2018 will see the U.S. Military launching a brand-new mission. This one is aimed at ensuring that those who are serving the nation also secure enough funds for their future.
The United States is getting ready for some really big changes in its official military retirement system, one that will impact several million existing and future members in service.
Military service is known to offer excellent pensions to its members, that is, those serving the U.S. Army, Navy, Coast Guard, Marines and Air Force.
Up until now, each military member was eligible to receive an assured pension equivalent to at least 50% of his/her base pay. However, in order to receive this benefit, the member was required to be in service for a minimum of 20 years. And unfortunately, most members don’t continue for that long.
Jeri Busch, from the U.S. Department of Defense, informs that people are constantly shifting jobs today and need retirement benefits which can be carried along.
Revolutionizing the old system
Busch has served in the Navy for almost 22 years and believes that the newly introduced retirement plan will enable many members to kick-start long-term savings. Further, this is also an important step towards hiring and retaining the talent needed to ensure the readiness of the forces.
“BRS” or “Blended Retirement System” is the name given to the new program that combines a definite contribution plan and a conventional pension. It almost resembles the 401(k) plan utilized in the private sector. From January 1, all those entering the U.S. military would automatically get enlisted in the newly launched BRS program.
In the meantime, approximately 1.6 million existing active duty National Guard and Army Reserve members need to make a critical decision. As 2018 comes to an end, members who have been in service for under 12 years need to decide whether they wish to stay in the traditional plan or shift to the new BRS program.
Taking greater responsibility for the future
For those who decide to opt-in, it would be vital to decide the amount of money they will contribute to their contribution plan- Thrift Savings Plan (TSP) offered by the federal government to government civilian staff for decades.
“Opting in” means that members would be taking a greater responsibility for future savings. They would start learning ways to safeguard their future and their personal retirement.