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Are you a military officer? Me too! Check out the chart I made for the above average officer net worth. Thanks to Sam at Financial Samurai for the idea to put this chart together.

This guy doesn't settle for being average

Let me start off by saying I am not enlisted. I asked around and did the best research I could to calculate average enlisted pay, but its not easy. Every case will be different, with different deployment cycles, special pays, spouse income, and whether or not you live on base.

I’ve experienced the officer side of life for a few years now so I can write from personal experience. For the enlisted side, I can only ask questions, look at the pay charts and educate myself, but I can’t live it.

Just like on the officer side, an enlisted person is definitely worth more than their investable assets. You can be the best technician at your job or leader on and off duty and still be drowning in credit card debt.

Usually though, if you excel at your job, you will also want to excel in all aspects of your life. In this article I’ll lay out what the above average enlisted personnel should have saved throughout their career.

The above average enlisted man/woman knows:

  • That the TSP is the best investment vehicle for their retirement
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  • That banking with a military friendly bank or credit union like USAA saves both money and time
  • Not to completely rely on a military pension, because less than 20% of active duty personnel make it the full 20 years
  • You are more financially savvy than your peers and you didn’t buy that brand new Ford F-150 with a high interest rate at the lot right off base/post.
  • You understand that power of compounding interest, simple index investing, and spending less than you earn
  • You never carry a balance on your credit card, but you do use a cashback credit card to get the most for your purchases

Assumptions:

  • This chart is for single airmen, soldiers, sailors, and marines. If your spouse works, your total net worth or your standard of living should be higher.
  • In this chart I assumed that you prioritize your tax advantaged retirement investments, like the Roth IRA and Roth TSP. Once you have enough income to start making taxable investments, you start doing that as well.
  • I assumed a 4% investment return, which is a bit low considering the stock market averages 6-7% in the long run (30+ years).
  • I also assumed that you wait until you make E-6 to buy a house and then you build $500/month of equity

The Average Net Worth for the Above Average Soldier, Sailor, Airmen, or Marine

Age Rank Roth IRA Roth TSP Taxable Investments Home Equity Total NW
19 E-2 $0 $0 $0 $0 $0
20 E-3 $0 $5,000 $0 $0 $5,000
21 E-4 $0 $10,000 $0 $0 $10,000
22 E-4 $2,500 $17,500 $0 $0 $20,000
23 E-5 $5,100 $35,700 $0 $0 $40,800
25 E-5 $10,616 $74,313 $0 $0 $84,929
27 E-5 $22,702 $116,077 $0 $0 $138,780
29 E-5 $35,775 $161,249 $0 $0 $197,024
31 E-6 $49,914 $210,107 $10,200 $12,000 $282,221
33 E-6 $65,207 $262,952 $21,232 $24,000 $373,391
35 E-7 $81,748 $320,108 $43,365 $36,000 $481,221
37 E-7 $99,639 $381,929 $67,303 $48,000 $596,871
39 E-7 $118,989 $448,795 $103,395 $60,000 $731,179

Summary:

  • As a young enlisted member (E-2 and E-3), focus on becoming the best you can at your job, continuing your education, staying out of debt, and building an emergency fund. Start contributing between $400-500/month to your Roth TSP account. As you reach the NCO level, keep increasing your savings every year.
  • Congratulations on the promotion to E-4 (Senior Airman, Corporal, or Petty Officer Third Class)! You should start contributing more to your Roth TSP account with your increased pay. After wearing your new stripes for a few years, you should be maximizing your Roth TSP contributions and begin contributing to your Roth IRA.
  • By the time you have been an E-5 (Staff Sergeant, Sergeant, or Petty Officer Second Class) for a few years, you should be able to maximize your Roth TSP and Roth IRA investments. This is where your hard work and savings should pay off with a net worth of over $100,000.
  • By the time you make E-6 (Technical Sergeant, Staff Sergeant, or Petty Officer First Class) you should have enough income to not only maximize your tax advantaged investments (Roth IRA and Roth TSP), but also start investing in taxable investments. Towards the end of your E-6 time you will rapidly approach the half million dollar mark.
  • As you approach retirement as an E-7 (Master Sergeant, Sergeant First Class, or Chief Petty Officer), your hard work and slow but steady investing pace has built a nest egg of over $700,000. You should be able to safely withdraw $22,000-$30,000/year for the rest of your life from this fund in addition to your military pension.

