The Military offers benefits that rival – or surpass – those offered by civilian employers. Not only do servicemembers have access to health care, but they can also plan for the future through the Military’s life insurance and retirement plans.
Free Health Care
Active-duty servicemembers receive free medical and dental care. In addition, the spouse and dependent children of an active-duty servicemember may enroll in military health care (a small enrollment fee and annual deductible may apply). As of 2011, TRICARE, the Military’s health care plan, will cover dependents of servicemembers up to age 26.
Life insurance can help protect a family’s financial stability. Active-duty servicemembers may select up to $400,000 in Service Group Life Insurance (SGLI) at a cost of only $27 a month, which is automatically deducted from each paycheck.
The Department of Veterans Affairs (VA) provides dozens of federal benefits to veterans and their dependents, including VA home loans that are guaranteed by the federal government. Other VA programs include educational assistance and disability compensation.
Servicemembers can retire with full benefits after 20 years of service, which is far earlier than most civilian jobs. Whenever they choose to retire, they have to choose between two options after 15 years of service:
- Receive $30,000 after 15 years and then receive a retirement fund after 20 years that equals about 40 percent of his or her highest pay.
- Receive no cash bonus at 15 years but receive a retirement fund after 20 years of service that equals about 50 percent of his or her highest pay.
In general, servicemembers must retire after 30 years of service.
Thrift Savings Plan
The Thrift Savings Plan (TSP) is a government-managed retirement savings and investment plan that works similarly to a 401(k) plan, offered by private companies. Servicemembers can choose how much money to deduct from their pretax pay, and they have several different funds in which they can invest. Servicemembers don’t pay taxes on their investment earnings until they begin to withdraw money at retirement.