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Presentation at the 2021 Annual Conference of the
Western Economic Association International
June 30, 2021
Heidi Golding and Elizabeth Bass
National Security Division
Vietnam Veterans’ Income
in Retirement
For information about the conference, see https://tinyurl.com/9zehbej5.
1
Vietnam veterans refers to male veterans who served on active duty in the U.S. armed forces during the Vietnam War, regardless of location or type of service. Nonveterans are men
who did not serve on active duty at that time. This analysis includes men ages 63 to 78.
Veterans from the Vietnam War (August 1964–January 1973) constitute the last
cohort subject to the draft and represent roughly one-third of veterans. By 2018,
most had retired from the workforce. As people leave the workforce, their sources
of income change.
Because little is known about the financial security of Vietnam veterans, CBO
compared the income of male Vietnam veterans with the income of male
nonveterans of the same ages.
▪ On average, in 2018, Vietnam veterans and nonveterans had roughly
comparable total income, $63,300 and $65,000, respectively. Similar results
were found for men age 71, the most common age for veterans.
▪ Disability compensation from the Department of Veterans Affairs (VA) provided
a substantial portion of many veterans’ income. Excluding those payments,
their income was $59,000, 9 percent lower than nonveterans’.
▪ In general, Vietnam veterans received more money from Social Security and
retirement plans than nonveterans did.
At a Glance
2
Background
3
The Vietnam War and the Draft
Number of New Enlisted Personnel
Nearly 9 million people
served in the U.S. military
during the Vietnam War;
more than 2 million of
them had entered the
military before 1965.
Draftees accounted for
fewer than one-quarter of
those who served. Local
boards determined who
was drafted until 1969;
that system was largely
replaced by a draft lottery.
Deferments were
common, particularly for
those enrolled in college.
Those deferments were
mostly eliminated in the
early 1970s.
4
Some men volunteered for military service in part because the pay and benefits
were reasonable compared with civilian options. For enlisted careerists (those
who completed four years of service), pay was typically about 85 percent of the
median pay of comparable civilians. At first, junior enlisted personnel were paid
much less than most could have earned elsewhere, but pay raises in the early
1970s brought them into rough parity with civilians. The military also offered
occupational training, educational benefits, and other benefits that were not
typically found in the private sector.
Enlisted personnel were at neither the top nor the bottom of their generation in
terms of ability, as measured by education levels and test scores. For instance,
about 70 percent of new enlisted personnel held at least a high school diploma;
the share for all men ages 20 to 29 was roughly 75 percent. DoD did not accept
men with very low test scores or men who could not meet its physical fitness
standards.
Military Personnel During the War
5
Characteristics of Vietnam Veterans
6
Age Distribution of Vietnam Veterans and Nonveterans, 2018
Percent
The bulk of Vietnam veterans
were in their late 60s or early
70s in 2018. The reason is
that most men entered military
service between ages 18 and
23, and a disproportionate
number did so when forces
were largest, from 1966 to
1969.
7
Traits of Vietnam Veterans and Nonveterans, 2018
Characteristic Veterans Nonveterans
Educational Attainment
Did not complete high school 5 15
High school 30 25
Some college 38 24
Bachelor’s degree or higher 27 36
U.S. Citizen 100 95
Married 68 69
Racial or Ethnic Group
White 82 74
Black 10 9
Hispanic 5 10
Other 3 7
Geographic Region
Northeast 15 19
Midwest 22 21
South 40 37
West 23 23
Functionally Disabled 32 24
Employed 33 41
Memorandum:
Total Population 5,423,900 14,944,600
Number in Sample 68,400 178,200
Percent
8
Financial Well-Being
9
CBO’s primary source of data was the American Community Survey, which is one
of the largest surveys conducted by the Census Bureau. Those data were
supplemented by administrative data from VA about recipients of and payments
for disability compensation.
CBO compared Vietnam veterans’ and nonveterans’ sources of income: earnings
(including self-employment income), Social Security (including retirement,
disability, and survivor benefits), investments, retirement plans (including defined
benefit and defined contribution plans and other sources), and disability
compensation from VA. Some residual categories, such as public assistance and
VA pensions, were excluded.
