Blended retirement system

1,805 Views | 7 Replies | Last: 6 yr ago by TheCougarHunter
bigtruckguy3500
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Working my way through the online training.

Does the better option really come down to if you're sure you're going to be in for 20 or not? I can see myself going to 20, and I don't see myself getting out before 12. But I have no wife/kids yet, so makes it much harder to predict my actions as a single person now.

I'm playing with the numbers and wondering what the likelihood is to come out ahead with the BRS if you do go to 20. It would all depend on how well the market performs and if you maximize government matching, right? Any other variables to consider?
clarythedrill
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I am at 27, so my choice is obvious. If going to 20 and only 20, and putting money into the TSP, then the non-traditional way would probably pay off over the long run. It is a hard choice to make if you have been in less than about 15 as of now.
zip04
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AG
I'd recommend staying with the traditional plan and still paying into TSP if you are planning on making it to 20. I feel the blended system will hurt retention, which will lead to an increase in bonuses eventually.
bigtruckguy3500
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I think you're right. A big problem with the DoD calculator that I didn't consider at first is that it doesn't take into account service members that contribute to TSP already and go with the old system.

But I've been crunching numbers, and even if I get out at 12, I really wouldn't gain much with the BRS. If Uncle Sam matched me dollar for dollar over 12 years, he would contribute a max of around 60k into my TSP in today's dollars. Considering he's not going to back pay my TSP for "missed" contributions if I opted into the BRS, I'll end up with much less than that.

clarythedrill
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BTG, try this: https://jko.jten.mil/courses/brs/leadertraining/Launch_Course.html. It is a BRS training course that is helpful.

you may have problems getting to the site if not on the Army's network, or try removing the "s" from http. I can reach the site on my government computer, but can connect from home on my personal.

Ehh, nevermind, that is probably the same online training you are currently taking.
Trinity Ag
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S
The bottom line is that BRS was developed to reduce long term personnel costs for DoD.

What that means is that it by definition offers less benefits than the previous system -- IF you go to 20.

It is better for those who don't stay for the full career, and the previous system offers nothing -- expect TSP. And those TSP contributions are pre-tax, but NOT matched by the government.

If you are committed to an Army career, the legacy system is the way to go.

But that hard to be certain of when you are a PVT or 2LT.
AggieEP
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I don't mind the change in the retirement systems because as the training makes clear at the beginning, the blended system is going to help the vast majority of folks who don't do 20. People who used to walk away with nothing will at a bare minimum get the 1% contributed into their TSP and matched an additional 4% if you contribute that much or more.

What does get on my nerves is the idiotic math they try to use to justify how the BRS could be better for someone who is doing 20. In the training they show a couple of scenarios where they actually count the service member's own TSP contributions in their calculation comparing it against the legacy system. I felt that their was a bit of intentional dishonesty with that and they should be ashamed of trying to mislead someone into picking the BRS. We all know that not everyone is that bright with money and a DoD sponsored training that shows you that one can give you more money than the other will probably sway a few folks into choosing it.

As for advice, I'm at 7 years and it's a no brainer to stay with the old system even though I don't know if I'm going to do 20. My enlistment is up at 8.5 years this time and so that decision will likely be the one that has me decide if I'm going to make it to retirement or not as I'll probably re-enlist for 6 this time. If I switched to the new system this January I'd only get about 1 year of matching before I got out. And that's the real rub for people who are already in, if you switch, how much matching are you going to get. 1 year of matching at 5% isn't near enough for me to gamble giving up the higher annuity and total payout of the old system even though I'm not committed to 20. Maybe if I was at 6 months of service in a 6 year contract you make that gamble because you have 5.5 years to get matched and 19.5 total years to potentially get matched if you ended up doing 20.
clarythedrill
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I look at the BRS in the light of what is it going to do to the force, as far as readiness is concerned. Right now, all the junior officers and E-6/7s will leave if they can take their retirement with them, if they get tired of all the BS. With the old system, they would put up with it to make it to 20. With the BRS, you will have very few who stay to 20 years, so what type of quality are we going to see in the mid grade officer and NCO ranks?
TheCougarHunter
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AG
clarythedrill said:

I look at the BRS in the light of what is it going to do to the force, as far as readiness is concerned. Right now, all the junior officers and E-6/7s will leave if they can take their retirement with them, if they get tired of all the BS. With the old system, they would put up with it to make it to 20. With the BRS, you will have very few who stay to 20 years, so what type of quality are we going to see in the mid grade officer and NCO ranks?


For every one of those types, there's at least one who does the bare minimum to skate by and make it to 20. Most E-7 and E-8 I've seen past the 15 year mark give zero ****s.
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