fi nancialforum The Way Forward T become a national concern.
Learn More Premium and Life members are eligible for financial counseling through MOAA finan- cial planning services. To find out more, visit
www.moaa.org/financi alcenter.
46 MILITARY OFFICER MAY 2017
The new blended retirement system is here to stay. Lt. Col. Shane Ostrom, USAF (Ret), CFP®, breaks down DoD’s plan to educate servicemembers on how to save for retirement.
The days of being for or against the new blended retirement system (BRS) are over. Now, the issue comes down to dealing with the need for fi nancial literacy. Beginning in 2018, DoD automati- cally will enroll new servicemembers in a 401(k)-style retirement plan. In the nation’s 40-year history with 401(k) and individual retirement accounts, many have failed at the savings and investing mission. As I’ve mentioned before, many Americans have little to no savings for retirement, which has become a national concern. DoD makes a case for the BRS by high- lighting its portability and the fact it takes care of the 85 percent of servicemembers who don’t serve long enough to retire. How- ever, attention also should be focused on preparing career-minded servicemembers to manage their own fi nancial futures. By changing the retirement system, DoD adds personal fi nancial planning to the stresses of servicemembers’ missions and life-or-death risk-management responsi- bilities. In some ways, this move is similar to corporations that eliminated pension plans in exchange for 401(k)s. The retire- ment change wasn’t too drastic this time, but modifi cation has opened a door to begin moving in that direction. Financial advisor Suze Orman and DoD aim to accomplish a fi nancial education mission for the services that unfortunately hasn’t happened for the nation as a whole. Though fi nancial literacy has failed in the private sector, can it succeed in the services?
It might be possible. Setting up training and education for the services is like shooting fi sh in a barrel, and the chain of command certainly can help get things done. So if it’s possible to achieve fi nancial literacy, the ser- vices likely would be able to make it happen. DoD leaders should appreciate they are facing a new battle and new enemy: a fi ght against the misconceptions, misleading information, and sales pitches fi red at will by the massive fi nancial service industry, the media, and get-rich-quick marketers. Government fi nancial counselors are up against fi nancial advisors who work on sales commissions in a battle for the minds of servicemembers learning how to save for retirement under BRS. Some might question where fi nancial
literacy will fall in DoD’s laundry list of priorities. Given the obvious priorities of budget cuts and dozens of operational mis- sions worldwide, where will concern over a sergeant’s fi nancial future measure up? For servicemembers’ sake, MOAA hopes
the fi nancial education programs set up by DoD will hit a home run. Either way, MOAA’s dedicated staff will use fi nancial ar- ticles, blog posts (
www.moaa.org/fi nanceb log), webinars, and classes delivered with unbiased rules of engagement to help with this all-important education mission.
MO
— Lt. Col. Shane Ostrom, USAF (Ret), is a CFP® and benefi ts information expert at MOAA. Visit
www.moaa.org/fi nancialcenter for other re- sources. Email specifi c benefi t and fi nance inqui- ries to
beninfo@moaa.org.
PHOTO: SEAN SHANAHAN
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