Beyond Your Service Member’s Pay: The Benefits of Military Service

As a member of your service member’s support network, you may have heard the good news that both active-duty and reserve military personnel received a 3% military pay raise in 2021. Beyond the salary bump, you’ll be glad to know that military service offers your loved one additional ways to be financially fit while shaping their lives and preparing them for the future.

The military provides notable compensation benefits, ranging from paid vacation to retired-pay plans that beat those many private-sector employers offer. It also offers free or reduced-cost housing, a host of special and incentive pays, free financial and tax consultations and more. At the same time, the military offers your service member opportunities to develop both professionally and personally. Tuition assistance and opportunities to travel and develop leadership skills are just some of the reasons a military career is unlike any other.

Military financial benefits

Allowances: In addition to base pay, service members may also receive housing and food pay. A basic allowance for housing helps your loved one offset the cost of housing. Whether they choose to live on the installation or in town, BAH provides a reasonable amount each month to afford housing based on their rank and the area where they live.

Basic allowance for subsistence is a monthly allowance meant to assist service members in paying for meals. However, if your service member lives on the installation, they will not receive BAS but will have access to free meals on the installation.

Overseas Cost of Living Allowance is a nontaxable allowance designed to offset the higher overseas prices of non-housing goods and services. It is not a fixed amount and may vary based on location, paygrade, years of service and number of dependents. OCOLA can fluctuate based on the exchange rate and should not be included in your monthly budget. Learn more about OCOLA and the 2023 OCOLA adjustment process.

Special and incentive pays: While base pay and allowances cover the fundamental components of military pay, special and incentive pays are used to compensate service members for hazardous or difficult duty assignments and to recruit and retain them. There are more than 60 special and incentive pays. Common S&I pays are:

• Hardship Duty Pay: For service members at duty stations where the standard of living is significantly below the continental United States.
• Assignment Incentive Pay: This incentive is paid to service members for unusual assignment circumstances like extended tours.
• Hazardous Duty Incentive Pay: For service members who perform hazardous duties like aircrew members.

Paid vacation: Service members receive 30 days of paid leave each year as well as all federal holidays. Whether it’s a short or long trip, your loved one can go on vacation and fully enjoy their time off while still receiving salary and any other allowances that are due to them. If a service member has accumulated over 60 days of paid leave, they must use the excess days or lose them by the end of the year.

Full military health and dental insurance: You can rest easy knowing that your service member is fully covered at no cost to them through TRICARE Prime. Active-duty service members will never pay out of pocket for any type of care within the network for this comprehensive medical insurance program. TRICARE also offers several plans that cover service members and their immediate family members at competitive rates.

Retired pay: Service members who stay in the military for a full 20-year career will qualify for monthly retired pay, which provides a continuing source of income long after the member has ended their service. In addition to this pension-like benefit after a full career, new members and those who previously opted into the Blended Retirement System can also earn government-provided contributions to a 401(k)-like savings account called the Thrift Savings Plan. This option is available to all members covered by BRS, even for those who do not intend to serve a full 20-year career. TSP is another avenue for service members to save and secure their finances for retirement. Service members can choose between a traditional or Roth account. Even if a service member decides not to retire from the military, they can roll their TSP into another 401(k) after separating from the military, or leave those funds in the TSP to continue growing until they reach full retirement age.

Free or reduced-cost housing: For those service members who are required to live on the installation, they can enjoy living for free in the barracks or dorms. Service members who receive a housing allowance are offered affordable housing options on the installation or in town through the housing office.

Family Supplemental Subsistence Allowance Program: This is a Defense Department program that supplements an eligible active service member’s household income if it’s below 130% of federal poverty guidelines (maximum payment is $1,100 per month). FSSA is only available for members with at least one dependent in their households who are serving overseas (not including Puerto Rico, the U.S. Virgin Islands or Guam). For more information about the FSSA program or any other assistance, members should contact their family support center, command or community services financial management counselors. The FSSA Application, DD Form 2857 is available on the WHS DOD Forms website.

Affordable life insurance: Service members are automatically signed up for Servicemembers’ Group Life Insurance through their branch. It offers low-cost coverage to service members for up to $500,000 at only $31 per month.

Free financial help: The military provides free financial perks to service members like financial counseling and tax services through Military OneSource. Your service member can be coached through several money-related issues like budgeting and money management, and MilTax allows them to easily prepare and file their taxes every year.

Military discounts: Maybe one of the greatest financial perks and least considered is military discounts. Service members have access to many perks like tax-free shopping at exchanges on the installation as well as discounts at the movies, restaurants, amusement parks and much more. And for their traveling needs they never have to worry about paying for luggage when flying within the continental United States.

Signing and reenlistment bonuses: At times, the military offers enlistment and reenlistment bonuses to service members in certain career fields. These bonuses are usually offered to help recruit and retain for jobs that are hard to fill or that require high skill levels, and they can range in the thousands. Each branch determines how much to offer. Bonuses are not guaranteed and change constantly at the discretion of each branch. For accurate information on bonuses, it is best to contact a local recruiting office.

Professional and personal development

Military service shows your loved one what they are capable of, helping them grow both personally and professionally. The military instills strong values, such as integrity and personal responsibility, traits that will serve your loved one well, wherever they go in life.

Professional development: As a service member, your loved one will acquire knowledge, skills and abilities that civilian employers value. These include:

• Leadership. The military trains individuals to lead with confidence, example and integrity.
• Discipline. Service members learn that success requires them to see a task through to completion and take responsibility for their actions.
• Flexibility. Conditions can change quickly in the field. Service members learn to adapt to new situations with little preparation.
• Teamwork. The military is made up of people of different backgrounds and personalities. Service members learn to overcome their differences and work cooperatively to accomplish their mission.
• Communication skills. The military teaches service members to communicate with one another effectively and efficiently.
• Problem-solving skills. Service members learn to think on their feet. When something doesn’t go as planned during a mission, they quickly identify new solutions.
• Technical skills. In addition to their technical education, service members have opportunities to become proficient in a variety of technical and tactical skills.

Tuition assistance: Your service member may qualify for tuition benefits while serving and after leaving the military. The military Tuition Assistance program provides up to $4,500 of assistance per fiscal year. The Department of Veterans Affairs administers a number of education benefit programs, including the Post-9/11 GI Bill, which your service member can use after leaving the military.

Job stability: Regardless of the economy, the military offers a secure job and a regular paycheck.

Personal development: As a member of the armed forces, your service member will be challenged to grow in new ways. They will discover new strengths and capabilities, boosting their confidence and opening new pathways in life. Areas of personal development through military service include:

• Fitness. Physical fitness is important in the military where staying strong and healthy is essential to the mission. In addition to the physical benefits of staying fit, studies have shown that exercise boosts emotional well-being.
• Friendship. Deep bonds of friendship often develop among those who serve together. Service members connect with one another through shared experiences and mutual dependence.
• Travel. Service members have opportunities to live in different parts of the country and the world. Being exposed to new cultures and ways of life broadens their horizons and teaches them about how the world works.
• A sense of purpose. Serving in the military can instill the sense of purpose that comes from working toward something much bigger than yourself.

Military service comes with many benefits — both financial and personal. Whether your loved one plans to serve one tour of duty or retire after 20 years, you can be confident they are fully compensated while serving their country and have opportunities to gain skills and strengths that will shape their life in positive ways long into the future.