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.