Built on the 2027 rates as they stand. The rank table and chart use the 7-6-5 raise for 2027 (7% for E-1 to E-5, 6% for E-6 to O-3, 5% for O-4 and above) until DFAS posts the official tables in December. If Congress sets 3.6% for everyone instead, no pension here drops by more than $18 a month. VA figures use the 3.6% COLA announced October 14, 2026, run through the VA's own rounding.
People search all the time for how much they need saved to retire. Most of the answers assume the same path. You save through a whole career, retire around 65, and live off what you built. Few are built around a military pension and VA disability.
That's a big gap. A pension and a VA check pay every month for life and go up with inflation, but neither one shows up on a brokerage statement. So when you compare yourself to someone who only invests, you leave out your biggest source of income.
I wanted to look at a case study that might help answer the question, and compare it with a civilian retirement path. The case study is a retired E-8 with 100% VA and $1.3M saved. Below is how to turn the pension and VA into a portfolio number on the 2027 pay and VA rates, and what a civilian would have to save to end up in the same place.
The short answer. Multiply the yearly pension by 25 to 30. Do the same with your VA after a bump for being tax free. An E-7 retiring at 20 years in mid-2027 gets $3,013 a month, the income of a $904,000 to $1,085,000 portfolio. In the case study below, a retired E-8 with 100% VA, the pension and VA come out to $2.44M to $2.93M.
A Pile of Money and a Mailbox
Say you have two neighbors. One has a big pile of money in the bank. The other has a mailbox that gets a check every month for the rest of their life. Both want to live off what they have.
The question is how big the pile has to be to pay what the mailbox pays. That's what your pension and VA are worth as a portfolio. You can't sell a mailbox, and that matters (more on it below), but the income is the same.
Why a Pension Is Worth 25 to 30 Times What It Pays
Most of the “how much do I need” calculators run on the 4% rule. Take 4% of a portfolio in the first year, raise that amount with inflation every year after, and history says the money lasts about 30 years. Turn it around and every $1 a year you want to spend takes $25 in the pile.
Thirty years fits someone who retires at 65. Most military retirees leave the service in their early 40s and need the money to last 50. Early Retirement Now's withdrawal study tested every start date back to 1871 and found that a mostly stock portfolio paying out 3.5% or less almost always lasted, even over 60 years. Use about 3.3% to stay on the safe side and the multiplier is 30.
Checking It Against What the Income Costs to Buy
You can also ask what it would cost to buy the same income outright. The closest thing for sale is a ladder of TIPS, Treasury bonds that pay a set rate on top of inflation. On October 16, 2026 the 20 year TIPS paid 3.01% over inflation and the 30 year paid 3.16%, according to Treasury's daily real yield curve. At those rates, funding an inflation-protected check for 50 years costs about 25 times one year's payment, the low end of the same range. That's the pension's present value in the strict sense. The 30x figure is something else, the stock-heavy portfolio you'd need to pull the same income safely for 50 years. Treasury doesn't sell TIPS longer than 30 years, so treat this as a rough check and not a price you could lock in.
VA Is Worth More Per Dollar Because It's Tax Free
A civilian living off a 401k or an IRA pays income tax on every dollar they take out. Your pension is taxed the same way, so a dollar of pension and a dollar of 401k withdrawal match up. Your VA check isn't taxed at all. To end up with the same money, the civilian has to take out more.
A quick way to handle it is to divide your yearly VA by 1 minus your tax rate before you multiply. In the 22% bracket, $30,000 of VA matches $38,462 of 401k withdrawals. In the case study the bump is much smaller, and the next section shows why.
Case Study of a Retired E-8 With 100% VA
Here's the case study family in 2027. The service member retired in mid-2023 as an E-8 with 21 years under High-3, and the pension started at $2,992 a month. DoD's first COLA for a mid-2023 retirement was 0.9%, and full COLAs of 2.5%, 2.8% and 3.6% came after that. Four COLAs later the pension is $3,293 a month, $301 more than the first check. Rated 100% with a spouse and two kids under 18, the VA adds $4,587.51. The rating is 50% or higher, so CRDP pays both checks in full with no offset. The family has $1.3M saved, and the retiree is 43.
| Monthly | Yearly | Tax adjusted | At 25x | At 30x | |
|---|---|---|---|---|---|
| Pension (retired 2023, after 4 COLAs) | $3,293 | $39,516 | $39,516 | $988K | $1.19M |
| VA 100%, spouse, 2 kids | $4,587.51 | $55,050 | $57,991 | $1.45M | $1.74M |
| Total | $7,880.51 | $94,566 | $97,507 | $2.44M | $2.93M |
So a civilian would have to pull $97,507 a year out of a 401k to keep the $94,566 this family keeps. At 25x that takes $2.44M. At 30x, which fits a 50 year retirement, it's $2.93M. A civilian would have to build that much on their own to retire on the same income.
Add the $1.3M they've saved and they live like a civilian with $3.74M to $4.23M.
