Thursday, October 15, 2015

Unequal retirement pay for older veterans

I just heard where there is no cost of living increase for social security this year because of low gas prices. Is congress getting one?
Anyway, I have been thinking of veterans who served and retired years ago, like 30 years or more. Now let's say a veteran retired in the 1970's with a retirement around 400 a month and now with cost of living increases over the years let us put their current retirement at about $1700.00 a month. In this day and age that is not a lot.
Now let us compare congressional retirement : First they are eligible for pension after 5 years of service while military retirement is 20 years at least. Second congressmen have a contribution system for the most part unlike the military but congressmen get paid more. In 1975 congressional salaries were $44,600 per year which is around $194,000 in today's money. You can see that a congressman could contribute a considerable amount of money compared to an enlisted person in the military base pay for an E-9 over 20 years was on around 1200 per month which equates to around $14400.00 per year. Now if you compute retirement using high 3 numbers you will see the enlisted guy gets a much smaller retirement which only increases with cost of living increases which have to be approved by congress. Now look at salary increases between military and congressman. In 2014 an E-9 over 20 was paid $5,674 per month about for a yearly amount of $68088. A congressman gets $174000 per year. Again the congressman who only has to serve 5 years to receive a retirement can contribute more while a veteran who serves 20 years or so get less and still needs cost of living increases controlled by congress. Now even if the military went to a contribution system they would still not be able to contribute as much to retirement and would still have to deal with rising over all costs to them without a corresponding increase in income. Congress grants cost of living increases but it does not take into account real life costs.
Since 1975 congressional salaries have increased by 290 percent while an E-9s salary has increased by 372 percent but still subject to cost of living increases for increase in retirement.
Why do our older veterans have so little retirement compared to today? Since the 1970 congress decided to make military pay closer to civilian pay so they increased pay amounts significantly but the veterans from before this have their retirement calculated with values before the correction plus they use only the final pay to calculate the value so they make less than an E-9 retiring today pretty much. Same job, same amount of service, but older vets get lower pay for retirement and with increase in medical costs as they get older they and their family are screwed. Way to go congress. 

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