The Incredible Financial Benefits of Dual Military Couples

Today I’ve got a guest post for you on a topic you don’t see discussed much online – dual military couples. Matthew, a fellow blogger and one half of a dual-mil USMC enlisted couple, is going to talk about the financial benefits of their situation. I gotta say – I knew it could be beneficial, but when you see these numbers…WOW! They are really taking advantage of their situation and using it to propel their way to financial freedom!

Take it away, Matthew!

Hi! I’m Matthew, the owner and author of FourWallsofFIRE.com. Four Walls is a blog with a focus on financial independence and early retirement, but it also covers family, mind (education or mindset), and time along with how these various subjects tie into the FIRE Movement.

Before I get started explaining how AWESOME the financial benefits are of being a dual active military couple, I want you to know that my wife, Gina, and I, are both active duty Sergeants in the Marine Corps. More importantly, we are both wholeheartedly dedicated to reaching FIRE (financial independence & retire early).

For simplicity’s sake, I won’t include any information concerning deployment pay, bonuses, per diem while TDY, or other financial benefits that may only be recognized sporadically throughout a military career.

Additionally, since my wife and I are enlisted Marines, all the numbers throughout the article will be intended for enlisted active duty couples. At the end, I’ll offer a short list of numbers (dollar amounts) for officers that cover each situation.

Alright, back to the awesomeness of being dual active military. 

As if it wasn’t enough to have two war-fighting machines under one roof, there are some phenomenal financial benefits to being a dual military couple. Let’s just lay them out there.

1. Basic Allowance for Housing (BAH)
2. Basic Allowance for Subsistence (BAS)
3. VA Loan
4. Tuition Assistance & GI Bill
5. Pension

Just the basic benefits of being active duty, right? Wrong. Along with several other benefits, dual military couples receive TWO of every benefit on that list. Ready to dive in?

Basic Allowance for Housing For Dual Military Couples

This is the bread and butter of dual military couples right here. Your Basic Allowance for Housing rate depends on your location and rank. The more expensive of an area you live in and higher ranking you are, the more BAH you’ll receive. Additionally, BAH is untaxed, which is an enormous advantage.

When both spouses are active duty military and have no children, both of the spouses will receive BAH without dependents. If the couple has a child, the higher ranking member will claim the child as a dependent and their BAH rate will increase accordingly. It’s worth noting that your BAH rate will not increase with multiple children.

Here’s an Example

My wife and I recently transitioned away from Camp Pendleton, CA, so we’ll just go with that area and our ranks when we departed. We were both E-5s living in Carlsbad, CA. An E-5 at that location without dependents receives $2,172/month. An E-5 with dependents makes $2,592/month. We didn’t have our son at that time, so with no dependents we were earning $4,344/month in untaxed BAH!

While living in Carlsbad, we rented a two bedroom apartment for $1,780/month. Right away we were saving just under $31,000 each year.

That’s Not All

At our new duty station, we are AirBNB hosts. We charge around $35 per night and earn up to $950 each month. In Carlsbad, we had an extra bedroom in our apartment that we used FOR STORAGE (what a huge mistake). This bedroom could have been rented on AirBNB for a minimum of $65 per night. With an average of 20 occupancy nights each month, we would have been earning $1,300, or an additional $15,600 annually.

Two Quick Tips

1. Dual military couples should request the MOST expensive duty station possible. This allows for the highest BAH rates. In turn, the couple can save huge sums of money by maintaining affordable housing.
2. Get creative, especially if you don’t have children. Have roommates, rent a room on AirBNB, or even rent a basement or bedroom in a house. House hacking with 2 BAH payments is like throwing rocket fuel on your FIRE!

Basic Allowance for Subsistence

With BAS being an allowance, like BAH, it’s untaxed. The 2019 enlisted rate for BAS is $369. Therefore, a dual mil enlisted couple receives $738 per month in BAS. 

Gina and I spend about $450 every month on groceries for the two of us and our toddler son. By subtracting $450 from $738 and multiplying the difference by 12, you can see that we save just under $3,500 per year on food.

VA Loan

I don’t claim to be an expert on the VA loan, but for military couples looking to invest in real estate during their careers, having two VA loans available could be beneficial.

