From E-1 to Millionaire: A Blueprint for Financial Success in the Military

When a young American raises their right hand and takes the oath of enlistment, they commit to a life of service, sacrifice, and discipline. Yet far too often, that same commitment does not extend to their personal finances. Many service members leave money on the table, underutilize their benefits, and miss out on the extraordinary wealth-building potential of compounding. The purpose of this article is to show how even an E-1, the lowest enlisted pay grade, can retire as a multi-millionaire. The math works, the discipline is achievable, and the opportunity is right in front of every new enlistee.

An E-1 with less than four months of service makes about $2,100 per month in base pay in 2025. Housing and food allowances often cover the essentials. Healthcare costs are minimal compared to civilian peers. Retirement system contributions under the Blended Retirement System (BRS) include automatic and matching contributions to the Thrift Savings Plan (TSP). This combination means that even at the lowest rank, a service member has a stronger ability to save and invest than most 18- to 20-year-olds in civilian life.

The cornerstone of wealth building for service members is the Thrift Savings Plan. The TSP is effectively the government’s version of a 401(k), with low costs and simple fund choices. Under the BRS, the government automatically contributes 1% of base pay and matches 100% up to 3% and 50% through 5%.  So if you contribute 5%, the government will also contribute 5%. That is a guaranteed 100% return before any investment gains are considered. For this reason, a 5% withholding should be the lowest amount a servicemember considers.  The C, S, and I Funds mirror major equity markets at very low expense ratios, making them cost-effective ways to capture market growth. Young service members generally benefit from using the Roth TSP option, which allows their contributions to grow tax-free over decades. An E-1 who contributes just 5% of base pay—roughly $100 per month—and invests in equities can accumulate more than one million dollars by age 60, assuming modest long-term average returns of 7%.

Of course, contribution is only part of the story. The number one wealth killer in the military is not low pay but lifestyle creep. High-interest car loans, credit card debt, and unnecessary purchases of depreciating assets derail thousands of service members each year. Financial discipline at the beginning of a career is critical. Buying a reliable used car instead of financing a new one, living within the means of housing allowances, and resisting the urge to inflate expenses early all create surplus cash flow that can be invested. The dollars saved in the first enlistment compound into six-figure differences later in life.

Another opportunity is the guaranteed nature of military promotions and time in service pay raises. Moving from E-1 to E-5 in the first four years nearly doubles base pay. The mistake many make is allowing spending to rise in lockstep with earnings. A better path is to redirect each increase in pay into higher TSP contributions. Imagine starting at 5% as an E-1, increasing to 10% as an E-4, and reaching 15% by the time you pin on NCO rank. By the mid-20s you could be saving $500 to $800 per month, which accelerates compounding dramatically.

The mathematics of compounding are incredibly powerful when used early. Investing $300 per month starting at age 20 at a 7% return grows to about $740,000 by age 60. Increase the contribution to $500 per month and the balance exceeds $1.2 million. The earlier you start, the more time your dollars have to multiply. Every year of delay requires much larger contributions to achieve the same outcome. This is why starting in the first enlistment matters so much.

If that same E-1 who started with a 5% Roth Contribution, raised that by 1% for the next 5 years, and held a 10% contribution for the rest of their working life, they would peak at just over $2 million dollars of net worth!  If instead they upped it by 2% per year to a max of 15%, they would peak at over $2.6 million.   By upping their contributions annually to coincide with annual cost of living adjustments, they wouldn’t even say a drop in their paychecks and any time in service or promotion pay increases would be theirs to spend!

For leaders, this is not just a personal finance issue but a professional responsibility. Teaching young service members about the TSP, the dangers of debt, and the long-term benefits of investing builds stronger, more resilient units. A financially stable team member is less distracted and better prepared to focus on the mission.

There are pitfalls to avoid. The most common is not contributing early, which forfeits the government match and years of compounding. Another is cashing out TSP balances upon separation, which erases years of progress. Lifestyle inflation is a constant risk. And finally, ignoring the Roth TSP option often leaves younger members paying unnecessary taxes decades later when withdrawals begin.

The conclusion is straightforward. Becoming a multi-millionaire in the military does not require luck, inheritance, or outside income. It requires starting early, contributing consistently, living below one’s means, and leveraging the benefits already in place. Every E-1 has the potential to retire a millionaire. The tools are available. The only question is whether the discipline and mindset will follow.

Disclaimer: For illustrative purposes only, not intended as individualized financial advice. High Flight Financial, LLC is a fee-only fiduciary firm serving military members, veterans, and their families.