Military Retirement Calculator

Military retired pay

How military retired pay is calculated

Every military retirement plan works the same way: the Defense Department takes a retired pay base and multiplies it by a percentage multiplier. For most people retiring today the base is the High-36, the average of the highest 36 months of basic pay, which is usually the last three years of service and is often called High-3. The base uses monthly basic pay, not BAH, BAS or special pays.

Under the High-36 and Final Pay plans each year of service is worth 2.5 percent, so 20 years gives a 50 percent multiplier. The Blended Retirement System (BRS) uses 2.0 percent a year, so 20 years gives 40 percent. REDUX, the plan for members who took the Career Status Bonus, starts from 2.5 percent a year but subtracts one percentage point for each year short of 30, so 20 years also gives 40 percent. With the default inputs, a $5,500 High-36 and 20 years under High-3 comes to $2,750 a month.

The plan depends on your date of initial entry into military service (DIEMS), the date you first entered a uniformed service in any capacity. It does not change if you leave and come back, and it can differ from your pay entry base date.

Source: DoD Military Compensation and Financial Readiness, retirement plan chart; 10 U.S.C. 1409.

Years of service and DoD rounding

For an active duty retirement, each full month beyond your full years counts as a twelfth of a year and leftover days are dropped. DoD's Financial Management Regulation carries the months to two decimals of a year and rounds the multiplier to the nearest hundredth of a percentage point: 20 years 7 months is 20.58 years, which gives 51.45 percent under High-3 and 41.16 percent under BRS. The monthly retired pay is then rounded down to the next lower dollar (10 U.S.C. 1412). The calculator applies the same steps. For members retiring after December 31, 2006, the multiplier is no longer capped at 75 percent, so service past 30 years keeps adding to it.

Our calculation with the multipliers in 10 U.S.C. 1409 and the DoD FMR rounding rules; monthly amounts rounded down to the dollar.

Guard and Reserve retirement

A reserve retirement needs 20 qualifying years, each one a year in which you were credited with at least 50 points. You earn 1 point for each day of active service, 1 for each drill period attended, 1 for each day of funeral honors duty and 15 for each year of membership. For the multiplier, DoD divides your total points by 360: 4,735 points is 13.15 years, which is 32.88 percent under High-3 and 26.30 percent under BRS. The reserve points input on the calculator starts with that DoD example.

Reserve retired pay normally starts at 60. If you were called to qualifying active duty after January 28, 2008, the start age drops by 3 months for each 90 days of that duty in a fiscal year, but never below 50. The High-36 for a reserve retirement is based on the pay tables in effect when your pay begins, and your years for the pay table keep counting while you wait in the gray area, so enter the High-36 you expect at that time. REDUX does not apply to reserve retirements.

REDUX and the age 62 restoral

Members who took the Career Status Bonus retire under REDUX. The multiplier is reduced by one percentage point for each full year of service below 30 and one-twelfth of a point for each month. On the first day of the month after your 62nd birthday, DFAS recomputes your retired pay as if you had never taken the bonus, restoring the full multiplier. REDUX cost-of-living adjustments are the CPI increase minus 1 percentage point, both before and after 62. With 30 or more years there is no multiplier reduction.

What the Survivor Benefit Plan costs

The Survivor Benefit Plan pays your spouse a monthly annuity of 55 percent of the base amount you choose. For members who first entered service on or after March 1, 1990, spouse coverage costs 6.5 percent of the base amount, taken from your retired pay. The full base is your whole retired pay; for REDUX it is figured without the REDUX reduction. You can instead pick a reduced base of at least $300, with your spouse's concurrence. In the default example, full coverage on $2,750 costs $178.75 a month and would pay your spouse about $1,512 a month. Reserve Component SBP adds a premium set by DoD, so the calculator does not estimate it.

Extras under the Blended Retirement System

BRS pairs the smaller pension with contributions to the Thrift Savings Plan: an automatic 1 percent of basic pay plus matching of up to 4 percent more. It also offers continuation pay, a mid-career bonus for extra service, and a lump sum option at retirement: a discounted payment of 25 or 50 percent of your estimated retired pay in exchange for reduced monthly pay until you reach full Social Security retirement age. The calculator shows the full monthly amount without a lump sum. For TSP contributions from a federal paycheck, see how TSP contributions affect your paycheck.

Cost-of-living adjustments, taxes and VA pay

Retired pay rises each December 1 by the percentage increase in the consumer price index, except that REDUX retirees get that increase minus 1 point. Retired pay is paid on the first day of each month for the month before. The military retirement pay tax guide covers federal withholding and state rules. If you also receive VA disability compensation, the VA disability tax guide explains concurrent receipt. To compare with your pay while serving, try the military pay calculator, and for dual-service households the dual military couple tax guide.