(Image courtesy of author)
Practice Notes
FIRE for Effect
Achieving Financial Independence through Military Service
By Major Geoffrey R. Pariza
Financial independence retire early (FIRE) has gained an almost cult-like following in recent years due in large part to internet forums1 and millennials’ dissatisfaction with their current working life.2 Confronting the challenges of the pandemic and coming to terms with our mortality has only served to accelerate this trend.3 This article will seek to explain what FIRE is and, conversely, what it is not, and offer some insights on how to leverage military service benefits to achieve it.
What FIRE Is and Is Not
Before discussing what FIRE is, it is easier to start with what it is not. This is important because most of the internet has gotten it wrong. Financial independence retire early is not about yachts and “tendies”4 where every day is a vacation. It is not a path to conspicuous consumption. It is not even about retiring in the traditional sense of the word. Rather, FIRE is about having the means to achieve your purpose. The first step, achieving financial independence (FI), is having enough wealth to control your time.5 A multitude of studies has shown that having control over one’s life, as much as such a thing is possible, is the biggest predictor of happiness.6
What to do with all that time once we no longer need to devote it to paid employment is the second half of the equation: the “retire early” part. Not having a real answer to this question is probably the biggest failing of the online FIRE movement. The FIRE community seems to fall into two broad categories. The first is hell-bent on escaping from their current misery.7 The second is not necessarily miserable in their current life but dreams of a life of endless vacation.8
Neither notion is particularly healthy, helpful, or the actual point of FIRE.9 Depending on how much is “enough” and how frugal you are willing to be, achieving FI could take decades, and life is not going to remain on pause while you to do that. We “cannot simply numbers-crunch [our] way to emotional well-being and quality of life.”10 Said another way, life is too short to be miserable. The idea that you need to live like a miser for ten or twenty years while being unhappy in a job you hate to obtain some future unknown happiness is not a recipe for the good life. It is not worth it, and it is not going to work.
Your life is happening now. As far as the other camp is concerned, endless vacation sounds great on its face, but if every day were Saturday, it would lose its thrill soon enough. Countless surveys and studies of retirees have shown time and again that it gets boring and expensive quickly.11 Try this experiment. We will use golf because that is what attorneys supposedly do, but you can substitute your leisure activity of choice. Take a calendar and write down the tee times you would like if you had achieved FI and did not have to work for money any longer. Now look at all the other white space on the calendar. What are you going to do with all that time in-between?
The point of FIRE is not to retire from something. It is not an escape from your miserable working life. The point is to retire to something. That something is not an endless vacation, but your purpose. Something you want out of your life that gives you a sense of fulfillment and satisfaction. It could be anything, and it is likely different for each of us. It could very well be some semblance of what you are currently doing, with reduced hours to give you more time for golf or family or friends or travel or whatever. To achieve FIRE, you need to figure out what that purpose is. Saving for the sake of some unknown future event is all well and good, but if you do not know what you want out of life you are not really saving for a goal, nor do you know how much is enough to achieve FI.12
How to Achieve FI Through Military Service
What your purpose is and how much is enough to achieve it are questions only you can answer, but here are some strategies and benefits that can help you reach that goal. The first and most obvious strategy is to stay in service until you are retirement eligible. A pension is an invaluable resource. It is income for life, backed by the full faith and credit of the United States.13 It will also allow you to safely chase higher returns in your investment portfolio by having a larger percentage of your allocation in stocks.14 The present value of an officer pension is well over a million dollars and more than likely approaching two million dollars.15 That is the amount of money you would need to have invested currently at a certain rate of return in order to generate the income you receive from your pension. The Defense Finance and Accounting Service has calculators that you can employ to see what the present value of your pension is, assuming you remain in service long enough for it to vest.16
You may be able to achieve FI with just your pension. You may not. But it makes sense to employ other strategies as well for a host of reasons. In their book, The Millionaire Next Door, Drs. Thomas Stanley and William Danko profile what the average American millionaire looks like.17 What they found was that millionaires were generally self-made and more than likely people of modest means who lived frugally and were prodigious savers.18 They also found that the majority of millionaires either operated on a budget or used a “pay yourself first” strategy by saving X amount off the top and then spending the rest.19 This is not surprising. What this tells us is that you, too, can be a millionaire. The path to FI is rather simple, do not allow your income to define your budget. Save more. Spend less.
