View Single Post
Old 11-26-2006, 08:27 AM
  #8  
USN(Ret)
Line Holder
 
Joined APC: Aug 2006
Posts: 47
Default

The main problem with being retired military, is that you have 20 years or less to pay into a 401K as a civilian employee. I have not found a retirement plan that yields as much as military retirement does, considering military salaries, and the fact that most of us will receive retired pay for close to double the amount of years we spent on active duty. Also consider the COLA increases every year. If you can live frugally, and max out a 401K for 20 years, I suppose you could have a sizable balance by retirement time.

While I advise taking advantage of a 401K, and "free money" and the tax benefits all considered, I don't think they can be the main component of a retirement plan like the government and investment community thinks that they can be. If a person can put money into them regularly for 40 years, and get the long term benefits of the stock market, they can probably be well off by retirement. But with the ups and downs of careers these days, consistant funding is problematic.

I think in future decades, this 401K philosophy of retirement plans, is going to have many seniors living a much lower standard of living than thought possible. If one is a high wage earner, or more likely owns a small business, they will be alright. The vast majority of folks at the median income or below, who are "working stiffs", are going to find the 401K money just doesn't last very long, considering the increase in life spans.
USN(Ret) is offline