CBO’s Approach
10
CBO restricted the sample of Vietnam veterans to men ages 63 to 78 who had
served on active duty during the war, regardless of location or type of service.
Some Vietnam veterans who were older and probably spent a large part of their
military careers during other eras, and some younger ones who served in the all-
volunteer force (which was composed solely of volunteers rather than a mix of
volunteers and draftees), were excluded. In total, about 15 percent of Vietnam
veterans were excluded from the analysis.
CBO imputed Social Security income and retirement plan income using various
statistical methods. CBO found that about 20 percent of recipients of Social
Security underreport such income and that roughly 40 percent of people who
receive income from a retirement plan do not report it.
CBO’s Approach (Continued)
11
Total average income consists of income from earnings, Social Security, investments, retirement plans, and disability compensation from VA. CBO did not control for demographic or
other factors influencing income sources. The most common age for Vietnam veterans in 2018 was 71. The shaded area denotes the largest three-year cluster of Vietnam veterans
(one-third of the total).
Annual Average Income of Vietnam Veterans
and Nonveterans, 2018
Dollars
On average, Vietnam
veterans age 71 or younger
had less income than
nonveterans; those age 72
or older had more income
than nonveterans.
12
CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of
the total).
Annual Median Income of Vietnam Veterans
and Nonveterans, 2018
Median income (excluding
disability compensation
from VA) for Vietnam
veterans age 71 or younger
is almost the same as for
nonveterans; older veterans
consistently had somewhat
more income than
nonveterans did.
Dollars
13
CBO did not adjust the data to account for characteristics other than age and veteran status. Income excludes disability compensation from VA.
Share of Vietnam Veterans and Nonveterans
Ages 63 to 78 in Each Income Group, 2018
The percentages of Vietnam
veterans in the highest and
lowest income groups were
smaller, and those in the
middle income groups were
larger, than those of
nonveterans.
14
CBO did not adjust the data to account for characteristics other than age and veteran status.
Average Income for Vietnam Veterans and Nonveterans
at Age 71, by Source, 2018
Sources of Income Veterans Nonveterans
Earnings 12,400 18,800
Social Security 20,800 19,700
Investments 6,400 9,200
Retirement Plans 21,000 18,000
Subtotal 60,600 65,700
Disability Compensation From VA 4,900 n.a.
Total 65,500 65,700
2018 Dollars
15
CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of
the total).
Earnings of Vietnam Veterans and Nonveterans, 2018
Earnings remained a large
component of income for
men of retirement age.
Among all men and,
separately, among all men
who worked, Vietnam
veterans earned less, on
average, than nonveterans
did.
16
CBO did not adjust the data to account for characteristics other than age and veteran status.
The Share of Vietnam Veterans and Nonveterans
Who Worked, 2018
The share of Vietnam
veterans who worked was
smaller than that of
nonveterans, although the
difference dissipated for
the older men. Most men
over age 65 no longer
worked.
17
CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of
the total).
Social Security Payments to Vietnam Veterans
and Nonveterans, 2018
Vietnam veterans
claimed Social
Security earlier and
received about the
same amount as
nonveterans.
18
CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of
the total).
Investment Income of Vietnam Veterans
and Nonveterans, 2018
Most men did not
receive income
from investments.
Among those who
did, Vietnam
veterans received
much less than
nonveterans.
19
CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of
the total).
Income From Retirement Plans for Vietnam Veterans
and Nonveterans, 2018
Among all men, on
average, Vietnam
veterans earned
more retirement
income than
nonveterans did.
Among men who
received retirement
income, that
difference was
reversed for
younger men; for
older men, the gap
was smaller.
20
CBO did not adjust the data to account for characteristics other than age and veteran status.
The Share of Vietnam Veterans and Nonveterans
Who Received Income From Retirement Plans, 2018
Vietnam veterans
were much more
likely to receive
income from
retirement plans.
