Military Pay Covers Most Things, But Not Everything
MilitaryOneSource.mil provides an in-depth exploration into how military pay works, and which things are ultimately covered on a monthly basis as you serve. Categories that will define monthly income include the following:
- Tax Withholding
- TSP Contributions
- Monthly Base Pay
- Insurance Deductions
- Available Leave, As Well As Earned Vacation Days
- Collateral Elements Including Varying Allowances And Special Pay Situations
Breaking Down Base Pay And Allowances
Your monthly leave and earning statements will include a monthly “base” amount. This will be determined by rank and length of service. The lowest amount of pay for under two years of service is $1,650.30 a month, as of January, 2021. The highest pay is $16,608.30 for the highest rank at 36 years’ of service. Here’s the breakdown.
Essentially, you’re looking at a spread of between $19,803.60 and $199,299.60 a year, depending on your length of service and rank. This pay is before associated incentives and allowances like food and housing, as well as associated special needs.
There is variance here. The present opinion of those determining payout says that government housing does not exist in a quantity sufficient to provide living arrangements for all military personnel and their families. If you’re living in government housing, you won’t receive full housing allowance. Those who don’t live in government housing will have options as regard allowances for the securement of commercial housing. You can explore more details here.
Collateral Cost Deferral: Insurance, Etc.
Beyond allowances and base pay, you’ll be able to save money on insurance through groups like USAA, and you’ll have tax deductions available. When it comes to leave and vacation days, you can make money without being on duty as well.
The “TSP” in TSP Contributions stands for Thrift Savings Plan. Essentially, this plan reserves a certain amount of pay toward retirement. TSP earning potential increases over time. You’re going to see about a threefold increase in contributions over the course of twenty years. Your military pay will still have normal deductions from your check such as taxes related to Social Security, and federal taxes.
A Closer Look At Allotments
When it comes to allotments, you’ve got discretionary and non-discretionary options. Discretionary allotments include things like commercial life insurance premiums, dental options, dependent payments, bank deposits, rent, mortgage, and other similar expenses. Non-discretionary allotments might apply to savings bond acquisition, charitable donations, and other similar financial areas.
Half of allotments will be deducted from mid-month pay, remaining in the system until the other half is deducted from pay at the end of the month. When the month is over, the total amount is submitted to whichever recipient has been designated in the allotments. You’re allowed up to six discretionary allotments a month, and as many non-discretionary allotments as you’d prefer. Associated allotments can’t be used for acquisition or rental of property.
Special Pay Situations
Special military pay is additional compensation to base pay and allowances. There could be incentives added given one field or another, and such incentives may apply even to relatively new personnel. Varying eligibility will apply. You can read more on special pay on Military.com.
Understanding Financial Options In The Military
In a nutshell, benefits of military service, allowances, and base pay make even the least tenured service a profitable option for many. What you’ll save in insurance, and what benefits exist once you’ve left the military, will expand the weight of base pay. Additionally, retirement packages and service length contribute to increasing base pay.
The bottom line: will the military pay for everything? Not exactly–however, pay does increase over time, and wages are competitive.