I am sure this question has been answered numerous times, but I am unable to find the answer using the search funtion.

Has anyone done the math and figured what you must earn to offset a military retirement? I am a very junior O-4 with 11-years of service and plan on getting out in the next year.

I plan on joining the Guard or Reserves and securing an airline or cargo job. The pay cut I can deal with..it is the retirement causing concern.

Thanks in advance.

You do know you don't get your retirement until age 60 UNLESS you have 20 years active duty, right? 19 years AD plus 1 year in the Guard means waiting til age 60 (congress is trying to lower it to 55 if you've been activated in the Guard/Reserves since 9/11 but don't bank on it passing). I assume you know all that so...just a wag from my window seat...11 years AD and say 9 years doing the minimum at a Guard unit...in today's dollars, you would get about $2000 month in retirement (I think, not real sure, it's all taxable, so takehome is $1600 ish)...that is a WAG, take it with a grain of salt. I hope you have been (and continue to be) maxing out your TSP. I am in your same position (but already in the Guard) and am assuming my TSP has a 90% chance of being there when I hit 60, my military retirement has an 80% chance of being there, my airline pension about 60% and my social security about 50%. Which also explains why I put away a fair amount into my own private civilian funds (IRA types) every month because that has about a 95% chance of being there when I hit 60. If ALL goes well, I might actually make more when I turn 66 then when I am still flying at 65 but I am sooooooo not planning on that happening!

I've looked at those numbers in the past, but don't have them handy now. A lot of it nowdays depends on which airline you think you're going to work for if you get out, and compare that to a 20 AD retirement followed by an airline job. Here's my very rough assessment...


FDX, UPS, SWA: You will end up ahead of the game. Risks: Low, but possible SWA longterm decline.

Other Majors: Probably break even on average. If you move up fast (CAL, USAir) you might get ahead of the game relative to 20 years AD. At DAL, upgrade will be much slower. Risks: Mergers, downturn, terror, etc.

Regionals/ACMI: Stay in for 20 unless lifestyle is a huge factor for you. Risks: Same as majors except you move up so fast that you will soon be out of furlough zone (bottom 25%). Also regional airlines can be fired without notice, which may cause them to liquidate all flight operations (happened to Skyway a few days ago).

I'm addressing just finances, someone will probably point out that intangibles like numerous sand deployments should also be considered. I've been out for a while so I remember more of the good and less of the bad

Kit Darby and his actuarial wizards answered this exact question about 10 years ago. For a person on active duty and going to a major, you would come out ahead if you left the military up to the 18 year point. This was based, however, on the pre-9/11 contracts, including very generous airline A and B funds. At most airlines, the pay and retirement benefits have decreased or been eliminated.

In today's world, it would depend on so many variables (which airline), and now age 65 has added another twist, so the break even point is probably several years earlier. A wild guess would be the 12-14 year point.

If you can get out of active duty, and land a job at UPS, FEDEX, or SWA in the next 2-3 years, then it may be worth it. Getting a Reserve or Guard job if you get out will lessen the loss, as you will start getting the reduced (compared to AD) pension at 60.

Quality of life, for me, is the most important factor. Money comes and goes, but QOL is what brings a smile to my face (along with hot chicks)

Good Luck!

Yeah, I remember those calculations floating around. I know a guy who quit at 17 years in 1999...fortunately for him, he chose Brown over UAL

dude, i just figured all this crap out myself b/c i have 3 more years and that will put me at 11.5 years of service when/if i get out.

comparative assumptions: 12 years active then go airlines versus 0-4 until 20 years of service then airline job, 25k pilot bonus from years 11-15 if i stayed in, work until 60, reserve retirement at age 60 with 12 years of points
also, i factored in the opportunity cost of the decrease in salary for the first few airline years with an appreciation at 5% annually untaxed. i made my reserve retirement calculations assuming i did one of those CAP jobs or academy advisor jobs which accrue retirement points at the minumum amount but no pay.

my conclusion....get out for UPS, but not airtran. and thats if your decisions are purely monetary. i used ups and airtran since they both only had 2 pay scales which makes it easy to figure out and are each at the end of the majors pay spectrum.
to elaborate: at age 60 with UPS, you will come out 700k ahead by getting out early. at airtran, 200k in the hole.

the one thing i didnt factor in was the additional 8 years or airline retirement growth you would accumulate by leaving at 12 years instead of 20. therefore, with airtran you probably will come close to breaking even. ups---like hitting the lotto i guess.

the intangibles which should be thought about: the ability to accumulate home equity in the airlines(assuming youre willing to commute if necessary) versus moving every 3 to 4 in the mil; that could be a fair amount of money. the guarantee that you dont have to go back to iraq unless you want to. been there, dont that and have no desire to go back. and the biggest of all, trading 200 hours of work each month for 100 or less.

so, the quick synopsis: any major that will hire you is worth it, even at the 12 year point. if the usaf does away with the bonus, then its a no brainer. the 25 for 5 years is the only thing that even makes it remotely close.

pm me if you more ?'s.

forgot one thing. spouse's profession and lost income there. mine's been, for the last 6 years, and will be a stay at homer until my youngest starts school in 2 years but after that the free ride is over. lol, dont tell her i said that. shes a college grad and the impact of military moving has without a doubt cost us money. not so much right now, but it did before we had kids and would even after theyre both in school fulltime. so, 8 years of her building a career in one locale, while i cant pinpoint a dollar figure, is definitely worth something.

1971- I am with you on the reliability of these government programs, I am not counting on any of that money. Not so much a TSP guy (3%), more of an Roth IRA & Save for the $20K annual salary guy right now. I am deploying 6-months out of every year.... and have been doing such since 2003. 9-more years of this crap, not exactly what I or my family had in mind!! Mentally my career move is a done deal, just have to work the finances.

Thanks for pointing out the reserve retirement system, but I was already aware of the age requirement. Actually, I am already at 16yrs for service, but only 11 active. Honestly, as long as I am flying I will stay until they kick me out. I have been very selective by applying for non-deployable or short TDY units. (KC units, C-17, etc)

web- I can not PM because of permission..must be a new guy thing? See if you can PM me, I have a few questions. Thanks.

Takes 10 posts to pm someone so you might want to make up a few nonsensical ones...KC-135 Guard/Reserve units aren't deploying for more than a month at a whack right now so that might be a good place...I don't trust any unit that flies an airplane that starts with a C-, they get jerked around quite a bit.

In a recent issue of the Air INC magazine, they did a article on this exact question, military retirement vs getting out now. I do not have it in front of me right now, but when I get home will post the numbers.