Does the Gov. match for military members?

Military Discussion.

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Cstone_88
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Does the Gov. match for military members?

Post by Cstone_88 »

I have been told a bunch of different things. Thanks guys!

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rcozby
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Re: Does the Gov. match for military members?

Post by rcozby »

"Currently, members of the uniformed services do
not receive matching contributions. However, the
secretary of each individual service is allowed by law to
designate particular critical specialties as eligible for
matching contributions under certain circumstances."

Go here (p. 5) for more info: https://www.tsp.gov/PDF/formspubs/tspbk08.pdf

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Navig8tor
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Re: Does the Gov. match for military members?

Post by Navig8tor »

Navig8tor
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crondanet5
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Re: Does the Gov. match for military members?

Post by crondanet5 »

Anybody on your dock going to take it?

wisepierre
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Re: Does the Gov. match for military members?

Post by wisepierre »

There will be no match until FY2018, and it will be optional for all current service members to elect into.For the first few years it will be 1%, and after a number of years, will bump up to 5%. When the bump will occur is still bein worked out and adjusted.

Note that the 5% match comes with a reduction in pension from 50% base pay upon retirement, to 40%.

Currently there is no match.

crondanet5
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Re: Does the Gov. match for military members?

Post by crondanet5 »

Anyone smart enough to calculate what a 5% match would do to equal receiving a 50% pension after 20 years? Use life expectancy of 76.

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Re: Does the Gov. match for military members?

Post by crondanet5 »

Nav how you doing with the Mississippi flooding? That's in your bailiwick isn't it?

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Relevant
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Re: Does the Gov. match for military members?

Post by Relevant »

crondanet5 wrote:Anyone smart enough to calculate what a 5% match would do to equal receiving a 50% pension after 20 years? Use life expectancy of 76.

The math doesn't work. This is simply another transfer of risk and a decrease in benefits to the employee. Not unlike the replacement of CSRS with FERS.

crondanet5
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Re: Does the Gov. match for military members?

Post by crondanet5 »

Correct.

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Navig8tor
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Re: Does the Gov. match for military members?

Post by Navig8tor »

crondanet5 wrote:Anybody on your dock going to take it?


The few folks around here who I've heard talk about it aren't impressed. The "government match" isn't going to happen for another couple of years, and then it's not going to be enough to really matter for an employee who is on the lower end of the pay scale...which is an exact intention of the program.

I recently received an email alert from the MOAA indicating that the Pentagon has made a move to lengthen the time period from accession to actually receiving the "government match" to 5 years. Meaning, you gotta be on active duty for five years before you START receiving the match. This scheme goes against the very fabric of the initiative used by the Pentagon to sell this crap to the service branches. I'm not quoting verbatim; however, it was something along the lines of "To give new members an immediate benefit of having a 401K-type investment vehicle that they can take with them..." >>> If you don't make crap, you can't save crap >>> 0+0=0 <<< That's a load of crap!

You aren't going to get a government match until you've been in 5 years??? Most young folks don't come out of the gate putting money into the TSP so the Pentagon is getting exactly what they want out of this deal: reduced retirement benefits and no money out of their pocket in a government match for the first five years.

With only 17% of military folks actually reaching retirement, in my opinion, they are really the only folks being effected by this deal. The government will save MILLIONS OF DOLLARS in retirement benefits by spending much less in a small percentage TSP match to the 83% of people who don't make the military a career. Couple that with their recent move to put a stop to the transfer of 9/11 GI Bill benefits to dependents and WOW, they are pulling back all kinds of money that has more or less been some of the few "perks of a military career."

How much would they save if they bought two less F22's this year? How much would they save if they stopped paying Senators who work 160 days a year, and accomplish very little when they do work, $190,000/yr?

Fiscal responsibility...WHAT IS THAT???
Last edited by Navig8tor on Fri Mar 18, 2016 6:43 am, edited 1 time in total.
Navig8tor
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USCG, RET

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Navig8tor
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Re: Does the Gov. match for military members?

Post by Navig8tor »

crondanet5 wrote:Nav how you doing with the Mississippi flooding? That's in your bailiwick isn't it?


River flooding has pretty much subsided. There is a lot a farmland flooded but for the most part the water is receding. Shouldn't see much of a winter snow/ice melt north of Tennessee this year...it's been a "warm" winter.

This year, I see an extreme LOW water coming. Either way, flooding or extremely low...keeps me busy.
Navig8tor
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crondanet5
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Re: Does the Gov. match for military members?

Post by crondanet5 »

The barge movers are screaming about missing navigational aids.

crondanet5
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Re: Does the Gov. match for military members?

Post by crondanet5 »

Back to the new contribution program. So say an E-4 leaves the military with 8 years in. Do they continue to contribute to the program after leaving government service? Does the government put in money every year thereafter? Can they make IFTs? I am not sure how 8 years of low TSP contributions and 3 years of government 5% matching yields $800,000 at age 60. Anybody got a handle on this?

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Navig8tor
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Re: Does the Gov. match for military members?

Post by Navig8tor »

crondanet5 wrote:Back to the new contribution program. So say an E-4 leaves the military with 8 years in. Do they continue to contribute to the program after leaving government service? Does the government put in money every year thereafter? Can they make IFTs? I am not sure how 8 years of low TSP contributions and 3 years of government 5% matching yields $800,000 at age 60. Anybody got a handle on this?


Bottom line is IT DOESN'T. I've been putting in the max contributions for right at 15 years, and averaging a 10% annual return (if removing 2008 - which I mostly recouped), yet I'm no where near $800K in my TSP account.
Navig8tor
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Navig8tor
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Re: Does the Gov. match for military members?

Post by Navig8tor »

crondanet5 wrote:Back to the new contribution program. So say an E-4 leaves the military with 8 years in. Do they continue to contribute to the program after leaving government service? Does the government put in money every year thereafter? Can they make IFTs? I am not sure how 8 years of low TSP contributions and 3 years of government 5% matching yields $800,000 at age 60. Anybody got a handle on this?


Assuming a CUMULATIVE AVERAGE of base pay for an individual who came in as an E2, was promoted to E3 and E4 the 2nd and 3rd year respectively, and contributed 5% of base pay per year for 4 years on an average base salary of $25000 (per the pay scale)...that's a shade over $100/month for 4 years...if said named individual left that money in the TSP until age 60, had no further contributions, and earned 8% per year...the account balance would be worth about $113,000.

#1 Most kids are not going to contribute 5% of their base pay. They need that party money when the finally get away from their parents and away from home. Sure, there will be a few who do; however, based on my own 30-yr career, during which I've counseled hundreds of new hires on savings/investment, the overwhelming majority of young people feel "they don't make enough to save." I have a feeling the majority of first-term enlistees will contribute the mandatory 1% and leave it at that. As well, they can also opt out of doing that providing they opt out every year.

#2 The market won't earn earn 8% per year for 40 years running

#3 If the Pentagon pushes the 5-year service time before getting a match, most young enlisted people will never see the match. Most do a tour and get out.

#4 Providing folks do stay in 5 years and begin to get the match; it's going to take well more than a $100/month contribution to attain $800K.
Navig8tor
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