2022 AFBA Financial Planning Guide

Chapter 1. Military Pay & Allowances Military Income & Benefits In General ...................................................................................... 1–1 Armed Forces Comparative Ranks. ......................................................................................... 1–2 Active Duty Basic Pay. ............................................................................................................ 1–3 Other Types of Pay & Allowances............................................................................................ 1–4 Access to Your Pay Account. .................................................................................................. 1–5 Thrift Savings Plan (TSP)........................................................................................................ 1–6 Military Information & Pay Worksheet..................................................................................... 1–7

publication. If you think you are entitled to an item we cover, check with your Finance or Personnel Office to determine specific requirements. 1–2. ARMED FORCES COMPARATIVE RANKS. While the military grade structure is the same in all departments, the titles that are associated with each rank can vary. For example, depending upon the branch of service, an E–7 may have the title Sergeant First Class, Master Sergeant, Gunnery Sergeant, or Chief Petty Officer. The table on the next page provides a summary of the grade structure and titles used in the United States Armed Forces. 1–3. ACTIVE DUTY BASIC PAY. A military member’s basic monthly pay is similar to a civilian’s salary and, like the civilian, it is usually the member’s primary source of income. Each year the President submits a pay raise request to

1–1. MILITARY INCOME & BENEFITS IN GENERAL. Military compensation is a complex system of over 40 pay and allowance items. Since military compensation is usually the service member’s primary source of income and because the entitlements are complex and subject to change, it is important that both the member (and his or her family) understand how these entitlements fit into the family’s total financial plan. As we review the most common items of pay and allow­ ances, keep in mind that the amounts and benefits we discuss are subject to change. The information provided is the most current available at the time of publication. It is also important to remember that entitlements to most military pay and allowances are based on satisfying a variety of requirements that are too numerous to outline in this

CHAPTER 1 | MILITARY PAY & ALLOWANCES

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