Should I stay or should I go now? Military Retirement Questions

[Cowspot28]

Stats: W 29, H 32, S 1; savings rate around 60%; no debt; net worth 150,000

H is an E6 in the Army with 10 years in and 2 years left in his contract. We are trying to weigh the pros and cons of a military retirement vs getting out and following our dream of homesteading.

He has enjoyed his military service, but he is currently in an acidic work environment and chances of a promotion are low for his MOS unless he switches to warrant officer. I make about 25% more than him working for the Army as a civilian in a HCOLA. Our goals are to homestead and raise a family of 3-5 kids. We would eventually like for one of us to be a SAHP and will likely have to anyway financially if we have the number of kids we want. I have a higher earning potential with a doctorate degree, but he has the pension and free healthcare if he retires after 20 years. At our current savings rate, we may be FI in 10 years anyway, but our spending will likely go up as our family size increases and of course income will go down if one of us leaves the workforce.

Questions:
Does it make financial sense for H to get out in 2 years, use the GI bill, and be a SAHD therby losing the pension and healthcare?
Are we missing more financial gain if I am the SAHP as I have a higher earning potential than him?
How would you calculate the benefit of a higher salary for me now vs the lower salary for him now and lower pension in 10 years for the rest of his life?
Other insights?

Thanks for your help! Let me know if you need additional information.

[SummerLovin]

I recommend he stay the next 10, and get the lifetime of  retirement pay with COLA, and the healthcare  benefits.  It's not that much longer, and the environment he's in now will change as people transition in and out of the unit.  It sounds hokey but he can't change the people but he can change how he reacts to the toxicity by not allowing himself to get sucked in.
Going warrant would also be a good opportunity for him, and improve your financial situation to enable the purchase of a homestead.
Is he taking classes now? If not he should and try to gain skills and knowledge to help achieve your long term goals.

You'll need to look at your priorities and determine what is most important.  Be sure to run the financials for each of your top 3 scenarios and sit and discuss.  I recall someone on one of the boards doing an analysis of the  value of a military retirement. I believe he used actuarial tables.  I'll link if I find it.

[former player]

With 2 more years on his current contract, when does the decision need to be made?  Another year on, feelings might have changed.

Does your husband want to use the GI bill?  What for?  Does he have another career in mind?  What does that typically earn, and is it a career which fits in geographically or timewise with homesteading?

You say you have higher earning potential, but you are working for the military in a HCOL area.  How does that fit in with homesteading if he retires?  What are your career plans?

Homesteading is a timeconsuming way of life more than it is an income to live off.

I suspect you will be fine whatever you do, but there are a lot of variables at the moment.

[Nords]

H is an E6 in the Army with 10 years in and 2 years left in his contract. We are trying to weigh the pros and cons of a military retirement vs getting out and following our dream of homesteading.

He has enjoyed his military service, but he is currently in an acidic work environment and chances of a promotion are low for his MOS unless he switches to warrant officer.

Other insights?

Thanks for your help! Let me know if you need additional information.

First let's deal with the quality of life issues, and then address the money.

If your spouse is not feeling challenged and fulfilled, then he should leave active duty.  Trying to clench his jaw and gut it out to 20 will only risk his physical, emotional, and even mental health.  (It'll be a lot of fun for you and the kids, too.)  So unless he sees a better life as a warrant, it's time to leave active duty for the Reserves or National Guard.

With only two years left to the transition, both of you should attend TAP (or whatever the transition seminar acronym is now) to start figuring out the plan.

Quality of life will take a huge jump up in the Guard/Reserve.  You'll probably still be able to swap off childcare to coordinate his drill weekends and annual AT, and he'll continue to earn good years toward a Reserve pension at age 60.  If he wants, he could still pursue a Guard/Reserve warrant commission. 

Another option would be to enter federal civil service and "buy back" his military service credit.  (Some states do this for their civil service as well.)  It's not as good a deal as a Reserve/Guard career (with a pension at age 60) and a civilian bridge career, but it's the next-best thing.

Regardless of the financial options, the first decision should be to leave active duty for the quality of life... and then go Guard/Reserve for the pension option.