Why the bump is only 5% here. On a joint return with two kids, the standard deduction and the child tax credit cover the whole pension, so the family owes $0 federal tax on it. The civilian taking out $97,507 pays $2,941. State tax would widen the gap, since a lot of states that don't tax military retirement still tax 401k withdrawals. These figures are federal only, on 2026 tax law.
When the kids grow up, the VA drops to $4,307.87 a month once both are past 18, or 23 if they're in school. The portfolio figure barely moves, though. Without the child tax credit the pension starts owing $732 a year of federal tax, and the civilian loses the same credit, so they still need about the same withdrawal to keep up.
That's the case study. Yours starts with what lands in your account.
Your rank, years and VA rating set the two checks, and your state decides how much of the pension you keep. Put yours in and see your pension, your VA and what lands in your account after tax. Then price them the way the case study does. About a minute, free, no account, nothing saved.
Find my number →What a 20 Year Pension Is Worth by Rank in 2027
Here's the same math for a High-3 pension at 20 years, retiring in mid-2027. Pension dollars are taxed like 401k dollars, so these need no tax bump. Under BRS the multiplier is 2.0% a year instead of 2.5%, so take about 80% of any figure here. If you're already retired, like the case study family, skip the chart and use your current check.
| Rank at 20 years | Monthly | Yearly | At 25x | At 30x |
|---|---|---|---|---|
| E-5 (SGT/PO2) | $2,180 | $26,160 | $654,000 | $785,000 |
| E-6 (SSG/PO1) | $2,582 | $30,984 | $775,000 | $930,000 |
| E-7 (SFC/CPO) | $3,013 | $36,156 | $904,000 | $1,085,000 |
| E-8 (MSG/SCPO) | $3,296 | $39,552 | $989,000 | $1,187,000 |
| E-9 (SGM/MCPO) | $3,769 | $45,228 | $1,131,000 | $1,357,000 |
| W-2 (CW2) | $3,515 | $42,180 | $1,055,000 | $1,265,000 |
| W-3 (CW3) | $3,937 | $47,244 | $1,181,000 | $1,417,000 |
| W-4 (CW4) | $4,347 | $52,164 | $1,304,000 | $1,565,000 |
| O-3 (CPT/LT) | $4,433 | $53,196 | $1,330,000 | $1,596,000 |
| O-4 (MAJ/LCDR) | $5,149 | $61,788 | $1,545,000 | $1,854,000 |
| O-5 (LTC/CDR) | $5,707 | $68,484 | $1,712,000 | $2,055,000 |
| O-6 (COL/CAPT) | $6,347 | $76,164 | $1,904,000 | $2,285,000 |
For other years of service, find your monthly pension on the 2027 retirement pay chart, multiply it by 12, then by 25 and by 30.
What VA Disability Is Worth by Rating in 2027
These are the 2027 VA rates for a veteran with a spouse and no kids. They're before the tax bump, so for most people the real figure is a little higher. Below 30% the VA pays nothing extra for a spouse. Rates with kids are on the 2027 VA disability rates page.
Rated under 50%? Then the VA isn't extra money for a retiree. DFAS takes the same amount out of your retired pay unless you qualify for CRSC, so don't add these rows to the rank table. The swap still helps a little, since that part of your pay becomes tax free. At 50% and up, CRDP pays both in full.
| VA rating | Monthly | Yearly | At 25x | At 30x |
|---|---|---|---|---|
| 10% (no dependent pay) | $186.92 | $2,243 | $56,000 | $67,000 |
| 20% (no dependent pay) | $369.50 | $4,434 | $111,000 | $133,000 |
| 30% | $640.36 | $7,684 | $192,000 | $231,000 |
| 40% | $915.49 | $10,986 | $275,000 | $330,000 |
| 50% | $1,286.68 | $15,440 | $386,000 | $463,000 |
| 60% | $1,622.68 | $19,472 | $487,000 | $584,000 |
| 70% | $2,032.55 | $24,391 | $610,000 | $732,000 |
| 80% | $2,359.83 | $28,318 | $708,000 | $850,000 |
| 90% | $2,651.34 | $31,816 | $795,000 | $954,000 |
| 100% | $4,307.87 | $51,694 | $1,292,000 | $1,551,000 |
How Much Do You Need to Retire With a Military Pension
Here's the formula that works when part of your income is guaranteed.
What you need saved = (what you spend in a year minus your guaranteed income) × 25, or × 30 if it has to last 50 years
Say a household spends $100,000 a year. These are rough numbers that skip taxes.
- A civilian with no pension needs about $2.5M, or $3.0M at 30x.
- An E-7 retiring at 20 years with 70% VA and a spouse has $60,547 a year coming in. The gap is $39,453, so they need about $986,000. If the money has to last 50 years, that's about $1,184,000 at 30x.
Same life, about $1.5M less to save. That's why the answer to “how much do I need” is different for a military retiree.
The Civilian Retirement Path
This is the path most retirement calculators are built for. The money only has to last about 30 years after 65, so 25x is enough.
