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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.
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
- Tracking your investments with Personal Capital makes it easy to see all your accounts in one place
- 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
- 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|
- 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!
19 thoughts on “The Average Net Worth of the Above Average Enlisted Personnel”
First, thank you for all that you are doing, both in the military and with this blog. I’ve been following your blog since 2014. I’ve read just about everything you’ve written here. The Military Money Manual is my favorite military personal finance blog and I follow several. I often recommend your blog to military service members. Please, keep up the great work. Your podcast is very informative. I’ve been listening since the beginning and one of the episodes reminded me of this post. I haven’t read/listened to your book yet. Do you have any plans to put it on Scribd? I want to check it out. I think it would be a great gifting book.
Next, I’ll answer your questions.
• Do you think these numbers are attainable?
– Yes, these numbers are attainable for people depending on their circumstances (I do not want to over-generalize) and willingness to grind. I’ve shared and discussed this post with several folks. I have shared the officer version too. Your charts are wake-up calls to some, motivational to others (me), and crushing to others. I try to educate as many people as possible in the finance space. I’m sure you know the struggle, some get it and some don’t. I’ve come across many people toward the end of their military career that never opened their eyes to the world of investing/personal finance. Most wish they had or, for those that did, wish they had begun sooner. I hope more people grasp these concepts and prioritize investing earlier in their careers. Life is more enjoyable when you don’t live paycheck to paycheck and don’t have to worry about paying the bills. Growing up, I saw so many family members struggle to pay them that I look forward to paying them off. It is wonderful to have money to travel, buy nice things, eat at fancy restaurants, buy gifts for friends and family, donate to charity, and do whatever the hell you want after hanging the uniform up. Personally, I’m all in for FIRE and to leave a legacy.
• Where do you fall in the list?
– I’m 36 and my wife is 33 (civilian). I’ve been in the Air Force for close to 18.5 years (MSgt/E-7).
Our balances are (rounded to the nearest thousand):
IRAs (mixture of Roth and Traditional, mostly Roth): $232,000
TSP (mixture of Roth and Traditional, mostly Roth):
Non-tax advantaged investment accounts:
We prioritize our Roth IRAs over the TSP because we have more flexibility of what we can purchase.
We always max our Roth IRAs (this is non-negotiable) and never, not ONE TIME have I maxed out my TSP.
We have a net worth of a little over $500K. We were higher earlier this year. We could have been around $600K, but this year I had a few individual stocks that didn’t do so well. Additionally, we purchased a $70K Tesla a few years ago. No regrets on either. All of the investment losses are unrealized, and I still have faith in most of these high P/E stocks. It just is not what the market currently wants. Also, the Tesla is incredible. Best purchase ever! We plan to buy another soon.
Had I not made four massive mistakes* as a single, young Airman we would easily be worth around $750K maybe even upwards of $900K today. There is no way to know the exact amount, but I got to that number a few years ago after some rough calculations.
*The mistakes are as follows: One, I started contributing to the TSP (traditional since there wasn’t a Roth option) as a 19-year-old A1C, BUT I only contributed 9% of my base pay. I certainly could afford to invest much more since my only bill at the time was a cell phone bill. I don’t remember the exact cost of the bill, but I’d guess it was in the ballpark of $30-$55 a month. I only contributed a small amount because I was trying to get my supervisor off my back. More on my supervisor in a few. When I joined as a single E-3 living in the dorms I made $16.3K a year. To say I had more to invest is an understatement. I could have easily contributed at least 25%. In 2022, that same Airman will make $25.9K! *Young Airmen, find a way to save and invest!* You CAN do it.
Second mistake: I was invested solely in the G Fund, and the money sat there for eight years! I know, I know. Well…I DIDN’T know back then. Back to my supervisor, he was a couple of years away from retiring, with $0 saved for retirement. He “encouraged” his Airmen to open a TSP account and contribute to it. It was a different time back then ;). Although he meant well, he never told us to move the money out of the G Fund after opening it, so that is where mine was parked for almost a decade. At least the default fund for military personnel joining now is an age-appropriate L Fund. The L funds did not exist when I joined. Yes, I know I am old. My supervisor probably did not know much about the TSP. He did not want any of his Airmen to be in the same situation 15 or 20 years later. We did not have as many official or unofficial finance briefings/classes back in those days. We did not have many individuals trying to educate people financially in their units, at least not on the enlisted side. I have heard the officers did a better job of this. I doubt there were any military personal finance blogs in the early 2000s.
