When to retire from the military?

[Sarcogito]

I am career military and will be hitting my 20 year mark likely at the end of my next assignment. I am trying to decide whether or not to retire and start a second career on the civilian side or to stay in the military for another 10 years and retire around my 30 year mark.

If I retire at my 20 year mark I will be 44 years old and would get a pre-tax monthly pension of about $3,000/month. To those who are unfamiliar with the US military pension system, we start drawing our pension immediately upon retirement regardless of age. So I would start drawing that $3,000/month at 44.

With a wife and two school-aged kids I obviously would have to keep working. $36,000/year just won’t cut it. With my experience I could easily walk into a civilian government job earning a much higher salary than what I earned in the military. But the benefits and pension would not be near as good.

See, if I stay in the military until my 30 year mark I would be retiring at the age of 54 with a pension of 75K/year and the kids would be out of the house. Even if I didn’t save any money, which of course I do, I could live comfortably on that pension. 54 years old seems like a damn good age to retire and I wouldn’t have to work anymore if I didn’t want to.

If I get out at 20 and start a civilian career I don’t think I could fully retire at 54 with the same certainty of that kind of financial security. I mean, if I invested my larger income wisely and the market was cooperative around the time I wanted to retire, I might be able to retire at 54 with even more security, or maybe not. 10 years isn’t long to be vetted into a pension plan, even though I would likely earn close to 100K a year, not including my military pension. My ultimate goal is to be able to stop working by the age of 55 if I choose.

And even though my salary in the military isn’t super high, it isn’t bad. I work in embassies and thus am always stationed overseas. We live in very nice housing at no expense to me and my kids get to go to outstanding private international schools. Sure, every once in a while you get caught in the middle of an armed rebellion but no job is perfect.

So, from a financial perspective, is it foolish of me to stick it out 30 years? My one fear is that they change the pension system on me. It is almost guaranteed it will change sometime in the near future because, let’s face it, it is a pretty sweet deal. But I would hope those of us already in would be grandfathered.

 

[RabidAlpaca]

I got out of the army with 7 years in because I absolutely couldn't stand it. I remember even when I only had 3 years in people kept telling me to "ride it out" until retirement.

This doesn't seem to be the case with you; you seem to like your job at least a decent amount. Honestly, if I liked the job and were that far in, I'd just do the extra 10. Even if you fall short of the 10, you're still letting the pension grow every 2 years.

You've got great health coverage for you and your family, which is getting more expensive by the day in the states, and overall military pay is pretty good.

The only real issue is what you brought up about them changing the retirement. I think their solution is more to reform retirement for new recruits, and kick out more people. So if you can avoid being laid off, I think you might be fine.

Then again, it's the army.

 

[Sarcogito]

I got out of the army with 7 years in because I absolutely couldn't stand it. I remember even when I only had 3 years in people kept telling me to "ride it out" until retirement.

This doesn't seem to be the case with you; you seem to like your job at least a decent amount. Honestly, if I liked the job and were that far in, I'd just do the extra 10. Even if you fall short of the 10, you're still letting the pension grow every 2 years.

You've got great health coverage for you and your family, which is getting more expensive by the day in the states, and overall military pay is pretty good.

The only real issue is what you brought up about them changing the retirement. I think their solution is more to reform retirement for new recruits, and kick out more people. So if you can avoid being laid off, I think you might be fine.

Then again, it's the army.

Admittedly, as far as military gigs go, I have a pretty good one. In many ways my quality of life more closely resembles that of a State Department Foreign Service Officer.

 

[UtahBill]

I am career military and will be hitting my 20 year mark likely at the end of my next assignment. I am trying to decide whether or not to retire and start a second career on the civilian side or to stay in the military for another 10 years and retire around my 30 year mark.

If I retire at my 20 year mark I will be 44 years old and would get a pre-tax monthly pension of about $3,000/month. To those who are unfamiliar with the US military pension system, we start drawing our pension immediately upon retirement regardless of age. So I would start drawing that $3,000/month at 44.

With a wife and two school-aged kids I obviously would have to keep working. $36,000/year just won’t cut it. With my experience I could easily walk into a civilian government job earning a much higher salary than what I earned in the military. But the benefits and pension would not be near as good.

See, if I stay in the military until my 30 year mark I would be retiring at the age of 54 with a pension of 75K/year and the kids would be out of the house. Even if I didn’t save any money, which of course I do, I could live comfortably on that pension. 54 years old seems like a damn good age to retire and I wouldn’t have to work anymore if I didn’t want to.

If I get out at 20 and start a civilian career I don’t think I could fully retire at 54 with the same certainty of that kind of financial security. I mean, if I invested my larger income wisely and the market was cooperative around the time I wanted to retire, I might be able to retire at 54 with even more security, or maybe not. 10 years isn’t long to be vetted into a pension plan, even though I would likely earn close to 100K a year, not including my military pension. My ultimate goal is to be able to stop working by the age of 55 if I choose.

And even though my salary in the military isn’t super high, it isn’t bad. I work in embassies and thus am always stationed overseas. We live in very nice housing at no expense to me and my kids get to go to outstanding private international schools. Sure, every once in a while you get caught in the middle of an armed rebellion but no job is perfect.

