You'll Be Rich in the Military - in Ways You Don't Think

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American Soldier in his office
Mie Ahmt/Getty Images

I hear "You'll never be rich being in the military" all the time, from lower enlisted to command level officers. The military perpetuates the mentality that we don't make that much money. I'd like to argue that we do make a lot, and that the military is an incredible steppingstone to the middle class.

When I got shipped off to boot camp, I was making about $400 every two weeks. I always thought to myself how much more I had made in the civilian world. But I wasn't taking into account what didn't show up in my paycheck. Here are 10 big financial benefits of serving in the military:

  1. Training. Depending on your service and military occupational specialty, you'll get up to two years of training before reaching your first duty station. Much of this training translates straight into college credits -- and it looks great on a résumé.
  2. Retirement. The military is one of the last employers in America to offer retirement plans. After serving a mere 20 years, service members can choose to separate with 50 percent of their base pay every month for the rest of their lives. If they're eligible, they can stay up to 30 years to receive 75 percent of their base pay, and high-grade officers can retire with 40 years to receive 100 percent.
  3. Health care. While serving on active duty, service members and their families (spouse and children) will have free health care through Tricare so they are in the peak physical and medical condition they need for their jobs.
  4. Dental. Dental is free for service members, because good oral hygiene is necessary to maintain a deployable status.
  5. Commissary. The commissary is pretty much just an enormous grocery store, with better-than-Walmart (WMT) prices (most of the time). They also have enormous "lot sales" every so often where they have blowout prices of stuff you actually want.
  6. Basic Allowance for Housing. When you're a low enlisted rank, they'll stick you in the barracks (or dorms in the Air Force). The barracks, as terrible as they may seem at the time, save you so much money it's incredible. Typically, they're in the same parking lot as your workplace, so the commute is eliminated. Utilities are included, too. And you don't need to write a check for rent and worry that you won't have enough money, because the basic allowance for housing is granted to all military members. The allowance also gives you the ability to rent a house off-base or to use base housing.
  7. Tuition assistance. Depending on your branch of service, you could be eligible for up to $4,500 per year toward college classes. By taking full advantage of this, you could have an associates's degree in one enlistment and a bachelor's in two. And don't forget that you could earn college credit for your training through the College-Level Examination Program or Defense Activity for Non-Traditional Education Support.
  8. The GI Bill. Typically used after separation, the GI Bill allows you to go to college at no extra cost to you. During the first year of your service, you will pay $100 per month toward the GI Bill. After that, you owe nothing. Service members can choose among two versions (the Montgomery GI Bill and the Post 9/11 GI Bill), and there is a way to get a few extra free credit hours if you switch between them in a specific way. It's also transferable to your spouse or children, although you need to serve at least four extra years after the election has been made.
  9. Thrift Savings Plan. If a pension plan wasn't enough, military members have access to the retirement savings plan, with a traditional and Roth option. It bases allocations on stock indexes and has extremely low operating costs -- read: very, very low expense ratios.
  10. Veterans Affairs loans. VA loans resemble Federal Housing Administration loans -- with a few awesome advantages. These include no down payment and no mortgage insurance requirement. They also usually let you have access to the best current rates available. And you maintain this benefit for life. Married to another service member? Then you each get your own VA loan to use.

Other benefits include military discounts (thank you business owners!), networking (you'll meet hundreds, if not thousands of people during your tour), experience (management and occupational), VA benefits and free simple income tax filings.

I'm not advocating that you join the military for financial reasons, but I am trying to highlight some of the financial perks that you wouldn't see in your paycheck.


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Scott Sharitt

7. Tuition Assistance has been severely restricted in recent years but the idea that you can somehow work full time and get a Bachelors Degree in 4-6 years is complete BULL SH*T! It never has been possible. I have used TA and taking 2 classes at a time was the worst decision I ever made. TA is there and service members should use it, but it is not totally free school and it will take you a very long time to finish with the different deployments, field exercises and deployments you will do.
8. The new GI Bill is great and it is a great recruiting and retention tool for the military. If you are a veteran DO NOT LET IT GO TO WASTE!
9. The TSP is like a 401k and even though there is no match for military members it still is a very low expense way to save for retirement. There are a few funds to choose from and even though there performance is conservative in my opinion I still used it and would recommend it for other service members.
10. The VA loan guarantee is good for what it was intended however there have been a few problems as a result of it. In many areas service members buy houses because the mortgage is lower than rent in the area. Many put no money down and therefor have little or no equity when it comes time to move in 2-5 years. When you add in closing costs and commissions they can't sell it for what they owe.