To match the case study's pension and VA that way, a civilian would draw $97,507 a year, and at 25x that takes $2.44M saved by 65. Starting at 22 and earning 5% a year over inflation, which is an assumption and not a promise, that's about $1,389 a month into a 401k for 43 years, in today's dollars.
On the case study's timeline the number gets much bigger. The retiree served 21 years and started drawing the pension around 40. For a civilian to stop working after the same 21 years with the same income for life, the money has to last about 50 years, so it takes 30x, $2.93M. At the same 5%, that's about $6,673 a month for 21 years, far more than a 401k alone lets you put in.
About 60% of what's being matched is the VA, which is disability pay and not something the career itself earns. The pension alone, $39,516 a year, would take about $563 a month from 22 to match at 65, or $2,704 a month over the same 21 years.
Most people on the civilian path don't come close. In the Federal Reserve's 2022 Survey of Consumer Finances, only 51% of households age 65 to 74 had a retirement account at all, and the median among the ones that did was $199,600 in 2022 dollars.
The case study retiree is 43, so the family also has 22 more years before 65. If the pension and VA pay the bills and the $1.3M stays invested, at the same 5% it would be about $3.80M in today's dollars by 65. None of this counts Social Security either. They'll get that on top, starting somewhere between 62 and 70, and the Social Security guide for military retirees covers when to claim.
Where the Comparison Breaks Down
- It's safer than a portfolio. It can't crash and it can't run out. The 4% rule failed in a few bad stretches of market history, and the pension doesn't care what the market does.
- It's less flexible. It stops when you die unless you paid for SBP, which costs 6.5% of the base amount and pays your spouse 55% of it. You can't sell it or borrow against it, and you can't pull out a lump sum for a house.
- VA can change. The VA can re-examine a rating that isn't permanent. A permanent and total rating normally isn't re-examined, and one held 20 years can't be cut below that level except for fraud. If yours could still move, use the low end.
- It leaves out Tricare. Health coverage for the whole family is worth thousands a year next to buying it on the open market in your 40s, and none of it is in these numbers.
Should You Count a Military Pension in Net Worth?
Keep two numbers. Net worth is what you own and could sell. The second number adds the pension and VA, priced at 25 to 30 times what they pay in a year. Net worth is what a lender or a planner means when they use the word. The second number is the one to use when you compare yourself to someone who only invests.
So for the case study family, “we have the equivalent of a $4.23M portfolio” is fair. “We're worth $4.23M” isn't.
Put a number on your own mailbox
The tables use round examples. The calculator takes your rank, years, state and VA rating and shows your own pension and VA and what lands in your account after tax, plus the civilian salary you'd need to keep your lifestyle. It takes about a minute, and it's free.
See my real take-home →Military Pension Worth FAQ
How much is a military pension worth?
Multiply the yearly pension by 25 to 30. That gives the portfolio that would pay you the same income. An E-7 retiring at 20 years in mid-2027 gets $3,013 a month (projected until DFAS posts the 2027 tables), which is the income of a $904,000 to $1,085,000 portfolio. An O-5 at 20 years gets $5,707 a month, worth $1,712,000 to $2,055,000.
What is the present value of a military pension?
It's what it would cost to buy the same inflation-protected income outright. Priced off TIPS at about 3% over inflation, 50 years of payments cost about 25 times one year's amount. So a 20 year E-7 pension in mid-2027, $3,013 a month, has a present value of about $904,000, a little less once you count that it stops at death. Drawing the same income safely from a stock-heavy portfolio for 50 years takes closer to 30 times, about $1,085,000.
How much is 100% VA disability worth in savings?
At the 2027 rate for a veteran with a spouse, $4,307.87 a month, 100% VA pays what a $1.29M to $1.55M portfolio would. VA is tax free, so a civilian living off a 401k would need a little more than that to keep the same money.
Should I count my military pension in my net worth?
Keep two numbers. Net worth is what you own and could sell, and a pension isn't part of it. Then price the pension and VA at 25 to 30 times what they pay in a year and add that to your net worth. Use the second number when you compare yourself to someone who only invests.
How much do I need saved to retire with a military pension?
Take what you spend in a year, subtract your pension and VA, and multiply what's left by 25, or by 30 if the money has to last 50 years. A household spending $100,000 a year with no pension needs about $2.5M. An E-7 retiring at 20 years with 70% VA and a spouse has $60,547 a year coming in, so the same household needs about $986,000, or $1,184,000 at 30 times.
How much would a civilian have to save to match a military pension and VA?
In this post's case study, a retired E-8 with 100% VA, a civilian retiring at 65 would need about $2.44M to draw the same income. Saving from age 22 at an assumed 5% a year over inflation, that's about $1,389 a month for 43 years in today's dollars. To stop working after the same 21 years, it takes about $2.93M and $6,673 a month. About 60% of that is the VA, so the pension alone takes about $563 and $2,704 a month.
Is a military pension better than a 401k?
They do different jobs. A pension pays for life and rises with inflation, so it can't run out. A 401k can be sold, borrowed against or left to your kids, and a pension can't. Most retirees have both, and many planners treat the pension as the safe part of the mix.