Posted on Mar 25, 2015
What “percentage” are you, based on income? Do you think you are adequately compensated?
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Do you think you are adequately compensated in comparison to your civilian “peers” or do you think the military personnel are under-paid? If you think military personnel are underpaid, why? If you think you, in particular, are underpaid, why?
Even if one ONLY CONSIDERS BASE PAY, military compensation compares really well to nationwide averages.
Personally, I’d be quite happy with more pay; why not? But I’d assess that the total compensation package is both adequate and logical, as it provides relatively good pay and additional compensation for education (via special pays and increased rank/promotion for higher education levels), skills (again, via special pays), experience (time in service), and leadership (higher compensation levels for increased responsibility).
Search “pay” on Rallypoint, and you’ll see literally hundreds of questions and threads on the topic of military pay. In these questions and threads, and elsewhere (just search the internet and you’ll be inundated with articles about changes to military pay and compensation, for example), you’ll come across two general themes: 1) military personnel are under-compensated; and, the alternative, 2) military personnel are over-compensated.
There are, of course, plenty of studies about military pay and compensation.
The ones by the Government, as expected, tend to assert that military personnel are more than adequately compensated. These types of studies generally focus on total military compensation, which is quite a bit different than pay. One study by the Congressional Budget Office estimated that the average Servicemember earns a total compensation package worth $99,000 (http://www.goarmy.com/benefits/total-compensation.html). I suspect many of you share my doubts about the methodology used to make such calculations. I’m especially averse to data on “average” Servicemembers; it is unclear to me what an “average” Servicemember is, given the disparity in compensation between the newest E-1 and the Chairman of the Joint Chiefs of Staff, especially as I can’t find a description of what the Government characterizes as the “average” Servicemember (age, rank/grade, marital status, location, dependents, education level, etc, etc). If you want, though, you can use this calculator (http://militarypay.defense.gov/mpcalcs/Calculators/RMC.aspx) to see how much the Government believes your total compensation package to be. For another example, see the Center for Naval Analysis’ report comparing military and civilian compensation (https://www.cna.org/sites/default/files/news/2010/Comparing%20Military%20and%20Civilian%20Compensation%20Packages%20D0016569.A4.pdf).
On the other hand, entities interested in securing additional pay and benefits for military personnel, such as the various service and veteran’s associations, advocate for increasing compensation of military personnel. MOAA provides a good example at: http://www.moaa.org/Main_Menu/Take_Action/Top_Issues/Serving_in_Uniform/Compensation/SecDef_Warns_of_Pay_Cuts.html.
As James Fallows wrote in the January/February 2015 issue of The Atlantic, in his highly regarded article “The Tragedy of the American Military,” the military and military personnel have become something akin to a sacred cow. He asserts that the “American public and its political leadership will do anything for the military except take it seriously.” The perceived gap between civilians and the military is a topic covered at length, both in the news media, scholarly journals, and the blogosphere and other less formal fora (for examples, see http://www.rand.org/pubs/monographs/MG379.html, http://nation.time.com/2011/11/10/an-army-apart-the-widening-military-civilian-gap/, https://scholar.google.com/scholar?q=civil+military+gap&hl=en&as_sdt=0&as_vis=1&oi=scholart&sa=X&ei=jcgSVaH3HYGBU9eWgfgG&ved=0CBsQgQMwAA ).
Some military personnel may have the tendency to perceive that part of the civil-military gap is a disparity in pay between civilians and military personnel. Frankly, this view has always confused me, as pay in both the Government (including in the military) and the civil sector is largely impacted by many of the same factors: education, skills, experience, and leadership.
I recently came across a New York Times piece (http://www.nytimes.com/interactive/2012/01/15/business/one-percent-map.html?_r=0) that is useful in understanding how pay for military personnel stacks up against civilian income levels. The tool allows you to enter a given household income (pre-tax) and then provides comparison for how that income stacks up against the national average, as well as 344 different zones throughout the country. Give it a try; perhaps you’ll be as shocked as I was at where your income actually puts you in comparison to the rest of the U.S. population.
