The Financial Benefits Of Joining The Military: Free Education, Great Retirement, And More!

Raising The Flag in Iwo Jima 1945
Raising The Flag in Iwo Jima 1945

The following is a terrific guest post from Spencer, a captain in the US Air Force, who gives a complete overview of the financial benefits of joining the military. 

There are many different paths you can take in life. Blue collar, white collar, no collar – the jobs you do often reflect your upbringing. If you come from an affluent community or family, one path you might not have considered is joining the military. Military service has many rewards, some of which can be a free college education, an exciting non-standard job, travel opportunities, and the chance to do some amazing things around the world.

A college degree is a necessity to achieve substantial financial goals, unless you're the next Mark Zuckerberg or Bill Gates. But college is getting more and more expensive every year, way outpacing inflation. Student loan debt only gets you a negative start on your journey to financial freedom. Alternatively, military service can enable you to get a free college degree, have a job lined up when you graduate, and make money while you go to school.

Slicing Through the Military's Mysteries

At university I joined Air Force ROTC during my freshman year and eventually picked up a 2.5 year ROTC scholarship which covered my tuition for those last years. I graduated and commissioned as a second lieutenant in 2010.

In this post I'd like to explain a few facets of military life for the uninformed:

  • Choosing between commissioning as an officer or enlisting
  • Whether you should join the military or get a college degree
  • The three main options for becoming an officer: Academy, ROTC, or OTS
  • Enlisting and then using your GI Bill for college
  • How service commitments work
  • Financial advantages to military service you may not have considered

Here's some of the benefits joining the military could have for you:

  • Free college education at the school of your choice
  • A rewarding and exciting job guaranteed when you graduate from university
  • A pay scale that doubles your pay in just 5 years of working
  • Tax free income and tax free investments
  • Access to the TSP, the best retirement program in the world
  • The chance to see and do things other people only hear and dream about

Join the Military as an Officer or Enlisted?

Here's a quick guide to military rank and hierarchy. In the military you have E and O paygrades, which also translate to rank. (There's also warrant officers, or “W” paygrade, but we won't get into that in this post.) Es are your enlisted force, ranked E1-E9. Os are your officer corps, ranked O1-O10.

Lower rank enlisted are your lowest members of the totem pole. These are your privates, airmen, seamen, and marines. These are your blue collar, entry level positions. However, many of the jobs young recruits perform take a lot of training and are highly specialized. Crypotologists (code makers and breakers), drone sensor operators, and cargo aircraft loadmasters are all young enlisted personnel. Many of these recruits only have a high school diploma and tend to be fairly young as well. These are E1s (recruits) to E3s.

Next you have the non-commissioned officers. These are your middle managers, promoted out of the enlisted ranks. They are skilled at their job and have years of experience doing their job. They lead the lower ranked enlisted and prepare them to become NCOs one day. These are your E4s and 5s, your sergeants. A strong, knowledgeable, and professional NCO corps is one of the principle reasons the US military is the best in the world.

Above NCOs you have the SNCO, Senior Non-Commissioned Officers. These are the E6-E9s, the Master Sergeants (in the Air Force) and higher. These are your most senior enlisted personnel, who have worked years to get to this rank and have thousands of hours of cumulative experience in getting the job done. Most have at least a bachelor's by this stage in their career and many have master degrees as well.

Above all the enlisted force you have the commissioned officers. These are what civilians would consider white collar professionals. Doctors, lawyers, pilots, – all of them are officers.

At the bottom, the lieutenants and captains (O1-O3) are the workhorses of the officer corps, often directly leading dozens if not hundreds of troops. These young officers are also usually the most technically proficient members of the officer corps. They fly the planes, launch the missiles, and analyze intelligence from our assets around the world.

Your middle managers are your majors (O-4) and your directors are lieutenant colonels (O-5). Your civilian Vice-Presidents loosely translate to colonels (O-6) and CEOs translate to generals (O7-O10). In the entire DoD, with over a million employees, there are only 400 generals. Generals are your Presidents and CEOs. Many of them have much more power, more employees, and larger budgets than any Fortune 500 CEO.

Enlistment or Commissioning

If you have a college degree or are thinking of getting one, commissioning and becoming an officer is what I recommend. There are amazing jobs on both the officer and enlisted side. Both enlisted and officers get to be leaders, managers, technical experts, and contribute mightily to the war effort.

Most enlisted personnel get their bachelor degrees very early in their career or come in with one, so don't for a second think that just because you're an officer you're the smartest guy in the room or have all the right answers. It doesn't go well for the brand new second lieutenant who tells the experienced NCO how to do their job. Respect goes both ways.

There are advantages and disadvantages to either an enlisted or officer path. While there is more responsibility and career BS to deal with as an officer, I think the increased pay and job opportunities make up for it. However, you have many amazing job opportunities as an enlisted member. So it's

Joining the Military versus Going to College

Serving in the military and getting a college degree are often viewed as two separate activities. This couldn't be farther from the truth. Today's military is a well educated professional fighting force. To be an officer, a bachelors degree is required as a minimum. To be competitive for promotion to executive level (O-5 and higher) you need a master's degree at a minimum. Many senior leaders have PhDs from top universities.

