The Magazine of Future Warfare

The Magazine of Future Warfare

Editorial

Most militaries have a retirement system, which becomes more costly every year as people live longer and the cost of new health care technology and drugs needed to keep the elderly alive rises rapidly. In 1950, American life expectancy was 68.2 years, which rose to 77.6 by 2003. This trend indicates that people joining the US military today at age 18 and retire at age 38 will receive retirement pay and full medical benefits for another 44 years until they die at 82 years of age. As a result, these servicemen will collect retired pay for TWICE as long as active duty pay.

This has caused personnel costs to soar. The US military now spends more on a force of 1.4 million active duty personnel than it did on 2.1 million personnel in 1983, even after adjusting for inflation. Most of this cost is the result of two decades of annual pay raises above the rate of inflation. These pay raises also increased eventual retirement costs, while retirees live longer each year. Prior to World War II, servicemen had to serve until age 60 to retire and collect a monthly retirement check. Back then, the US military paid the average retiree benefits for only around seven years since life expectancy was 67 years. Returning to that standard is possible, but will upset those who expect retirement checks in their middle-age.

It has become normal in the confused world of the US military for someone to "retire" and then take a job on a military base and earn another paycheck from the military, or through a contractor. This is very lucrative, but this "double dipping" is expensive and counterproductive since it encourages highly trained people to "retire" in their 40s. For example, during the wars in Afghanistan and Iraq, the US military had manning problems as many senior enlisted men retired so they could earn more money as security contractors funded by US military contracts.

If the US military is to survive in a future where most people live past age 100, Generals must propose changes now so that new enlistees cannot collect a retirement check until age 50. After 20 years of service, they can transfer to a reserve status and pursue other careers, but they will not receive monthly retirement checks until age 50. They will retain medical benefits and access to base facilities. This is similar to the retirement system for reservists, who can "retire" after 20 years, but do not receive a monthly check until age 60.

This will allow those who join at age 30 to receive a retirement check immediately after 20 years of service at age 50. This may seem unfair, but this is the identical benefit for someone who served 20 years on active duty from age 18 to age 38. Assuming both live until age 82, they will both receive 32 years of retirement pay starting at age 50. As part of this change, enlisted careers will be stretched and senior enlisted E-7 and above allowed to serve until age 50 if they remain fit, rather forcing them to retire in the 40s because of arbitrary time-in-service limits.

The advantages of this plan are immense, far beyond the money saved in retirement costs. First, highly skilled servicemen are less likely to retire when they become eligible after 20 years of service, thus improving military readiness. Second, those who shift to a reserve status after 20 years of service can join a reserve unit and draw reserve pay until age 50. This will greatly enhance cooperation between active and reserve components since many of senior reservists will have more than 20 years of active experience, and will improve the quality and skills of reserve units. For example, an experienced pilot costs millions of dollars to train, yet many retire after 20 years, or may be forced to retire after failing promotion around age 44. These experienced pilots would love to fly in the reserves until age 50 to fill vacancies, but they cannot join a reserve squadron today because they receive retirement checks.

Reserve duty will pay $614 a month to an E-7 with 20 years of experience. In addition, they can earn credit for each day on duty toward their retirement pay calculation at age 50. Therefore, an E-7 who transfers to the reserves at age 38 after 20 years of active service may spend 12 years in the reserves, so his retirement pay will be based on ~21 years of total active service. If his unit is mobilized, it will be more than that. Another advantage is that many servicemen who retire early have a desire to return to the active force after a few years in the civilian world. However, it seems wasteful to give up retirement pay, and the bureaucracy discourages this. If he were not receiving retirement pay, he is much more likely to reenlist in the active force to fill a vacancy. Reserve duty isn't required and many will prefer to remain in the inactive reserve until their retirement pay kicks in at age 50.

Longer careers will mean that retirees earn a larger monthly check, but they will do so for fewer years. Moreover, the military will get more mileage out of each GI so fewer career servicemen are required and fewer retirees produced. For example, the armed services shape their manpower so around 100,000 enter the career force each year, i.e. those who will serve until they retire after around 24 years of service. If they were encouraged to serve an average of 28 years by delaying retirement pay to age 50, only around 85,000 are needed to enter the career force each year, eventually resulting in 15,000 fewer retirees each year. Given that retirees live another 40 years, that would eventually reduce the overall number of retirees by some 600,000!

The only objection is that this may hurt recruiting and retention. However, few young people are interested in retirement, and collecting a retirement check at age 50 is very attractive and much younger than retirement plans elsewhere in the nation. Some 40% of Americans who pay taxes to fund military retirement have no pension other than Social Security, where the retirement age is gradually increasing from 65 to 68. The only opposition may be from military groups who oppose any reductions for any reason. However, they should understand that it was easy to provide generous retirement benefits after World War II because little funding was required since pay was low and it would be decades before the large numbers of servicemen from World War II and the Cold war retired.

At one time, the US military was known for low pay but great retirement. Military pay has surged these past two decades along with that of federal employees so that servicemen now make around 80% more than most Americans, a figure that does not include the value of their generous retirement plan. In addition, military retirees are living ten years longer than after World War II and life expectancy will continue to grow. The retirement pay burden is a growing threat to America's national security, especially with large budget deficits. Something must be done now for the good of the nation and the armed services. If current service members want to ensure full funding for their retirement, they should support a law that delays retirement pay for new enlistees until they reach age 50.

Carlton Meyer editorG2mil@Gmail.com

G2mil editorials may be freely distributed without permission

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Winter 2007 Articles

Letters - comments from G2mil readers

V-22 Videos - why the Osprey is unsafe

Diesel-Electric Corvettes - essential for future naval warfare

Restore the Value of Medals - too many

Grunt Rockets - American infantry

Chavez Warns Against Iran Attack - $5 a gallon oil?

Army Force Structure (pdf) - September GAO report

Situation Called Dire in West Iraq - says a Marine Colonel