Vietnam Veterans’ Income in Retirement

In this report, the Congressional Budget Office looks at the income of male Vietnam veterans now that most of them have reached retirement age. (Very few Vietnam veterans were women.) More than 6 million of those men—some of whom were drafted and others who volunteered—are still alive. Previous research showed that veterans earned less for a decade after the war ended because of their military service but caught up to nonveterans by the early 1990s. But since then, as veterans have left the labor force, their sources of income have changed, including compensation and benefits from the Department of Veterans Affairs (VA), and little is known about veterans’ current financial status. Lawmakers and others have expressed concern about their well-being.

What Did CBO Find?

In 2018, the average income of Vietnam veterans and nonveterans was roughly comparable: For veterans, who were 63 to 78 years old at that point, it was $63,300, slightly less than the $65,000 average for nonveterans. The veterans’ average includes the disabilitycompensation that some receive from VA. With that disability compensation excluded, veterans’ average income was $59,000, 9 percent less than nonveterans’ average income.

The income gap between veterans and nonveterans was largest for men in their mid-60s; on average, Vietnam veterans who were age 72 or older in 2018 had more income than nonveterans, whether or not VA’s disability compensation was included. For veterans and nonveterans age 71—the modal, or most common, age of veterans—there was little or no gap in average income (see Figure).

Veterans age 72 or older had more income than younger veterans because those older veterans probably earned more during their working years. Older veterans generally had spent more years in the military, had higher levels of education, and probably differed in other ways that are harder to measure—such as skills learned in the military or sense of purpose. Those characteristics could affect their income in retirement.

In general (and at age 71), veterans received more income from Social Security and retirement plans than nonveterans, and nonveterans had higher earnings and more income from investments. The differences probably arose from the types of jobs veterans and nonveterans held.

With VA’s disability compensation excluded, income was distributed more equally among Vietnam veterans than among nonveterans. In comparison with nonveterans, a smaller share of veterans’ income was in either the lowest or highest quintile (fifth) of income, and a larger share was in the middle three quintiles, for all men ages 63 to 78. For veterans who received VA’s disability payments in addition to their other income, the average annual payment was $18,100. Those disability payments made their income higher than other veterans’ income, on average.

Whose Income Did CBO Examine?

CBO looked at male veterans who served on active duty during the Vietnam War and were between the ages of 63 and 78 in 2018, about 5.4 million veterans. That group included most of the veterans who served during the peak years of the war. Only those members of the National Guard and reserves who were activated during the war—roughly 25,000 men—were considered Vietnam veterans. CBO excluded women from its analysis because they were a very small share of Vietnam veterans in 2018 (4 percent). Veterans who did not serve during the Vietnam War were excluded from the samples that CBO analyzed.

Of the nearly 9 million people who served, 3.4 million were deployed to Vietnam or to other countries in Southeast Asia where the war was waged. (The rest were located in the United States or on overseas bases outside the war zone.) Less than one-quarter of those who served were drafted, but a disproportionate share of draftees served in Southeast Asia. In many aspects, the makeup of the military reflected the young male population in the United States at that time: Most service members were White and had a high school education.

How Did CBO Analyze Income?

CBO used data from the Census Bureau’s 2018 American Community Survey (ACS) to estimate income from different sources for Vietnam veterans and nonveterans ages 63 to 78. The ACS is one of the biggest surveys that the Census Bureau administers, reaching roughly 1 in 40 U.S. households each year. CBO relied on the ACS because it samples a large number of veterans, and its data on income information are about as accurate as data from other national surveys that also report veteran status.

CBO examined the selected group of veterans and nonveterans at two points in time: 2008 and 2018. In 2008, most were still working but near the end of their careers. CBO calculated earnings in that year because earnings are closely linked to retirement income. At the second point, 2018, most of the group were no longer working. CBO did not quantify the potential effects of different factors such as education and work experience that strongly influence the amount and sources of income. At the second point in time, 2018, CBO focused on four sources of income common to veterans and nonveterans—earnings, Social Security, investments, and retirement plans. For veterans, the agency also calculated income with and without disability compensation paid by VA. In 2018, about 1.3 million Vietnam veterans ages 63 to 78 received that compensation because of medical conditions or injuries incurred during their military service. CBO’s estimates of VA’s disability payments relied on data from both the ACS and VA.

What Are the Limitations of the Report?

CBO’s study has limitations that are common to any analysis based on survey data. Some income is reported incorrectly, and CBO used statistical methods to improve the accuracy of results. In addition, the report is an incomplete picture of veterans’ overall finances because CBO did not examine all types of income. But in describing veterans’ regular sources of income in retirement, it contributes to a greater understanding of their financial security and can inform Congressional decisions about support for veterans.