There are several ways to get the military to pay for your education. They require varying levels of commitment and pain. In my opinion, the most painful option is to attend a service academy. There are four major service academies in the US:

  • US Military Academy (Army) in West Point, NY
  • US Naval Academy in Annapolis, MD
  • US Air Force Academy, Colorado Springs, CO
  • US Coast Guard Academy, New London, CT

At these academies you'll go through an initial summer course of a few weeks similar to basic training. You'll have a tough year your first year where you are harassed by upperclassmen and have many more restrictions placed on you than your friends at normal universities.

The Academy admissions process is crazy. When I went through it took months of interviews, tests, physicals, medical waivers, and a nomination from my US Senator. It's much more in depth than a regular college application. Just a few of the requirements include:

  • A rigorous physical fitness test
  • A military physical evaluation
  • Top SAT/ACT scores
  • Class rank
  • Letters of recommendations
  • Essays
  • A nomination from a US Congressman or Senator

The nomination from the US Congressman can be the hardest, as they only have a certain number (usually less than 10) slots to give out every year. Your entire package is scored and weighted and then you are ranked against your peers. The top several hundred get acceptance letters and then the rest are put on a waiting list in case the top candidates don't accept.

Your reward for enduring all this pain and annoyance is a FREE top notch education, especially in the engineering fields. You'll even get paid a few hundred dollars a month while you are a cadet or midshipman. Definitely better than graduating with $60,000 in debt like I did.

At the end of the day you get to commission as an officer in the US military. Not too bad. You'll pin on the rank of 2nd Lieutenant (Army, Marine Corps, Air Force) or Ensign (Navy) (O-1).

Reserve Officer Training Corps – ROTC

The Reserve Officer Training Corps or ROTC is offered at hundreds of major universities around the nation. There are three flavors: Army, Navy, and Air Force (Marines fall under the Navy ROTC). If you don't have a scholarship, you don't need to commit to the service until summer before your junior year.

ROTC usually consists of a 1-3 hour class for your year group taught by a military instructor, a 2 hour weekly leadership course, several physical training or PT meetings a week, and usually a special event once a month or so. It takes up about as much time as a junior varsity sports program would, 10-15 hours a week depending on committed you are.

If you're smart (unlike me), you'll apply for a four year scholarship in high school. You can try ROTC for the first year with no obligation and then sign your paperwork sophomore year. Four year scholarships cover room and board, tuition, books, and pay a monthly stipend.

ROTC was the option I chose. I joined up in my freshman year and picked up a 2.5 year scholarship my sophomore year. This paid for the rest of my schooling, a book stipend every semester, and a monthly stipend as well. Amazing how much fun you can have in college on just $450 a month! When you graduate, you'll be the same rank as someone who graduated from the service academy and the same job opportunities.

Officer Candidate School OTS/OCS

Your last option for becoming a commissioned officer is Officer Training School or Officer Candidate School (OTS/OCS). This is an intensive 10-17 week (depending on the branch of service) course that produces commissioned officers rapidly. OTS/OCS consolidates four years of basic officer training that the Academies and ROTC teach into a few months.

This program is usually a gap filler when there's a time of war and the military needs more officers than the ROTC or Academies are producing per year. OTS/OCS can be even more difficult to get into than the service Academies and spots can be extremely limited at times. The same bachelor degree requirements apply.

Upon graduation you'll receive a commission in the US military and the same rank, pay, and privileges as an ROTC or Academy graduate.

Enlisting and Then Using Your GI Bill for School

One way of getting your college degree and serving your country requires a bit more thinking ahead. If you were an extremely bright high school student, you could follow this plan of delaying college and using your GI Bill to get a free education.

The Post 9/11 GI Bill covers 100% of in-state public tuition at any university, pays a book stipend, and gives you 36 months of BAH (Basic Housing Allowance) entitlements. You can transfer the benefits to a spouse or a child as well. Itís an amazing benefit for our veterans.

  1. Enlist out of high school, serve 3-4 years on active duty, save as you go.
  2. Separate, use your GI Bill benefits to go to university for free. You'll be much older and wiser than your fellow students and probably actually learn something, rather than just be a typical 18-22 year old.
  3. Get the degree you want, the job you want, and start your life with no college debt.

Do not do this just for the free education. Military life is not easy and if you join simply to get GI Bill benefits, you will probably struggle at boot camp, struggle while you serve, and you may not get the experience you thought you would.

If you already plan on serving and want a great way to kickstart your adult life and get a free college education, the GI Bill option might be for you.

Service Commitments

Service commitments are a legal contract between you and your military branch. They are usually incurred at enlistment or commissioning, when you get training, when you receive certain benefits, or based on your job.