The chart I’ve attached shows what “percentage” various military grades “are,” in comparison to the rest of the country. For example, at the low-end of the scale, the chart shows that E-1s are in the bottom 17 percent, based on income; at the other end, four-star general/flag officers are in the top 6 percent.
Methodology.
For each grade, I used two pay levels, both from the 2015 pay table. The first level, shown in the red bars on the chart, is for base pay at a “normal” time in service for each grade. I determined a “normal” time in service myself (an E-2 at 1 year; an E-3 at 2 years; and E-4 at 4 years; and O-1 at 1 year, an O-3 at 6 years, etc, etc, etc). The second pay level, shown in blue bars on the chart, is for base pay at the Retention Control Point (http://www.apd.army.mil/pdffiles/ad2014_03.pdf) for enlisted and non-commissioned officers and the Mandatory Retirement Date for officers (http://dopma-ropma.rand.org/retirement-for-years-of-service.html). (I’d note that I still really don’t understand the rules for the limits established by Level II of the Executive Schedule for O-7 through O-10.) I did include the ranking non-commissioned officers from each Service in the data, and this is shown in the chart as E9#. I’d note that I could not find and am not familiar with how warrant officers are managed as far as retention control points or mandatory retirement dates go. Thus, data for warrant officers is derived from only the “normal” time in service for each grade.
I then put the pay levels into the New York Times tool (http://www.nytimes.com/interactive/2012/01/15/business/one-percent-map.html?_r=0) and recorded the given percentage based on the national average. A weakness in this methodology is that the New York Times tool uses data from 2011 or 2012, but for pay levels I used data from the 2015 pay table. I’d make an educated guess that this weakness probably skews the data a bit, perhaps by a couple percentage points either way. I’m comfortable with this, mostly as I haven’t found a better tool than the New York Times tool that quickly allows for comparison of income levels.
Finally, I ran two examples that include base pay and other entitlements. I used myself as the first example (O-4, 14 years), and used the data from the entitlements column of my most recent LES. On the chart, this example is annotated as O4*. Using base pay only, O4s are in the top 28 to top 25 percent, as compared to national income levels. Using an actual O4 as an example, including base pay and other entitlements on the LES, bumps O4s into the top 13 percent, representing a jump of 12 to 15 percent. For the second example, I used an E-6 with 12 years of service and no special pays, but BAH for Ft. Hood and BAS (for BAS and BAH: http://www.defensetravel.dod.mil/site/bahCalc.cfm, http://www.defense.gov/news/newsarticle.aspx?id=123873). This example is annotated as E6* on the chart. A normal E6, using base pay only, is in the bottom 39 to bottom 44 percent of income earners nationwide. Adding BAH for Ft. Hood and BAS bumps an E6 up by 15 to 20 percent, to 59 percent (or, rather, the top 41 percent).
Except for the O4* and E6* examples, I used only base pay in the data. Clearly, total military compensation includes much more than base pay, regardless of how hard the non-pay benefits are to quantify. As shown in the O4* and E6* examples, including only the entitlements shown on an LES (BAH, BAS, and the like) makes a substantial impact on income. Housing represents the largest part of this impact. As the O4* and E6* examples suggest, including LES entitlements bumps one up by something like 12 to 20 percent. I think it would be fair to include BAH/OHA/housing benefits in an assessment of military pay, and if anyone would like to extend this study to account for the thousands of BAH/OHA/housing benefit levels, feel free.
The take-away from the paragraph above is that the chart shows the absolute low-end of an assessment of military compensation, as it only (except for the O4* and E6* cases) considers base pay. Considering other entitlements would substantially impact the data, and would raise the percentage level of all grades by a substantial amount (probably in the range of 12 to 20 percent, with more of a bump for those at the lower end of the scale and a much smaller bump for those at the upper end of the scale).
