Early Retirement Could Be Bad Deal for Troops

Early Retirement Could Be Bad Deal for Troops

January 16, 2012
Military.com
by Michael Hoffman

Servicemembers who accept a 15-year retirement incentive approved by Congress this month stand to lose hundreds of thousands of dollars over the lifetime of their retirement payments, according to early estimates.

This realization, combined with poor national economic factors that are expected to compel many servicemembers to stay in uniform, could make it even tougher for service officials to entice troops to leave on their own to meet the services' goals of reduced end strength.

Earlier this month, the chiefs of the military services received approval to reinstitute Temporary Early Retirement Authority -- better known as "15-year retirement" -- that allows officers and NCOs to retire up to five years before the traditional 20-year service mark at a reduced pay rate.

The services have not yet announced if they will offer early retirements, but defense analysts expect the services to try to use the incentive to pare down their forces, especially in the Army and Marine Corps, the two branches likely to suffer the deepest reductions.

A servicemember's retirement pay is calculated similar to traditional retirement pay: A Soldier might receive 50 percent of his basic pay after serving 20 years. However, those who accept an early retirement must subtract 3.5 percent for each year of service below the 20-year mark.
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