For most officer career fields, you're committed to 4 years after you commission and then can re-enlist for 2-4 year chunks. Enlisted service commitments are usually less than officer, usually because the training and cost of producing an officer is more than producing a new enlisted service member.

For Air Force pilots, the commitment is 10 years. And the clock doesn't start ticking until your training is complete, which could take up to 2 years. Imagine committing yourself to a job that you have very little idea how it works or what it will be like for 12 years. Not an easy decision to make. Not many people sign contracts for that many years of their life.

Most people will serve these periods completely. Sometimes the DoD offers early retirement (called TERA, or Temporary Early Retirement Authority) or separation bonuses (VSP – Voluntary Separation Pay) to incentivize troops to get out early if the service is overmanned. These overmanning situations are usually caused by Congressional downsizing.

Military Officer Promotions

The military is not a meritocratic society. Promotion is primarily based on years in service, not performance. For a young officer fresh from commissioning, you'll promote in 18-24 months from 2nd Lieutenant (O-1) to 1st Lieutenant (O-2). That promotion rate is almost 100%. Usually it takes a DUI or a criminal conviction to not make that promotion. Sad but true.

After 1st Lieutenant you'll make Captain (O-3) in another two years. Now you're four years since you graduated college and you've moved up two ranks! And so did everyone else. At this point in your career rank doesn't differentiate the top performers from the bottom.

It's not until O-4, or Major, that the services really start differentiating between the top and bottom performers. You usually meet your first promotion board for major around 6 years of being a captain, or 10 years of total service. Promotion above O-4 becomes much more difficult and the rate drops to below 50%.

Usually about 80% of those captains who stick around long enough to meet their major's boards promote. The other 20% who are passed over will eventually be forced to separate, due to the up or out culture in the military. As soon as you get good at your job, the military will make you move on to the next one! It doesn't create many efficiencies. See Tony Carr's John Q. Public blog for a more detailed discussion on the angst amongst the Air Force officer corps.

How Much Can You Make in the Military

If you join the military thinking you'll be living fat off the government gravy train, think again! Your benefits packaged may be fair after a few years, but your pay for your first few years of service will be low. A young enlisted service member could be making as little as $20,000 their first year of service. A freshly graduated lieutenant will be making less than $40,000.

Your pay consists mainly of:


Basic pay, for 2014, is calculated off of that table above, and is set by Congress every year in the National Defense Authorization Act (NDAA). Basic pay is subject to income tax.

Allowances are tax free pay for specific needs, like housing, food, or clothing. Most service members receive BAH (Basic Allowance for Housing), unless they live in military housing. BAH is paid either with or without dependents, so there is an economic incentive to get married when you work in the military.

Most service members also receive BAS (Basic Allowance for Subsistence), unless they're on a government meal plan. These allowances can make up a substantial portion of a soldiers income.

Special Pays are usually subject to income tax and are paid for special duty or skills. Pilots and aircrew receive flight pay, submariners receive submarine pay, and bomb squad guys receive Hazardous Duty pay. When you're in Afghanistan or any war zone you'll receive Hostile Fire or Imminent Danger Pay, which is about $225/month. If you deploy to Africa or other remote locations, you'll usually receive Hardship Duty Pay, depending on the location.

Let's take a married, four year Air Force Captain living in Las Vegas, Nevada. Her Basic Pay is $5168, BAH (with dependents) is $1449, and BAS is $246. So in total sheís making $6,863 per month, or $82,356 per year. Since the BAH is untaxed, her taxable income looks like $65,000 to the IRS, which saves her some money at tax filing time.

If she deploys to a combat zone, her entire income is tax free. If she moves her stuff into storage and breaks her lease (allowed under military lease clauses) at her apartment, she could bank most of that income. Deployment is an excellent time to top off your Roth TSP, Roth IRAs, and any other investment accounts.

Financial Advantages for Military Personnel

First off are the tax advantages. Allowances are untaxed and can be substantial (20-40% of your income). If you deploy or go TDY to a combat zone, your entire paycheck for that month is tax free. Once you hit a certain number of tax free months, youíll actually drop below the poverty level and probably qualify for the earned income tax credit. What a crazy tax system we have!

I believe the Thrift Savings Plan (TSP) is the best retirement program available in the world, and it's only available to federal government employees and the military. The super low cost funds (10% of what Vanguard charges, or 0.03% on average) mean that you keep more of the money you make in your pocket. Passive, low-cost index funds beat 80% of actively managed funds over 20 year time horizons. The TSP offers every service member access to the cheapest passive index funds around.

With the Roth TSP and Roth IRA, you can put away your low tax or non-taxed income in tax free, watch it grow tax free, and then enjoy it tax free in retirement. The funds available are limited, but I don't think you should be trying to hit home runs with your TSP/401k. The limited choices actually forces you to diversify and invest in a smart asset allocation and not bet it all on one or two stocks.