For younger men,
the difference
amounted to more
than 20 percentage
points.
21
Sector of Employment for Vietnam Veterans
and Nonveterans, 2008
One reason that
Vietnam veterans
had more income
from retirement
plans was probably
that they had held
more jobs with
retirement benefits.
In 2008, they were
more likely to hold
jobs in the federal
government. They
also appeared
likelier to hold jobs
with a union
presence.
Federal
government
2% State and
local
government
13%
Private
employer
63%
Self-
employed
22%
Nonveterans
Federal
government
7%
State and
local
government
13%
Private
employer
64%
Self-
employed
16%
Veterans
22
VA provides monthly tax-free payments to veterans who, in its determination,
have disabilities, medical conditions, or injuries that were incurred or aggravated
during active-duty military service.
▪ VA assigns a rating, which ranges from zero to 100 percent in increments of 10,
to each veteran with service-connected disabilities.
▪ In 2018, base payments ranged from roughly $1,500 to $36,000 for the year,
depending on the rating; some veterans also received supplemental payments.
▪ About 1.3 million Vietnam veterans (nearly 25 percent) received disability
payments from VA in 2018; the average payment per recipient was about
$18,100.
▪ Veterans who received payments were more likely to be in the lower half of the
income distribution.
Disability Compensation From VA
23
CBO did not adjust the data to account for characteristics other than age. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of the total).
Disability Compensation From VA Received by
Vietnam Veterans, 2018
Most Vietnam veterans
did not receive disability
compensation from VA.
Those who did received
an average of $18,100.
On average, those who
received disability
payments had less
income from other
sources than other
veterans did. Including
VA payments, they
received slightly more
total income than other
veterans did.
24
Congressional Budget Office, Vietnam Veterans’ Income in Retirement
(October 2020), www.cbo.gov/publication/56679.
Congressional Budget Office, Options for Reducing the Deficit: 2021 to 2030
(December 2020), www.cbo.gov/publication/56783.
Congressional Budget Office, Veterans’ Disability Compensation: Trends and
Policy Options (August 2014), www.cbo.gov/publication/45615.
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Vietnam Veterans’ Income in Retirement

  • 1. Presentation at the 2021 Annual Conference of the Western Economic Association International June 30, 2021 Heidi Golding and Elizabeth Bass National Security Division Vietnam Veterans’ Income in Retirement For information about the conference, see https://tinyurl.com/9zehbej5.
  • 2. 1 Vietnam veterans refers to male veterans who served on active duty in the U.S. armed forces during the Vietnam War, regardless of location or type of service. Nonveterans are men who did not serve on active duty at that time. This analysis includes men ages 63 to 78. Veterans from the Vietnam War (August 1964–January 1973) constitute the last cohort subject to the draft and represent roughly one-third of veterans. By 2018, most had retired from the workforce. As people leave the workforce, their sources of income change. Because little is known about the financial security of Vietnam veterans, CBO compared the income of male Vietnam veterans with the income of male nonveterans of the same ages. ▪ On average, in 2018, Vietnam veterans and nonveterans had roughly comparable total income, $63,300 and $65,000, respectively. Similar results were found for men age 71, the most common age for veterans. ▪ Disability compensation from the Department of Veterans Affairs (VA) provided a substantial portion of many veterans’ income. Excluding those payments, their income was $59,000, 9 percent lower than nonveterans’. ▪ In general, Vietnam veterans received more money from Social Security and retirement plans than nonveterans did. At a Glance
  • 4. 3 The Vietnam War and the Draft Number of New Enlisted Personnel Nearly 9 million people served in the U.S. military during the Vietnam War; more than 2 million of them had entered the military before 1965. Draftees accounted for fewer than one-quarter of those who served. Local boards determined who was drafted until 1969; that system was largely replaced by a draft lottery. Deferments were common, particularly for those enrolled in college. Those deferments were mostly eliminated in the early 1970s.
