Retirement Decision
Essay title: Retirement Decision
“The Retirement Decision”
Decision Summary: I am at the 17.5 year point in my career and need to decide if I want to stay in the Navy past 20 years or retire and pursue other interests. My naval career to date has been successful and I consider myself competitive for promotion to O-6. However, I am not hard over on being a Navy Captain. In fact, considering the family ramifications of becoming a Captain in my career specialty, I may not want to be one at all. However, staying in the Navy for Captain may be economically advantageous. The decision to retire or not must be made by myself and my family within the next few months before we start negotiating with the detailer for the next set of orders.
Executive Summary
Four alternatives were analyzed for the decision problem. These are:
Retire at 20 years of service and seek employment in the local Dahlgren area
Retire at 20 years of service and seek out the very best career alternative
Stay in the Navy to make O-6 while trying to “homestead” in Wash DC
Stay in the Navy to make O-6 and be detailed in the best interests of the Navy
Three attributes were developed to base the decision problem on. These are:
Net present value of expected salaries and income stream over my lifetime
Number of moves my family would be expected to make
Satisfaction level of the various military and civilian job opportunities
Utilities and relative weights were developed for each of these attributes. A decision tree was modeled for the expected scenarios. Based on the expected utilities and weightings the preferred choice is to Retire at 20 years of service and seek employment in the local Dahlgren area. Sensitivity analysis was developed for the weighting of each attribute and “Retiring at 20 years” was always preferred to “Staying in the Navy to make O-6”.
An Excel spreadsheet using PrecisionTools is included justify the decision.
Objectives Hierarchy
The overall fundamental objective is to maximize happiness with my career choice. The Navy has been very good to me but there has been a cost in upheaval when moving my family and from family separation due to deployment. I am currently in the very best job of my Navy career and all future job opportunities do not seem as attractive. Factors that seem important to me in order to maximize my career happiness are
Stable family life. This would be done by minimizing moves to new geographic locations and reducing family separation as a result of deployments.
Satisfaction with my job. This would be achieved if I worked for a good boss and did interesting work. Alternatively, I would also enjoy being my own boss and running my own business.
Adequate compensation. I would like to maximize my salary for whatever my career specialty would be. If maximization required excessive work hours, I would at least want to optimize the salary level to sustain my current life style. Fortunately, with a military retirement and spousal income this is easily achieved.
A graphical representation of this hierarchy follows:
I have elected to use three attributes in the decision problem. These are:
Minimize moves. Moves have always been stressful for my family. Now that my children are approaching their High School years this has even more significance. The expected number of moves for alternative will be compared. Family separations are not as much of an issue since I have “paid my dues” with four deployments to date. Future Navy jobs are not likely to include deployments.
Income level. The net present value of all future income streams over my lifetime (through age 80) will be compared for each of the alternative. The income stream will include my job salary, military retirement and spousal income.
Job Satisfaction. A constructed measure will be developed using each of the base objectives (boss type and nature of work) within the scale.
The Alternatives
Four alternatives have been prepared. These are
Retire at 20 years of service and seek employment in the local Dahlgren area. This alternative would allow for