Know What Money Is and Where It Is Going
You cannot do this if you do not know where your money is going. There are several resources available to assist in this area and fintech20 has made it easy. Websites and apps like mint.com and youneedabudget.com make tracking spending effortless. Army Community Service (ACS) also offers free financial readiness planning classes and resources at every installation that can assist with budgeting.21 Moreover, the Chaplaincy often offers funded slots for Dave Ramsey’s Financial Peace University course.22
If the idea of budgeting makes your skin crawl and you do not like the idea of a “pay yourself first” strategy, Vicki Robin, the mother of FIRE,23 offers another way. In her 1992 book, Your Money or Your Life, Robin counsels achieving FI by redefining what money is.24 According to Robin, money is not a store of value or something that gives us power or freedom, but rather it is our life energy.25 It is something for which we trade our most valuable resource: our time.26 We can transform our relationship with money and curb our spending by determining what our purpose is and what our real hourly wage is. We can then use that information to evaluate our expenditures by asking ourselves if each expense was worth the hours of life it took and whether the expense is in line with our values and in furtherance of our purpose.27
Doing this exercise, in and of itself, can change spending habits without having to budget per se. Obviously, some expenses, like toothpaste, are going to be neutral, but eliminating others, like coffee shops, may generate significant savings. According to one recent survey, the average millennial spends over $2,000 a year on coffee.28 Do you know how much you currently spend on coffee a year?
Where to Generate Savings
Two of the biggest expenses we have are housing and transportation.29 This is an area where we can generate significant savings with millionaires once again offering a recipe for success. A lot of people who live in expensive homes and drive expensive cars have little wealth.30 We all have a story about the Soldier who used his deployment cash or enlistment bonus to buy a flashy car but can barely afford the insurance.
Officers, despite their higher pay, can often run afoul of similar problems as the pressure to keep up appearances and lifestyle creep cause their expenses to exceed their income. People who have achieved FI, on the other hand, live below their means and often own modestly priced and/or used cars.31 A car is not an investment. It is a means of transportation and, more importantly, it is a depreciating asset.32 The moment you drive your new car off the lot, it has lost somewhere around 10 percent of its value.33 It loses about 20 percent of its value in the first year and then depreciates another 15 percent a year for the next four years.34 Many luxury-brand cars fare much worse, losing upwards of 50 percent of their value in the first five years of ownership.35
A home may not depreciate like a car, but nonetheless, a home is not an investment.36 It is where you live, and it is a liability.37 This is a controversial statement because people have strong feelings about home ownership. Feelings aside, for Soldiers, buying a home is a terrible financial decision in most cases.38 The transactional costs alone make it a bad idea for people who move every two to three years.39 You may get tunnel vision and look at the difference between mortgage payments and rent, but you are likely overlooking a myriad of other costs associated with buying, owning, and selling a home.40 Moreover, houses are not liquid and require constant reinvestment.41 They also do not appreciate in value in the same manner as securities do.42 After factoring in inflation, there is on average little appreciation in value if any.43 A better strategy for achieving FI is to rent, ensuring that your total housing costs come in at or under your BAH at every duty station, thereby allowing fluctuations in income due to changes in your BAH to not derail your budget.44
(Image courtesy of author)
Invest in your Future
The savings gained from employing these strategies can then be invested.45 If you are in the Blended Retirement System (BRS),46 the no brainer is to put at least 5 percent of your pay in the Thrift Savings Plan (TSP) because you will get a 5 percent match.47 That is a guaranteed 100 percent return on investment. It is free money. No investment will ever produce returns that well. If you are not part of the BRS, it does not much matter whether you utilize the TSP or an individual retirement account (IRA). Regardless of which one you choose, the Roth option is generally the best option for a host of reasons.48
The TSP’s low fees are often touted as the principal reason why you should invest in it.49 The TSP does have low fees, and fees over the long run can significantly impact your retirement portfolio.50 Nonetheless, this is not the principal reason you should invest in the TSP as lower fees can be found elsewhere.51 The principal reason is that it is the only place you can invest up to $22,500 a year and let it grow tax free.52 If you are deployed, you can contribute even more, up to the annual deferral limit, which is currently $66,000.53 Currently the maximum contribution limit for an IRA is only $6,500.54 If you cannot currently contribute more than that, then it does not much matter, but if you can, you should utilize the TSP.
