes to keeping experienced service members for complicated jobs, I want to be very, very sure.

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