When you deploy, there is a special savings vehicle offered by the Treasury called the Savings Deposit Program (SDP). The SDP gives you a federally guaranteed 10% return on your money while you're deployed and up to 90 days after you return. You can deposit up to $10,000 in the program. Earning $1000 extra per year isn't going to make you a millionaire, but it is a great place for your emergency fund cash that would otherwise be making 1% in a savings account.

Another tremendous benefit is the access to VA Home Loans. These are loans guaranteed by the US Department of Veterans Affairs and offered to active duty, reservists, guardsmen, and veterans who served honorably. These loans do not require PMI and can be for 100%+ of the value of the property. A down payment is usually not required. This can be a great tool to achieving home ownership or building a real estate empire around the world every time you PCS (move)!

The Golden Ticket: A Military Pension

Military pensions are rare. Only about 15% of the total force makes it to retirement. Even then, the pension is calculated only off your Basic Pay, not your total income. If you get out right at 20 years, you'll collect 50% of the average basic pay for the last three years, which usually works out to $40-50,000 for an officer and $25-30,000 for an enlisted member. Not exactly a lavish income that demands Stealth Wealth.

Congress has recently targeted military pensions so don't count on it to be completely unmolested while you receive it. Congress recently tried to change the way pensions were adjusted for inflation to save money, which would have taken thousands of dollars away from veterans. With just a little savings you could have $500,000 to $1,000,000 in the bank easily when you pull the trigger and retire from the military.

Now you're somewhere between 38 and 42 and if you invested wisely, you might be able to retire early like Doug Nordman. A military pension would make a great slice of income to add to your financial independence portfolio.

If you'd rather keep your nose to the grindstone, you can get started on the second career or starting that business you always thought about on those long deployments overseas. And you'll have a little bit of income to support you while you get started.

I hope this primer on military life, enlisted vs. officer, how to get to the military to pay for your college, and military financial benefits was helpful. The military can be a great place to get a free college education, start your working life, serve your country, or make a career of it and earn that pension check.

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57 thoughts on “The Financial Benefits Of Joining The Military: Free Education, Great Retirement, And More!”

  1. One aspect I didn’t see mentioned was changing your Home Of Record (home state) to one that doesn’t tax income, even if your duty station is in your original state that does tax income.

  2. Just_wondering

    As a retired reservist, I will receive a pension at 60. This makes me think I can be more aggressive with my 401(k) allocation since I will have guaranteed funds coming in at a certain age. Any thoughts on stock investing, when you know you will have guaranteed funds coming in. Can’t the pension be considered the “bond” portion of your investments?

    1. Yes, your pension can be considered the bond portion of your investments, only better since it is adjusted for inflation and won’t go down (like some bond funds).

  3. green_knight008

    I would agree with most of this, with one glaring exception. The TSP is certainly not the greatest retirement program in the world, by itself it’s middle of the road to low middle at best. The very limited investment options that do not incorporate a high level of risk for younger investors in particular is a problem. According to the Army Times a few months back when they were discussing the 401k replacement to pensions, the average return for TSP participants is 4%. That would be 3% less than the average of the S&P over time-for various reasons, not the least of which is that the automatic placement of your investment is in GFund if you don’t specify-an all to common occurrence among younger enlisted in particular. I remember looking at my youngest brother’s TSP results after he had put money into the program for a couple years. All invested in GFund, and returns that were so low it was painful-he might have been even with inflation at his ~1% return.
    Don’t get me wrong, I’ve seen far worse programs (the SDP, btw, is imo the best investment option the military offers, too bad it’s limited to 10k and you have to go to a combat zone to get it), but it doesn’t hold a candle to some of the civilian 401k’s I’ve had mainly because of the lack of matching funds and lack of investment options. Now, when you start to add in a 20 year pension, it starts to look much rosier, but as you’d mentioned that’s a low percentage of those who serve.
    In order, the financial benefits mentioned rank to me like this:
    VA Loan
    Tax breaks
    GIBill/9/11 Bill
    Retirement pension (if you make it to 20!)
    SDP (when eligible!)
    That said, don’t get into the military because you think it’s going to make you rich. It will build a strong foundation for your life in education and discipline assuming you choose the right options when you enter the service, and it is a worthwhile experience in my opinion. It will also not be easy, you will sacrifice things that a civilian does not have to, and you will not get paid as much as you probably should be for what you do. It’s not about the money, that’s just a sidebar to choosing to serve.

    1. Yes, if you leave all of your money in the G Fund in the TSP, you will not see equity level returns. But it only takes a few clicks to move your money into the higher return C (S&P 500), S (Total US Stock Market minus the S&P500), or I (International) Funds. The military does a poor job of educating it’s personnel on how to invest and properly utilize the TSP, but that’s no excuse for the smart military investor.

