Out of curiosity, since housing is taken care of (BAH or barracks), how much of your base pay do you save or invest each month?
When I was a young O, I didn’t save at all. Just spent it all. Then as I got older, it turned into 10% of my base pay, then 20%, etc. I just wish I would’ve saved more earlier on and invested instead.
What’s a good rule of thumb? Is it 30% of your base pay?
Ratio of Saving/Spending
byu/DonutsAndBurritos inMilitaryFinance
Posted by DonutsAndBurritos
3 Comments
I save 25% gross minimum, sometimes more. Depends on the month/plans. This does not include vacation type savings.
As an O-3 I was at around 50% and felt like I lived pretty lavishly
As a rule of thumb investing 30% of your base salary will set you in good stead. That said, it really depends on your goals in life. If you like your field and plan to retire after 20+ and work until full retirement age, then I’d recommend saving less (20ish%) and enjoying life more, as compound interest will take care of any of your retirement needs that your pension(s) won’t. If you don’t relish the idea of working for so long, then perhaps saving 30% of your total compensation might be better and allow you to fully retire after 20.