  • 5. 4 Some men volunteered for military service in part because the pay and benefits were reasonable compared with civilian options. For enlisted careerists (those who completed four years of service), pay was typically about 85 percent of the median pay of comparable civilians. At first, junior enlisted personnel were paid much less than most could have earned elsewhere, but pay raises in the early 1970s brought them into rough parity with civilians. The military also offered occupational training, educational benefits, and other benefits that were not typically found in the private sector. Enlisted personnel were at neither the top nor the bottom of their generation in terms of ability, as measured by education levels and test scores. For instance, about 70 percent of new enlisted personnel held at least a high school diploma; the share for all men ages 20 to 29 was roughly 75 percent. DoD did not accept men with very low test scores or men who could not meet its physical fitness standards. Military Personnel During the War
  • 7. 6 Age Distribution of Vietnam Veterans and Nonveterans, 2018 Percent The bulk of Vietnam veterans were in their late 60s or early 70s in 2018. The reason is that most men entered military service between ages 18 and 23, and a disproportionate number did so when forces were largest, from 1966 to 1969.
  • 8. 7 Traits of Vietnam Veterans and Nonveterans, 2018 Characteristic Veterans Nonveterans Educational Attainment Did not complete high school 5 15 High school 30 25 Some college 38 24 Bachelor’s degree or higher 27 36 U.S. Citizen 100 95 Married 68 69 Racial or Ethnic Group White 82 74 Black 10 9 Hispanic 5 10 Other 3 7 Geographic Region Northeast 15 19 Midwest 22 21 South 40 37 West 23 23 Functionally Disabled 32 24 Employed 33 41 Memorandum: Total Population 5,423,900 14,944,600 Number in Sample 68,400 178,200 Percent
  • 10. 9 CBO’s primary source of data was the American Community Survey, which is one of the largest surveys conducted by the Census Bureau. Those data were supplemented by administrative data from VA about recipients of and payments for disability compensation. CBO compared Vietnam veterans’ and nonveterans’ sources of income: earnings (including self-employment income), Social Security (including retirement, disability, and survivor benefits), investments, retirement plans (including defined benefit and defined contribution plans and other sources), and disability compensation from VA. Some residual categories, such as public assistance and VA pensions, were excluded. CBO’s Approach
  • 11. 10 CBO restricted the sample of Vietnam veterans to men ages 63 to 78 who had served on active duty during the war, regardless of location or type of service. Some Vietnam veterans who were older and probably spent a large part of their military careers during other eras, and some younger ones who served in the all- volunteer force (which was composed solely of volunteers rather than a mix of volunteers and draftees), were excluded. In total, about 15 percent of Vietnam veterans were excluded from the analysis. CBO imputed Social Security income and retirement plan income using various statistical methods. CBO found that about 20 percent of recipients of Social Security underreport such income and that roughly 40 percent of people who receive income from a retirement plan do not report it. CBO’s Approach (Continued)
  • 12. 11 Total average income consists of income from earnings, Social Security, investments, retirement plans, and disability compensation from VA. CBO did not control for demographic or other factors influencing income sources. The most common age for Vietnam veterans in 2018 was 71. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of the total). Annual Average Income of Vietnam Veterans and Nonveterans, 2018 Dollars On average, Vietnam veterans age 71 or younger had less income than nonveterans; those age 72 or older had more income than nonveterans.
  • 13. 12 CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of the total). Annual Median Income of Vietnam Veterans and Nonveterans, 2018 Median income (excluding disability compensation from VA) for Vietnam veterans age 71 or younger is almost the same as for nonveterans; older veterans consistently had somewhat more income than nonveterans did. Dollars
  • 14. 13 CBO did not adjust the data to account for characteristics other than age and veteran status. Income excludes disability compensation from VA. Share of Vietnam Veterans and Nonveterans Ages 63 to 78 in Each Income Group, 2018 The percentages of Vietnam veterans in the highest and lowest income groups were smaller, and those in the middle income groups were larger, than those of nonveterans.
