Run My Route Running Map - pft prep in Cabot

Run My Route Running Map - pft prep in Cabot

military retirement benefits

There exists in our military a system which provides a constant pension for anyone who is willing to put themselves through 20+ years of active service to the country.  It gives the individual 50% of the salary they are used to (the average of the last three years of their duty).  Currently, the average retired (20+) colonel can receive a pension salary of $50k.  FY11 pay charts   For each year after 30, you get an additional 2.5% added on up to 75%.  This is only for base pay.  Retired members receive no partial allowances (BAS, BAH, FSA, combat pay, etc.  google them).  There is a whole separate thing under the VA for healthcare benefits.

Well, the government wants to change it all.  Here's their (really fucking horrible editing job) presentation
They want to pay us all an extra 16.5% of our base pay, but put it directly into the Thrift Savings Plan.

I want to do some math here. I'm going to put it into excel and run it as if I were a brand new Second Lieutenant as of June 2011.  It's going to be exactly 20 years of service.  And expecting the pay charts to increase 3% annually to make up for inflation (the same amount they have historically increased military pay for the past several years.  they do the same thing for Congress, by the way).  Standard promotion for O2 (first lieutenant) is at 2 years.  From there it gets complicated but we'll say they get promoted to O3 at 5 years, O4 at 9 years, O5 at 13 years and O6 at 18 years. To make the math work, if O2 is made at 2 years, then O2 pay starts with year 3, or on the pay charts it is >2.  This would give the retired colonel an annual salary of $77,787.12.  And this amount also rises to match inflation.  And it lasts until the person dies.
The new plan would have paid the member an extra $311,587.70 by the time they had reached their retirement.  Assuming none of this money was taken out to pay for a house or education, they still wouldn't be able to touch it until they reached Social Security age.  (if SS is around by the time they reach that age, more on that in another blog).  Assume our 2LT was 22 at the time of commissioning, they would be 42 at the time of retirement.  Over the next 23 years (let's say SS age is 65 in the future), that money would have grown to (assuming it has always been growing at 7% interest annually) $10,382,149.33.  This amount is in future dollars, which have not been valued for inflation (because I don't want to do that math).
My question is, what is a 65 year old going to do with $10M? Do you know what 3% interest on $10M is?  It's $300K.  I would love to live on $300K a year.  I don't know what I'd do with it all.  I'd probably just keep investing it.  I would still have 4% growth on the $10M if I only took out $300K.
This makes it sound like a great plan.  I could have all of this money in the future.
Now, let's say our service-member contribute $5,000 to a Roth every year, which I do.  Over their 20 years in the military, my accounts should have $204,977.46.  By the time they can take that out, they should have $5,044,495.33.  That's assuming no other contributions have been made since retirement.

This has been a big exercise in math for the sake of saying that the government is essentially making us pay into our own privatized social security, instead of paying a proper retirement.
Ummm, why don't we just do this with everyone's money? Heck, my parents would actually have money saved up for retirement.
The reason we don't do things like this is because nobody wants to put away money for the future.  Everyone just wants to spend money.
The old system was in place because there is little incentive to remain in the military for a full career, other than a sense of duty.  A sense of duty will only get you so far in a community so shat upon by congress and the president, not to mention other members of that community.  Plus, you're volunteering to put your life on the line for your country.  You are also volunteering to have a below-nominal family life of being gone whenever the government wants you and not being compensated for that.
A  retired colonel in the Army will have spent about 5 years of his career deployed overseas.  He will also have spent 1-2 years of his career away from his family at training or some other temporary duty assignment.  That is about 7 years total where you are away from your family, spread out over the course of 20 years.  It can get worse if you're a sergeant at 20 years.  
There is huge discussion about a mass exit from the military if the plan changes.  People are shooting for a full career of 20+ years.  With the way the system works now, only about 20% of the people who try to, will make it to the 20 year mark.  There are a lot of things that you can't control.  And a lot of people don't even try to get to the 20 year point.  For many service-members, the military is only a small part of their life.  I think it would be great to give everyone a better incentive for being in the military.  But I don't think it's very wise to remove the best incentive for career officers.  I would love to be a 44 year-old colonel with a whole lot of career opportunities before me.  That would be awesome.  Will I try if they change the policy? Probably not.

