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. 

American Families Reunite this Fourth of July

Is your American family eating meals together?  What types of conversations are you having?  Is it fun or unpleasant?  Do both parents work?  What kind of attention are children getting these days?

These questions among many others present a rude awakening to some families that they are not a united team.  Some may blame the busy schedules such as work or sports.  I know of many families stressed to the point of yelling at their children or driving themselves nuts just trying to make it on time to a sports event for their child.  One dance recital was scheduled on a Sunday morning which is unbelievable to me since the majority of patrons denounced this and some refused to participate in their child's dance recital (that's just WRONG in my mom book). 

Divorce rates are high and could be higher were it not for high attendance at marriage classes and Sunday School.  The divorce attorneys are eager for more business as the same sex marriage act passed in New York (unbelievable since few remain committed to the same partner for very long...a research fact that I am not making up). 

Fathers need to be around and are important.  Over 70% of black babies are born to single mothers (as many are incarcerated or are in gangs soon to be incarcerated) [Bringing up Boys by Dr. Dobson].  Strong male leadership is low, and men lack etiquette.  More women earn degrees and fill up those colleges and universities. Even the Washington Times article on Guys got it Made?  Think Again is garnering some attention here.  Where is the man in America?  It takes two to make a family function.  It takes a man to step up and be the leader of the family. 

Mothers need to cool it and be.  Women are a wonderful breed and adapt well to multitasking.  Frustration levels are high due to working, weight gain, stress, depression, and yes, finances.  For some, men are not around and the working mom struggles to do it all.  I read Mary Kay's book You Can Have It All and that is for the overachiever.  Most of us are just trying to do the basics.  No mom can have it all and expect her family to stay in tact unless she is my hero of a superstar.  (There are some out there).

Problems such as drugs, addictions (ex. the computer, the blackberry, overcommitment, drugs, alcohol, sex, or other), and other major problems lead to more negatives than positives.  Please consult your church or a professional.  While I write this online, you have a choice to make things better.  Help may not be readily available but you can start simply by taking things one minute at a time.  Not easy but it will get better with patience and believing in your decision to do better. 

With more families struggling to be these days, it is important that American Families REUNITE and do things together. 

• Stop the insane running around to playdates. 
• Stop checking your blackberry every two minutes...it can wait. 
• Stop and think about your lifestyle choices.

For many, it took 9/11 to understand the wake-up call and adjust real quick to what was happening within their family unit.  It's okay to make less money and have MORE time with your family.  It's even better when you can play a family game and not have the phone interupt.  Focus on the Family has some great literature as well.  The financial perspective presented here is that no amount of money can buy what a blessing your family is. 

By spending time with your family, you can enjoy no costly divorce bills, no excessive spending to make up for the pain you caused yor kids or no nightmare fighting with people you gave your heart to.  Even more important is rebuilding the American family to redo what is evolving in our country....the breakdown of the family. 

This holiday weekend, I wish everyone a joyous celebration and encourage you to reunite your American family.  Nothing fancy but a phone call and say hey let's get together because we can!  I challenge you American Families to Reunite!  God bless you all.

Wedding Season: Is the Happy Couple Financially Ready?

It's wedding season.  Is the happy couple financially ready?

Most couples when they tie the knot haven't reviewed some important financial items when they marry.  Granted in today's American culture, more than 70% of couples marrying have been living together.  I could not believe this statistic when I read it in the Wall Street Journal's article The Gifts on Every Wedding List by Sue Shellenbarger.  What amazes me is how much time, effort and attention to detail each couple getting married spends on the wedding registry as well as wedding planning and yet they tend to overlook certain matters such as finances and debt.  Setting up house is just as important as setting your financial affairs in order.  With today's couple marrying in their late 20s, each has had an opportunity to accumulate some items as well as some debt or savings. 

First, it is important that you both review your last tax return statement, your investments and financial statements, your debt (credit card, student loans, auto loan, etc...), your assets and your income(s).