  4. I agree with the person who said that you must play your cards right. I enlisted in the reserves right out of high school with the intention of going through the ROTC Simultaneous Membership Program. The Reserve benefits, while good, don’t hold a candle to what you get from being on active duty. If I had a chance to do things over again, I would have enlisted into active duty for 4 years, and then got my degree on the full GI bill active duty people get and do ROTC or OCS. Having to get mobilized or deployed because of your reserve status can put a serious dent in your college plans. This is not a problem when you are an honorably discharged civilian enjoying the full benefits of the post 9/11 GI bill.

  5. Very interesting read! I’very always wanted to know more about the military system and how the finance portion works. I have friends in the military and one recently retired with a pension. This has helped open my eyes!

    One thing I enjoy about reading FS is seeing detailed articles like this from different contributors.

  6. I credit much of my wife and I’s financial success to taking advantage of her military benefits. She graduated from a service academy so has an Ivy caliber degree. We save thousands a year on healthcare costs with top notch care. This includes perks such as free travel medication for exotic vacations. Speaking of travel, military discounts and travel perks are widespread and excellent value.
    We choose to take public transit which the military pays for us. Having an available commissary and exchange saves us thousands each year with cheaper then average and tax free goods. Banking and insurance with USAA is both cheap and top notch. Along with having numerous top tier reward credit cards that waive all fees.
    We save her entire income and live off only half of mine, which is substantial in Hawaii since BAH is much higher then average out here. Maxing out Roth savings accounts is easy and taking into account tax free income is tax free in and out. We have our fingers crossed that she makes it to retirement since the permanent source of income would really diversify our long term finances.
    Not all roses and duckies though, out of the 4 years i have been with her, i have had to go without her for over a year at times.

    1. I’m not sure I can be away with my wife for over a year at a time, let alone more than 1-2 months at a time. That would be pretty lonely no? How do you fill the void?

      1. Huuuuge carve out to everything above. You’ve gotta be (perhaps paradoxically) radically independent, and same goes for your spouse!

  7. I wonder if there are any negatives to joining the Army? Hmmm. It seems like 100% positives from this article. Or maybe its that a recruiter wrote it…

    1. Not a recruiter – just someone giving his opinion.

      There are lots of negatives – like potentially getting shot at or having a bomb blow up under your truck and losing limbs.

      1. Any Captian who espouses the Military without providing a hint of the downside, is a recruiter in essence.

        1. HooahHooahHooah

          They’re an AF captain…

          There is virtually no danger. Very few AF officers are special operations, so very few actually do dangerous things.

          I’m an Army O. I’ll tell you shit is dangerous on this side of the house.

          But here’s the funny thing, an analysis was done comparing military deaths to civilian deaths (sometime during the War on Terror).

          Branch Number of Deaths / 100 to Number of US civilian Deaths / 100

          Navy 1
          Army 2
          Marines 5
          Air Force 0.5

          Interesting enough, an 18 year old kid or a 25 year old young adult in the AF was half as likely as dying as a civilian… because the military treats you like a kid and makes you wear stupid reflective belts when you cross the street.

          If you’re non-combat in the military (70% of the Army…), you are statistically safer than a civilian.

    2. Other negatives besides physical harm include:

      1) Perhaps not doing even better financially in the private sector. None of the recent entrepreneur billions served in the military, I don’t think.

      2) Being restricted from moonlighting on other interests.

      3) Having to move around every 2-4 years, and separating from close friends.

      4) Being stationed for months away from loved ones.

      1. I appreciate the list, its always nice to see a cost/risk analysis when promoting something as a financial benefit. “Soldier” is the top most stressful job on all the lists that I can find online of stressful jobs.

    3. Just sharing my experience! Yes, most of the things I mentioned are the positives, but I’m a positive person. I’m not a recruiter at all. Of course there’s downsides: being away from my wife for months at a time, getting shot at, living in tents, 120 degree heat in Iraq in the summer, staying awake for days on end, eating MREs (meals ready to eat), etc. But I get to work with some of the best people in the world, do some of the coolest things in the world I can’t talk about, go places you’ve never heard of, and meet people who don’t exist. And they pay me to do all this!

  8. Joining the military was the best thing I ever did.They paid for my education and saw a lot of countries.I love being able to go to the VA, the service has been great, don’t pay to see a doctor and only pay an $8 copay for meds.

  9. No Nonsense Landlord

    Far too many people complain about no jobs, and they are too lazy to join the military. If you are not willing to serve, you should not even be allowed to vote. Or your taxes should be double. Maybe Military folks (and veterans) should even be exempt from taxes for their entire lives?

    This country is what it is because of our military. As a disabled Vet myself, I have no sympathy for low income people that have not served.

    1. Yes you’re right. The military is everything. There are no other factors that contribute to why America is “what it is” and anyone who doesn’t do exactly what you have done deserves to be derided. I see that all of your training has really taught you to consider things with a balanced perspective. Why stop there? People who don’t serve shouldn’t even allowed to use public places paid for by public taxes. Or maybe… its our taxes that pay your wages.

