How to set salary expectations for civilian life. Transitioning to civilian life presents veterans with countless challenges. With all of the major lifestyle changes and intense planning for the future, some things will naturally be forgotten. Believe it or not, many veterans overlook a very important part of civilian life: how their civilian pay will differ from their military pay.
As you begin your job search, it’s important to understand that your military compensation was more than just your take home pay. Many military entitlements disappear when you transition to civilian life, so you have to plan for additional costs as well as changes in cost of living.
In this blog, we outline four steps that will help you calculate a reasonable civilian salary and plan for the expenses that surprise some veterans when they begin their civilian careers.
- Understand what you currently make.
Don’t just look at your take home pay. The easiest way to calculate your current pre-tax pay is to look at your Leave and Earnings Statement (LES), add up your monthly pay and entitlements, and multiply that figure by 12 to project your total annual earnings.
If you only look at military pay charts, you won’t get the full picture of what you make. These charts don’t account for additional entitlements, such as Basic Allowance for Housing (BAH), Basic Allowance for Subsistence (BAS), or cost-of-living adjustments (COLA). Remember, in the civilian world, your pay will not include any additional entitlements. The salary you agree to is what your employer will pay you.
- Examine differences in costs of living.
After you calculate your current annual salary, it’s important to compare your current cost of living with the cost of living for wherever you’re planning to move. You don’t have to do this work alone. Online calculators (like this one) will help you break down the various differences. If you’re moving somewhere with a higher cost of living, be sure to factor that change into your salary needs.
- Plan for deductions.
How much cash you’ll have in your pockets each month is of equal importance to your annual salary, so pay attention to what will be deducted from your civilian checks. Are you participating in a 401(k) plan? Will you be responsible for union dues? What about health insurance? Life insurance? Before accepting a job offer, ask what benefits the company is offering and how much those benefits typically cost. Planning for these deductions will provide a more accurate estimate of how much money you’ll have in your budget.
- Don’t forget about health care costs.
TRICARE is free while you’re in the military. Unless you’re joining the Army National Guard or the Reserves, your TRICARE coverage will expire (and even if you join one of those groups, your coverage will no longer be free).
Many service members experience sticker shock when they see how much health care costs for someone with a civilian job. Although healthcare plans vary widely, some can be very expensive. Before you accept a new position, make sure you understand how much money will be taken out of your paycheck for health insurance, as it will most likely be the largest deduction from your paycheck.
Need help planning for civilian life?
There’s no way around it. Transitioning to civilian life can seem daunting, but understanding how much money you’ll need to make in order to live comfortably is an essential step for veterans. Conducting some basic research ahead of time will prevent the shock of a smaller-than-expected first paycheck.
If you need additional support throughout your transition to civilian life, get in touch with INvets. Our tools and professional network help veterans start lucrative careers in Indiana. Whether you need a new challenge or a chance to climb the ranks at a reputable organization, you’ll find thousands of relevant listings on our job board.
Register for an INvets account today to start planning your next move.