Michael Moore

Ok, I should have labeled it Documentaries.  But I got started on this by first watching Capitalism: A Love Story.  I just finished Michael Moore Hates America.  That guy makes a good point.  He doesn't hate Mr. Moore.  I don't hate Moore.  I think he is a muckraker of sorts.  One that makes a lot of money from his version of it.  It's interesting stuff to watch.  I don't necessarily agree with any of it.  But it's interesting for me.  I like to hear what people have to say.  Even if their argument is shit.

cars and gasoline

God Damn!  Why does my car still have tires and why am I paying $4/gallon for gas that comes from the middle east/Venezuela?  Watch the movie Gas Hole and decide whether we should have bailed out the car industry and whether we should have really put a strangle on BP with their oil spill.

Join the revolution! Mason in 2026!!

Federal Reserve

At 24 years of age and with a Bachelors of Science from one of the nation's premier academic institutions, I just now understood the Federal Reserve.  And I hate it.  It is a complicated system of banks buying stock in a central bank and getting a constant 6% dividend, no matter the state of the economy or the market.  This central bank also loans money and sets interest rates corresponding to a goal inflation rate of 2% annually.  I'm sorry, did somebody say that there is always going to be inflation?  Yes, it is built into our system.  We are doomed to fail if we plan to fail.  2% inflation means your 3% growth on investments is really only worth 1% investment.  And that's putting it in really simple terms.  You actually get even less than 1%.  But that's not the least of our problems.  The Fed has been directly tied to the problems leading to the Great Depression, the second great depression of 2007 and the bank bailout which put our government $1.5 Trillion in the hole, with no return.  We didn't even loan money to them.  We just handed it over.  And we did it in such a way that they are accountable to nobody for the money.  We can't tell them how to spend it.  They don't even have to tell us where it went.  I suggest Moore documentary: Capitalism, A Love Story
You don't have to agree with him.  Just watch the movie and get fired up about something.

Actually, that leads me to something else I hate: next blog will be on cars and gasoline

Cannabis and Hemp

Recreational drug use.  It's interesting when you think about how somebody in Venice Beach, CA lighting up a joint could somehow be connected to a 19 year-old mother of 4 in east Texas living on welfare checks.  They're both just trying to get high and forget about their troubles for a few more hours.  Proponents of the legalization of marijuana like to say that marijuana doesn't hurt anybody and that it might actually have some health benefits.  Proponents of our continued war on drugs will tell you that drugs ruin lives and families and we need to do everything that we can to stop this injustice.  I say, why the hell is this up for an argument?  We thought that it was a bad idea to have alcohol be made or sold in our country for consumption.  This lead to an avenue that was profitable for organized crime.  Organized crime grew and prospered, and when prohibition ended (maybe with the intention of lowering crime) it sank its teeth into other vices that people were willing to pay for on the black market.  The idea is that legalizing marijuana will create a profitable tax flow for the government and we can all stop spending so much money on enforcement of a (supposedly ridiculous) prohibition.  They say crime will decrease like it did at the end of alcohol's prohibition.  Did crime decrease at that time because we allowed for the production and sale of alcohol again?
Some people say there are health benefits to smoking/eating/breathing marijuana.  Some people say that it is a drug and it will kill you.  in 2009, a government poll said 16.7 million people had used pot within 30 days of the poll.  With a current population of 307 million, that would equate to 5.4% of America's population smoking pot and telling the government about it.  Currently, there have been no deaths directly linked to marijuana use (supposedly).  A google search will tell you that there are lots of marijuana deaths.  I'm not really sure.  I don't work for a government agency that is supposed to know these things.  I work for a government agency that doesn't give a fuck.
I need a really, really good reason to legalize a drug which is known to mess up people's lives.  For that matter, credit cards and cheap mortgages are almost as bad as hardcore drugs if you want to fuck up your life.
Hemp on the other hand.  Why the hell is it illegal to grow hemp?  Probably because it is associated with marijuana, which it can be.  Hemp can grow almost anywhere, with very little water and poor soil.  It can be made into fabric which is stronger and softer than cotton.  It can be made into rope which is nearly as strong as equivalent nylon, if not stronger.  It can be made into pulp and then paper, reducing our need to chop down trees for paper.  It can even be made into bio-diesel with little effort.
Aaargh.  Watch the documentary The Union and tell your friends to watch it.  Don't necessarily believe it all.  Just watch it.