      1. No Nonsense Landlord

        Thank you for the confirmation. As you state, there are many people that feel entitled to live here, and not sacrifice at all. They are always begging for more, yet not willing to work or sacrifice for it.

        Are you one that rides in the wagon, or is helping to pull it?

        1. Yes I feel like I help pull it by going to work every day and paying taxes and buy advising and orchestrating others to file their taxes (professionally). Just one doesn’t serve doesn’t mean they are being pulled. It takes more than a great military to make a great country.

          1. No Nonsense Landlord

            Thank you for helping pull the wagon.

            It does take more than the military, although without it we may be a different country.

            Far too many people complain about lack of jobs, healthcare, education, etc. when all they have to do is sign up. It’s a sad state of affairs when someone on welfare, who has never contributed a anything, has better benefits than our veterans.

    2. What do you think is at the core of people who can’t find jobs, or who are struggling financially, and not willing to join the military?

      How much of it is due to not being aware about all the financial benefits? I’m guessing awareness is more than 50% of the issue, and other factors make up the rest.

      I don’t see how someone who is broke wouldn’t strongly consider serving after reading this article and the comments no? Lots of great success stories post military service.

      BTW, I can definitely get behind a 0% income tax for all military personnel while in service and a lower flat tax rate after service below a certain income threshold e.g. $250,000.

      My father and grandfather served in Vietnam and WWII. I feel unworthy in this respect, so I try to make up for it in other ways.

      1. No Nonsense Landlord

        It may be lack of information, but I think it is mostly due to our lack of respect for the military and law enforcement in general. And the very high social nets we have. When I got out, it was right after Vietnam. It was not a great time to be in the Military.

        It may very well be time to start the draft, and have military schools for kids that cannot seem to graduate. If you look at the urban violence, there is definitely a discipline problem. The Military would help solve that.

        1. The MasterChief

          sure it would…… Let’s have everyone join the military for no other purpose than to have a place to be. What a great use of tax dollars.

          1. No Nonsense Landlord

            It is better than warehousing them in prison, although it is hard to get locked up. Short of a murder, rarely do people actually go to jail for very long. Even with murders, I have seen probation and 5-year sentences.

        2. Stop it. A lot of civilians aren’t informed. I didn’t know nothing about the military. I am from NY . There isn’t a big presence there. All i knew was saving private ryan and homeles people

    3. That’s quite possibly the dumbest thing I’ve ever read. Vets like you make me ashamed of my service at times.

      1. Thanks for your insightful and value-adding comment! I can’t wait to read why this is the dumbest thing you’ve ever read. Have a great day!

  10. Prior enlisted soldier here. Thanks for the great post on how to think logically about the financial benefits of military service. I happened to get into a great career field by accident and now recommend many young people to look into the option of joining the military for in demand training and education benefits.

    Of course it’s not for everyone, maybe just a tiny few. But much like how people view the trades I think military service is overlooked and can be a great building block for a prosperous life.

  11. Great post! It is difficult to express just how awesome the VA loan benefit alone is! Imagine buying a new house every 3-4 years with no down payment and potentially no closing costs! On top of that, you are receiving pay that will cover the mortgage cost (if you choose your house wisely). Then, when you leave for the next station, you have a rental that is primed for a local to move in or another military family.
    One of my favorite parts of the VA loan is that you are allowed to buy up to a 4-plex!

    1. Another military vet I spoke to said the same thing. He’s accumulated a small portfolio of rental properties with very little capital down thanks to the VA loan.

      Something to think about folks!

  12. I am a big believer that that the military should be an option for everyone. I positioned my life to go to the citadel. In the end, wake forest was the only out of state school I applied to. But, I spent several years exploring this option at a military oriented boarding school. I think it’s a great choice if that’s what you want.

  13. I graduated from a service academy and did my five years (minimum service obligation) and immediately went to one of the best b-schools (HSW). After b-school I worked (still do) on Wall Street and haven’t looked back. I can tell you that I have ZERO regrets about serving and am very proud of my time in uniform. That said, I find the space I now work a MUCH more professional environment (still must play game of politics but that’s everywhere). The leadership in the military is generally a joke as promotions are almost entirely a function of time in grade and longevity, rather than merit. It was very hard to respect one’s boss knowing he/she outranks you merely because he/she has worn the uniform longer.

    I would also hardly call the military educated. It’s very rare to come across an officer whose masters degree isn’t from some online degree mill. The most highly-educated officers are selected early to teach at service academies and attend top-notch programs. However, this path is highly competitive and small relative to the size of the officer pool.

    To reiterate, I loved my time in uniform, but many perceptions of the military are flat wrong.

    Would love to hear a reader’s opinion to the contrary…

    1. First, great article (the OP). I specifically liked the comparison of military ranks to corporate titles. My wife is a GS14 (equivalent of an O5) civilian employee of the DoD, and I’m a director at a top FS company, so I often translate ranks/titles for friends in the corporate, government, and military worlds. If I were to pick nits, I think the General ranks could be broken down a bit more. A 1-star is probably equivalent to a Senior Vice President, a 2/3 star an Executive Vice President, and a 4 star a CEO of a major corporation.

