The #1 Easiest Way to Get Rich in the Military – Take the Leap and Just Stay In
Because of the value of the government pension, staying in is the easiest way to get rich. And when I say “staying in” I’m not talking about becoming the Master Chief Petty Officer of the Navy or the Chairman of the Joint Chiefs of Staff. I’m talking about doing a reasonable job as an officer or enlisted member for at least 20 years. Let’s look at two scenarios.
A 20-Year E-7
Let’s assume that someone enlisted in 1997 at the age of 18, and stayed in 20 years until 2017, making it to E-7. According to the DoD actuarial tablesDoD actuarial tables, the value of a 20-year E-7 pension is $689,299.
Yes, just by staying in for 20 years you are 2/3rds of the way to being a millionaire and you’re only 38 years old. If you saved in the Thrift Savings Plan (TSP) during your career, you’re likely a millionaire already because $5,000 compounded at 10% for 20 years is approximately $315,000.
A 20-Year O5
Let’s assume that our officer was commissioned in 1997 at the age of 22, and stayed in 20 years until 2017, making it to O-5. According to the DoD actuarial tables, the value of a 20-year O-5 pension is $1,332,882.
Yes, just by staying in for 20 years you are already a millionaire and you’re only 42 years old. Depending on how much you saved in the TSP, you could be a multi-millionaire or darn close to it.
You Can’t Screw It Up
People try to time the stock market, wind up buying and selling investments at the wrong time, take loans from their retirement accounts, don’t save/invest enough, and find all manner of ways to screw their finances up. But when it comes to the military pension and the value it provides, the best thing about it is that you can’t screw it up.
Stay in for 20+ years…do a reasonable job and promote at the normal times…you’re rich. It’s that easy.