I need your feedback!

  • Do you think these numbers are attainable?
  • Where do you fall in the list?
  • Do you think you could really have over $700,000+ saved at the end of your 20 year career?
  • Do you think a young NCO can save up a six figure net worth?
  • Leave a comment and share this post with your friends!

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The Average Net Worth of the Above Average Enlisted Personnel

13 thoughts on “The Average Net Worth of the Above Average Enlisted Personnel

  • September 23, 2014 at 07:24
    Permalink

    Spencer,

    Normally when I read your articles, I agree with them, I especially agreed with the above average officer net worth article(I actually fit this profile)…this one is a bit far fetched, in my opinion. As a prior-enlisted guy, who has never had any type of debt, saving the 5k as young E-3 would be back-breaking! I get what you’re saying, but instead of setting a specific dollar amount, why aren’t you recommending that they set a solid budget first? Is that implied? I can’t understand why you are prioritizing the Roth TSP over the Roth IRA, it’s a great option, but the investment options with it are extremely limited…can you explain your thought process?

    Not attacking your article by any means, it just seems that this article, at least for the early years, doesn’t take into consideration the amount of pay that young enlisted are getting. Unless they deploy, and in that case, absolutely put away some cash…but if they are single, living in the dorms, and trying to support themselves–these numbers may be a tad off…but if it’s a generalization then I understand.

    Reply
    • September 23, 2014 at 12:41
      Permalink

      Lewis – with no debt, no dependents, living on base, and a solid budget, why do you think it’s unreasonable to save $5000/year as an E-3? I calculated about $2100/month take home for an E-3. Minus $500/month of TSP investing still leaves $1600/month for all other expenses, and housing is taken care of. As a prior-E guy, I’m definitely interested in your personal experience!

      When I lived on base during my training school, riding a bike on base was reasonable, keeping my gas and automobile maintenance way down. Plus, you brought up deployment, where expenses are literally $zero/month and a young enlisted man/woman can sock away lots of tax free pay into the Roth TSP.

      I recommend prioritizing the Roth TSP initially because it’s easy to setup and very hard to screw up. I see the limited investment options as a bonus actually, because for 90% of the population you don’t need anything more exotic than what the TSP offers. All it takes to set up is a couple clicks in myPay and then allocating all of your money to the lifecycle fund of your retirement year. Once you understand investing better, you can change your allocation with a few clicks on TSP.gov. You can see I recommend opening a Roth IRA very soon after you begin contributing to the Roth TSP. I believe that those two years are a great time to understand more about your investing strategy so that you don’t open a Roth IRA at an expensive brokerage that doesn’t meet your investing profile.

      Thanks for the comment, I appreciate the perspective!

      Reply
      • September 24, 2014 at 07:39
        Permalink

        Hey Spencer, happy to engage in some discussion with you…I provide briefings to FTAC and make a few squadron briefings with really good information (at least I think). I’d be happy to provide you with that slide show, I think you would find it interesting.

        Anyway, base pay for an E-3 with less than 2 years is right at $1805. While your numbers make a lot of sense, for the majority of people who don’t think like you and I do…saving so much might put them in a bind.

        And for the deployment issue, you’re right, save everything! I just got from a deployment, maxed out SDP first (obviously), then saved everything else! I preach to my guys that maxing out the Roth IRA and Roth TSP are mandatory items, then branch out and get an investment portfolio set up–other than those two, and with wise investment choices you can really be set up. Staying out of debt, of course.

        Finally, I see your point about the simplicity of everything…making things too complicated is a deterrant to most people investing.