      Second, I was hoping someone would chime in with the post-military options. I graduated undergrad from a top 5 school, and have my MBA from a top 20. A number of my peers from undergrad joined the military, some of whom my wife has bumped into over the years. Likewise, I have run into a number of former military officers professionally, including during my MBA program, and in MBA recruiting.

      I was a consultant between undergrad and grad skool, and I’ll admit you learn a lot in that world you wouldn’t learn in the military. Similarly, other common paths (finance, marketing, sales, politics, startups) offer great learning opportunities. But virtually no other path will offer the same kind of leadership opportunities the military provides. If you’re exceptionally bright and a high performer, with the ability to supplement your military experience with a graduate degree from a top school, you can basically write your own ticket.

      Lastly, this isn’t even getting into the medical / dental side of the military. I grew up in a military family (my father served 29 years, including fighting in 2 wars), and many of my friends / girlfriends’ parents were physicians. What a great way to pay for your medical education while also getting tremendous medical experience. My good buddy is an air force dentist, and has binders of some of the crazy issues he saw (and fixed) during his service, before he opened his own practice.

    2. Thanks for sharing. I guess I have no problem respecting those who’ve worn the uniform longer than me. Unless they are completely unfair, nasty, and incompetent people, I think respecting our elders is very important in organizations and society.

    3. I agree. Military is educated? That’s a joke if I ever heard one. Very few enlisted have legit college degrees. I don’t consider a degree from American Military University or UoPhoenix to be legit.

      Senior Officers have “graduate” degrees. Usually from somewhere like Naval Post Grad or some other service college, at least in the Navy. They are pretty much meaningless on the outside.

      The military is a good finishing school, but doing 20 years is a surefire way to get divorced, or have your kids hate you when you move them the 5th time in 10 years.

    4. Hi John, I agree with you that in my experience many officer’s have master’s degrees from very “military-friendly” online institutions. However, most of them aren’t degree mills, just average or below average online universities. However, I wouldn’t knock the military post-graduate schools.

      The lack of promotion based on merit is a real problem without a solution in the near-term. Far too many people make senior leadership positions just because all the smart/good people saw the light and got out into the civilian world. It’s a real shame that we don’t have a smarter promotion system or incentivize the right people to stay in. The Navy is currently discussing getting away from year group promotions and moving towards a more meritocratic system. Definitely a step in the right direction.

  14. I’m of the opinion that anyone not medically disqualified for military service has no right to complain about the cost of a college education. The military pays for your tuition for credits taken while on active duty, and the Post 9-11 GI Bill pays your tuition along with a living stipend when you’re out. I have an associates, bachelors, and masters degree. All three paid for by the U.S. Army. No it’s not easy, in fact it’s can very difficult to do. But the vast majority of young people today have this path as a viable alternative to 6 figure student loans. It’s sad to see that more people don’t use this option.

    1. Nice job having all three degrees paid for. How long have you served in the military in return? What are some downsides you see to serving in the military?

      You make a good point. Serving in the military is open for all. I guess people just choose to go into debt over service, and higher life risk.

      I do think many students/families don’t understand or know that there are all these financial benefits for military service. Maybe this article will help spread the word a little.

  15. Great post! I haven’t written a comment on Sam’s blog in a while, but I just had to come out the newsfeed to give you some love on this massive post.

    One can talk all day about the benefits of joining the military. If you get down into specifics, meaning branches of services and jobs within those branches, you’ll find even more perks. For example, a 20 year-old-Navy Nuclear trained mechanic can get a $90,000 bonus that kicks after serving 4 years. A Navy Nuclear trained officer can get more than $30,000 bonus per year after serving 4 years. Medical doctors get loans paid for plus bonuses and the list goes on.

    Either way, this post just hits the mark. Recruiters can answer specifics of each program, but be careful because often times they can only “sell” the jobs that are available. It’s a numbers the rest of life.

    1. More service = more financial bonuses? Sounds good to me!

      One of the best bonuses I see is joining the military at a young age (e.g. 18), work for 20 years, retire at 38, get a pension, and then work another job or become an entrepreneur to earn double money.

    2. “For example, a 20 year-old-Navy Nuclear trained mechanic can get a $90,000 bonus that kicks after serving 4 years.”

      Don’t think that the Navy doesn’t work that $90,000 back out of you, via blood, sweat, tears and sleep deprivation. There is a reason everyone in the nuclear navy looks 10 years older then they actually are. I averaged 60-85 hours per week in port, and probably close to 100 hours of awake time per week while underway, if not more. The longest I was ever up for was 37 hours.

      My advice for anyone joining the military is to avoid the nuclear navy. It isn’t worth it. The government wouldn’t offer to pay you an extra $20,000 per year if it was a good deal.

