COLA - Military Retirement Concerns

COLA or cost of living adjustments is a measure that affects military retirees.  COLA change could affect retiree benefits article by Rick Maze presents interesting financial perspective on what's evolving.  Keep in mind that Congress has to approve the increase legislatively each year.  There's been a lot of talk about this issue online.  COLA explained shows the current COLA track and how we have seen a strong inflation uptick since March 2011.  Some military retirees appreciate getting something.  Others are critical of Congressional pay/benefits.  Some others dislike lawmakers and the usual disappointment that comes from these issues being handled by government.  Whatever the case, it's important to understand what is in store for retirees.

Interestingly, one blogger posted the following information about pay/benefits for Congress people.
Members of the House(speaker gets $223,500), Senate(except for majority and minority ldrs who get $193,400) and VP all get the same salary. $174,000/yr. Members of Congress receive retirement and health benefits under the same plans available to other federal employees. They become vested after five years of full participation. Members elected since 1984 are covered by the Federal Employees' Retirement System (FERS). Those elected prior to 1984 were covered by the Civil Service Retirement System (CSRS). In 1984 all members were given the option of remaining with CSRS or switching to FERS. As it is for all other federal employees, congressional retirement is funded through taxes and the participants' contributions. Members of Congress under FERS contribute 1.3 percent of their salary into the FERS retirement plan and pay 6.2 percent of their salary in Social Security taxes. Members of Congress are not eligible for a pension until they reach the age of 50, but only if they've completed 20 years of service. Members are eligible at any age after completing 25 years of service or after they reach the age of 62. Please also note that Members of Congress have to serve at least 5 years to even receive a pension. The amount of a congressperson's pension depends on the years of service and the average of the highest 3 years of his or her salary. By law, the starting amount of a Member's retirement annuity may not exceed 80% of his or her final salary.  This blogger provided a lot of financial perspective here.  Other bloggers echo the concern that Congress people earn six-figure incomes and don't take a paycut during a serious financial time while military personnel don't get compensated in as fair of a manner. 

I respect people who serve in public office to a certain degree.  I respect fellow military personnel and their families as they relocate their lives to different parts of the world, endure financial hardships, make a sacrifice for the good of their country and even will make the ultimate sacrifice.  Both people serve this nation in ways that we need of their service.  John Adams was a great statesman, and his marriage is one that I am in awe of.  Historically, it was a high calling and an honor for someone to serve in public office.  Today, it is discouraged by many.  Homeschooled children tend to seek ways to influence politics more so than traditionally schooled children today.  I present these facts as perspective as there is great history and much to learn from those who came before us.    Perhaps we are returning to some tried and true methods from our American heritage. 

With retirement drawing near for many or retirement to occur in 30 years, it is important to understand how your military retirement will benefit you.  For many on fixed income, it is wise to revisit your budget.  While costs continue to rise, many have tight budgets that limit more so than before what one is able to afford and/or go and do.  Whatever the case may be, it is wise to work with a financial advisor, friend or someone who is good at number crunching.   I constantly revisit our budget each month, and in looking back on past budgets from years past, it amazes me at how we make it happen regardless of our limited income.  Happiness comes from the things in life that money can't buy.  It's so nice to afford things and not worry about making ends meet.  Yet, sometimes, it's the little things in life that remind us of what it is that we need to do in our life.

2012 Military Pay Outlook & US Government Shutdown

According to Military.com 2012 Pay News - The president's 2012 budget request includes a proposal for a 1.6% military pay raise for 2012. While slightly larger than last year's military pay increase, the 2012 proposed military pay increase would be the second smallest in 50 years.

Concerning all the political and current news being reported, I am leery of what's to come next.  Our current economic climate is seeing some positive signs such as manufacturing has picked up according to the Institute for Supply Management.  Leading economic indicators look good as a recovery appears stronger and stronger since the 2009 dip.  Housing has yet to see any improvement as personal income is down.  While personal consumption is up according to the US Dept of Commerce, I suspect that it is the usual Amerian tendency to spend with a credit card or other debt.  For those military members interested in managing their financial affairs better,  I would determine a household budget based on current pay and then computer another budget based on the 2012 military pay proposed above.  While military personnel and their families should NOT endure the stress of  getting paid, it is important to get out your calculator, pen & paper, and/or computer to determine your spending plan.  Military wives especially need to lower their spending habits because it is amazing the unlimited choices relative to your limited financial resources.

In the article Why Put Military Pay At Risk?, it lends perspective on general sentiment.  That this political talk is WRONG. 

Accordig to Rick Maze of the Air Force Times, Rep. Hunter is trying to get Congress to pass HR 1551 where military pay would be guaranteed.   To date, there are 39 co-sponsors of the bill.  The challenge is the debt ceiling and what the US Government intends to do regarding this $14.3 trillion debt issue.  There is a financial risk involved with guaranteeing such a large amount of money for any business situation let alone government.  However, the military is a different matter when it comes to government and certain financial obligations.  There are other budget cuts that should occur before reducing military pay (the above small increase in military pay 2012 is a political statement that is an insult to hardworking and underpaid military personnel and their families) such as fourth generation welfare recipients who have a refridgerator, cable tv, a wii or playstation, and these electronic food stamp cards where purchases include beer, wedding cakes, steaks and other.   I personally do not have cable tv nor a wii or playstation.

As of this blog publication, there is no guarantee that military pay will occur should the government shutdown occur.  I am sorry to type this because it is just wrong.  Historically, this has been a challenge for past armies and military troops throughout the ages (the Romans and others).  It is critical to pay your military because if you look at history, it is a telling tale.

Second Quarter 2011 Report

This second quarter at Alfa Sugar has seen some serious ups and downs.

First, the No Pay if Fed Shutdown Occurs article generated a high amount of interest where there were 490 hits in one day alone. (Over 600 in a two-day time period)

With all-time pageviews topping 807, it's been a neat second quarter.  I appreciate the readership interest and hope to square away current business activity and return to more writing.  This time of year proves to be busier than norm for me so that is why not as many articles have been published. 

Top three articles for this second quarter at Alfa Sugar include the following:
1) No Pay if Fed Shutdown Occurs
2) What is Alfa Sugar?
3) a tie between
Concurrent Retirement & Disability Pay for our Veterans
&
American Families Reunite this Fourth of July

We have an international audience representing the following countries:  the United States, United Kingdom, Canada, Germany, Romania, Singapore, India, Hungary, Russia, Turkey as well as a few others.