Can You Count on a Military Pension?

“patriotism… bought and paid for, is not patriotism.”

President Calvin Coolidge (pictured), during a compensation package for WW1 veterans


Is a US military pension something you can count on over the next twenty or thirty years?

I don’t think so.

Pensions are a debt like any other, as a court decision during Detroit’s recent bankruptcy trial recently stated.  That trial maintained that pensions don’t receive special protections during insolvency.  Translation: it’s possible for motivated government’s to shed pension obligations that grow too onerous.

Will the Federal Government do that?

If history serves as a guide, it’s probable.  The US government’s track record on military pensions is pretty terrible.

It’s a record that starts with the founding of the country…

In 1781, the US Congress demobilized the Continental Army (the forerunner of the US Army) without paying the soldiers as promised.

1783, four hundred veterans, marched on the capital (then in Philadelphia) to demand their pay from their wartime service.

The Governor of Pennsylvania, a former militiaman that was sympathetic to their cause, decided not to stop the protesters.  

So, still unwilling to provide restitution to the veterans and in fear for their safety, Congress fled to Princeton, New Jersey.

NOTE:  Pennsylvania’s lack of action is the reason the federal government is located in DC.  The District of Columbia is under federal control, which means the US military can be used against protesters without pesky restrictions imposed by states.

We’ve seen similar situations develop over the years, whenever the US government was pressed for funds.

Worse, we are living during a period of time when our government is deeply corrupt (corporate free speech? and a monstrous financial crisis occurs w/o anyone going to jail?).

In an environment like that, how long do you think it will it take the beltway bandits willing to buy influence, to raid the $50 billion the government sends to retirees and their survivors? 

I’m not holding out much hope over the long term that any US government pension (or subsidy) will survive intact.

If that’s the case, it’s important to secure an American dream based on a new basis.  Make sure you are ready by adding new streams of income (one of the big ideas behind HomeFree) when times are still good. That income might become the difference between achieving the American Dream or not, over the long term.

Think long term.  Many of the assumptions you are basing your future on today, won’t survive the future.


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Discussion — 5 Responses

  • Richard Lee December 12, 2013 on 8:46 pm

    “Think long term. Many of the assumptions you are basing your future on today, won’t survive the future.”

    That is some solid advice!

  • Brad Sweet December 13, 2013 on 2:41 pm

    I’ve thought along these lines myself. But I’ve found, in talking with a range of active duty and retired military members, that the possibility is too alien for most who serve/have served to wrap their heads around.

    Obviously the best option for those who qualify for or currently receive a pension is to prepare for the possibility that it may be diluted or lost entirely, primarily by finding new revenue streams now, as you urge on this site.

    But I worry about the psychic shock that would occur for the millions of pensioners if this scenario were ever to play out, and about their ability to cope with so fundamental a breach of trust. And I fear that should our society reach such a point, then worrying about alternative income streams may be secondary to taking action against the political class which brought about the calamity…

  • Gli Amici December 13, 2013 on 9:14 pm

    Today, inflation is low (supposedly), interest rates are low (artificially) but both will change.
    When they change the governmental financial obligatory dominoes will start falling.
    Military pensions are but one of those dominoes.
    Corporate pensions are not much different.
    Your industry will determine where your pension stands in the domino line.
    Creating alternate income streams NOW is a really good idea. Many Thanks!!

  • djysrv January 6, 2014 on 9:39 pm

    You may want to take another look at the history of payment of military pensions following the revolutionary war. Here are two citations and brief snippets from reasonably credible sources.

    The period leading up to this demobilization was a stormy one for the Congress. During the winter of 1782 the Army had grown impatient, and rumors that it would take matters into its own hands gained credence when several anonymous addresses were circulated among the officers at Newburgh, urging them not to fight if the war continued or not to lay down their arms if peace were declared and their pay accounts left unsettled. In an emotional speech to his old comrades, Washington disarmed this threat. He promised to intercede for them; in the end, Congress gave in to the officers’ demands, agreeing to award the men their back pay and to grant the officers full pay for five years instead of half pay for life. Demobilization then proceeded peacefully,

    Much of the national debt was in the form of bonds issued to Continental veterans, in place of wages the Continental Congress did not have the money to pay. As the bonds continued to go unpaid, many had been pawned for a small fraction of their value. Madison proposed to pay in full, but to divide payment between the original recipient and the present possessor.

  • Ringdocus January 20, 2014 on 6:53 pm

    Covenants/promises/contracts are no better than those making/entering them – thus benefits are at the whim of men not laws – and there will be no certitude of payments.