Military Retirement Pay

Military retirement pay is one of the top three benefits of military service along with medical and other benefits. Also, all military retirements are protected from inflation by annual Cost of Living Adjustments (COLAs), based on changes in the Consumer Price Index (CPI) as measured by the Department of Labor.

Military Retirement Plans

A military retirement plan could be considered one of the best retirement plans around. There are a few options depending on when you began your service. Know your options and how to calculate your military retirement pay to find out which option is best for you.

Final Pay

If you began your military service before Sep. 7, 1980, you’re eligible for the Final Pay Retirement system. Your retired pay is calculated by multiplying your final base pay by 2.5% for every year of service.

High-36

If your military service began between Sep. 8, 1980, and July 31, 1986, you are eligible for the High 36 Retirement System. High 36 is very similar to the Final Pay Retirement System except your retired pay is calculated using an average of the three highest paid years of service.

REDUX

If your military service began between Aug. 1, 1986, and Dec. 31, 2017, you qualify for REDUX Retirement System or the High 36 System. This system is based on your highest 36 months base pay. After your 15 year service anniversary you will receive a Career Status Bonus (CSB) and your retirement pay is reduced. If you have 30 years or more of service, there is no pay reduction.

Blended Retirement System (BRS)

If you began your military service after Jan. 1, 2018, you are eligible for the Blended Retirement System (BRS). With BRS, you will receive 40% of your base pay after 20 years and a bonus at 12 years, which is 2.5% of your annual base pay. The military will contribute 1% of your base pay to your Thrift Savings Plan (TSP).

Disability

If you are determined to be medically unfit for service with a DoD disability rating of at least 30%, you are eligible for disability pay. This is calculated using percentage of disability or years of credible service.

Retired Pay Base

There are two ways of calculating your military retired pay base, the final pay method and the high 36 method. The final pay method sets the retired base pay equal to the final basic pay. The high 36 method is the average of your highest 36 months of basic pay. The date you began your military service will determine which method is used to calculate your retired pay base.

Retired Pay Multiplier

Final Pay and High 36 Plan Multiplier

For the Final Pay and High 36 retirement plans each year of service is 2.5% to your retirement multiplier. Depending on the type of service, active duty or reserve, your years of creditable service will be calculated differently.

REDUX Plan Multiplier

If you qualify for the REDUX retirement plan, your multiplier is reduced for each year less than 30 years of service at retirement.

Disability Plan Multiplier

The disability retirement multiplier will be the highest of the assigned disability percentage at retirement not exceeding 75% or by the applicable retirement plan multiplier and years of service.

Years of Service	20	21	22	23	24	25	30	35	40	41
Final Pay	50%	52.5%	55%	57.5%	60%	62.5%	75%	87.5%	100%	102.5%
High-36	50%	52.5%	55%	57.5%	60%	62.5%	75%	87.5%	100%	102.5%
REDUX	40%	43.5%	47%	50.5%	54%	57.5%	75%	87.5%	100%	102.5%
BRS	40%	42%	44%	46%	48%	50%	60%	70%	80%	82%

Cost of Living Adjustment (COLA)

All military retirement plans include an annual Cost of Living Adjust (COLA). Each retirement plan adjustment is based on changes with the Consumer Price Index. For the Final Pay, High 36, Disability, and BRS retirement plans, the yearly cost of living adjustment is equal to the percentage increase of the CPI.

For the REDUX retirement plan the COLA is about one percentage point less than the other retirement plans. If you have the REDUX plan you’ll be given a on time adjustment at 62 years of age to make up the difference in COLA to equal what it would have been for High 36. The COLA will then revert to the previous percentage.