So, from a financial perspective, is it foolish of me to stick it out 30 years? My one fear is that they change the pension system on me. It is almost guaranteed it will change sometime in the near future because, let’s face it, it is a pretty sweet deal. But I would hope those of us already in would be grandfathered.

You didn't say what your education is or what kind of job prospects that will get you...but as a Navy retiree, I say stay, but only for the minimum amount of time, each time. In my day, that was 2 years at a time. This gives you security of employment but doesn't tie you down for a long period of time.
You will retire with your own medical benefits and no need of a prospective employer's retirement benefits whether you do it now or 2 years from now or longer.
In 73 I wanted out, but the wife said the economy is bad, jobs are few, we should stay, so I re-enlisted for 4 more years, and soon regretted it. I should have re-upped for only 2. I found that getting past E6 was very difficult. So in 77 I got out and went into the reserves for 10 years, and still could not make E7. No matter, once I hit 60 and retired, the E6 over 20 retirement pay and benefits is nothing to sneer at. I get 3/8 base pay, thanks to the long active duty segment.
When I was short, less than 6 months, I started looking around for a civilian job, and got a good one. But during the process, one employer told me that they avoid the senior enlisteds and officers who too often have forgotten how to work, and/or might expect too much from the employer.

 

[Sarcogito]

You didn't say what your education is or what kind of job prospects that will get you

I have a BA and I am a warrant officer. If I got a civilian job with DoD I could walk into a GS/GG-13 job or the equivalent with the State Foreign Service.

If I decided to steer clear of government work then I would probably be best suited for management in a small business or perhaps a teacher. I have also accrued plenty of accounting experience.

 

[UtahBill]

I have a BA and I am a warrant officer. If I got a civilian job with DoD I could walk into a GS/GG-13 job or the equivalent with the State Foreign Service.

If I decided to steer clear of government work then I would probably be best suited for management in a small business or perhaps a teacher. I have also accrued plenty of accounting experience.

The thread reminds me of an old Beetle Bailey cartoon, Sgt. Snorkel is walking around in town and can't understand the disorder of civilian life. He couldn't wait to get back to his beloved army post....
OTOH, after a lot of years not being near a base, we finally moved near one and started using the commissary at Luke AFB in AZ. It was nice to be in a place that is clean, the people are courteous, you can leave your car unlocked, etc.

 

[MaggieD]

I am career military and will be hitting my 20 year mark likely at the end of my next assignment. I am trying to decide whether or not to retire and start a second career on the civilian side or to stay in the military for another 10 years and retire around my 30 year mark.

If I retire at my 20 year mark I will be 44 years old and would get a pre-tax monthly pension of about $3,000/month. To those who are unfamiliar with the US military pension system, we start drawing our pension immediately upon retirement regardless of age. So I would start drawing that $3,000/month at 44.

With a wife and two school-aged kids I obviously would have to keep working. $36,000/year just won’t cut it. With my experience I could easily walk into a civilian government job earning a much higher salary than what I earned in the military. But the benefits and pension would not be near as good.

See, if I stay in the military until my 30 year mark I would be retiring at the age of 54 with a pension of 75K/year and the kids would be out of the house. Even if I didn’t save any money, which of course I do, I could live comfortably on that pension. 54 years old seems like a damn good age to retire and I wouldn’t have to work anymore if I didn’t want to.

If I get out at 20 and start a civilian career I don’t think I could fully retire at 54 with the same certainty of that kind of financial security. I mean, if I invested my larger income wisely and the market was cooperative around the time I wanted to retire, I might be able to retire at 54 with even more security, or maybe not. 10 years isn’t long to be vetted into a pension plan, even though I would likely earn close to 100K a year, not including my military pension. My ultimate goal is to be able to stop working by the age of 55 if I choose.

And even though my salary in the military isn’t super high, it isn’t bad. I work in embassies and thus am always stationed overseas. We live in very nice housing at no expense to me and my kids get to go to outstanding private international schools. Sure, every once in a while you get caught in the middle of an armed rebellion but no job is perfect.

So, from a financial perspective, is it foolish of me to stick it out 30 years? My one fear is that they change the pension system on me. It is almost guaranteed it will change sometime in the near future because, let’s face it, it is a pretty sweet deal. But I would hope those of us already in would be grandfathered.

If you wait 10 years to retire, you'll be giving up $360,000. And you'll still be working.

If you retire, you'll get $360,000 and still be working.

I wouldn't give up the $360,000. I'd retire.

Seriously, in this climate of "never knowing," the smart thing is probably to take "what is." Why don't you do some job hunting before you decide? See what's out there and what you could command.

 

[mike2810]

So if you stay in the military for 10 more years your retirement will be 75K vs 36K (3k/month).

Seems the question to ask is based on todays economy, do you have a job lined up that has a good chance of lasting 10 years?
If your kids are going to in college, is it covered. Can you provide for them under your 36K retirement if the private job fails to last?
Would working for a private company result in at least 39K or more in retirement to equal the 75K.

Bottom line though. Is what will make you the happiest? New job for 10 years. or staying at your military job. There is more than dollars to consider with a job.