Following in the steps of many major U.S. corporations, a major American institution of its own is opting to swap out pensions for a 401(k) plan for its employees.
But when that employer is the U.S. military, the notion that pensions - for so long a cornerstone of and a motivating factor for extended military service – may be phased out in the future, comes as an unsettling notion to many military families.
A recent Pentagon-sponsored report by the private-sector Defense Business Board offer the option of a signifcant overhaul of the existing, long-standing 20-year-vesting military retirement, subbing in a very civilian-styled 401(k) plan in its place.
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Current servicemen and women have been reassured by the government that the proposed changes would only affect new hires, but a recent survey by the First Command Financial Behaviors Index suggests that there's quantifiable uneasiness among the ranks.
Some 73 percent of middle-class military families surveyed (senior NCOs and commissioned officers, with household incomes of $50,000 or more) said they feel nervous about the full ramifications of the changes.
In reaction to the changes (and whatever future changes lie in store), 42 percent of respondents said they would work to increase the amount of money they put into savings, as well as working to decrease their debt levels.
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