Will the Military Get a Pay Raise in 2024?
The United States Department of Defense (DoD) is responsible for distributing military pay raises to millions of active-duty and civilian personnel. In recent years, the military has continued to face challenges, including understaffing, equipment shortages, and the ongoing war efforts in various regions. For these reasons, the concern about a pay raise for service members has become a high-priority topic.
<Will the Military Receive a Pay Raise in 2024??>
According to the Milley’s Proposal, the defense budget for 2024 is expected to increase substantially, with a significant percentage allocated for military pay adjustments. General Mark A. Milley, Chairman of the Joint Chiefs of Staff, has proposed that the military pay raise increase by 4% in 2024. This proposed increase takes into account the rising inflation rate, cost of living, and the need for military personnel to maintain comparable standards of living.
Other key factors that will drive the decision for a potential pay raise include:
• Inflation Rate: As the economic climate continues to fluctuate, the rising inflation rate is expected to play a significant role in determining future military pay adjustments.
• Cost-of-Living Adjustments (COLAs): TheCOLA is designed to reduce the impact of inflation by providing a pay increase relative to the rise in Consumer Price Index (CPI). A COLA between 2.5 and 3.5 % is expected for 2024.
• National Security: An increased budget allocation for National Security will result in more funds being poured into military pay, housing, and equipment.
Given these factors, it becomes clear that a pay raise for the military in 2024 is extremely likely. Whether it will be a meager 2.1% or a more sizeable 4% increment, the reality is that the military’s pay packages will need to be reshaped to address the shifting economic landscape.
Breakdown of Potential Pay Rise
To provide a context for the proposed pay adjustments, here’s a quick breakdown of what a percentage increase might mean for certain military personnel:
| Pay Grade | Current Annual Earnings | 4% Potential Pay Rise |
|---|---|---|
| E-9 (O-10 Commandant) | $143,400 | $5,736 (increase) & $149,136 PAO |
| E-5 (O-6 Captain) | $41,300 | $1,652 (increase) & $42,952 W2 |
| E-1 (E-7 Staff Sergeant) | $14,400 | $571 (increase) & $15,971 W-2 |
Keep in mind that these numbers are highly dependent on various factors including individual performance, time spent in service, and grade promotions.
What Changes Can We Expect?
A pay raise in 2024 is expected to bring about changes in two main areas:
Enhanced Benefits Package: Expected enhancements include:
- Increased COLA Cap: A potential increase above the current 3% COLA cap to better track inflation.
- New Housing Allowance Reimbursement (see below).
- Increased Education and Training Bonuses.
- New Parental-Leave Policy.
To offset the costs of homebuying, theDepartment of Defense has proposed extending the HomeownershipAllowance. This update will provide $850 million for the expanded program, with anaim to help military personnel deal with the increased costs and responsibilities associated with homeownership.
Other Factors Playing a Role
In anticipation of the pay raise vote, other key factors require consideration:
• Taxes: As new pay rates become effective in 2024, expect to see an increase in federal income taxes for single filers.
• Health Insurance: Rising healthcare costs and the shifting dynamics of healthcare reform means that military personnel may start to see premium increases
• Retiree Benefits: The recent Forever GI Bill signed into law in 2022** may lead to increased costs for retiree benefits, affecting the wallets of those in retirement.