The Benefits of Military Service
Military service offers several additional aids to achieving FI that are often overlooked. A simple way to up your savings rate is to make more money, but the inverse is also true. Soldiers may look at the private sector with envy and believe that if they jumped ship for a civilian job, they would make more money. This is often not in fact the case and the realization can be a rude awakening.
While in the service, a not insignificant portion of your income is not taxed by way of your basic allowance for housing (BAH) and basic allowance for subsistence (BAS).55 Moreover, a multitude of states that have an income tax do not tax military pay or retirement.56 If you are currently paying state income tax, it is only a matter of time until you are assigned to a duty station in a state that either has no state income tax or a military exception, and it would be wise to change your state of residency once you are able to. If you leave the military, you will lose these tax benefits.
You will also lose your free insurance. Insurance is not an investment, but it does offer benefits. While you remain in the service, your out-of-pocket healthcare costs are zero, and the out-of-pocket costs, if any, for your Family members are relatively small.57 The same cannot be said for the private sector. In 2022, the average family contribution to employer-paid healthcare, after taking into account premiums and copays, was $6,106.58 This amount also may not include dental,59 orthodontics,60 and vision61 insurance, which the military provides to Service members and are available for dependents at reduced costs. Savings on health insurance will continue after retirement as well and is an invaluable benefit for maintaining FI.62 A recent study estimated that a couple who retired at age sixty-five in 2020 could expect to pay nearly $300,000 in out-of-pocket medical expenses during retirement.63 Retirees with Tricare, on the other hand, have significantly lower out-of-pocket expenses than the general public.64
When we think of insurance for ourselves, we often think of only life insurance and health insurance, but disability insurance is arguably just as important. Your chances of becoming disabled in your prime earning years are higher than your chances of dying during the same period.65 According to the Social Security Administration, more than one-in-four twenty-year-olds will be disabled before reaching the age of retirement.66 Some private sector employers offer disability plans, but the average personal plan costs between 1-3 percent of an employee’s annual salary.67 Costs can fluctuate wildly depending on: (1) the benefit period, in other words, how long it will pay out; (2) the elimination period, or how long the insured has to wait for benefits after becoming disabled; and (3) how much income it will provide.68 By virtue of your military service, you are covered by an unbeatable disability plan; not only will you not have to pay for any medical care associated with your disability, but you are guaranteed permanent disability payments and may even be able to remain on active duty until the issue resolves itself.69
Along this same vein, military retirees have access to The Federal Long Term Care Insurance Program.70 Long-term care insurance differs from disability insurance in that it is not intended to replace lost income due to disability, but rather to pay for long-term care that you need as a result of some chronic illness or injury that prevents you from taking care of yourself.71 Normal health insurance, such as Tricare, does not cover these costs.72 These plans in the civilian sector have essentially become unaffordable.73 Due to huge miscalculations in underwriting, premium increases of over 200 percent are not uncommon.74 Long-term care is prohibitively expensive, hence the premium increases, but purchasing insurance from the Federal Long Term Care Insurance Program may result in significant savings over policies available to the public at large. The less money you spend on healthcare and insurance, the more you have for your purpose.
