How much is my Miltary Retirement worth now?

It's easy for Military Members to feel like their Net Worth is always undervalued because their retirement benefits are not calculated like civilians.


Well now you can. It's a pretty easy financial calculation. Here's how its done.

• You calculate how much you will most likely receive during the course of your retirement
• Then you find the present value of that total number as it's valued today
• This is a good rough estimate

The steps are as follows:

1. Calculate the future value of your retirement:
1. Retirement Monthly Payment X Number of Years in Retirement X 12 Months = the Future Value of your retirement
2. Calculate the Present Value of your retirement using the Present Value Calculator provided:
1. http://www.investopedia.com/calculator/pvcal.aspx
2. Use .58 for the interest rate (this is 7% return divided by 12 months)
• 7% is the typical return for a low risk investment
• This is what someone would value this investment over several years
3. Number of Periods = (Years in Retirement + Years till Retirement) X 12 months
3. The number this calculator spits out is the Present Value of Your Retirement

Why this works:

• You would never sell your Retirement benefits but theoretically you could
• This enables us to place a basic value on the retirement as a whole
• Once you have a good idea of a monetary value you can figure out present value

Why this is still a big estimate:

• This still doesn't account for your healthcare and other military benefits, you could theoretically add those into the calculation
• The value of this get's significantly less the further out you are from retirement
• This also doesn't take into account that your retirement is not guaranteed as well

It's important to understand your retirement has a present value so you can see that you have built net worth over time even though that net worth is not available right now.  Well, neither is any retirement savings so it shouldn't keep you from using it as a value.


Tony D.