        Thanks for the discussion!

        Reply
        • September 24, 2014 at 11:59
          Permalink

          Hi,

          Lewis, I would like a copy of your slideshow if it is in regard to mil.finance.

          Jeff

          Reply
          • September 24, 2014 at 13:54
            Permalink

            No problem Jeff, it’s geared towards younger enlisted members but has great information nonetheless…if you feel comfortable enough, please give me your email address and I will send it to you.

        • September 24, 2014 at 13:59
          Permalink

          I’d be very interested in seeing that slide show, Lewis. I’ll send you an email or you can reach me at spencer [at] militarymoneymanual [dot] com

          Reply
        • October 17, 2014 at 05:40
          Permalink

          I’d love a copy, too. I am always looking for more tools for my toolbag, and I confess to being a little out of touch with the young, single, enlisted side of things.

          If you don’t mind sharing with a complete stranger, my email is kate (at) katehorrell (dot) com.

          Thank you!

          Reply
  • March 11, 2015 at 06:27
    Permalink

    25 years in as enlisted and your numbers seem way,way, way high for a typical young couple.
    we have exceeded your posted number for our age group ,but that included my working(spouse) in a civilian job that outpaid the military income by as much as 8x /yr. after my active duty husband hit e-8, i stopped working and starting doing military volunteering which has been satisfying. we are likely in the 1%tile financially for enlisted families .so, please don’t take this wrong but, i’m afraid your savings goals exceed practical living for the great majority. please modify your numbers.

    Reply
    • April 30, 2015 at 18:42
      Permalink

      Thanks for commenting, S. Mara. I wrote these goals for the above average enlisted person, not the average or below average. This is a benchmark for those who want to achieve financial independence sooner rather than later. With a solid budget and not living beyond your means, do you think these savings goals are impossible? I don’t think so. Investing 20% of your pay as an E-3 is definitely not easy, but it’s also not impossible. When you build those investing habits early in your career they stay with you even as your pay goes up.

      Reply
  • November 1, 2015 at 09:56
    Permalink

    What is the percetage of roth tsp contribution did you use on your chart? Thanks

    Reply
    • November 3, 2015 at 16:21
      Permalink

      I assumed an initial savings rate of $5000 per year and increasing every year a few thousand dollars. Eventually towards the end you’ll be maximizing your TSP and IRA contributions.

      Reply
  • September 29, 2017 at 07:11
    Permalink

    Fantastic post! As an enlisted Airman, in my final enlistment (17 years), I was just thinking about how much I COULD have saved. This is pretty accurate for the ABOVE AVERAGE enlisted person.

    I honestly never thought of saving and investing until I was at the NCO Academy a couple of years ago. Maybe that’s when maturity decided to smack me in the face as hard a humanly possible. But we had a representative from USAA talk about all these things. It was a tough pill to swallow.

    All I really cared about was having money to pay my bills, and a little cushion for emergencies and fun.

    I did ONE thing right when I was young. I invested into a Roth IRA when I was a 19 year old E-2. And that was only to get my Flight Superintendent off my back. It was with the wrong company, and I didn’t contribute very much. But at least it was something. I’ve done what I can to correct my ways, but I can’t help but kick myself at what could have been.

    It’s something I try to use to educate my Airmen. Sometimes I get that glazed over look of “Who cares!?”, and sometimes I get an airman that really does care. But this is something I’m definitely going to show my, and any, airmen. Along with the post of what to do with your money if your new.

    This post would probably be good to put back up near the top of your blog.

    Thank you for this!

    Reply
    • September 30, 2017 at 02:20
      Permalink

      Frank, thanks for the kind words and I hope the post is motivating to your young (or old) airmen! I’m glad you had a Flight Super who stayed on your case to open a Roth IRA when you were young. Do the same for your new airmen or at least get them to contribute 5% to the TSP if they are under the BRS to get the full gov’t match. Great opportunity for young servicemembers to start saving for retirement when they aren’t even thinking about it.

      Reply

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