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Working for Half Pay? Maybe, But Not at 20

5 Pages Posted: 19 Nov 2011  

Scott T. Nestler

Naval Postgraduate School

Date Written: November 17, 2011

Abstract

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

Nestler, Scott T., Working for Half Pay? Maybe, But Not at 20 (November 17, 2011). Available at SSRN: https://ssrn.com/abstract=1961323 or http://dx.doi.org/10.2139/ssrn.1961323

Scott T. Nestler (Contact Author)

Naval Postgraduate School ( email )

1411 Cunningham Rd.
Monterey, CA 93943
United States

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