Do you include your BAH when you calculate the 15% you're supposed to set aside for retirement?
I would think you should since on getting out we'll still need to pay for housing, however here in Hawaii BAH is a pretty large amount so it kind of throws things off. I'd like to increase some other areas of our budget but I don't want to short-change our retirement savings.
Kevin N
Favorite Answer
Retirement calculations are a bit "strange" for military folks. When you're trying to follow a basic formula like "save 15% of your income," you have to remember that that figure is based on a "typical" income. I actually found it "better" (for me) to calculate not only the BAH, but what BAH would approximately equate to - which means considering BAH as after-tax dollars. Essentially, I added ~28% to the BAH figure, and, after adding it to my base salary, special pays, and BAS (+28%), considered that result as my target salary. From that target salary I calculated my retirement percentage.
It's tough to be able to put that much aside, but if you can do it, you'll be thankful you did!