5 Pages Posted: 19 Nov 2011
Date Written: November 17, 2011
Throughout a military career, service members often hear a phrase about how someone who is serving past 20 years is “working for half pay.” Presumably, the thought behind this old saw is that since they are eligible to retire, they could simply stop working and collect their pension worth half of their wages. In reality, those retiring at 20 years actually receive about one-third of their total pre-retirement compensation package; the "half pay" isn't actually attained, by by both enlisted service members and officers, until approximately 30 years of service. This is demonstrated with some illustrative examples. Potential military retirees should be aware of these facts, as they make crucially important personal and professional decisions with long-term implications.
Keywords: military retirement, pension, retirement
JEL Classification: J26, G23, H55
Suggested Citation: Suggested Citation