016 How Much You Really Make, aka The Blended Retirement System's Cash Value

Most of us who leave the military before 20 years do so to chase higher paychecks in civilian jobs. And while the dollar amount printed on the check every 1st and 15th will likely be more, are you really making more in terms of total compensation? As it turns out, we all need to do a little math to figure out how much the military is actually paying us -- and the results can be stunning!

The value of our free (barracks) or subsidized (Basic Allowance of Housing) room and board, free healthcare, and other perks ends up being worth $23,000-50,000 (or more) per year. When added to the modest Base Pay of a military career, these perks take you up to, or way over, the average income for American workers. In fact, an E-1 making $25,000 also gets $23,000 in benefits -- $23k worth of food and housing and healthcare that they will have to pay for as a civilian.

But on top of that there is the massive value of Military Retired Pay, aka your monthly pension. If you were to DIY your own pension, you'd need to save $15,000-24,000 per year for 20 years just to equal the value of your Retired Pay. That more than levels the playing field, and in fact, we argue, makes U.S. service members some of the best-compensated employees in the entire United States!

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