The same logic applies to childcare costs. The average American family pays over $10,000 a year in childcare costs.75 Service members, on the other hand, may pay significantly less by utilizing Department of Defense child development programs,76 which are designed to cost 20-25 percent less than similar civilian childcare.77 Child development programs (CDP) include both on-post and community-based childcare as well as subsidies for off-post childcare.78 The amount of money each family is eligible to save over private childcare varies greatly as fees are set annually and are based on total family income,79 which is defined as all earned income and includes all pay and entitlements, such as BAS and BAH.80 There are also multiple child discounts, which allow fees to be reduced by up to 20 percent when more than one child receives care at the same facility.81 In the case of subsidized care, Service members may receive reimbursement of up to $1,700 per child per month for amounts over their total-family-income-associated fee.82 All in all, the use of CDPs amounts to significant childcare savings for Soldiers, which allows that excess money to be invested in your future.
(Credit: Vitalii Vodolazskyi - stock.adobe.com)
Leaving the Service Could Cost You
Depending on your family situation and where you live and work after leaving the service, the loss of these benefits could easily require you to earn 25-50 percent or more than you currently do just to break even.83 This calculation does not include other lost military benefits such as free gym memberships, commissary benefits, and discounts and freebies. If you are seriously considering leaving military service to make more money, it would behoove you to take a hard look at your annual personal statement of military compensation84 and fill in all those blanks to get an accurate picture of your civilian compensation equivalent.
Conclusion
By employing these strategies (viewing expenditures through the lens of FI and achieving your purpose, living frugally, investing savings, and managing risk by insuring yourself), you can easily achieve FI during a twenty-year military career or even sooner. As far as a roadmap is concerned, how to achieve FI is the easy part, the difficulty lies more in discerning your purpose. Without that piece of the puzzle, real FIRE is not possible. TAL
MAJ Pariza is a litigation attorney with the Environmental Law Division, U.S. Army Legal Services Agency at Fort Belvoir, Virginia. He holds a certificate in financial planning from Duke University and is a candidate for CFP® certification.
Notes
1. See Financial Independence / Retire Early, Reddit, https://www.reddit.com/r/financialindependence (last visited Apr. 25, 2023).
2. See, e.g., Dawn Allcot, Gen X & Millennials Would Rather Be Unemployed Than Unhappy at Work, GO Banking (Apr. 6, 2022), https://www.gobankingrates.com/money/jobs/gen-z-millennials-rather-be-unemployed-than-unhappy-work; Peter Economy, Why Are Millennials So Unhappy at Work?, Inc. (Feb. 4, 2016), https://www.inc.com/peter-economy/why-are-millennials-so-unhappy-at-work.html.
3. Kevin Roose, Welcome to the YOLO Economy, N.Y. Times (Oct. 7, 2022), https://www.nytimes.com/2021/04/21/technology/welcome-to-the-yolo-economy.html.
4. The Wall Street Bets subreddit refers to making lots of money as “tendies,” as in chicken tenders that they will be eating once they make it big. See Jake Davidson, Meet the Bros Behind /r/WallStreetBets, Who Lose Hundreds of Thousands of Dollars in a Day—And Brag About It, Money (Oct. 25, 2018), https://money.com/wall-street-bets.
5. Vicki Robin & Joe Dominguez, Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence 153 (3d ed. 2018) (2008).
6. See Morgan Housel, The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness 83-89 (2020).
7. See, e.g., Terri Bennett, How I Left a Toxic Job and Discovered Financial Independence, Fin. Gym Blog (July 21, 2021), https://financialgym.com/blog/2021/7/12/how-i-left-a-toxic-job-and-discovered-financial-independence; Katie Gatti Tassin, Fighting Burnout with Money, Money With Katie Blog (July 21, 2021), https://moneywithkatie.com/blog/burnout-why-reaching-financial-independence-is-the-best-thing-for-your-work.
8. See, e.g., Johnny Africa (Chenn), Traveling the World for a Year After Reaching FIRE: How I Increased My Net Worth, Johnny Africa Blog (Aug. 1, 2022), https://johnnyafrica.com/travel-the-world-increase-net-worth.
9. See Mitch Anthony, The New Retirementality: Planning Your Life and Living Your Dreams . . . at any Age You Want 12-18 (5th ed. 2020).
10. Id. at 135.
11. See id. at 43-51.
12. See id. at 134.
13. See Retired Pay, U.S. Army: My Army Benefits (May 24, 2022), https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/Retired-Pay?serv=128.
