Sync.com - private cloud

What Is Military Retirement Worth?

Military Salute

Some links may be affiliate links. We may get paid if you buy something or take an action after clicking one of these. Disclaimer

I just recently reenlisted for another term stretching me out to a total of eight years. In my next reenlistment, I will have to start thinking about making this a career or getting out.
The military requires you to serve for twenty years to receive military retirement pay. At eight years in I will be almost halfway there. If I choose to reenlist after that then I might as well stay in for the long haul.

This got me thinking about the value of retirement. If I serve 19 years then get out, I will have made some decent money, maybe get an education for free and a decent resume. If I choose to serve for at least twenty years, then I will receive 2.5% of the years served of my final base pay for the rest of my life.

2.5 X 20 years = 50%.

Using the current 2013 pay chart, an E6 with 20 years of service earns a base pay of $3,650.70 a month. His retirement pay will be $1,082.10 each month for the rest of his life. That is $12,985.20 a year and if he lives for another 40 years he will receive $519,408 in retirement. Now, this does not factor in the cost of living adjustment and is solely based on this year's base pay but it is to give you an idea.

An E7 will receive $2,164.20 a month for a total of $1,038,816 over 40 years.

An E8 will receive $2,423.85 a month and a total of $1,163,448 over 40 years.

If you were to break that down over the first 20 years worked it comes out to be an extra $2,164.2 a month in pay for the full 20 years for someone who retired as an E6. It's an extra $4,328.4 a month for an E7 and $4,847.7 for an E8.

That is the difference between serving 19 years and 20 years. So if you are ever disappointed about the size of your paycheck then remember if you stick it out until 20 years then the time you put in now will be worth much more.

PrivateThrifty.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Stay in Touch

As an Amazon Associate I earn from qualifying purchases

We partner with Rakuten Marketing, who may collect personal information when you interact with our site. The collection and use of this information is subject to the privacy policy located here.

Disclaimer: This is a private website that is NOT affiliated with the U.S. government, U.S. Armed Forces or Department of Veteran Affairs. U.S. government agencies have not reviewed this information. This site contains information about GI Bill benefits, VA loans, news and services for military veterans and is not connected with any government agency. GI Bill® is a registered trademark of the U.S. Department of Veterans Affairs (VA). The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

© PrivateThrifty and privatethrifty.com, 2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to PrivateThrifty and privatethrifty.com with appropriate and specific direction to the original content.