[I'm too lazy to pull out all the quotes related to the comments I want to make, but hopefully this will all make sense anyways.]
- On the subject of earnings after leaving the service. The best way to figure out what you make now is to take a paycheck calculator (here is
one, but there are many out there) and work backwards to find the annual salary that matches your take home from the service. Easier, faster, and more accurate than rules of thumb, plus you can tailor it to where you plan to live once out of the service if you know where that is. Don't forget medical costs. I think some of you are going to find out that your equivalent salary is higher than you thought it was.
- Out of about 2 dozen guys who retired around the same time I did that I can speak about, only a couple of us make more post-retirement (not counting our retirement paycheck - if you plan to count that then the number goes up considerably). Pags and R1 already covered this, but obviously it is a combination of your actual useful skills plus the career that you are interested in that will determine what you make. For the case of officers, our past salary history doesn't hurt us at all, but you may have to make a special effort to translate your military earnings for a civilian HR office.
- I haven't bothered to re-run the numbers with the COLA change (which I am expecting to be temporary anyways), but when I did the math on staying in vs getting out, and retiring at 20 vs retiring later, one of the big drivers is 401k match. If you make a decent salary (match is usually based on a percentage of that at most places), then the 401k match can likely drive the case that retiring at 20 is a better choice than staying later, unless you make it all the way to 30 years as an O-6 (depending on your assumptions O-5 at 27 years can be equal). COLA for retirement pay was one of the smaller drivers in that equation and I doubt this would have changed my conclusion.
- For the people who tried to calculate the NPV of a military retirement, you get 1 above for your math and 2 below for headwork for your assumptions. Earnings growth of that retirement lump-sum, in our scenario, is completely risk free. That means a far lower rate of return and thus a far higher lump sum needed. Let alone the fact that there is no risk to outliving your life expectancy.
- With TSP authorized for the military for >10 years now (and IRAs have always been), nobody should be leaving with "nothing" in retirement. Speaking for the officer side, even if you only contributed your flight pay (and nothing else) to either or both for your minimum commitment, that would absolutely be worth something when you hit 59.5.
- A couple people mentioned the post-9/11 GI Bill - that thing is fantastic. Take advantage of it, and make sure you transfer at least one month to any dependent you might want to share it with prior to getting out.
- I've said it before on this site, but one of the real keys is to keep your personal finances under control. If you put yourself in a position where you can't afford to miss a single paycheck or take the risk of a new career, then you will take whatever crap your current employer cares to give you and you will like it.
- From my "already got mine" perspective: compensation in the military is currently very good on the officer side. Given the current civilian employment sector and the military's desire to get smaller, I don't see potential changes causing an uncontrollable/undesired flood of departures. Having said that, generally speaking I still believe the lifestyle should make the choice. If I hadn't been able to stay flying for 18/20 years my 20 would have been a lot more painful, I think. If you still love the military then staying in will treat you fine. If the thought of completing one more mandatory anti-terrorism lecture is going to make you strap a vest on yourself, then a penny-a-day pay cut would probably send you to the door.
TL/DNR: Don't be a passenger in your own life: do your own math and make your own decisions, and make those decisions based on reality, not on how you wish the world were.