  • 15. 14 CBO did not adjust the data to account for characteristics other than age and veteran status. Average Income for Vietnam Veterans and Nonveterans at Age 71, by Source, 2018 Sources of Income Veterans Nonveterans Earnings 12,400 18,800 Social Security 20,800 19,700 Investments 6,400 9,200 Retirement Plans 21,000 18,000 Subtotal 60,600 65,700 Disability Compensation From VA 4,900 n.a. Total 65,500 65,700 2018 Dollars
  • 16. 15 CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of the total). Earnings of Vietnam Veterans and Nonveterans, 2018 Earnings remained a large component of income for men of retirement age. Among all men and, separately, among all men who worked, Vietnam veterans earned less, on average, than nonveterans did.
  • 17. 16 CBO did not adjust the data to account for characteristics other than age and veteran status. The Share of Vietnam Veterans and Nonveterans Who Worked, 2018 The share of Vietnam veterans who worked was smaller than that of nonveterans, although the difference dissipated for the older men. Most men over age 65 no longer worked.
  • 18. 17 CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of the total). Social Security Payments to Vietnam Veterans and Nonveterans, 2018 Vietnam veterans claimed Social Security earlier and received about the same amount as nonveterans.
  • 19. 18 CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of the total). Investment Income of Vietnam Veterans and Nonveterans, 2018 Most men did not receive income from investments. Among those who did, Vietnam veterans received much less than nonveterans.
  • 20. 19 CBO did not adjust the data to account for characteristics other than age and veteran status. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of the total). Income From Retirement Plans for Vietnam Veterans and Nonveterans, 2018 Among all men, on average, Vietnam veterans earned more retirement income than nonveterans did. Among men who received retirement income, that difference was reversed for younger men; for older men, the gap was smaller.
  • 21. 20 CBO did not adjust the data to account for characteristics other than age and veteran status. The Share of Vietnam Veterans and Nonveterans Who Received Income From Retirement Plans, 2018 Vietnam veterans were much more likely to receive income from retirement plans. For younger men, the difference amounted to more than 20 percentage points.
  • 22. 21 Sector of Employment for Vietnam Veterans and Nonveterans, 2008 One reason that Vietnam veterans had more income from retirement plans was probably that they had held more jobs with retirement benefits. In 2008, they were more likely to hold jobs in the federal government. They also appeared likelier to hold jobs with a union presence. Federal government 2% State and local government 13% Private employer 63% Self- employed 22% Nonveterans Federal government 7% State and local government 13% Private employer 64% Self- employed 16% Veterans
  • 23. 22 VA provides monthly tax-free payments to veterans who, in its determination, have disabilities, medical conditions, or injuries that were incurred or aggravated during active-duty military service. ▪ VA assigns a rating, which ranges from zero to 100 percent in increments of 10, to each veteran with service-connected disabilities. ▪ In 2018, base payments ranged from roughly $1,500 to $36,000 for the year, depending on the rating; some veterans also received supplemental payments. ▪ About 1.3 million Vietnam veterans (nearly 25 percent) received disability payments from VA in 2018; the average payment per recipient was about $18,100. ▪ Veterans who received payments were more likely to be in the lower half of the income distribution. Disability Compensation From VA
  • 24. 23 CBO did not adjust the data to account for characteristics other than age. The shaded area denotes the largest three-year cluster of Vietnam veterans (one-third of the total). Disability Compensation From VA Received by Vietnam Veterans, 2018 Most Vietnam veterans did not receive disability compensation from VA. Those who did received an average of $18,100. On average, those who received disability payments had less income from other sources than other veterans did. Including VA payments, they received slightly more total income than other veterans did.
  • 25. 24 Congressional Budget Office, Vietnam Veterans’ Income in Retirement (October 2020), www.cbo.gov/publication/56679. Congressional Budget Office, Options for Reducing the Deficit: 2021 to 2030 (December 2020), www.cbo.gov/publication/56783. Congressional Budget Office, Veterans’ Disability Compensation: Trends and Policy Options (August 2014), www.cbo.gov/publication/45615. Related Publications