I did briefly consider health care benefits, but decided adequate data was not readily available and it would just be too hard and time consuming to develop data for all grades in all locations (again, if someone would like to add to this, feel free). Some studies put the average health care benefit for military families at around $3,000 a year (https://www.cna.org/sites/default/files/news/2010/Comparing%20Military%20and%20Civilian%20Compensation%20Packages%20D0016569.A4.pdf, page 44). While unrealistic (as military health care is part of the sacred cow mentioned above and will never change), if military health care was every disbanded and we were all required to sign up for coverage made possible by the Affordable Care Act, it would cost a married O-4 with no children $6,750 annually to enroll and a married E-6 with one child stationed at Ft. Hood $5,961 annually to enroll (you can run the calculations at http://www.npr.org/blogs/health/2013/09/30/226456791/how-much-will-obamacare-cost-me-try-our-calculator). Based on this, it is clear that the military health care benefit is substantial. Running the numbers, even assessing the benefit at only $3,000 a year, adds five percentage points or so for those at the low end of the scale and one or two percentage points for those in the middle of the scale; $3,000 doesn’t make much of a difference for those at the upper end of the scale, though.
Poverty comparison.
The Government defines poverty as annual incomes below $11,770 (bottom 9%) for households with one person; $15,930 (bottom 14%) for two-person households; $20,090 (bottom 18%) for three-person households; and $24,250 (bottom 23%) for four-person households (and so on; for full data, see http://aspe.hhs.gov/poverty/15poverty.cfm).
Considering only base pay, only married E1s and E2s with one or more children and married E3s and E4s with two or more children fall below Government defined poverty rates. And these E1s, E2s, E3s, and E4s just barely fall below the poverty line, even when only considering base pay. Add in housing, health care, BAS, special pays, and these E1s, E2s, E3s, and E4s no longer fall below the poverty line.
Population assessment.
At the end of January 2016, there were 1,307,786 U.S. active duty military Servicemembers (https://www.dmdc.osd.mil/appj/dwp/dwp_reports.jsp).
Per the data I’ve presented, all E1s through E7s, W1s, and O1s (and probably about half of O2s) have incomes (base pay only) that place them in the bottom half of incomes nationwide. This group (E1-E7s, W1s, O1s and half of O2s) represents 82.6 percent of active duty Servicemembers.
All E1s and E2s have incomes (base pay only) that place them in the bottom 20 percent of incomes nationwide.
All E1s, E2s, E3s, and E4s have incomes (base pay only) that place them in the bottom 30 percent of incomes nationwide.
Conclusion.
Using only base pay to compare the income levels of active duty military personnel with nationwide income levels is a terrible way to compare compensation levels. Considering only base pay when considering income levels provides comparisons based on bad data.
If one considered only base pay, one can see why some argue that military personnel, especially junior enlisted, should be paid more. Acknowledging that the base pay incomes of 82.5 percent of military personnel puts them in the bottom 50 percent nationwide is tough.
If one considered base pay plus the entitlements that appear on one’s LES (housing, BAS, special pays, etc), it would be difficult to understand arguments calling for increased across-the-board military pay.
If one considered base pay plus entitlements that appear on one’s LES plus entitlements that do not appear on one’s LES (education, health care, family support systems, etc, etc), understanding arguments that call for increased across the board military pay becomes even more difficult to understand.
However, even if one ONLY CONSIDERS BASE PAY, military compensation compares really well to nationwide averages.
Personally, I’d be quite happy with more pay; why not? However, I’d assess that the current total compensation package is adequate across the board. I’d assess that the total compensation package is as good or better than what most military members could find in the civilian market. I’d assess that the total compensation package is logical, as it provides additional compensation for education (via special pays and increased rank/promotion for higher education levels), skills (again, via special pays), experience (time in service), and leadership (higher compensation levels for increased responsibility).
