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Will Military Pension Cuts Affect Social Security?

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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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 29, 2013, at 1:44 PM, VikingBear wrote:

    Cutting veteran's benefits is a really dumb idea. What's going to happen when all these particular citizens start to believe their government has been hijacked?

    What happened after the first world war when they asked, peacefully enough, for their promised bonuses to be paid early? Look it up.

    Now imagine what will happen if their existing benefits are CUT? It won't likely be just a loss of faith in the government. Best case, the Senators and Representatives who played games with Veteran's benefits will be voted out of office en masse, if they are not impeached or forced to resign first.

    I don't want to speculate in writing what the worst cases might be.

    Think about it.

    Do something peaceful about it.

    Veterans believe their benefits were paid for in blood.

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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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