Before we begin part 2 of the career path decisions series, I’d like to highlight a few things. First, if you haven’t liked the new Facebook Page, please do so to stay updated on the latest blog posts and highlights moving forward. Second, expect a crowdfunding initiative for a military related charity in the coming weeks (most likely AER as 0% interest loans for Soldiers make a difference). More to follow but any donations are greatly appreciated.
Today marks the second part of a three part series aimed at examining the financial outcomes associated with potential courses of action a Soldier, Sailor, Airman, or Marine could take at the end of his or her contract or service obligation. The last post looked at the financial outcomes associated with leaving the military and pursuing an MBA. This post will examine the financial outcomes of a transition directly into the workforce and our next post will examine the financial outcomes associated with remaining in the military. The financial outcomes for each will assume that the service member has completed a 4-year degree (either through commissioning or through tuition assistance), is eligible for full post 9/11 GI Bill (in today’s situation, they are likely transferring it to a family member — bear in mind the ADSO), and has served honorably prior to exiting the military. Today we will examine the financial costs, considerations, and benefits associated with entering the work force directly after a transition from the military.
Unlike a MBA, a transition out of the military directly into the work force costs you nothing unless you spend a significant amount of time searching for a job — in which case you are only saddled with the opportunity cost associated with lost wages during your search. In this respect, a direct transition costs up to $100,000 + less than a MBA depending on which program you choose and what type of financial aid you are given. To reduce this potential opportunity cost, we will look at a few considerations.
- CSP Participation: Did you use the critical skills program to secure an internship prior to exiting the military? If you’re not familiar with it, take a look at the link. Participating in an internship prior to leaving the military could help you land a stellar job after departing the military.
- Use of Recruiting Programs: Many programs seek to hire service members directly for placement into management positions. A few such as BradleyMorris,inc and Alliance Careers assist transitioning military members in finding a job based on salary, desired location, and other factors.
- Military Occupational Skill: This is probably the biggest factor to consider as your skillset determines your marketability. If you flew C-17s, served as a nurse, or hold a Top Secret clearance, you have significantly different opportunities than those with other MOSs.
- What do you want?: Family considerations, desired location, and personal satisfaction cannot be underestimated in choosing your future career.
Benefits vary depending on the position that you choose to pursue but are also largely dependent on your skillset. If you are looking into a particular career, I recommend taking a look at the Bureau of Labor Statistics page to determine potential salary ranges for your desired career. Doing so, you’ll quickly find that salaries range depending on your skills. For example, if you are a transitioning engineer, the average 2018 salary for engineers was $99,230 whereas a transitioning C-17 pilot can expect to make an average of $169,560 depending on the size of the airline they transition to. Prior to pursuing a career solely based on these statistics, it’s worth discussing salary, benefits, and other considerations with your prospective employer.
FINAL FINANCIAL VALUE
To compare the three end of service obligation options previously discussed, we will obtain a range of future potential earnings based on a direct entry into the work force after leaving the military. Given that options certainly vary depending on what career path you pursue, we will examine three potential options that give a broad perspective: the average salary of a job with a TS clearance, a job transition into management, and a low end compensation perspective. To compare these options, we will again make the following assumptions.
- You join the work force at age 30 after departing the military
- Your salary increases at 2% per year to remain on par with inflation
- You work continuously until age 65 with no breaks, layoffs, or sabbaticals
The table above details the lifetime salary outcomes based on pursuit of an average TS clearance job, a career in management, and a perspective on the low range of potential compensation for post military careers that require a Bachelor’s degree. This is a strictly salary based analysis and does not include additional benefits, significant pay raises, or other factors that could influence total financial compensation. Based on this analysis and the aforementioned assumptions, one can expect a return of between $2,599,700 and $6,320,400 for a career after exiting the military without pursuing additional degrees. Again, please remember that these numbers are based on average salaries and do not include all monetary and non-monetary benefits. At the end of the day, it is important that you choose a career or path that is right for you!
For those that are interested, our next blog post will focus on the total salary and pension based financial compensation for pursuing a full military career. $
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Any accounting, business or tax advice contained in this communication is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion.