People join the military for many reasons and under different circumstances. When thinking about joining, some may wonder if military service provides enough financial compensation, stability and opportunities for a desirable lifestyle. This is an excellent question. Below is a general overview of some military benefits to help you make an informed decision or, if already serving, take advantage of the benefits available to you. The below is from an active duty Marine Corps perspective. There are some differences between services as well as between the active and reserve components.
Pay
Military pay can be complicated, so let’s talk about the main components. Firstly, your basic pay is based on your rank and your time in service. As you progress in rank and gain years in service, your pay will increase.
Your basic housing allowance (BAH) depends on where you live, your rank, and whether you have dependents. For example, you will receive more housing allowance in southern California than you will in South Carolina due to the increased cost of living. Also, your housing allowances will increase as you progress in rank and again if you have dependents. If you prefer to live on base, you can exchange your BAH for on-base housing. This is an attractive option for some because utilities and maintenance are cost-free in addition to an increased level of safety and convenience.
Along with the above primary pays, there are allowances for food and clothing. There are also signing and re-enlistment bonuses available to certain specialties. Other incentive pays and allowances are available for various specialties, skills and circumstances like aviation, language, combat, family separation, etc. The minutia of these pays and allowances will be covered in another article. More on military pay.
Taxes
There are many, often substantial, tax advantages available to military members. For example, most allowances are not taxed. This leaves basic pay, special pay and bonuses as the primary taxable military pays. Additionally, some states allow military members to avoid paying state income taxes under certain circumstances. Many products and services on base are tax-free as well. More information on military tax issues.
Medical Care
Service members can get free, comprehensive medical care for them and their family. Anyone who’s paid health premiums for a family understands the value of this benefit. Service members also receive things like physical therapy, corrective surgeries (i.e. PRK/LASEK eye surgery), medications, supplements, and others cost-free. More about military medical care.
Life Insurance
Unfortunately, many of us underestimate the value of life insurance until it’s too late, especially when we’re young and death seems so far away. Service members can purchase life insurance for themselves (SGLI) in $50,000 increments up to $400,000. The cost of the maximum $400,000 coverage is exceptional at only $27/month no matter what your age, health or specialty. Additionally, service members may also purchase coverage for their spouse and children in $10,000 increments up to $100,000 at competitive rates (FSGLI). For example, coverage for a spouse or child at the $100,000 level for someone 35 or younger is only $5/month. More information on SGLI. More information on FSGLI.
Educational benefits
The GI Bill is a popular military benefit that provides service members money for college, vocational and other educational institutions. The GI Bill now includes more appropriate compensation (based on state tuition rates) and a BAH (allowance for housing) component. With the Post 9/11 GI Bill came another, less familiar feature called the Yellow Ribbon Program which is available after leaving active duty. Under this program participating institutions will pay some or all of the remaining tuition beyond what the GI Bill covers. This feature makes private institutions more accessible and easier to afford. More information on the GI Bill. More Information on the Yellow Ribbon Program.
While on active duty, service members can use Tuition Assistance (TA). This pays for courses up to $250/credit hour totaling up to $4,500 per year for most branches. Essentially, this allows you to earn a Bachelor’s degree for free while serving without using your GI Bill. This program may also be used to earn a Master’s and Doctorate degree as well. More information on Tuition Assistance.
With the new Post 9/11 GI Bill service members may also pass their education benefits onto their dependents after certain time in service milestones are met.
Retirement
Military retirement is without a doubt one of the best retirement programs, but it must be earned. Military service requires a serious commitment and can be incredibly demanding on the service member and their family.
At its most basic level, for 20 years of service an individual receives have of their qualifying basic pay for the rest of their life. Retirement pay increases by 2.5% per year, capping at 100% after 40 years of service. For example, if someone joined the service at age 17 they could potentially retire as a Sergeant Major or Chief Warrant Officer at age 37 and receive over $30,000/year for the rest of their life, still young enough to begin another career. More on active duty retirement.
In addition to the above, the military offers a voluntary retirement savings program called Thrift Savings Plan (TSP) which is similar to a Traditional IRA. The Thrift Savings Plan allows service members to contribute significantly more per year than Traditional and Roth IRAs. Thrift Savings Plan Website.
Experience and Training
I have no doubt that it is possible for an individual to sit at a desk their entire career and never actually go anywhere or see anything, but this is highly unlikely. But based on choice of branches, occupational specialty and motivation you can do just about anything you desire. In the Marine Corps I’ve had the opportunity to manage logistics, work in aviation, manage nearly a billion dollar budget, perform combat operations and security patrols with foreign militaries, lead large groups of people towards a common goal, etc. I’ve also had the opportunity to live all over the United States and see different parts of the world. That’s just something you can’t put a price on, especially if you want to leave the military to pursue a career elsewhere. Everyone’s experiences vary, but in my mind this is one of the largest benefits.
Benefits from training are highly dependent on occupational specialty. For example, a military police officer will have an advantage if they wish to follow a career in law enforcement later in the civilian world. A number of my friends were aviators in the military and are currently flying for airlines, FedEx or other organizations while serving in the reserves. The opportunities are immense and some occupational specialties transfer more easily to the civilian world than others.
Perks
There are countless military perks. Things like military discounts, free tickets to events, free college for children in certain states, preferred job placement, etc.
Pride
This speaks for itself, some things you just can’t put a price on. Whenever someone tells me, “Thank you for your service” all I think is, “Well, you make it easy.” The American people make serving a very worthwhile and rewarding experience, which is just icing on the cake.
How many, on their death-bed, would give all they had and more to feel like they made a difference with their life? The pride from making such a contribution to society and the world is immeasurable and lasts a lifetime.
Official website for military compensation: http://militarypay.defense.gov/
