Follow-Up: Financial Implications of Staying In Until 20 vs Getting Out

A few months ago, I posted this thread and got a lot of great responses. Ultimately, I decided to take several suggestions from that thread and wanted to post a follow-up since I found the results surprising.

For my background, I am currently an O-4 nurse anesthetist (CRNA) who passed the 8 year mark in May 2024. I owe education payback until May 2026.

My Actions

The first thing I did was look into Doug Nordman. Here's his website. He wrote a book called the Military Guide to Financial Dependence. I didn't read the book but I listened to this podcast which he was guest on for 2 episodes. If you are interested in reading his book, you can either pay for it or go to your library on base and it will probably be there. He also mentions that most of the content in the book is also on the website, so buying the book isn't necessary.

My biggest takeaway from him was to stay in the military until "the fun is over (and you will know when the fun is over)" and then transition over to the guard or reserve, that way you can still get the pension/benefits when you turn 60.

He also made some comments on BRS vs High 3. I am in BRS and it never bothered me that I elected into it. From my understanding, there isn't much of a difference in BRS vs High 3 if the stock market is good.

Next, I hired a MFAA Financial Advisor to do the math for me. In order to calculate it out, some assumptions had to be made. Those assumptions were:

• Inflation of 3%
• I would make O-5 on first try and get out at 20 years
• My disability would increase by $1,000/mo by staying in until 20 vs getting out
• Non-military earned incomes (moonlighting, etc) would not be included
• I took my bonus now. I am in education payback and my bonus is a consecutive payback. I won't take my bonus until my education payback is over but it made the calculations easier.

For me, my military retirement at 20 years is approximately worth 1.9 million dollars. This evaluation includes both my pension, VA disability and when able to collect; social security. It also assumed I live until 90 years old (41 years of collection). This evaluation does not include tricare for me or my spouse and does not include other potential benefits such as use of Space-A, use of the commissary/gym, etc. If I separated, I would need to make up that 1.9 million over the 10 years (or 190,000/year).

For comparison, I gave a W2 and 1099 job in Illinois. Even though this is not my state of residence, it has the best wages to cost of living ratios in a state I would consider living in and is considered the "best case scenario" for my wages. These jobs assumed I would work 40 hours/week for 48 weeks/year. Below is a comparison of my current income and potential jobs. I also want to note that comparison between jobs is really difficult. Other ways jobs will compensate employees are bonuses, more paid time off, or money for education opportunities. These vary from job to job and it is hard to factor those in.

Again, I want to point out I do not currently take home 176,777, but it is the best case scenario for my take home if I was able to take all my bonuses. In Illinois, in order to make up that $190,000, I would need to find a job that has a gross income of $530,000. For my profession, those wages are impossible to find in an 40 hour work week. I know someone who clears 700,000 before taxes, but he works 70 hours a week. That lifestyle is not something I am interested in. So while it is possible for someone to make up that amount, it is not something that I see myself doing.

One other trend I have noticed regarding wages in the civilian world is that they are not increasing. I have friends who have not had any meaningful raises for the last 3-4 years. If that trend continues, the gap between military wages and civilian wages decreases.

Final Thoughts

How good the military retirement/disability surprised me. Throughout my career, I have heard from everyone to just get out when my commitment is over, that I can make more money on the outside, etc. While that is true, it doesn't appear that you make more money in the long-term. However, if you have a high financial income ceiling like I do, you will probably be fine either way. So the question really comes down to how much do you like the military lifestyle.

One other consideration for me is being able to fully retire at the age of 46 and enjoy living life and not having to work if I don't want to. Would you work 10 more years to know you can get the next 41 years off? I think that's a good trade-off.