If you read all of this, thanks!
Even if one ONLY CONSIDERS BASE PAY, military compensation compares really well to nationwide averages.
Personally, I’d be quite happy with more pay; why not? But I’d assess that the total compensation package is both adequate and logical, as it provides relatively good pay and additional compensation for education (via special pays and increased rank/promotion for higher education levels), skills (again, via special pays), experience (time in service), and leadership (higher compensation levels for increased responsibility).
Search “pay” on Rallypoint, and you’ll see literally hundreds of questions and threads on the topic of military pay. In these questions and threads, and elsewhere (just search the internet and you’ll be inundated with articles about changes to military pay and compensation, for example), you’ll come across two general themes: 1) military personnel are under-compensated; and, the alternative, 2) military personnel are over-compensated.
There are, of course, plenty of studies about military pay and compensation.
The ones by the Government, as expected, tend to assert that military personnel are more than adequately compensated. These types of studies generally focus on total military compensation, which is quite a bit different than pay. One study by the Congressional Budget Office estimated that the average Servicemember earns a total compensation package worth $99,000 (http://www.goarmy.com/benefits/total-compensation.html). I suspect many of you share my doubts about the methodology used to make such calculations. I’m especially averse to data on “average” Servicemembers; it is unclear to me what an “average” Servicemember is, given the disparity in compensation between the newest E-1 and the Chairman of the Joint Chiefs of Staff, especially as I can’t find a description of what the Government characterizes as the “average” Servicemember (age, rank/grade, marital status, location, dependents, education level, etc, etc). If you want, though, you can use this calculator (http://militarypay.defense.gov/mpcalcs/Calculators/RMC.aspx) to see how much the Government believes your total compensation package to be. For another example, see the Center for Naval Analysis’ report comparing military and civilian compensation (https://www.cna.org/sites/default/files/news/2010/Comparing%20Military%20and%20Civilian%20Compensation%20Packages%20D0016569.A4.pdf).
On the other hand, entities interested in securing additional pay and benefits for military personnel, such as the various service and veteran’s associations, advocate for increasing compensation of military personnel. MOAA provides a good example at: http://www.moaa.org/Main_Menu/Take_Action/Top_Issues/Serving_in_Uniform/Compensation/SecDef_Warns_of_Pay_Cuts.html.
As James Fallows wrote in the January/February 2015 issue of The Atlantic, in his highly regarded article “The Tragedy of the American Military,” the military and military personnel have become something akin to a sacred cow. He asserts that the “American public and its political leadership will do anything for the military except take it seriously.” The perceived gap between civilians and the military is a topic covered at length, both in the news media, scholarly journals, and the blogosphere and other less formal fora (for examples, see http://www.rand.org/pubs/monographs/MG379.html, http://nation.time.com/2011/11/10/an-army-apart-the-widening-military-civilian-gap/, https://scholar.google.com/scholar?q=civil+military+gap&hl=en&as_sdt=0&as_vis=1&oi=scholart&sa=X&ei=jcgSVaH3HYGBU9eWgfgG&ved=0CBsQgQMwAA ).
Some military personnel may have the tendency to perceive that part of the civil-military gap is a disparity in pay between civilians and military personnel. Frankly, this view has always confused me, as pay in both the Government (including in the military) and the civil sector is largely impacted by many of the same factors: education, skills, experience, and leadership.
I recently came across a New York Times piece (http://www.nytimes.com/interactive/2012/01/15/business/one-percent-map.html?_r=0) that is useful in understanding how pay for military personnel stacks up against civilian income levels. The tool allows you to enter a given household income (pre-tax) and then provides comparison for how that income stacks up against the national average, as well as 344 different zones throughout the country. Give it a try; perhaps you’ll be as shocked as I was at where your income actually puts you in comparison to the rest of the U.S. population.