Second, once you've determined your combined net worth statement, it is important to review your financial goals for before, during and just after you marry.  Are you planning to buy a house and have two condos to sell?  Do you have $120,000 in student loan debt?  Are you working your way through college?  Are you paying for your wedding?  Where you both are and where you plan to be after you marry is important to review, determine a financial game-plan and then forecast how you aim to achieve this financially.

Third, it is important to decide as a couple how you both plan to go forward from your wedding day.  Will you both relocate to a new city and be a first-time homeowner?  Will you merge your salaries and pay off those student loans?  Is one of you returning to school while the other works to support you both? 

Fourth, upon review of your goals, dreams and/or plan, then it is wise to develop a spending plan.  How much money will you have coming in?  How much money will you have to spend on your relocation?  How much will you need to purchase that house?

Finally, once you've reviewed this initial game plan, then it is wise to seek accountability with a financial advisor, a parent or trusted person, and/or your premarital counselor.  Gaining wisdom from those who have been married a long time will enhance your decision-making for the early days of your marriage. 

I recently read the book The Family CFO: The Couple's Business Plan for Love and Money by Mary Claire Allvine and Christine Larson.  It's a neat book that I wish my husband and I had when we were merging our households together.  Now I am not going to do a book review here, but merely offer it as a good resource to read and check out.  I've read also Dave Ramsey's book Financial Peace and really appreciated the approach to marriage from both couple's perspectives.  Regardless of how you start your marriage, it is important to get some good premarital counseling and discuss your fianances. 

BTW, if you do not get good quality premarital counseling, then I highly recommend that you seek another way to get superior premarital counseling....Our minister just saw with us for three sessions and it was too vague, broad and general for what modern couples need.  We should have pursued another premarital setup that went into great detail.  Marriage is never easy and having this kind of opportunity to work on premarital issues will really make you and your soon to be spouse at ease during your wedding years.  For those in the military, it's easy to marry and walk into marriage so please contact Military OneSource as well as the base chaplain for more ways to better prepare for marriage. 

From a faith-based perspective, I strongly advise couples marrying today to study what the Bible says about marriage, understand your role as husband/wife, and seek ways to work on your marriage.  It is important to pray for one another.  It is important to spend time together as as couple.  It is important to communicate well.  It is important to manage your finances well together.  In reading the Biblical Marriage, it reminds all readers that the most important relationship in your life is your spouse.  It can provide the most joy and happiness and yet it can provide the most pain, heartache and lasting scars of any relationship.  More people are delaying marriage until their late twenties.  There is nothing wrong with marriage at a young age as long as the people in love go into it for the right reasons. 

Marriage is a wonderful institution where a man and a woman commit themselves to each other, and their wedding day is when that commitment is made public.  While everyone loves to see a beautiful wedding, the wedding dress, the flowers, the reception, and all the other fun and exciting things that go with each wedding, it is a distraction from what's important.  A man and woman are getting married.  Focusing on this union is what's important.  I wish each Couple-To-Be great happiness.

This is Part One on this article and I will write Part Two and post later. 

Unemployment Number Raises Alert to Investors

As the unemployment number is reported today, the bleeding scene on my computer confirmed the stock market's sentiment regarding it.  Economic Woes Slam Stocks is a good recap.   If you read this article on CNBC by Patti Domm, you will see how concerns are elevated. Next Tuesday when the Fed Chairman speaks will be very interesting.

Calls coming in about how Obama has messed up the economy are happening in homes across America.  All I know is that the current economic conditions particularly from a financial perspective are of significant concern.  After Jobs Data, is Q3E a Go?  is a good article highlighting a shared sentiment amongst many. 

Wall Street Endangerment

If you click on this link to review this write-up The Risks Are Enormous  then you will read and hear some common sense talk surfacing about Wall Street, Interest Rates and a probable Depression.