How much would you have to make to outweigh the military pay + benefits / retirement?
Military Retirement:
Assuming you serve as enlisted for 20 years, a rough estimate of your retirement as a E-7 would be:
- Pension: $1,351,827 (adjusted to $3,268,660)
- Gov TSP contributions : $100,754 (adjusted to $743,603)
- Service member TSP: $205,084 (adjusted to $1,513,605)
Let's say you commission at the 10-year mark and retire as a OE-3.
- Pensions: $2,103,048 (adjusted to $5,085,081)
- Gov TSP contributions: $124,340 (adjusted to $917,674)
- Service member TSP: $252,256 (adjusted to $1,861,748)
I'm currently stationed in California, the total military compensation is roughly worth around $70k, which is also the average salary in California. However if you have a salary of $70k here, after taxes it's about $52k. Add in rent, healthcare, gas, food etc. it get's pretty tight.
It doesn't feel quite right that you would come out ahead at a civilian $80k salary because it would be harder to save.
Yes, there are certain AFSC's where you can make around $100k upon separation– or you can use the GI Bill- but even with that I'm still questioning if you would come out ahead?
How much would you have to make as a civilian for it to outweigh the military benefits?
Other considerations:
- Heathcare costs
- Job stability in the military (the job market is kind of spooky right now / tech is competitive )
- Having little say in where you are stationed / harder to put down roots
- Being able to retire before 60
- Being able to use GI Bill and find a higher paying civilian career
- Time is finite
- Civilian vs Enlisted vs Officer
Using rough numbers from: https://militarypay.defense.gov/Calculators/
Civilian salary to be the equivalent of the military benefits / pension?
byu/voidfells inMilitaryFinance
Posted by voidfells
3 Comments
Very interesting question, can’t wait for someone with more expertise to answer.
You’re also failing to account for all of the lost years of VA disability income and wage growth from leaving early and not staying 20 years
I don’t have much insight on the financial side, but as a military wife , I would much rather have my husband take a lower salary for him to not miss milestones. I always feel like there’s several ways to make money, but you’ll never get time back with your family. Plus with little to no moving around , the wife can establish a career too and provide with wage growth from her career.
Additionally, I had a friend who worked for the Italian military and United Nations. Unsure how much $ he made , but while he was gone, his daughter just died . 5 years old , and her heart just stopped working. Don’t think his wife will ever recovered from that. Now he works a regular job , just so he can be home more for his wife and son. His wife picked up a job too because she wanted to go back to the workforce and could do that now. This is an extreme case and everyone is different .