By using one spouse’s VA loan to purchase a house and live there, the couple can move out one year later, use the second spouse’s loan and utilize their first house as a rental. 

On top of that, you are permitted to purchase a property with up to four units.  Therefore, a military couple could own a total of eight units in a short period of time by utilizing both VA loans.

Tuition Assistance and GI Bill

Gina and I have been in the Marine Corps for 6 and 7 years respectively. Upon enlisting, Gina already had her Bachelor’s degree while I had just a handful of classes towards my Associate’s. Since then, Gina has completed her Master’s and I’ve completed both my Associate’s and Bachelor’s.

By utilizing Tuition Assistance, we completed these degrees with next to no money out of pocket, and guess what? Our GI Bills have been left untouched. We will now be able to transfer our GI Bills to two children in order to pay for their college education. 

What does that do for us? By saving the GI Bill for our children, we will be able to redirect thousands of dollars to our investments.

Another unique option for any military member, but even more so for a dual military couple without children is to save the GI Bill and utilize it during your early retirement years. Here’s why: the Post-9/11 GI Bill pays BAH depending on your location, and you only need to take one in-person course to receive the full amount of BAH.

What does that mean?

Let’s say a couple reaches FIRE and decides to get out of the military at the age of 30. Going from having a steady paycheck from the government for several years to living solely off of investments is a little scary, right? Here’s what they could do:

One of the spouses could start going to college and take one in-person class and the rest of the classes online. They could go to school in a high cost of living area, like Washington DC, where the BAH for the Post-9/11 GI Bill pays just under $2,400 per month.

Remember, this couple has already reached FIRE, but just barely. With that being said, the student would commute to Washington DC for one class while their home would be far enough away to maintain relatively low housing costs.

This “hack” allows the couple to have several years of cushion to ease their way into early retirement as the other spouse would enroll in college right as the first one receives his or her degree.

This strategy can be picked up and moved to whatever part of the country you live in, as long as there’s a relatively high cost of living city within reasonable driving distance.

(Mil$ Note: You don’t actually have to do this in a high cost of living area. You could do this hack anywhere. Doing it in a HCOL area simply gives you a bit more BAH to play around with)

Pension

I nearly didn’t include the pension in this post because it’s so obvious! An E-7 who retires after 20 years of active duty service is paid an average of $24,000 per year ($19,200 if opted into the Blended Retirement System). Double that for the dual military couple for $48,000 annually. Can we agree on a name for that? How does Auto-FI sound to you?

Hold Your Horses, Let’s Not Cause a “Marriage Stand Down”

Who’s ready to get married to their fellow service members? Ready? Set. No! Look, I’m sure you went back and added up all those numbers in bold and realized that before even discussing the couple’s base pay and pension they were able to save nearly $50,000 per year. 

On top of that, you recognized their ability to invest in real estate relatively easily. Oh, and they used their GI Bills to provide a steady flow of income after they stopped working, even if they didn’t stick around for 20 years. Then, the couples who were “lifers” were able to hit Auto-Fi with their eyes closed.

So hey, Junior Marine, Airman, Sailor, or Soldier, or Coast Guardsman: don’t go out and search for a brother or sister in arms to marry. However, if you do wind up marrying a fellow war fighter, keep these five benefits in mind and secure your freedom at the same time as you’re defending ours.

As Promised – A Few Numbers for The Officers

• O-3 BAH in Carlsbad, CA: $2,874 without dependents, $3,252 with dependents. Total dual military BAH potential of $6,126 monthly or $73,512 annually.
• O-3 BAS: $254 monthly per member. $508 combined or $6,096 annually.
• O-5 Average Pension: $3,848 per month, $46,184 per year. Dual military couple retired at O-5 receives $92,368 annually with  legacy retirement plan or $73,894 using the Blended Retirement System.

How to Find Us

You can find me on Facebook or Twitter @FourWallsofFIRE, or by contacting me via my website, FourWallsofFIRE.com. 

If you’re interested in hearing from my rock star wife, who is also a personal trainer, she can be found on Facebook @BeSperryFit or on her website BeSperryFit.com

Thanks for reading!