The recently announced Bipartisan Budget Plan will cut military pensions by reducing annual Cost of Living Adjustments (COLA) by 1 percentage point. Presently, military pensions are adjusted for inflation so that servicemembers maintain purchasing power throughout their retirement. The new proposal will allow inflation to slowly reduce the value of a military retirement.

For example, an E-7 who retires at 20 years of service receives $2,148.40 in retired pay. Under the Bipartisan Budget Plan, by the time this member reaches the age of 62, the effective retirement pay will be $1,761.65 -- $386.75 less per month. Over the course of 20 years, the retired servicemember will lose close to $50,000 in retired pay.

Furthermore, these cuts will affect all servicemembers -- those who are retired and those who are currently serving. This is a significant change to the military retirement system. As the Department of Defense reconfigures to save money, it is important to clearly recognize where the savings are coming from.