The chart I’ve attached shows what “percentage” various military grades “are,” in comparison to the rest of the country. For example, at the low-end of the scale, the chart shows that E-1s are in the bottom 17 percent, based on income; at the other end, four-star general/flag officers are in the top 6 percent.
Methodology.
For each grade, I used two pay levels, both from the 2015 pay table. The first level, shown in the red bars on the chart, is for base pay at a “normal” time in service for each grade. I determined a “normal” time in service myself (an E-2 at 1 year; an E-3 at 2 years; and E-4 at 4 years; and O-1 at 1 year, an O-3 at 6 years, etc, etc, etc). The second pay level, shown in blue bars on the chart, is for base pay at the Retention Control Point (http://www.apd.army.mil/pdffiles/ad2014_03.pdf) for enlisted and non-commissioned officers and the Mandatory Retirement Date for officers (http://dopma-ropma.rand.org/retirement-for-years-of-service.html). (I’d note that I still really don’t understand the rules for the limits established by Level II of the Executive Schedule for O-7 through O-10.) I did include the ranking non-commissioned officers from each Service in the data, and this is shown in the chart as E9#. I’d note that I could not find and am not familiar with how warrant officers are managed as far as retention control points or mandatory retirement dates go. Thus, data for warrant officers is derived from only the “normal” time in service for each grade.
I then put the pay levels into the New York Times tool (http://www.nytimes.com/interactive/2012/01/15/business/one-percent-map.html?_r=0) and recorded the given percentage based on the national average. A weakness in this methodology is that the New York Times tool uses data from 2011 or 2012, but for pay levels I used data from the 2015 pay table. I’d make an educated guess that this weakness probably skews the data a bit, perhaps by a couple percentage points either way. I’m comfortable with this, mostly as I haven’t found a better tool than the New York Times tool that quickly allows for comparison of income levels.
Finally, I ran two examples that include base pay and other entitlements. I used myself as the first example (O-4, 14 years), and used the data from the entitlements column of my most recent LES. On the chart, this example is annotated as O4*. Using base pay only, O4s are in the top 28 to top 25 percent, as compared to national income levels. Using an actual O4 as an example, including base pay and other entitlements on the LES, bumps O4s into the top 13 percent, representing a jump of 12 to 15 percent. For the second example, I used an E-6 with 12 years of service and no special pays, but BAH for Ft. Hood and BAS (for BAS and BAH: http://www.defensetravel.dod.mil/site/bahCalc.cfm, http://www.defense.gov/news/newsarticle.aspx?id=123873). This example is annotated as E6* on the chart. A normal E6, using base pay only, is in the bottom 39 to bottom 44 percent of income earners nationwide. Adding BAH for Ft. Hood and BAS bumps an E6 up by 15 to 20 percent, to 59 percent (or, rather, the top 41 percent).
Except for the O4* and E6* examples, I used only base pay in the data. Clearly, total military compensation includes much more than base pay, regardless of how hard the non-pay benefits are to quantify. As shown in the O4* and E6* examples, including only the entitlements shown on an LES (BAH, BAS, and the like) makes a substantial impact on income. Housing represents the largest part of this impact. As the O4* and E6* examples suggest, including LES entitlements bumps one up by something like 12 to 20 percent. I think it would be fair to include BAH/OHA/housing benefits in an assessment of military pay, and if anyone would like to extend this study to account for the thousands of BAH/OHA/housing benefit levels, feel free.
The take-away from the paragraph above is that the chart shows the absolute low-end of an assessment of military compensation, as it only (except for the O4* and E6* cases) considers base pay. Considering other entitlements would substantially impact the data, and would raise the percentage level of all grades by a substantial amount (probably in the range of 12 to 20 percent, with more of a bump for those at the lower end of the scale and a much smaller bump for those at the upper end of the scale).
