Archive for September, 2011

Military Pay 101

September 25, 2011

I see a lot of misinformation passed around so I spent a little time putting down the facts to give taxpayers some understanding of Military Pay. This might help you advise a young person who is thinking about joining the United States Armed Forces. I don’t mention the valuable training. In 1967 when I started Air Force Pilot Training in Super Sonic Jet Trainers, it cost the government about $6 Million to train one pilot. The Air Force was sending students to Ivy League Universities for up to two years to learn foreign languages.

Military pay can be very complicated because there are so many special pay categories such as Aviation Pay, Submarine Pay, Combat Pay, Family Separation Allowance, Medical Pay, etc. However, for the most part all military personnel receive Basic Pay + Basic Allowance for Subsistence + Basic Housing Allowance. The Housing Allowance varies with location. For my calculations below I will give you the total monthly pay based on Denver, Colorado. California, Alaska and some other places would be much higher. An E-1 is a Basic Trainee and the lowest possible rank. An E-5 is the lowest Sergeant rank or Navy Petty Officer 2nd Class. E-9 is the highest Enlisted Rank. An O-1 is the lowest Commissioned Officer Rank, an 0-4 is the lowest Field Grade Officer Rank (Major or Lieutenant Commander). An 0-6 is the highest Field Grade Officer Rank (Colonel or Navy Captain). I was an 0-6 receiving Aviation pay that ranges from $250 to about $900 a month. Here is the monthly and annual salary rounded to the nearest dollar for married personnel:
E-1: $3,215; $38,580
E-5 $4,409; $52,908
E-9 $9547.04; $114,564
O-1 $4,324; $51,900
O-4 $8,047; $96,564
O-6 $13,018; $156,216

Generals & Admirals earn more.  Warrant Officers Rank between Enlisted and Officers.
In addition there are other benefits including:
30 days paid vacation
GI Bill
Tuition Assistance
Many Bases offer University Residence Courses
VA-Guaranteed Home Loans
Lifetime Medical Care for Retirees & Families
Tax Free Shopping at Commissaries & Exchanges
Military Morale, Welfare and Recreation Services
Free Legal Services
Space Available Travel
Discounted Child Care
Military Spouse Employment Assistance
Thrift Savings Plan
Low cost life insurance for member through Service Group Life Insurance
Low cost life insurance for spouse through Service Group Life Insurance

Military service is many things to many people. For a high school graduate who takes advantage of the opportunities, the sky is the limit. For the high school graduate who spends off duty time in the bars and watching TV it will be a different story. Both can have rewarding careers and both can be happy but one will work for the other.