CHARLESTON AIR FORCE BASE, S.C. –
What's one of the first questions that comes to mind when the deployment tasking comes in for you? Is it "where am I going and for how long?" Is it "what job will I perform while I'm there?" I bet one question that comes to mind is "what deployment entitlements will I receive while deployed?" The finance office is a popular place when deployment taskings flow. The old adage "money in the bank" refers to something that's a sure thing.
When Michael Jordan shoots a jump shot or Peyton Manning throws a football, you can bet it's "money in the bank." The same can be said for you and the current expeditionary climate. We train constantly to meet the challenging demands of a deployed environment. It's a near guarantee you will deploy in the future if you haven't already. It's also a guarantee that during your deployment you will receive valuable financial benefits I call "money in the bank."
What would you do if I gave you $10,272 free and clear? Spend it? Invest it? Pay off bills? Better yet, what would you do if I gave you $75,273 or maybe $203,769 or the incredible amount of $551,613? Guess what? I don't have to give you anything; you already earn it if you deploy. Allow me to explain. We'll look at an eight-year married E-5 with a base pay of $2,570 per month. If deployed for 365 days to the U.S. Central Command area of responsibility, that E-5 will make $2,772 (assuming a 9 percent tax rate) in free taxes, $3,000 in family separation allowance, $2,700 in hostile fire pay, and $1,800 in hardship duty pay. That's a grand total of $10, 272 in free money! It's not a loan, and it's certainly money someone would not have if not deployed, which leads to the next discussion.
If this sum was not part of your pay before you deployed, why make it part of your pay when you are deployed? Granted, a portion of the money will help defer costs to cover expenses that normally would not arise if you were home, but the vast majority of it is free money. Unless you plan on using the money to pay off debt, why not invest it? This is when "money in the bank" truly takes on new meaning.
Let's say you take your $10,272 and invest it in a modest mutual fund earning 10 percent (historical average) and never invest another dime. Let's also assume you have a long-term commitment to leave it there 20, 30 or even 40 years. The magic of compounding interest means you will have $75,273 in 20 years to send your child to college. If your goals include an early retirement in 30 years, you'll have $203,769 in your nest egg. If your horizon is 40 years, you'll have $551,613 on a simple $10,272 investment. Remember, I'm not asking you take any money from your current earnings.
If you are not saving any of your current income now for retirement, don't worry. This plan doesn't take away a single penny of your current take-home pay. Let's explore just a step farther and say, once you returned from deployment, you wanted to start investing by adding $50 per month to your mutual fund. At 20 years, you would have $91,286. In 30 years, you would amass $289,464. In 40 years, your nest egg soars to $836,180. Not too bad for an investment of $10,272 of "free money" and a simple $50 per month investment.
Not everyone will have the opportunity to deploy, but the vast majority of us will. As a matter of fact, many of us will have the opportunity to deploy several times throughout our Air Force careers. Financial deployment entitlements are something you earned while deployed and, just like other decisions you make during your career, it's worth a second of your time to think about making those benefits work for you. Some will need these entitlements to cover unexpected costs. Others will use it to pay off debt that has accumulated for years. If you are in a financial situation where the entitlements can be invested, then I encourage you to do so. There are few things in life that are guaranteed. Deployment entitlements, however, are guaranteed and put to use wisely are definitely "money in the bank."