Military Officer- Highest Real Compensation?

rolex45's picture
Rank: Senior Chimp | 25

Hi WSO,

Junior Officer here, I was comparing my compensation to what my friends at corporations and banks make, and it seems that the total real compensation is higher as a junior officer than banking. Here's the general outline of the total compensation package as I see it:

Banking:
85k base ~70k bonus, total compensation of 145k. Average rent of 1.5-2k a month (many times higher), and food/living expenses that are far higher than the national average. Expenditure of several thousand dollars a year on professional goods: suits, shoes, ect. Very high taxes and expenses really pulls banking down...

Military:
52k total compensation up to ~70k after 2 years, 1/3 of which is non-taxable. If deployed, all compensation is not taxed. Rent average of 500 a month, and a minimum of 1/3 of yearly expenses covered (not using electricity or paying for food when in the field). You have access to many military perks: consumer good discounts, on post stores without taxes. Several thousand dollars of expenses on gear/uniforms for work, similar cost to banking. Education benefit is the real kicker, with yearly GI bill benefit totaling: minimum: 45k a year, average: ~60k, and Max: 90k (full ride+ room and board to schools like Berkeley Haas and Michigan Ross MBA). You also have to factor in the perpetuity of veteran healthcare (I know the VA system sucks) and veterans benefits for the rest of your life- value of this varies greatly depending on personal spending habits and propensity to take advantage of veteran status.

The above scenario is only possible for individuals entering through OCS or Non-scholarship ROTC, who get GI bill benefits right away with a commitment of 3 years. The compensation drops drastically when you stop earning GI Bill benefits. This calculation also assumes that you are using the full three years of GI bill benefits, attending a program like an MBA/MPA or law school after the military.

Bottom line: Although this could be handled much more quantitatively, it looks like the military beats out banking in terms of financial security. I am surprised that few people recognize the military as such a lucrative entry level career. For prospective monkeys who have a propensity for the military, I hope you take this into account.

Comments (6)

May 20, 2018

Compensation was the last thing on my mind when I was a young lieutenant in the USMC. Hopefully you didn't join for the money.

Also, your statement about pay as a junior officer is just flat out wrong. Comp not taxed? Deployments tax free? Not paying for chow in the field? Uniform allowance? $500 rent?

Haha. Boot.

May 20, 2018

BAH and BAS are not taxed, and salary is not taxed on deployment. From TurboTax Website:

"When a member of the military is serving in an area designated by the Department of Defense as a combat zone or is serving in direct support of military operations in the combat zone, he will qualify to have his income during that period excluded from federal income tax."

I don't know about you, but they never docked my BAS for meals in the field. Didn't say that there was a uniform allowance, I said that the uniforms were an expense. USMC is typically in more expensive areas, where I live 500 dollar rent is plenty sufficient. I know many people paying high 300 low 400 a month including utilities, with roommates.

Didn't mean to imply that I joined for the money, nor do I recommend others make that decision: they would likely be miserable. I had the impression that the military pay way really poor before I joined, but I am pleasantly surprised by the compensation.

May 21, 2018

I don't think you can count the GI bill as actual compensation, that is more or less paying for training. You could argue that if you got into banking you wouldn't need to get your MBA. That said, yes there are a lot of financial perks to joining the military but to say the compensation is the same may be a stretch

Most Helpful
May 21, 2018

You also have to factor in all the other non-salary / bonus items for banking to make it more apples to apples. Plus, your pay increases every year as an analyst by like at least $30k / year just for the fact that you exist.

  • At least $30 stipend per day on weekdays for dinner + $60 per day on weekends: conservatively use $30 per day on weekdays only for 50 weeks per year = $7,500
  • 6% match on 401k: On 145k as you stated that is $8,700 and will only go up as you become more senior
  • Free transportation home on weekdays: $10 per ride 5x a week for 50 weeks = $2,500
  • Many other discounts such as gym discounts (my bank does $50 per month = $600 per year), discounts on laptops, free copy of Microsoft Office, discounted phone plans, etc.

Edit: Also, the real value of banking is in the exit ops / earning potential you get years down the line. To compare just the junior level is shortsighted.

    • 7
May 21, 2018

Mission accomplished. Thank you for your service.

May 21, 2018
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