Pension problems have become rampant in the U.S., and military personnel could be the next group to suffer big cuts if a Senate-passed bill becomes law. Yet many fear that military pension cuts are just the first step of a process that could eventually spell trouble for Social Security recipients.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the bill and its ramifications for Social Security. Dan notes that the bill will cut cost-of-living adjustments by one percentage point annually for military pensioners younger than age 62, saving $6 billion over the next decade. The concern many have is that lawmakers could eventually suggest similar cuts to older military pensioners and even regular Social Security recipients. Dan discusses the impact of military pension cuts on Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), and other defense contractors, concluding that with cost-of-living adjustments already involved in the Social Security debate, military pension moves could indeed be another battle in the long political war over Social Security.
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Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin and Northrop Grumman. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.