Have You Reviewed Your Finances To See If Your Salary Expectations Are In Line With Your Needs?

🚨Transitioning servicemembers! Have you reviewed your finances to see if your salary expectations are in line with your needs?

Are your qualifications in line with your salary expectations?

Much of our pay on active duty is non-taxable.🤔

What does that mean?

It means that typically you are in a lower tax bracket than you normally would be and/or you are paying significantly less in taxes annually than with a civilian career. Have you performed a cost/finance comparison to see what you need?

The example I have provided is a close estimate of what a retiring E-7 is looking at, settling in NJ. There will of course be fluctuations as each person's finances are different and states of residence are different regarding tax rates and veteran programs.These numbers will also fluctuate based on years with the stripe on and years in service, but the comparison is what we need to focus on.

I have included an RMC example for a 20-year E-7 stationed in NJ:

Grade-E-7

Years of Service-20

Tax Filing Status-Married Filing Jointly

ZIP Code of your Permanent Duty Station-08641

Annual Basic Pay-$69,094.80

Annual Basic Allowance for Housing-$38,880.00

Annual Basic Allowance for Subsistence-$5,523.00

Non-Taxable Allowances (BAH + BAS)-$44,403.00

Number of Exemptions for Previous Calendar Year-6

Personal Exemption Amount-$0.00

Standard Deduction-$29,200.00

Total Deductions-$29,200.00

Taxable Income (Annual Basic Pay - Total Deductions)-$39,894.00

Tax Rate-12%

Gross Up-$50,457.95

Tax Advantage-$6,054.95

https://www.schwabmoneywise.com/civilian-vs-military-pay-calculator

If you are separating as an E-7 in NJ with 20 years of service, you will need a minimum of $105,792.00 a year from your new civilian job + your Pension to reach the same take-home pay which comes out to $138,192.00.🤯

This of course does not take VA ratings into account, but not everyone gets a disability check or a 100% rating.💯

Once you have this figured out, now you can begin to look at states that offer more incentives like untaxed pensions, no state tax, no property tax(if 100% disabled, etc). You can also start searching careers to see based on your legitimate relevant experience what salaries you can command.

This will also aid you in locating future employers as you may want to relocate to those areas. Reminder, simply serving 20+ years does not mean you have 20+ years of relevant experience in the civilian role you are applying to, this one seems to trip up people often when reviewing salaries on glassdoor.

Take-home income calculator: https://www.schwabmoneywise.com/civilian-vs-military-pay-calculator

Disability Calculator: https://www.hillandponton.com/va-disability-calculator/

State Report Card:https://lnkd.in/eKxzcAYN

#military #veterans #milspouse #dodskillbridge #transitionassistance