How to Easily Figure Out the Dollar Value of Staying In vs Getting Out of the Military

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Here is a table from the 2019 Statistical Report on the Military Retirement System:

Just by looking at this table, you can very easily learn a few things including:

  • The dollar value of staying in for 20+ years and receiving a retirement pension.
  • The incremental value of staying on active duty for additional years once you are retirement eligible.

The Dollar Value of a Military Pension

Let’s say you are an O-4 who has the option of resigning/separating at the 12 year mark. You think if you stayed in until 20 years you could make O-5, but you’re not sure just how valuable that military pension really is. You can figure that out by looking at the table above, and you can see that a 20 year O-5 pension has a dollar value of $1,458,837. You can reduce this value by about 20% ($1,167,070) if your are in the Blended Retirement System and would only get 80% of the full pension. That is what you’d be giving up by getting out at the 12 year mark as an O-4 and not staying in long enough to get the pension.

The Value of Staying Additional Years Once You are Retirement Eligible

Let’s say you are a 20 year O-5 who is weighing an extra 4 year commitment, and you think you could make it to O-6 if you stayed until 24. What is the dollar value of sticking around when it comes to your retirement pension?

We already mentioned that a 20 year O-5 pension was worth $1,458,837. If you stayed in another 4 years and made O-6 the value of your pension would have increased by $526,879 to $1,985,716, an average of $131,720 per extra year you stuck it out.

The Bottom Line

There are a lot of factors to consider when you are making the decision to stay in or get out, but by looking at the table above you can pretty easily quantify dollars values associated with:

  • Staying in for 20+ years and receiving a retirement pension.
  • The incremental value of staying on active duty for additional years once you are retirement eligible.

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