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The National Defense Authorization Act for Fiscal Year 2016 created a modernized retirement system for the military.

By Military Compensation | January 08, 2016

The National Defense Authorization Act for Fiscal Year 2016 created a modernized retirement system for the military.  This new retirement system is effective January 1, 2018.  Everyone serving today is grandfathered and can stay under the current system.  Those with fewer than 12 years of service as of December 31, 2017 will have an opportunity to opt-in to the new system during calendar year 2018. 

  • Today's military retirement system provides monthly retired pay after you serve at least 20 years.
  • Tomorrow's retirement system pays a lesser amount of monthly retired pay after 20 years, but supplements it with government contributions to your Thrift Savings Plan account and a mid-career continuation bonus.
  • Under the new system, members who serve at least two years retain their contributions, the government contributions made on their behalf, plus the earnings on all of the contributions.
  • During 2016, DoD will develop educational materials, tools and calculators to help members make this decision.
  • You can expect to receive training in 2017 and have your questions answered so that you can make an informed choice during the opt-in period for the new system (January 1, 2018 through December 31, 2018).

Attached is introductory information to include “frequently asked questions”.  There will be more information to follow in the coming months - Stay Tuned!

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