Sunday, September 05, 2004

Understanding Your Military Pay and What You need to Make When You Separate

Determining what you need to make in a position after your military service is probably the largest issue that you need to address when leaving the military. The consequences of an uninformed decision in this area can and will affect your earnings for the remainder of your life. In order to make an informed decision, you must fully understand your military pay and what civilian compensation package is necessary to equal that pay.

Military Pay:

Understanding your military compensation is pretty complex, so I will try to break it down first by the amount of money that you actually receive. A good site on general military pay can be found at: http://www.defenselink.mil/militarypay/. Military members receive basic pay, housing allowances, subsistence (food) allowances, clothing allowances (yearly). If you are a single member and reside in government quarters and eat in government messing facilities, you can substitute housing and subsistence allowances for those services. But, whichever is the case, you should calculate the full allowances into your pay to determine what you will need to maintain at least the same compensation. You must realize that at that point you will no longer be entitled to those services and will need the same as those that reside and eat at their own expense while in the military.

Regardless of your situation account for the full allowances that one would be entitled to if they lived and ate off-base. These numbers should only change in terms of single or married status for housing allowances. Everything else will be the same for everyone at the same grade and years of service.

Military members do pay taxes, but not as much as public or private employees. Any entitlement with the word "pay" in it is subject to tax while all others are not. In regular employment almost all pay is subject to taxation.

Some other items to consider regarding your military pay and benefits package are: Health insurance (which have no premiums taken and no copays), unlimited sick days and no retirement contributions from pay.

As you can see the tax advantages and avoidance of benefit contributions are immense and definitely need to be considered when determining what salary you should accept from civil employment.

Regular Compensation:

Normal compensation packages are more simple. Almost everything is taxed, less the following items: some retirement contributions, possibly health premiums and other health related expenses, 401K equivalent contributions up to certain percentages and other miscellaneous items (parking fees, mass transit benefits, etc.). These items can often be deducted from your pay prior to taxes being deducted.

In looking at regular compensation packages, you can see how many more items need to be deducted from your pay. In particular, you will deduct more taxes, health premiums and retirement contributions.

Additionally, you may now have to pay some out-of-pocket health expenses and if your obligated service has expired you will no longer have on-base privileges.

Calculations:

There is no simple formula to calculate exactly what you need to make to equate to your military pay and benefits, but you can get a good idea. The Department of Defense has developed a calculator which can give you a rough idea of what you will need to make. You can find this at: http://www.defenselink.mil/cgi-bin/rmc.pl . I am not sure how up to date it is, but it is a valuable tool. Unfortunately if you look for the amount that will calculate for you, you will come up short on payday because you will now be paying health premiums, retirement contributions, etc. So, simply take the number provided and add an estimate of what you think these costs might be. Simple web searches of these types of costs will most likely find you an average of such costs. The calculator will at least account for the military tax advantages.

Just remember, your W-2 and LES are not good sources in determining what you need to make when you separate, or you will most definitely come up short. Leave a comment if you need some personal assistance in this matter. Don't sell yourself short.

15 Comments:

At October 4, 2005 at 7:17 PM, Blogger Dr. X said...

Great job! Another decent payday loan site to add to my list! Hope you don't mind I leave mine here,
payday loan personal

 
At October 5, 2005 at 1:48 AM, Blogger Dr. X said...

Great job! Another decent payday loan site to add to my list! Hope you don't mind I leave mine here,
online payday loan instant approval

 
At October 7, 2005 at 10:31 AM, Blogger heropoo said...

Just thought i would say hi from Japan. Doing some blog surfing and found your site. Im looking for some cool styles of credit loan for my own blog. Theres some really amazing blogs about. if you have time check out my site you will find information on credit loan. Well when i get my blog running hope you come and check it out.

 
At October 7, 2005 at 6:18 PM, Blogger hexadecimals resources said...

I found a good online loan site. I am looking into it myself.

 
At December 27, 2005 at 6:30 PM, Anonymous Blue Cross of California said...

Great blog I hope we can work to build a better health care system. Health insurance is a major aspect to many.

 
At January 4, 2007 at 12:24 PM, Anonymous Anonymous said...

