This budget deal that was recently announced is better than the other ideas involving military retirement that some have been trying to make happen, but it is still a major blow to US military retirees and soon to be retirees:
The yearly value of a 20-year military retirement would be cut for the current force steadily until age 62 under a COLA cap provision in the “bipartisan” budget deal struck by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.), the House and Senate budget committee chairmen.
The cumulative effect would be to cut the lifetime value of military retirement by roughly $83,000 for a typical enlisted member who retires at age 40 after 20 years’ service. The typical officer retiring at age 42 after 20 would lose about $124,000.
That’s according to retired Air Force Col. Michael F. Hayden, director of government relations for Military Officers Association of America. Hayden also serves are co-chair of The Military Coalition, an umbrella group of more than 30 military and veteran associations, rushing to try to kill the deal.
Targeted in Ryan-Murray deal is full inflation protection for “working age” military retirees, those younger than 62. Retirees 62 and older would continue to get annual cost-of-living adjustments (COLAs) that match inflation as measured by the government’s Consumer Price Index. [Stars & Stripes]
You can read more at the link but as the article shows military retirees are basically paying an additional $83,000-$124,000 in additional taxes to the government by not being paid this money during their retirement. This deal also effects new government hires retirement as well but not those currently working who have over 5 years of service.