14. “The U.S. stock market has long been considered the source of the greatest returns for investors, outperforming all other types of investments including financial securities, real estate, commodities, and art collectibles over the past century.” Which Investments Have the Highest Historical Returns?, Investopedia (Sept. 29, 2022), https://www.investopedia.com/ask/answers/032415/which-investments-have-highest-historical-returns.asp.
15. The present value of a Service member’s pension is wholly dependent on their rank at retirement, years in service, and lifespan. Pensions for enlisted members who retire below the rank of sergeant first class will more than likely not have a present value of $1 million dollars. See Ryan Guina, A Military Retirement is Worth Millions of Dollars, Mil. Wallet (Feb. 16, 2023), https://themilitarywallet.com/military-retirement-worth-millions.
16. Military Compensation, U.S. Dep’t of Def., https://militarypay.defense.gov/Calculators.aspx (last visited Apr. 25, 2023) (providing different calculators for the Blended Retirement System, the Legacy High-3 retirement plan, the Final Pay retirement plan, and others).
17. Thomas J. Stanley & William D. Danko, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy (1996).
18. Id. at 30-36.
19. Id. at 41.
20. “Fintech is a portmanteau for ‘financial technology.’ It’s a catch-all term for technology used to augment, streamline, digitize or disrupt traditional financial services.” Stephanie Walden, What is Fintech?, Forbes (July 25, 2022, 3:33 AM), https://www.forbes.com/advisor/banking/what-is-fintech.
21. See Financial Readiness Program (FRP), My Army Benefits, https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/Financial-Readiness-Program-(FRP)?serv=120 (last visited Apr. 25, 2023).
22. Financial Peace Military Approved by Department of the Army, Ramsey Solutions (Jan. 2, 2014), https://www.ramseysolutions.com/company/newsroom/releases/financial-peace-military-approved-by-department-of-the-army.
23. A Growing Cult of Millennials Is Obsessed with Early Retirement. This 72-Year-Old Is Their Unlikely Inspiration, Money (Apr. 17, 2018), https://money.com/vicki-robin-financial-independence-retire-early. The seventy-six-year-old Robin had no idea that there was a movement based on her teachings afoot until someone told her at an event she was attending a few years ago. Id. This in turn promoted Robin to update her quite dated book and a revised edition was published in 2018. Id.
24. Robin & Dominguez, supra note 5, at 48.
25. Id.
26. Id.
27. See id. at 114. This calculation is not just hours on the job, but all time and money expenses associated with it. For example, the two hours we spend in the car each day, the money spent on childcare, the uniforms and accoutrements we would not have to purchase if we were not working.
28. McKenize Hyde, Caffeine Kick, Early Bird Blog by Amerisleep (July 17, 2022), https://amerisleep.com/blog/caffeine-kick.
29. Housing and Transportation Affordability, U.S. Dep’t of Transp., https://www.transportation.gov/mission/health/housing-and-transportation-affordability (last visited Apr. 26, 2023).
30. Stanley & Danko, supra note 17, at 1.
31. See id.
32. Andrew Martins, Is a Car an Asset?, Investopedia (Aug. 3, 2022), https://www.investopedia.com/car-asset-5207357.
33. Should I Buy a New Car?, Ramsey Solutions (Mar. 9, 2023), https://www.ramseysolutions.com/insurance/new-car-vs-used-car.
34. Rick Popely, Car Depreciation: How Much It Costs You, Carfax Blog (Feb. 3, 2021), https://www.carfax.com/blog/car-depreciation.
35. See Top 10 Cars That Hold Their Value the Best, iSeeCars, https://www.iseecars.com/cars-that-hold-their-value-study (last visited June 15, 2023).
36. Kevin Mercadante, The Truth? Your House Is Not an Investment, Money Under 30 (Apr. 28, 2023), https://www.moneyunder30.com/why-your-house-is-not-an-investment.
37. Robert Kiyosaki, Rich Dad Scam #6: Your House is an Asset, Rich Dad Blog (Dec. 24, 2019), https://www.richdad.com/is-house-an-asset.