Third mistake: I stopped contributing to the TSP after six short months. After two years at my first base, I PCS’d overseas and depleted the $10K I managed to save my first two years in the Air Force. I didn’t pull any money out of the TSP. The $10K was in a savings account. The TSP earned a few dollars of interest each year. It is hard to gain a lot of interest on $600 and change in the G Fund when you aren’t actively contributing on top of it. Ugh…hurts to know what it could have been.
Finally, mistake number four: I didn’t get out of the G Fund and start regularly contributing to the TSP until my NINTH year in the Air Force.
It took me getting married, realizing I was responsible for someone else, and buckling down and getting smart on personal finance and investing. Imagine where we would be now with twice the amount of compounding and contributing.
• Do you think you could really have over $700,000+ saved at the end of your 20 year career?
– Yes, at the current pace, I project we’ll have a net worth between $680K and $880K around the time I hit 20.5 years in. That’s subject to change, but the window is wide enough that I feel comfortable with this estimate. Of course, a 30%-50% market crash throws this out of the window (unless we can recover as quickly as we did in the spring and summer of 2020), but that crash will be even more beneficial for us in the long term.
• Do you think a young NCO can save up a six figure net worth?
– Yes again. I’ve seen more NCOs with six-figure net worths more times than I can count on my fingers and toes. I’ve even met a few Senior Airmen that had a six-figure net worth and I’m not talking about anyone that got it through a trust fund or inheritance. I’m not knocking anyone fortunate enough to have these options, my wife and I weren’t so lucky. Our families don’t have wealth. We are trying to break that cycle going forward. I crossed the $100K mark in 2014 (11 years in) as a SSgt, but I got a later start and made all those mistakes I mentioned earlier.
For those thinking these numbers in this post are unattainable, it actually gets easier once you develop a habit. The numbers don’t look as big once you have them. The numbers also grow faster in a shorter amount of time. If you don’t have several hundreds of thousands of dollars and/or aren’t a math whiz, allow me to illustrate:
$100K net worth milestones for my wife and I:
Year Net worth Age
2003 $0 18
2014 $100,000 29
2017 $200,000 32
2020 $300,000 35
2020 $400,000 35
2021 $500,000 36
Your accounts grow stupid fast as they swell. We’ve had a lot of one-day $10,000 moves and a handful of $20,000 swings in one day. 18+ years ago, I couldn’t fathom my accounts growing more in one day than the Air Force paid me in a whole year.
What I/we did in 18 years will only take about 3-6 years to double.
There will come a day where we will lose/gain $100,000 in one day and that will become more frequent as the accounts continue to grow.
Excellent comment! Thanks for the behind the scenes look. And thanks for being one of my longest returning readers.
I’m a 27 year old SSgt. approaching 8 years, and these numbers are definitely attainable. I’m happy to say that I’m actually ahead of schedule according to the chart despite not really getting my financial act together until about 3-4 years in as a SrA. Even happier to be sewing on Tech next year to boost my savings further. Great article, Spencer.
◾Do you think these numbers are attainable? Absolutely.
◾Where do you fall in the list?
Roth IRA: $53,000
Roth and Traditional TSP: $104,000 (I started investing before the Roth TSP was implemented)
Taxable Investments: $0
Home equity: $48,000
◾Do you think you could really have over $700,000+ saved at the end of your 20 year career? Yes
◾Do you think a young NCO can save up a six figure net worth? Yes
I started late in the game (~26-27 years old)–had I started at 18, I think I would comfortably meet the thresholds outlined in this post.
Thanks for the great data point! It’s very hard to get started when you’re so young. Not many 18 year olds are thinking about the long game at that stage.
I should caveat I am renting 2 houses and I own the one I’m living in now. Had I not invested in those, I could have a good chunk of change in the nontaxable account. Right now I’m excited that stocks are becoming bargains again!
I’m also applying to OTS next year to hopefully get a sweet financial boost.
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!
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.
What is the percetage of roth tsp contribution did you use on your chart? Thanks
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.
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.
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.
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.
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!
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!
Lewis, I would like a copy of your slideshow if it is in regard to mil.finance.
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.
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
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.