You see the constant point about staying in any time over 20 is a bad idea because you are doing 100% of the work for half the pay. However, I do think that this shouldn't be looked at the same for everyone. Only for those who NEED to work/want to work after their time.
I.e., if someone wants to fire after military retirement, I think it's a great idea to do OVER 20 so they can secure more pension. Doing 4 more years will add close to another $1k/mo to your pension depending on your rank, another $12k/yr. A good amount of money to pad retirement plans, especially if you are a young retiree and need access to money instantly.
I bring up this point because I see a lot of people shitting on staying after 20 without bringing up the pros.
Arguments for doing over 20 years
byu/ChiefBassDTSExec inMilitaryFinance
Posted by ChiefBassDTSExec
15 Comments
another argument is the amount of people that say they kicked theirselves in the ass during their 40s for not doing 20
For more perspective, to add another $12k in annual perpetual income, you would need to save roughly $300,000.
If you are an officer and you are an O-5 in a career field that doesn’t have a lot of earning potential out of the military, then staying in and making almost 200k would probably be worth it. Maybe if you are still an O-4 too.
That half pay argument is kinda weak in my opinion. Half of my base pay isn’t half my pay. Additionally, the amount you’d have to save from your post retirement salary to get guaranteed inflation adjusted income equivalent to additional years of pension is not small.
The economy is a good reason to stay in past twenty. There’s no guarantee you’ll find a job after you retire so at least you’ll have one if you stay in.
Doing over 20 is great. Im in the middle of my 19th year and plan on hitting more especially since i went to the dark side. I have 3 AFSC’s all paid training, multiple degrees all paid for with no service commitment added since i had already completed the ADSC. Family is doing good. Now I enjoy my hobbies and work. Looking forward to retirement and will get to choose whatever id like to do. Not for everyone though. I encourage everyone to figure out what they want to do with their life early though. When you’re young we feel like we’ll live forever. I feel better knowing the family is taken care of now whether im dead or alive and haven’t even hit 40 yet.
I don’t disagree with you necessarily, something that I think gets overlooked in the discussion is break even points.
If you do a 3k a month retirement vs. 4k a month retirement that starts four years later, the person with the three k a month retirement will be ahead in total money received until year 16 of retirement, after that point the 4k a month person pulls ahead.
Can someone explain the over 20 and making half your pay? I’m new to the sub and confused by this.
Yeah doing another 4 years could add 1k a month in pension, but that could be 4 years of experience you gain in your new job and 4 years of seniority which could mean higher pay or promotions. Which in the long run could mean more money.
That also is 4 years closer to another pension or retirement which most companies allow after 10 years.
Do your 20 and start a new career, that’s the smart move. My buddies who decided to stay in are making 75k less a year than me now lol
Love of the game?
I realize this is from a financial lens but the main reason to stay in past 20 is that you enjoy your job.
Beyond that, senior enlisted are paid pretty well. An E-8 at 22YOS is making 7k per month base plus another 2-3k in BAH/BAS. Plus free medical insurance, tons of benefits for their family like the GI bill. All while adding 2/2.5% to your pension every year. Officers even more so.
People have this misconception that every job on the outside is going to start them at 100k+ just for existing when they get out. The vast majority of the country isn’t earning nearly that much. Hearing about the people who get out and do super well is selection bias.
My rating in the Navy no longer has a projected rotation date at E-9 and I’ve been screened this year currently waiting for a billet to open. I’m riding this bad boy till the wheels fall off! 🤑🤑🤑🤑🙏🏻
I also want to add that I get a crap ton of value from credit cards that are free. That all basically gets wiped away when I get out…
I agree if you want to retire and never work again get as close to 30 as you can.
But you’re right every situation is different. Like for me if I stay past 20 I’d be committing two more sea tours. I’d be 38 going underway, standing duty, and doing one or two deployments. Why the hell would I do that when I can retire at 20 collect half of an O-3E base pay plus around 2k in disability. So I stay in and continue to make 11kish a month or retire and make 7k ish sitting on my hands. That extra 4k is not worth everything I just listed.
Also in my career field I can easily get a high paying job. So now I make 7k to do nothing and can make another 7k working at a data center working half the month and never sleeping on the ship. My kids will be preteens so even if it was a pay cut to get out I would 100% choose the slightly lower pay for the additional quality of life and to be around my kids instead of deployed for 10 months on an aircraft carrier to get slightly more money.
If I could have gone beyond 20 years, I would have. Sadly, I hit High Year Tenure.