Are You Ready to Leave Behind the Pay and Benefits of Military Life?

Are You Ready to Leave Behind the Pay and Benefits of Military Life?

Any major career change has consequences, but the military is unique in that you lose an entire support system when you leave.

Here’s What You Need To Know About Life After Military Benefits

Whether you realize it or not, the military is an ecosystem that supports its participants pretty holistically. You’re not fully aware of it until you’re completely separated and have to adjust to the loss of that support system. There aren’t many civilian equivalents that offer perks such as full health care, housing, tax-free benefits, education opportunities, clear paths to promotions, and even discount groceries and goods. That’s why you need to consider the big picture before accepting a civilian job or moving to a new place. Here are a few things to keep in mind about replacing those military benefits.

What does your family need?

Take an E-5 with three kids and a spouse. To get the same quality of life in a civilian career as he had in the military, the sergeant will need to look for a job that pays significantly higher than his E-5 pay plus housing allowance and subsistence. Why? Taxes, housing, and the cost of health care are two of the biggest expenses you’re not paying for when you’re in the military. Child care and grocery costs closely follow that.

When you pay taxes on your paycheck, with no portion of your pay in the glorious tax-free section, your take-home pay shrinks significantly. For example, let’s say you receive a job offer with a salary of $50,000 a year in Wichita, Kansas. Your bi-weekly pay, after taxes, would be about $1,544. You might be thinking, “Great! That’s more than I make now.” However, you have to consider health care. It’s very rare to find an employer that doesn’t require you to pay a portion of the costs, especially for dependents.

Child care is another huge hit to your wallet. Child development centers on military installations are heavily subsidized. You won’t find that in the civilian world. In fact, child care can be one of the most cost prohibitive aspects to moving to certain parts of the United States, especially cities.

What does this mean to you? Maybe you should consider your family or your in-law’s suggestion that you move somewhere near home (at least at first!), so child care isn’t immediately a financial burden. Or, it might mean that you need to save up a larger nest egg before leaving the service.

It could just mean that you use the GI Bill to get the education you need for a higher-paying job. There are plenty of options out there, but you just want to be eyes wide open before you leave the safety net of the service.

Now, if you’re a single soldier with no dependents to support, you’re in an easier spot. While you still have to tally up how much salary you’ll need to cover the basics, you can be a little more flexible in regard to living situation (one of the highest costs). For instance, you can always find roommates — an option that’s much harder if you had kids or an elderly dependent. You also don’t need to think about child care locations. That means you can probably go for a job that may not pay as well as you’d like, because you only have to take care of yourself.

What kind of salary should you expect?

Did I mention how much I miss military pay tables? In the civilian world, it’s so much harder to find out what salary a position will have, or what your peers make. It can be very frustrating to go through a few rounds of interviews only to find out the salary isn’t even close to what you’re aiming at.

Luckily, there are a few tricks you can try. First, do the obvious. Go onGlassdoor, PayScale, or salary.com to look for comparable positions and salary rates. You can sort by location, job title, and company. That baseline research is useful to know what ballpark figure to expect and what you can request if the hiring manager asks about your salary expectations. Now, if you want more pinpointed information, you might have to get more creative. This could mean using your network to find someone in a similar field and seeing if he or she is willing to share that information. Some job descriptions will state a salary range, which is another way to gather information.

How can you research cost of living?

You know how basic housing allowance changes depending on the zip code you live in? Cost of living is one of the factors that goes into those calculations. You can use that same research to help yourself figure out what it’ll take to move somewhere new, if that’s something you’re looking to do once you’re out.

One of my good friends left the Army and moved to a West Coast city after having lived in Kansas. Once he was there, he quickly ran through his savings paying his rent as he searched for a job. He eventually had to return to his childhood home in the Midwest. I’m sharing this because he’s a smart person, a former math major in fact. But personal finance is the great equalizer. If you don’t plan ahead and research the place you want to live and calculate how much it’ll cost you to live there, you may be in for an unfortunate surprise.

Try a cost-of-living calculatorto get your baseline numbers. Then, assuming you have job prospects in the area, see how much rentals or homes are listed for to see if it fits your budget.

The last word

Any major career change has consequences, but the military is unique in that you lose an entire support system when you leave. You have to try to make up for some of it with salary, but there are the community aspects to think about as well. In the Army, if you lived on post, you had access to an education center, a lending closet, libraries, daycares, schools, auto repair equipment, fitness centers, places of worship, and more. Those are all things you’ll need to think about and research (and discuss with your family!) before making any moves.