On my earlier post I had #6 Basic Allowance for Housing as #5 which is the Commissary.
5. The Commissary is no different in price than most other discount retailers other than there is no tax, however they do charge a 3% service charge which is still a little cheaper than most sales tax areas. Where I live (near Ft Campbell) however there is no grocery tax.

I hope this clears up any confusion that an overly rosy depiction of military compensation gave you. It is also important to note that there is a HUGE difference between enlisted and officer experiences.

Sunday at 5:12 PM Report abuse rate up rate down Reply
Scott Sharitt

1. Most Military training does not translate directly to civilian certifications. A great example of this is Air Traffic Controllers. These poor enlisted usually make less than $36k while their civilian counter parts make $75k for the same experience. Had a USMC friend who did military ATC and is now a civilian making double. Truck drivers are another great example of this.

2. Less than 18% of the total military force make it to the 20 year retirement. There is no partial vesting for military pensions. That means if for any reason you leave before 20 years you get no pension!

3. Though health care is mostly free for military and their family members (dependents) their choices for services are few. Essentially they are restricted to only military doctors who's higher priority is returning service members to full duty at the lost cost for the least amount of off time. This leads to gaps in care and I hate to say it but short cuts. It seems as though a quick answer is more important than a through answer. Without sharing too much of my personal medical history I have experience in this, trust me. There is also a culture in the Army to put your career over your health. I can't tell you how many times I have heard "Suck it up drive on" "take a knee drink water" "Take one for the team" "weak/no heart syndrome". Many Soldiers feel that revealing health problems threaten their careers, which it can.

4. Even though it is cheap service members have to pay for dental for their families.

5. The Barracks are equal or less than most college dorm rooms. Though it is true that Soldiers who live in the Barracks usually live within walking distance of work and they don't pay rent, water or electric some of the negative things about the Barracks include you have no choice where or who you live with, there is little or no privacy, phone internet and cable is a monopoly, you usually have no control over the heat or A/C, you are constantly under the watchful eye of your work supervisors, inspections are often and random, there are no over night visitors, all visitors must sign in and out, you can be told to move to another room at anytime with no help, and the Army does not care about your connivence.
On base house is subject to so many rule and regulations. The best part of living on post is that for lower enlisted it doesn't matter how many kids you have you can afford a place and for everyone the commute is short. Many installations have the best schools your kids can go to and the parks are also great. A few years ago the Army started rationing water and electricity for on post housing leaving service members to pick up any overages. BAH is adequate in most areas. The lower the cost of living the better it is but BAH for enlisted is based on apartment living not renting a house. If you buy a house near an installation good luck selling. Its better to rent unlese you have the cash flow to have 2 mortgages because you will move

Sunday at 4:44 PM Report abuse rate up rate down Reply
ddi92234

And don't forget, while you're learning to walk a dozen miles in 120 degree weather in full kit and body armor, your friends are getting promotions and raises in their jobs. And you can always translate all that walking into working for the Post Office!

July 29 2014 at 9:14 PM Report abuse rate up rate down Reply
jdykbpl45

Three hots and a cot. Three colds in a hole. Pick em.

July 29 2014 at 4:38 PM Report abuse +1 rate up rate down Reply
Joel

If you take up smoking or continue to smoke while being employed by the military, taking advantage of cheap, taxpayer-subsidized cigarettes in the PBX or commissary, and after you leave the military you develop cigarette-related lung/bladder/mouth/throat cancer or emphysema, should you pull out your Tri-Care or VA Health care to get your illness taken care of at taxpayer expense? Remember, smoking isn't a requirement for military employment.

July 29 2014 at 11:31 AM Report abuse rate up rate down Reply