I did briefly consider health care benefits, but decided adequate data was not readily available and it would just be too hard and time consuming to develop data for all grades in all locations (again, if someone would like to add to this, feel free). Some studies put the average health care benefit for military families at around $3,000 a year (https://www.cna.org/sites/default/files/news/2010/Comparing%20Military%20and%20Civilian%20Compensation%20Packages%20D0016569.A4.pdf, page 44). While unrealistic (as military health care is part of the sacred cow mentioned above and will never change), if military health care was every disbanded and we were all required to sign up for coverage made possible by the Affordable Care Act, it would cost a married O-4 with no children $6,750 annually to enroll and a married E-6 with one child stationed at Ft. Hood $5,961 annually to enroll (you can run the calculations at http://www.npr.org/blogs/health/2013/09/30/226456791/how-much-will-obamacare-cost-me-try-our-calculator). Based on this, it is clear that the military health care benefit is substantial. Running the numbers, even assessing the benefit at only $3,000 a year, adds five percentage points or so for those at the low end of the scale and one or two percentage points for those in the middle of the scale; $3,000 doesn’t make much of a difference for those at the upper end of the scale, though.
Poverty comparison.
The Government defines poverty as annual incomes below $11,770 (bottom 9%) for households with one person; $15,930 (bottom 14%) for two-person households; $20,090 (bottom 18%) for three-person households; and $24,250 (bottom 23%) for four-person households (and so on; for full data, see http://aspe.hhs.gov/poverty/15poverty.cfm).
Considering only base pay, only married E1s and E2s with one or more children and married E3s and E4s with two or more children fall below Government defined poverty rates. And these E1s, E2s, E3s, and E4s just barely fall below the poverty line, even when only considering base pay. Add in housing, health care, BAS, special pays, and these E1s, E2s, E3s, and E4s no longer fall below the poverty line.
Population assessment.
At the end of January 2016, there were 1,307,786 U.S. active duty military Servicemembers (https://www.dmdc.osd.mil/appj/dwp/dwp_reports.jsp).
Per the data I’ve presented, all E1s through E7s, W1s, and O1s (and probably about half of O2s) have incomes (base pay only) that place them in the bottom half of incomes nationwide. This group (E1-E7s, W1s, O1s and half of O2s) represents 82.6 percent of active duty Servicemembers.
All E1s and E2s have incomes (base pay only) that place them in the bottom 20 percent of incomes nationwide.
All E1s, E2s, E3s, and E4s have incomes (base pay only) that place them in the bottom 30 percent of incomes nationwide.
Conclusion.
Using only base pay to compare the income levels of active duty military personnel with nationwide income levels is a terrible way to compare compensation levels. Considering only base pay when considering income levels provides comparisons based on bad data.
If one considered only base pay, one can see why some argue that military personnel, especially junior enlisted, should be paid more. Acknowledging that the base pay incomes of 82.5 percent of military personnel puts them in the bottom 50 percent nationwide is tough.
If one considered base pay plus the entitlements that appear on one’s LES (housing, BAS, special pays, etc), it would be difficult to understand arguments calling for increased across-the-board military pay.
If one considered base pay plus entitlements that appear on one’s LES plus entitlements that do not appear on one’s LES (education, health care, family support systems, etc, etc), understanding arguments that call for increased across the board military pay becomes even more difficult to understand.
However, even if one ONLY CONSIDERS BASE PAY, military compensation compares really well to nationwide averages.
Personally, I’d be quite happy with more pay; why not? However, I’d assess that the current total compensation package is adequate across the board. I’d assess that the total compensation package is as good or better than what most military members could find in the civilian market. I’d assess that the total compensation package is logical, as it provides additional compensation for education (via special pays and increased rank/promotion for higher education levels), skills (again, via special pays), experience (time in service), and leadership (higher compensation levels for increased responsibility).
If you read all of this, thanks!