  16. Military service was never presented as a serious option to me. The prospect of going to war and the strict following orders structure are not for everyone.

    The financial benefits seem substantial, and I’m glad. The people doing these jobs certainly earn them.

  17. I was one of those people who joined the military for the GI Bill benefits. I enlisted in the Marine Corps right out of high school back in 2000. I wasn’t a U.S. citizen at the time, so becoming an officer was not an option.

    By the time my first tour was up at the end of four years, I was beyond ready to get out. I used my GI Bill covered most of undergrad (I came out with 20k in debt) and then I went to law school after that (another 200k of debt for a fancy Ivy).

    Joining the military to help pay for college can be worth it if you play your cards right. Here’s what I recommend, assuming you aren’t planning to make a career of military service: (1) Choose a non-combat related job and a duty station in the U.S. Those two things will make it infinitely easier to have the free time to: (2) get your Associate’s degree from a local community college while you are still on active duty. (3) Separate from service and go get your Bachelor’s and Master’s with your GI Bill. If you go to a public university and live cheaply, you can get out with little to no debt and only be two years behind your peers who took the traditional route.

    Also, I just had to point out one huge–and potentially underrated–veterans benefit: the VA home loan. Not only are the rates super competitive, but it enables you to purchase a house with $0 down and no PMI! And it’s reusable.

    1. Hi Tasha – Thanks for sharing your experience with the military and path to success!

      I wonder what the default rates are for VA home loans. I must imagine, much lower than non military home loans.

    2. Like Tasha I joined the military right out of High School (Air Force). After basic training you are sent to a technical school for your trade. Mine was aircraft maintenance (I thought I might want to be an airline pilot one day). I was lucky enough to get placed on the third shift for training, so I could go to the education office after class. I used this time to take as many CLEP and DANTES tests as possible as they are free to active duty. Upon getting to my first base, the first place I visited was the education office. They set me up with an admission to the Community College of the Air Force and a curriculum to get an associates in my military discipline. After about a year of actual on the job training and completion of a series of written tests you get a ‘Journeyman’ skill level and awarded college credits. Between my skill level and these CLEP and DANTES tests, I attained an associates without taking one class. I immediately went back to the education office and signed up for a bachelors – this time through a mainstream university. Embry-Riddle has instructors that teach at many bases and a few airports around the country. It took another 3 years due to deployments and a year long remote assignment, but I also received a Bachelors. This was all 100% paid for by being an active duty member, I had yet to touch a dime of my GI Bill. It was astounding to me that many people who I worked with also claimed they wanted school benefits, yet never took the time to start while the were active duty. I have kept in touch with many and after getting out, the majority did not utilize their GI Bills. I caution everyone who goes into the military for ‘education’ to start taking advantage as soon as possible, or you may become complacent and never begin.
      With a Bachelors and military experience I was recruited by a major government contractor off a job website. I then used my GI Bill to help pay for two Masters degrees (Science and an MBA). It covered all but my last class and a half.
      This all being said, also like Tasha, I was BEYOND ready to leave the military after about 3 years. I have enjoyed benefits in my adult life, such as no school debt, VA loans, etc. and realize they are a great thing. I just don’t know if I would choose the same path if I knew then what I know now. Officers may have a very different experience, but enlisted people in the military are nothing but government property. Higher ranking enlisted personnel are often only higher ranking due to time in service vs. capability. It was VERY hard to see poor management and decisions every day and stay silent. Thus, I had some issues. I did love my job working around jet aircraft and the guys I worked with were fun and good people. It wasn’t all bad.
      If you or your children are thinking of this path, just know that it is not the easiest.

  18. What a great post – so much detailed information.

    4 years for free tuition was not worth it for me. I graduated from high school about 30 years ago. I got recruiting calls and mailing about joining ROTC. However, I was worried about having to follow rules and not being able to ask why – so I had no interest in joining the military.

    1. What did you end up doing instead? I can see how 4 years of free tuition would be incredible for many families/students out there struggling to afford almost absurd level tuition nowadays.

      1. Nowadays is a key word.

        I went to s small private college in Boston called Suffolk University. When I stated there about 3o years ago tuition was less than $5,000 a year and fees were about $200 a year. now, tuition is definitely over $20,000 a year.

        I graduated with about $7,000 in debt that I paid off in about 3 years.

        I realize doing this today would be much more difficult.

  19. There are also great tax advantages for deployment (no tax in combat zones), and “pro-pay” for professionals in high demand (mostly medical). The Funded Legal Education Program (FLEP) also is available for those who wish to sell their soul to uncle sam for a few more years, but get law school paid. Ultimatley, I had my undergrad paid by a ROTC scholarship but chose to pay for law school out of pocket for the increased flexibility.

    1. Very good to know about taxes. Actually, that would be a head scratcher if the government taxed military folks in combat zones. What about 0% income taxes for all military personnel while on active duty? Sounds logical.

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