38. John Goodall, Buy or Rent: Revisiting the American Dream, Army Law., July/Aug. 2018 at 20, 20.
39. Id.
40. See id. at 20-21.
41. Id. at 21.
42. See Kathleen Elkins, Wealth Manager: Buying a Home is ‘Usually a Terrible Investment’—Here’s Why, CNBC Small Bus. Playbook (Apr. 24, 2023, 12:09 PM), https://www.cnbc.com/2019/04/18/wealth-manager-buying-a-home-is-usually-a-terrible-investment.html.
43. See Tim McMahon, Inflation Adjusted Housing Prices, Inflation Data (June 26, 2022), https://inflationdata.com/articles/inflation-adjusted-prices/inflation-adjusted-housing-prices.
44. Goodall, supra note 38, at 21.
45. This assumes that you do not have high-interest debt and have established an emergency fund. The first and most obvious answer is pay down any high-interest debt if you have it. See Beth Kobliner, Get a Financial Life: Personal Finance in your Twenties and Thirties 31 (4th ed. 2017) (1996). If you have credit cards on which you are paying 25 percent interest, eliminating that should be your first order of business. Not paying 25 percent interest is as good as earning 25 percent interest. It is also imperative to fully understand how credit cards accrue interest. Army Community Service can help you get a handle on your credit cards, see Financial Readiness, Army MWR, https://www.armymwr.com/programs-and-services/personal-assistance/financial-readiness (last visited Apr. 26, 2023), but suffice it to say, as long as you carry a balance from a prior statement period, any new charges will begin accruing interest instantly. Chauncey Crail, How and When Is Credit Card Interest Charged?, Forbes Advisor (Jan. 24, 2023, 4:12 AM), https://www.forbes.com/advisor/credit-cards/how-and-when-is-credit-card-interest-charged. While you are paying off high-interest debts, you should start saving for an emergency fund as well. John Egan, Is It Better to Save or Pay Off Debt?, Forbes Advisor (Jan. 12, 2023, 10:27 AM), https://www.forbes.com/advisor/banking/saving-vs-paying-down-debt. This is so you can cover unexpected expenses without going back into debt. Id. Most financial planners advise having six to twelve months of living expenses set aside in a savings account depending on whether one or both spouses work. See id. This is to account for the loss of a job. Id. In this author’s experience, Service members generally do not have to worry about downsizing, getting fired, or the company going out of business. As a result, you more than likely do not need to have twelve months of living expenses in an emergency fund. If the Army goes under, we have bigger problems than how much is in your emergency fund.
46. BRS: Uniformed Services Blended Retirement System, Mil. Compensation, https://militarypay.defense.gov/blendedretirement (last visited Apr. 26, 2023).
47. Contribution Types, Thrift Savings Plan, https://www.tsp.gov/making-contributions/contribution-types (last visited Apr. 28, 2023).
48. For most individuals, the Roth option will generate more income in retirement than the traditional option. See Maryalene LaPonsie, Deciding Between a Roth vs. Traditional IRA, U.S. News & World Rep. (Mar. 18, 2020, 1:11 PM), https://money.usnews.com/money/retirement/articles/deciding-between-a-roth-vs-traditional-ira. The Roth option also has more favorable withdrawal rules and is not subject to required minimum distributions. See id.
49. See, e.g., Lyn Alden, TSP’s Small Fees Add Up Big, FEDweek (May 15, 2017), https://www.fedweek.com/tsp/tsps-small-fees-add-big (“Overall, the TSP has virtually the lowest fees in the world, and is tax-advantaged similarly to a 401(k) plan.”).
50. See Sec. and Exch. Comm’n, Off. of Investor Educ. and Advoc., How Fees and Expenses Affect Your Investment Portfolio (2019).
