Servicemembers who have chosen to make the military their life’s primary career choice, seeing it through to retirement, often have the ability to receive retirement benefits significantly earlier than their civilian counterparts, giving them the chance to better enjoy their retirement.
The decision of when to retire from the military can be a simple one for some and a more difficult and calculated process for others.
Weighing the Benefits
One of the most compelling factors in making this decision tends to be the job of the servicemember. Those with a more dangerous, physical and mentally taxing career specialty tend to seek retirement sooner regardless of the increase in pay than those with jobs that are not front-line, high stress positions.
Military members are eligible to receive retirement benefits after 20 years of service, receiving 50% of the final base pay, which increases by 2.5% for every additional year bringing it to 75% of the final base pay at 30 years of service. Retirees also have the benefit of healthcare coverage, commissary access and exchange store services. Decisions on when to retire from the military is a very personal choice which is greatly affected by the servicemember’s current and future situation.
Perhaps the first question you should ask: Is the job you are in one you can handle staying in for an extended period of time to achieve a higher pension? If the answer is no, it is probably best to get out as soon as retirement is made available and seek employment elsewhere, if necessary. If you are willing to continue in your current job position, other factors should be looked into to make the best choice of how long to stay in the military.
“Veterans and retirees have the stomach to take risks, the ability to deal with ambiguity, and the drive to reach objectives.”
For example, is there a chance of promotion in rank which would increase your pension in the long run? If so, how many ranks could you move up in the time you have remaining? Another thing to look at is does the base pay level out at some point in the number of years served where additional years would not prove to be of benefit in increasing the pension at retirement? For instance, if you have achieved your highest possible rank for the time you have remaining, and the base pay for that rank will not increase with the addition of the years you have remaining, it would make sense to retire as soon as you hit that financial plateau instead of putting in more of your time that will deliver no financial benefit in the future.
One other thing to take into consideration is your skill sets, educational background, and desire to stay in the workforce. If you hold a high level of education or a specialized and in-demand set of skills and enjoy staying employed, you might want to explore your options in the civilian world as far as available jobs and there comparable salaries.
You might find that retiring at 20 years and pursuing a career outside the military that pays a considerable salary and may also have retirement options available may be more lucrative for your personal situation. This situation is a little more risky seeing as you would have to land a job in this volatile job market, but if you have the education and skills, it can often put you at the top of the list.
However, rather than dust off your resume, you could always start your own business. I make the case in my upcoming book Pathfinder! The Veteran’s Field Manual for Starting Your Own Business and Conquering the Online Economy that veterans and retirees make some of the best entrepreneurs. Both groups have the stomach to take risks, the ability to deal with ambiguity, and the drive to reach objectives. Retiring from the military and starting your own company might be the perfect solution in our still-recovering economy.
It is important to carefully and strategically create a retirement plan that works best for you and your family. Taking the time to work out the different scenarios and calculate the possible outcomes can prove to be a valuable step to ensure that you and your family enjoy a comfortable retirement.
For more information on all things retirement, visit Warrior Lodge, The Ultimate Online Military Resource.