US Air ForceCredit: Pixabay

Whether Active, Reserves or Guard, 20 Years of military service is still a great investment of your time. Military service is still an attractive life career and a long-term beneficial choice. This is especially true when you consider what it takes to put yourself in a comfortable financial position for that day you truly retire from the working world. You can retire as early as age 37 (although, most probably age 38), receive a pension for the rest of your life to include medical insurance, still leaving you time to start and retire from a second civilian career before collecting social security.[1][2]

Active or Reserves - It's Worth Your Time

If you are already serving in the military and you have the have the choice to stay – then stay. If not, or you choose to leave, join the Army or Air National Guard (NG) or one of the Branch Reserves (Army, Air Force, Marines, Navy, Coast Guard); this will allow you to keep your service time running and achieve a reserve retirement at age 60 (I believe the NG and Reserves are currently working on an age 55 retirement package).[3]

Old Guard at WashingtonCredit: Pixabay

Although this article is primarily written with the U.S. citizen in mind, and I know I have readers outside of the U.S., many nations have a similar military retirement system. The United Kingdom, for instance, has an active duty retirement system very similar to the U.S. system.

Most active duty military members retire between the ages of 38 - 48 years of age, and then start a second career. It just takes a 20 year commitment and in draw-down years it takes as little as 15 years to secure a retirement. After retiring from the military you can either begin a second career building a second retirement or use that new career or job to invest for the future (mutual funds, certificates of deposit, investment funds, IRAs, 401Ks, or savings). Then, by the time you qualify for social security, you will have multiple retirement funding streams: one military, investment funds, and social security to see you through your senior years of life.

Marine in AfghanistanCredit: Pixabay

Force Reduction

The great draw-down of U.S. troop strength has come to the country – again! And, it can be very inviting after all the long deployments, long days, pressure-cooker environments, and strain to the family and marriage, to decide to hang up the uniform and join the civilian world. Well, that may be great if you already have a lucrative job waiting for you. However, it’s more lucrative to stay long enough to retire from military service, even if an early retirement under Temporary Early Retirement Authority (TERA) 15 year retirement; at least you will have something of a guaranteed income to fall back on or build upon.

Think about it - how many careers still exist today that will let you retire after 20 years of service and provide you with both a lifetime monthly pension and medical insurance? These types of careers and businesses are becoming fewer and fewer every year. Government and other public service careers such as State and Federal Government employees, law enforcement, fire departments, and public school teachers are some of the more common careers still offering some form of full-life pension plan.

SailorCredit: Pixabay

It's true that there are still labor unions trying to hang on to permanent pension programs; unfortunately, fewer and fewer businesses offer these pension plans. Instead, many employers are opting for 401K plans. By 2007, only 21 percent of all private-sector workers were offered traditional pensions; thus leaving more and more of the American workforce left to build retirement plans relying purely on personal savings, individual retirement accounts (IRAs, 401k) and mutual funds.

20-Year Pension (Retired Pay)

A 20-year military retirement results in a retirement pension (technically called "retirement pay") roughly equal to 50% of your base military pay (method for calculating retirement pay amount is also based on other factors to include the date of original enlistment into the military. There are current political moves being made to reduce the 50% down to as low as 40%). As a rough example, and it must be rough since each year the averages change, an enlisted member at the rank of E-8 might retire after 20 years with an annual gross retirement income of over $29,000; while an officer rank of O-5 with 20 years might retire with a gross annual income of $49,000. These amounts are roughly based (very rough and general) on the 2014 military pay scale. This pay benefit does not even include the additional retirement benefits of medical care (TRICARE and Veterans Administration eligibility). As you continue to serve past your 20-year mark your retirement pay rate will obviously increase up to a limit.

Reserve Components

Air National GuardCredit: Pixabay

If you are already in the National Guard (Army, Air Force) and Reserves (Army, Air Force, Marines, Navy, and Coast Guard) then you know you have a 20-year retirement program that also includes any active duty service time performed. That active duty time really adds up the reserve points to provide a healthy retirement check at age 60. It is not unheard of for a former active duty troop with 4-10 years of active service to finish 20 years with the Guard/Reserves and end up with a reserve retirement, at age 60, equaling nearly half or more of what they would have received if they stayed on active duty in the first place.

Everyone active and reserves (Guard/Reserves age 60) retires under the parent service: U.S. Army, U.S. Marine Corps, U.S. Air Force, U.S. Navy, or U.S. Coast Guard, respectively. When a National Guard/Reserve troop retires before age 60, their time continues as inactive ready reserves (IRR) until they reach age 60. During that in-between (known as grey zone retirees) these IRR retirees continue receiving credit and points towards retirement so that when the reach age 60, their retirement base pay is calculated based on the military base pay for their rank at the time of age 60. That means retiring from the Guard/Reserves is a very lucrative option, considering a Guard/Reservist is also working on a civilian retirement at the same time.

Navy WarshipCredit: Pixabay

For the Non-Prior Service

Don't get me wrong, it's not just a simple matter of "signing-up" and sitting back for 20-years; there are enlistment qualification criteria and military schools to complete continuing throughout your military career (schools are specific to career specialty, unit needs, future promotion eligibility, and professional development). There are age limits and physical fitness requirements and aptitude testing that need to be completed in order to qualify for enlistment and stay in service. Your local military recruiter can provide you information on the latest requirements and how to prepare for testing.

West Point Military Academy GraduationCredit: Pixabay Images


For anyone interested in earning a commission as a military officer, there are other requirements that include passing an officer aptitude test and at a minimum a Bachelor Degree from an accredited college/university is required as well as completion of an officer commissioning program for example: West Point, Naval Academy, Air Force Academy, Naval Academy, Reserve Officer Training Candidate programs (ROTC), or active duty Officer Candidate Schools (OCS) programs. If you are considering an officer commission in the National Guard (Army or Air) check their current requirements (many states have their own OCS programs). Service branch websites will provide you more specifics on these requirements and age requirements.


Although this article is meant primarily for those people still of an age to qualify for enlistment or those prior military members that have left the service before earning a retirement, if you're a parent with kids near or of recruiting age, you should still seriously consider discussing this as a positive option for their future. As all parents know, sending their kids to college after they complete high school is a most desirable goal; however, it is also an extremely expensive goal. The military is a great way to earn funding for college. Additionally, young people need to think in terms of lifetime career and lifetime benefits. Without going to in-depth into the various benefits that go along with enlisting in the military, a 20 year retirement with medical benefits, college funding and enlistment cash bonuses should be extremely attractive to anyone thinking of their future.

Final Word

Whether you stay in the enlisted ranks or pursue a commission the results will be the same, after 20 or more years of service you can take your skills and experience out into the civilian working world and start a new career leading to that second retirement, be it a pension or investment savings.

Talk with your local recruiter or first check out the on-line service branch websites for more specifics on current available enlistment benefits and bonuses. Each service branch has its own requirements. You may even find different age requirements between the Active U.S. Army versus the Army National Guard. Currently, the Guard and Reserves are actively pursuing recruiting prior active duty personnel to fill in their ranks. All your active duty time counts towards your Reserve Retirement. That active duty time equates to more money in your Reserves Retirement check. Therefore, if you've decided to leave active duty with less than 20 years, you should seriously look at joining a Guard/Reserves unit.

The Military Guide to Financial Independence and Retirement
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