51. Fidelity currently offers three no-fee index funds. Barbara Friedberg, Fidelity’s No-Fee Index Funds—Are They Worth it?, Yahoo! Fin. (Feb. 28, 2019), https://finance.yahoo.com/news/fidelity-no-fee-index-funds-100118917.html. Vanguard, for example, also has funds with fees as low as .03 percent, Discover Vanguard Mutual funds & ETFs, Vanguard, https://investor.vanguard.com/investment-products/list/all (last visited June 16, 2023), as compared to the TSP’s comparable C Fund, which has fees of .043 percent. Administrative and Investment Expenses, Thrift Savings Plan, https://www.tsp.gov/tsp-basics/administrative-and-investment-expenses (last visited Apr. 26, 2023).
52. 401(k) Limit Increases to $22,500 for 2023, IRA Limit Rises to $6,500, IRS (Oct. 21, 2022), https://www.irs.gov/newsroom/401k-limit-increases-to-22500-for-2023-ira-limit-rises-to-6500.
53. See Ryan Guina, 2023 Thrift Savings Plan Contribution Limits & Rules – Deployed Contributions, Agency Match and More, Mil. Wallet Blog (Mar. 1, 2023), https://themilitarywallet.com/thrift-savings-plan-contribution-limits.
54. Retirement Topics–IRA Contribution Limits, IRS, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits (last visited Apr. 28, 2023).
55. Tax Exempt Allowances, Mil. Compensation, https://militarypay.defense.gov/Pay/Tax-Information/Exempt (last visited Apr. 26, 2023).
56. See Jim Absher, State Tax Information for Military Members and Retirees, Military.com (Mar. 3, 2023), https://www.military.com/money/personal-finance/state-tax-information.html.
57. Military Health Insurance, Mil. Benefits Ass’n, https://www.militarybenefit.org/membership-benefits/get-educated/militaryhealthinsurance (last visited Apr. 26, 2023).
58. Kaiser Fam. Found., Employer Health Benefits: 2022 Annual Survey 91 (2022).
59. U.S. Family Health Plan (USFHP) members may be entitled to free preventative dental care, see, e.g., Johns Hopkins, Dental, Vision & Additional Discounts, HopkinsUSFHP.org, https://www.hopkinsusfhp.org/members/my-benefits/dental-vision-and-discounted-services/#dental (last visited May 1, 2023), whereas all others will have to utilize the Tricare Family Dental Plan. Compare Rebecca Alwine, Everything You Need to Know About the Tricare Dental Program, Military.com (May 2, 2023), https://www.military.com/benefits/tricare/everything-you-need-know-about-tricare-dental-program.html (describing Tricare Family Dental Plan fees and coverage), with How Much Does Individual Dental Insurance Cost?, Humana.com, https://www.humana.com/dental-insurance/dental-resources/how-much-is-dental-insurance (last visited June 16, 2023) (examining average costs and coverage for dental insurance). As with all insurance, out-of-pocket costs will depend on copays, deductibles, coinsurance, and annual maximums. See Alwine, supra.
60. Tricare orthodontic care is available to dependents up to age twenty-three enrolled in the Tricare Dental Plan and has a 50 percent cost share, with a lifetime maximum payment of $1,750 per person. Alwine, supra note 59.
61. Dependents are entitled to one free annual eye exam a year and may qualify for additional benefits if enrolled in one of the US Family Health care plans. Eye Exams for Active Duty Family Members, Tricare.mil, https://tricare.mil/CoveredServices/Vision/EyeExams/EE_ADFM (last visited June 16, 2023); see generally US Family Health Plan, USFHP.com, https://www.usfhp.com/ (last visited June 16, 2023). Dependents may also enroll in the Federal Employees Dental and Vision Insurance Program (FEDVIP) to purchase vision insurance. Eligibility–Uniformed Services, Benefeds.com, https://www.benefeds.com/learn/fedvip/fedvip-eligibility-uniformed-services (last visited June 16, 2023).
62. See Paul Frost, Mil. Officers Ass’n of Am., One Chart Shows How Military Health Care Costs Compare to Civilians’ Fees, Military.com (Mar. 28, 2018), https://www.military.com/paycheck-chronicles/2018/03/28/one-chart-shows-how-military-health-care-costs-compare-to-civilians-fees.html.
63. Christy Bieber, Underestimating Health Care Costs in Retirement?, USA Today (Apr. 14, 2021, 7:02 AM), https://www.usatoday.com/story/money/personalfinance/retirement/2021/04/14/americans-underestimating-health-care-costs-retirement/115694158.
