(Army Times) Opinion: Be wary of bonus

[unhappycamper]

Be wary of bonus

With the economy tanking and family budgets being squeezed, an offer of $30,000 in cold cash might seem easy to snap up.

But the Career Status Bonus — available at 15 years of service in return for an agreement to stay in for at least 20 — may be the most expensive loan you could imagine.

Choosing the bonus means accepting a reduced retirement plan, known as Redux, which starts out smaller than conventional retirement and falls further behind over time with smaller annual cost-of-living adjustments.

For an average E-7 who gets out after 20 years, the price of that $30,000 bonus grows to more than $400,000 in lost retirement annuities over the course of an average lifetime, according to the Military Officers Association of America.

Put another way, if that $30,000 is thought of as a loan against future retirement earnings, that E-7 would pay an annual percentage rate of roughly 14 percent every year for 40 years to cover the amount he would give up in retirement annuities.


Rest of article at: http://www.armytimes.com/community/opinion/army_editorial_bonus_120108/%2e

[barbtries]

1. a lot of important information

which apparently the army ain't gonna tell ya.

$30,000...trillions going out the collective door for what?! and the army is making sick deals to enlistees who struggle for every dime and work their asses for peanuts, and DIE in stupid wars. i hate the whole concept of class, or caste - that any one person is somehow inherently more worthy than any one other. but i suppose that at one time anyway, i believed that in america we could all improve our situation through hard work and education. it just doesn't seem to be true anymore. we're becoming a two-class society in which the only yardstick is where and to whom you were born. in the midst of this seemingly unstoppable transfer of wealth to the already obscenely rich, barack obama becomes president. only in america...and let's hope real hard that his administration will successfully turn the tide and that in this incredibly rich nation more of its citizens can fully partake in its bounty.

[LaurenG]

2. Screw the retirees huh.

:mad: