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

by | 16Jan2018 | Uncategorized | 3 comments

Here is a table from the 2017 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 this table. Here is a blown up section so you can see the relevant number, highlighted in blue:

You can see that a 20 year O-5 pension has a dollar value of $1,332,882. That is what you’d be giving up by getting out at the 12 year mark as an O-4.

Let’s just change the scenario above from an O-4 to an E-5 who thinks they can make E-7 if they stay until 20:

The value of an E-7 pension at 20 years is $689,299, and that’s what you’d be giving up if you got out and didn’t stick around to 20.

The Value of Staying Additional Years Once You are Retirement Eligible

Let’s say that you are a 20 year E-7 and you are considering sticking around for another 4 years. If you do, you think you have a really good chance of making E-8. What is the dollar value of sticking around when it comes to your retirement pension?

We already mentioned that the value of a 20 year E-7 pension was $689,299. Highlighted above, the value of a 24 year E-8 pension is $914,368, an increase of $225,069 overall and an average of $56,267 for each extra year you stuck around.

Let’s say you are a 20 year O-5 who is weighing the same extra 4 year commitment, and you think you could make it to O-6 if you stayed until 24:

We already mentioned that a 20 year O-5 pension was worth $1,332,882. If you stayed in another 4 years and made O-6 the value of your pension would have increased by $483,513 to $1,816,395, an average of $120,878 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 this table 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.

(Here is the entire report that contains the tables.)

Personal Capital


  1. Dusty

    Do you know if there is a comparable table for reserve retirement?
    With the HPSP 1 year credit per year of reserve time, I think it’s a much tougher decision for higher paying specialties. I can get out at 16yrs (age 42), then do 2 yrs reserve time would get me a reserve retirement after adding 2 yrs of HPSP credit.
    By my math that gets me a pension at 60 that is about $1500 a year less than if I stayed until 20 with healthcare so that part is a wash.
    The question is the difference in value between a pension from 46-60yrs of age versus 4 years of the civilian pay differential which by my math even with a 4yr RB and low estimate for civilian pay is a $200,000 a year difference. Any insight?

    • Still In

      There do not appear to be similar tables for the Reserves. I’ll put a link to the whole report at the end of the post.

      • Dusty

        Thank you very much!
        I would assume it’s a much more complex computation with points and variations thereof.


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