Analysis of military retirees' postservice earnings and employment indicates that retirees fare better than was previously thought. The earnings differential between retirees and comparably aged and educated nonretired veterans is almost entirely due to retirees' working less--a decision that appears to be largely voluntary. In the transition period immediately following retirement, retirees are at a disadvantage in civilian employment, but eventually those who work full-time earn more, on average, than their nonretired counterparts. Retirees serving shorter careers and those in civilian occupations similar to their military occupations fare best in postservice earnings. These findings suggest: (1) the present system should be modified to provide immediate financial help to ease the transition to civilian life, (2) beyond this transition, the present retirement annuity may be larger than is necessary, and (3) more incentives should be provided to serve beyond 20 years.
This report is part of the RAND Corporation Report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.
Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/research-integrity.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.