I spent 33 years in Navy uniform, starting as an enlisted Electronics Technician at 17 and finishing as a Nurse Corps Lieutenant Commander. The question I hear most from people transitioning out, and from the nurses and doctors I've worked beside, is simple: "How much do I actually need to retire?"
The honest answer is that there isn't one number that works for everybody. But there is a straightforward way to find your number. Veterans often need a smaller pile of savings than the headlines suggest, because many of us already have income that keeps coming in after we stop working. The mistake is starting with the savings number. Start with income instead.
Important: Any numbers in this article are hypothetical examples and are not guaranteed. Omega Property Investments is not a law firm, attorney, or financial advisor and does not provide legal, tax, or financial advice. Please consult your own financial advisor (and your attorney or CPA) before investing.
Step 1: Decide what retirement costs you per year
Begin with what you spend today, not a rule of thumb. Pull twelve months of bank and card statements and total them. Then adjust:
- Subtract what goes away: commuting, work clothes, retirement contributions, possibly a mortgage that will be paid off.
- Add what shows up: travel, hobbies, helping grandkids and, above all, health care. If you're not covered by TRICARE or VA health care, budget for premiums and out-of-pocket costs before Medicare at 65.
Many planners use 70–85% of pre-retirement income as a starting estimate. That's a reasonable check, but your own spending is a better guide. Write down one annual figure in today's dollars. In the examples below, we'll use $90,000 a year.
Step 2: Count the income you already have coming
This is where veterans often come out ahead. List every income source that will pay you in retirement, and when it starts:
- Military retired pay. If you completed 20 years (or were medically retired), you have a monthly pension, adjusted annually for inflation. It's generally taxable at the federal level; state treatment varies, and many states exempt it.
- VA disability compensation. If you have a service-connected rating, this monthly payment is generally not taxable, which makes each dollar worth more than a dollar of taxable income. Depending on your rating and retired-pay situation, concurrent receipt (CRDP) or CRSC rules affect how it combines with retired pay. Check your specific case with DFAS or a VSO.
- Social Security. You can claim as early as 62, but your benefit is permanently reduced compared with waiting until full retirement age (67 for anyone born in 1960 or later). It grows further for each year you wait up to age 70. Get your actual estimate at ssa.gov.
- A civilian pension. VA, federal (FERS), state or hospital systems.
- Part-time or consulting income, if you plan to keep a hand in.
Here's a hypothetical example. Suppose a hypothetical veteran at age 62 expects $38,000 a year in retired pay, $18,000 in VA compensation and $24,000 from Social Security. That's $80,000 of income before touching a dime of savings.
Step 3: Find the gap
Subtract Step 2 from Step 1:
$90,000 spending − $80,000 guaranteed income = $10,000 a year gap.
That gap is the only part your savings, such as your TSP, IRAs, brokerage account or real estate, actually has to cover. For many veterans the gap is small. For someone who served four years and then went civilian, it may be most of the budget. Both are fine. You just need to know which one you are.
Step 4: Turn the gap into a savings target
A common rule of thumb comes from research by financial planner William Bengen in the 1990s, later popularized as the "4% rule." It says that withdrawing about 4% of your starting balance in year one, then adjusting for inflation, historically lasted about 30 years in many U.S. market periods. Flip it around and you get a quick estimate:
Savings target ≈ annual gap ÷ 0.04 (or gap × 25)
In our example, $10,000 ÷ 0.04 = $250,000. Someone with a $40,000 gap would need about $1,000,000.
Treat this as a starting point, not a promise. The 4% rule assumes a particular mix of stocks and bonds and a roughly 30-year horizon. If you retire at 45 after a full career, plan for a longer horizon and a lower withdrawal rate. And no one knows what future markets will do.
Step 5: Don't forget inflation and timing
Two details trip people up:
- Inflation compounds. At 3% a year, something that costs $90,000 today costs about $121,000 in ten years. Military retired pay and Social Security have cost-of-living adjustments, but your savings withdrawals and many civilian pensions don't adjust automatically.
- Income starts at different ages. If you retire from the military at 42 but Social Security doesn't start until 67, your savings may have to carry a bigger load for those 25 years. Then the load drops. A good plan models each phase separately.
That's exactly why we built a free calculator. Run your numbers in the Omega retirement calculator → It asks for your ages, savings, monthly contributions, expected income and other retirement income such as pensions and VA compensation. It then shows the estimated nest egg you'd need and whether your current path closes the gap under three hypothetical growth assumptions. You can print or save the results.
Where real estate fits (and where it doesn't)
Once you know your gap, you can think about which assets fill it. Real estate appeals to many veterans because rental income can feel like another "paycheck," similar to the pension they already know. Investors typically consider:
- Direct ownership (a rental house or small multifamily): you control it, but you're also the landlord, or you pay one.
- Real estate investment trusts (REITs): liquid and simple, but they trade like stocks.
- Private real estate funds and syndications: passive and professionally managed, but illiquid (your money is typically committed for years). Many are offered only to accredited investors.
Every option carries risk: vacancies, repairs, interest-rate changes, local-market downturns and, in private deals, sponsor risk and the possibility of losing your investment. Real estate shouldn't be the whole plan. Your guaranteed income from the military, the VA and Social Security already acts like the "bond" side of your portfolio, which is one reason some veterans are comfortable owning growth or income assets on top of it. Whether that fits you is a conversation for you and a licensed financial professional.
A five-minute checklist
- Total last year's spending, then adjust for retirement.
- List each income source, its amount and its start age.
- Calculate the annual gap for each phase of retirement.
- Multiply the gap by 25 for a rough target, then stress-test it with a lower withdrawal rate.
- Check your answer in the retirement calculator, or set a specific dollar target in the investment goal calculator.
- Subscribe to the Omega Investor Brief for plain-language lessons before you invest.
The bottom line
Service gave many of us something civilians pay a lot to build: income that lasts for life. Count it first. When you do, the "how much do I need" number often gets smaller and a lot less scary. If you'd like to talk through how real estate might fit your plan, book a call with me. No pitch, just a conversation between people who've worn the uniform.
Charles L. White, LCDR, USN (Ret.), Founder, Omega Property Investments
This article is for educational purposes only. The numbers are not guaranteed. Omega Property Investments is not a law firm, attorney, or financial advisor and does not provide legal, tax, or financial advice; please consult your own financial advisor (and your attorney or CPA) before investing. Examples are hypothetical and don't represent any actual investment or result. Consult a licensed financial professional, CPA or attorney about your situation. Investing in real estate involves risk, including loss of principal. Any offering by Omega Property Fund LLC is made only to accredited investors under Rule 506(c) and only through its offering documents. Full disclosures.