The U.S. military offers incomparable benefits to those who choose to serve — paid health insurance and housing, job security, and tuition assistance to name a few — however, when it comes to financial planning, service members are left largely in the dark.
Reforming the military’s retirement system is currently a hot topic in our nation’s capital. Both the House and Senate versions of the National Defense Authorization Act include proposals for retirement reform; the joint chiefs have weighed in; and the Department of Defense released a white paper last week outlining its position on the reforms. These proposals consist of two main courses of action: matching Thrift Savings Plan contributions for all service members similar to those available to what civilian government employees receive under the Federal Employee Retirement System, and a reduction in the multiplier used to calculate retirement pay after 20 years.
In 2013, nearly $104 million worth of food stamps were used at military commissaries, and according to a report from non-profit Feeding America, 620,000 households that included at least one soldier, reservist or guardsman, sought assistance with their food costs. Meanwhile, that same year, the Department of Defense’s Family Subsistence Supplemental Allowance, or FSSA — the program designed and funded by the DoD to keep military families from having to use food banks — rejected 96.6% of all applications.
The Military Compensation and Retirement Modernization Commission released its long-awaited final report on Thursday, offering a number of findings and recommendations for improving “the fiscal sustainability of the compensation and retirement systems.” These recommendations include moving from a defined benefit to a blended defined benefit and defined contribution retirement system, changing the health care system for family members and retirees, and an affirmation of existing quality of life programs. Fundamentally untouched are current military pay tables and allowances for housing and subsistence.