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Retired Pay

The following chart summarizes the differences between the four regular and non-regular retirement plans and disability retirement.

Name of Retirement Plan Type of Retirement Plan Criteria to Receive
Final Pay Defined Benefit that equals 2.5% times the number of years of service times the member’s final basic pay on the day of retirement Primary retirement plan for Reserve members with initial date of entry into service prior to September 8, 1980
High-36 Defined Benefit that equals 2.5% times the number of years of service times the average of the member’s highest 36 months of basic pay Primary retirement plan for members with initial date of entry into service on or after September 8, 1980, but before January 1, 2018
REDUX

Career Status Bonus $30,000 lump sum payment at 15th year of service with obligation to serve through 20 years + defined benefit

Defined Benefit is
(a) Prior to age 62:
2.5% times the number of years of service minus 1.0% for each year of service less than 30, times the average of the member’s highest 36 months of basic pay

(b) At age 62 and after:
2.5% times the number of years of service times the average of the member’s highest 36 months of basic pay

Optional retirement plan for active duty members with an initial date of entry into service after July 31, 1986, but before January 1, 2018. Eligibility to elect the Career Status Bonus ended as of December 31, 2017
Blended Retirement System (BRS)

Blended defined benefit and defined contribution plan.

Defined Contribution:
All covered members receive a Government contribution that equals 1% of basic or inactive duty pay to a tax-advantaged retirement account (Thrift Savings Plan (TSP)) after 60 days following the entry into Uniformed Service. Additionally, covered members have the ability to receive up to an additional 4% matching contribution from the Government to TSP beginning after 2nd year of service through 26th year of service

Defined Benefit:
Members who otherwise qualify for a retirement based on longevity of service will also receive a defined benefit that is 2.0% times the number of years of service times the member’s highest 36 months of basic pay

Only retirement plan for members with initial date of entry into service on or after January 1, 2018

Optional retirement plan for members with an initial date of entry into service on or before December 31, 2017, who:
(a) while on active duty, had fewer than 12 years of service as of December 31, 2017, and who elected to opt into BRS during the opt-in period; or,
(b) while in a Reserve Component, who had fewer than 4,320 retirement points as of December 31, 2017, and who elected to opt into BRS during the opt-in period

Disability

Retirement plan that equals to:
Retired Pay Base* times Multiplier %**

*Retired Pay Base – determined under Final Pay, High-36, or BRS depending on military service date of entry

**Multiplier Percentage can be either:
  • Member’s percentage of disability determined by the military service
  • Years of creditable service times 2.5% or 2.0% (Based on whether the member was a participant in one of the legacy retirement programs or the Blended Retirement System prior to the disability)

Note that in both cases the multiplier is limited to 75% by law

Determined medically unfit for continued service with a DoD disability rating of at least 30%

The below chart provides the basic criteria to determine which retirement plan applies:

Retirement Plan Criteria to Receive
Final Pay Entry before September 8, 1980
High-36 Entry on or after September 8, 1980, but before August 1, 1986 OR Entered on or after August 1, 1986, and did not choose the Career Status Bonus and REDUX retirement system
CSB/REDUX Entered on or after August 1, 1986, but before January 1, 2003 AND elected to receive the Career Status Bonus
Blended Retirement System (BRS) Entered the Uniformed Services for the first time on or after January 1, 2018 (automatic enrollment), or entered before December 31, 2017 and elected to opt into BRS during the opt-in period
Disability Determined medically unfit for continued service with a DoD disability rating of at least 30%

All four of the regular and non-regular retirement plans determine initial monthly retired pay by applying a percentage multiplier to the retired pay base.

Retired Pay Base

There are two methods for determining the retired pay base. They are the final pay method and the high-36 month average method. The final pay method, as the name implies, establishes the retired pay base equal to final basic pay. The high-36 method is the average of the highest 36 months of basic pay divided by 36. This is generally the last 3 years of service and is sometimes called high-3. The method used depends upon when the member first entered military service.

The method is determined by DIEMS (Date of Initial Entry to Military Service) or DIEUS (Date of Initial Entry to Uniformed Services). The date a member first entered uniformed service in any capacity establishes DIEMS. This date is fixed---it does not change. Departing the military and rejoining does not affect DIEMS.

Some individuals have unique circumstances that complicate determining their DIEMS. Here are a few examples:

  • The DIEMS for Service Academy graduates who entered an Academy with no prior service is the date they reported to the Service Academy, not the date they graduated.
  • Beginning an ROTC scholarship program or enlisting as a Reserve in the Senior ROTC program sets the DIEMS, not the graduation or commissioning date.
  • Members who entered the military, separated, and then rejoined the military have a DIEMS based on entering the first period of military service.
  • The DIEMS for members who enlisted under the delayed entry program is when they entered the delayed entry program, not when they initially reported for duty.
  • For those who joined the Reserves and later joined the active component, their DIEMS is the date they joined the Reserves.

Be aware that pay date (e.g., Pay Entry Base Date) may be different than DIEMS. Also, DIEMS does not determine when creditable service toward retirement is calculated---it only determines which retired pay base method applies.

Retired Pay Multiplier

For both the Final Pay and High-36 retired pay plans, each year of service is worth 2.5% toward the retirement multiplier. For example, 20 years of service would equal a 50% multiplier. The years of service creditable are computed differently depending upon whether retirement is from full time active duty or from a reserve career. These differences are explained under the Active Duty Retirement and Reserve Retirement pages.

For the REDUX retirement plan, which applies only to certain active duty retirements as described above, the High-36 multiplier is reduced by one percentage point for each year that the member has less than 30 years of service at retirement. For example, 20 years of service would equal a 40% multiplier. This is discussed more fully under the Active Duty Retirement page.

For disability retirement programs, the multiplier will be the higher of (a) the disability percentage assigned by the Service at retirement not to exceed 75%, or (b) the result of multiplying the number of years of service by the applicable retirement plan multiplier (e.g., 2.5% for High-36 or 2.0% for BRS).

In any case, the longer an individual serves, the higher the multiplier and the higher the retirement pay. For example:

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%

COLA

All military retirements are protected from inflation by an annual Cost of Living Adjustment (COLA), based on changes in the Consumer Price Index (CPI) as measured by the Department of Labor. Under the Final Pay, High-36, and BRS retirement plans, the annual COLA is equal to the percentage increase in the CPI year over year. Under REDUX, the COLA is reduced, as described in the table below.

Retirement Plan Cost of Living Adjustment (COLA)
Final Pay Annual COLA determined using the Consumer Price Index – Urban Wage Earners, published by U.S. Department of Labor, Bureau of Labor Statistics.
High-36 Annual COLA determined using the Consumer Price Index – Urban Wage Earners, published by U.S. Department of Labor, Bureau of Labor Statistics
REDUX Reduced annual COLA that is normally one percentage point less than the COLA determined for the other retirement plans (but not less than zero). Due to the reduced annual COLA, members participating in REDUX receive a one-time readjustment at age 62 to restore the difference in COLA to what it would have been under High-36. Thereafter, annual COLA reverts back to the lesser amount as above.
Blended Retirement System Annual COLA determined using the Consumer Price Index – Urban Wage Earners, published by U.S. Department of Labor, Bureau of Labor Statistics
Disability Annual COLA determined using the Consumer Price Index – Urban Wage Earners, published by U.S. Department of Labor, Bureau of Labor Statistics

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