If you are still answering questions, I have a few. I'm not military--my husband is--but I handle our finances. Needless to say, the military pay system can be confusing! Here's my situation--my husband is an O-4 medical officer (Family Practice). His commitment is up in May, but we just arrived at a new duty station 9/06. He wants to get out in 9/07. I'm wondering how this is going to effect his pay over the coming months. First off, there was a bonus he was supposed to sign for 10/06, but it would require a year commitment. Do you know if it would be possible to get a prorated amount for his final 11 months in the military? Or do we just have to give up this bonus entirely? Also, monthly there is a VSP bonus and a board certification bonus. Would these continue until he seperated, or do they also require a certain commitment period? I would really appreciate any help with this confusing issue! Thanks, jessr413@hotmail.com

 
At November 11, 2009 at 3:25 AM, Anonymous Anonymous said...

guaranteed cheapest viagra viagra equivalent alternative to viagra free viagra samples before buying viva viagra cialis viagra viva viagra viagra from india viagra benefits viagra soft tabs effects of viagra cheap viagra walmart lowest price viagra viagra lawyer columbus

 
At November 25, 2009 at 4:05 PM, Anonymous Anonymous said...

[url=http://www.xbox360achievements.org/forum/member.php?u=259462]order mexitil online cod[/url]

 
At December 6, 2009 at 9:34 PM, Anonymous Anonymous said...

Good day !.
You may , perhaps curious to know how one can collect a huge starting capital .
There is no need to invest much at first. You may commense earning with as small sum of money as 20-100 dollars.

AimTrust is what you haven`t ever dreamt of such a chance to become rich
The firm incorporates an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

It is based in Panama with affiliates around the world.
Do you want to become a happy investor?
That`s your chance That`s what you wish in the long run!

I`m happy and lucky, I began to take up income with the help of this company,
and I invite you to do the same. If it gets down to select a proper companion who uses your savings in a right way - that`s the AimTrust!.
I take now up to 2G every day, and what I started with was a funny sum of 500 bucks!
It`s easy to get involved , just click this link http://garedumek.100megsfree5.com/ucacydi.html
and go! Let`s take this option together to get rid of nastiness of the life

 
At December 18, 2009 at 4:30 PM, Anonymous Anonymous said...

Good day !.
might , probably curious to know how one can collect a huge starting capital .
There is no initial capital needed You may commense to get income with as small sum of money as 20-100 dollars.

AimTrust is what you haven`t ever dreamt of such a chance to become rich
The firm incorporates an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

Its head office is in Panama with structures around the world.
Do you want to become a happy investor?
That`s your chance That`s what you wish in the long run!

I feel good, I started to get income with the help of this company,
and I invite you to do the same. If it gets down to choose a proper companion who uses your savings in a right way - that`s AimTrust!.
I make 2G daily, and what I started with was a funny sum of 500 bucks!
It`s easy to start , just click this link http://jilasixa.bigheadhosting.net/baqozugu.html
and lucky you`re! Let`s take our chance together to get rid of nastiness of the life

 
At January 30, 2010 at 12:35 AM, Anonymous Anonymous said...

Hello everyone!
I would like to burn a theme at this forum. There is such a nicey, called HYIP, or High Yield Investment Program. It reminds of financial piramyde, but in rare cases one may happen to meet a company that really pays up to 2% daily not on invested money, but from real profits.

For quite a long time, I make money with the help of these programs.
I don't have problems with money now, but there are heights that must be conquered . I make 2G daily, and my first investment was 500 dollars only.
Right now, I'm very close at catching at last a guaranteed variant to make a sharp rise . Turn to my web site to get additional info.

http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]

 
At December 4, 2010 at 10:34 AM, Anonymous femdom literotica stories said...

What a pretty pussy. a gaping hole in the roof of police headquarters, whereunofficial witnesses claim Sapphire broke out.
free sex and rape stories
free wife sex stories
free adult animalporn stories
nifty stories in arabic language
free non-consent young sex stories porn
What a pretty pussy. a gaping hole in the roof of police headquarters, whereunofficial witnesses claim Sapphire broke out.

 
At November 28, 2012 at 10:16 AM, Anonymous Anonymous said...

Post55, http://www.arlo.net/massacree/ viagra online, uddb3, http://www.arlo.net/fccgb/ buy viagra without prescription, ukul6, http://www.arlo.net/fccgb/notes/ buy generic viagra, xudj6, http://www.arlo.net/bytes/ buy cheap viagra online, hqui6, http://www.arlo.net/live/ viagra for sale

 
At January 11, 2013 at 6:53 AM, Anonymous Anonymous said...

http://site.ru - [url=http://site.ru]site[/url] site
site

 
At January 25, 2013 at 3:19 PM, Anonymous Anonymous said...

http://site.ru - [url=http://site.ru]site[/url] site
site

 

Post a Comment

<< Home