Pay Cuts
Fair Pay
Compensation
Posted >1 y ago
Responses: 15
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I think I am under-compensated when compared to my civilian peers. According to the Bureau of Labor Statistics, the median salary for FAA Air Traffic Controllers is just over $122,000 a year. Versus my meager E5 pay. Ultimately though, I can pursue a career as a civilian air traffic controller if I like thanks to me being in the National Guard . . . I'm just not interested in it. I took a pay cut and instead pursued a job that lines up with my dreams better. . . working on computers.
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MAJ (Join to see)
Interesting perspective. For Lubbock, Texas, a E-5's normal base pay would put you right at about median household income (http://quickfacts.census.gov/qfd/states/48/48303.html), not bad for a "meager E5." It would also put you near the middle of the pack (bottom 42%) across Texas (non-metro areas). Adding in the 15-20% bump that comes with assessing the total compensation package, a normal E-5 in Lubbock, Texas is being compensated better than lets say 55-60% of the population. On the point that in some niche fields (air traffic controllers, for example), there is a substantial difference in civilian and military income levels, even if one takes the total compensation package into account.
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SGT (Join to see)
Oh I was being a bit tongue in cheek with the meager E5 comment, sir. As for the median income deal, my civilian job actually compensates less than the military, but as I said before, I'm doing what I love. I consider myself one of the lucky ones for having found a way to make money doing my hobby . . . fixin' computers.
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From my experiences being in the USAF. I felt as a SrA, I was adequately compensated. Because I do manage my money well, I can even go as far as saying I was overly compensated. I was able to afford everything I need, while able to save up for my luxury items and entertainment. (I have an Omega Speedmaster, sorry to name drop.)
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There is not a lot I can say about this subject. E-1's pay more in taxes than my base pay was when I was first in.
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If anyone thinks they are underpaid while on active duty, just wait till your off active duty. Once insurance is paid, taxes on everything you make is taken and limited paid days off it become quite apparent we were paid pretty decent. You remember that little paper that told you what you were making based on your compensation that we all thought was BS. Well it turns out it wasn't. Just saying.
Financial management by SMs is often piss poor though. I don't know if it's a failed school system or failed parenting but way too SMs learn the hard way about debt and responsibility.
Financial management by SMs is often piss poor though. I don't know if it's a failed school system or failed parenting but way too SMs learn the hard way about debt and responsibility.
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MAJ (Join to see)
CW2 John Brookins I still think that little piece of paper they used to give us to show how much we were compensated was BS. :) But you're point is well taken! Thanks!
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We are adequately compensated while in the service when you add all forms of pay. Retirement pay is the real question. Retirees are not adequately compensated for 20 years of service. Remember it is a percentage of Base Pay only. When you look at your LES as you get closer to retirement take that base pay and cut in half - out of that pay taxes and medical. Granted being 39 and receiving check is nice.
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MAJ (Join to see)
That puts you in the bottom 23%, based on base pay alone (using 54% of E6 retired pay). Assuming you live until you're 77 (average life expectancy), not adjusting for inflation, and using 2015 dollars, that makes your pension, in base pay only, worth something like $920,000. Using the military's calculator, http://militarypay.defense.gov/mpcalcs/Calculators/FinalPayHigh3Result.aspx, your pension is worth $1,740,298, on base pay only. Let's say the non-pay benefits double the value of the pension. So, your pension is worth something like $2-4 million. That's not bad!
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TSgt Kevin Buccola
and that is fine if your house is paid off, own no cars, pay zero on elect bills and do not want to eat. you can only stretch $1500 per month so far when my property tax and homeowner insurance alone is 11,500 per year. Even though the number $920,000 looks good, retirement pay is a joke. I am on my second career thank goodness to cover the rest of the bills, like food, electric, gas, cars.
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MAJ (Join to see)
TSgt Kevin Buccola Absolutely--its best to realize early that a military retirement check, even with the other benefits, is not in most cases going to allow one to maintain their standard of living without additional income.
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