64. See Frost, supra note 62.
65. See Wise Bread, 4 Things to Know About Disability Insurance, Money (Aug. 2, 2016), https://money.com/disability-insurance-facts.
66. The Faces and Facts of Disability / Facts, Soc. Sec., https://www.ssa.gov/disabilityfacts/facts.html (last visited Apr. 26, 2023).
67. See Colin Lalley, How Much Does Long-Term Disability Insurance Cost?, Policygenius (Mar. 14, 2022), https://www.policygenius.com/disability-insurance/learn/how-much-does-long-term-disability-insurance-cost.
68. See id.
69. See Veterans Disability Benefits, U.S. Dep’t of Veterans Affs., https://www.va.gov/disability (last visited Apr. 28, 2023).
70. Federal Long Term Care Insurance Program (FLTCIP), My Army Benefits (Feb. 28, 2023), https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/Federal-Long-Term-Care-Insurance-Program-(FLTCIP)?serv=126.
71. See Joel Palmer, Long Term Care vs. Long Term Disability: What’s the Difference?, Breeze (Dec. 9, 2022), https://www.meetbreeze.com/blog/long-term-care-vs-long-term-disability.
72. Covered Services: Long Term Care, Tricare, https://www.tricare.mil/CoveredServices/IsItCovered/LongTermCare (last visited Apr. 26, 2023).
73. See Sean P. Murphy, Skyrocketing Cost of Long-Term-Care Insurance Leaves a Couple in a Bind, Bos. Globe (Apr. 25, 2021, 3:49 PM), https://www.bostonglobe.com/2021/04/25/business/skyrocketing-cost-long-term-care-insurance-leaves-couple-bind.
74. See id.
75. Nicholas Vega, Child Care Now Costs More Than $10,000 Per Year on Average—Here’s Why That’s a Problem, CNBC Small Bus. Playbook (Feb. 21, 2020, 9:00 AM), https://www.cnbc.com/2022/02/21/average-cost-of-child-care-is-now-more-than-10000-dollars-per-year.html.
76. U.S. Dep’t of Def., Instr. 6060.02, Child development Programs (CDPs) (5 Aug. 2014) (C2, 1 Sept. 2020) [hereinafter DoDI 6060.02].
77. U.S. Dep’t of Army, Reg. 608-10, Child Development Services, para. 3-5.b.(6) (11 May 2017) [hereinafter AR 608-10].
78. DoDI 6060.02, supra note 76, encl. 3, para. 6.
79. Id. encl. 3, para. 7.
80. Id. at 64-65 (defining total family income).
81. AR 608-10, supra note 77, para. 3-5.
82. Army Fee Assistance Program, Childcare Aware of Am., https://www.childcareaware.org/fee-assistancerespite/military-families/army/afa-program/#howfeeassist (last visited Apr. 26, 2023) (“The Army Fee Assistance subsidy is the difference between what the Sponsor would pay based on the [Department of Defense] child care fee for the Sponsor’s [total family income] category and the community-based child care provider’s fee, up to a provider rate cap of $1700 per child per month.”).
83. I ran multiple calculations for post-governmental employment in Washington, D.C., Virginia, and Illinois and came up with pay increases of between 27-30 percent without childcare and 41-50 percent with childcare in order to break even. For those seeking Federal employment, remember that the Federal employee retirement system requires between .8 and 4.4 percent automatic annual contribution (depending on when Federal employment began). Federal Employee Retirement System (FERS), Off. of Hum Res. Mgmt., https://www.commerce.gov/hr/employees/benefits/retirement/federal-employee-system (last visited Apr. 26, 2023).
84. “The [personal statement of military compensation] shows you an estimation of how much your military pay and allowances would be worth in the civilian world.” Teresa Tennyson, How to Use MyPay: See Your Personal Statement of Military Compensation, Mil. Wallet (Jan. 5, 2023), https://themilitarywallet.com/mypay-les-guide/#h-see-your-personal-statement-of-military-compensation.