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Retirement Centers

What is Military Retirement?

Military Retirement and military retirement benefits are received after twenty years of active service or qualifying reserve service. Each year military retirement benefits increase with a cost of living adjustment. Retirees are still subject to the Uniform Code of Military Justice. It is possible for military retirees to be recalled to duty. The military retirement system includes various options and they are:

  • Initial military retirement pay increases for active duty service between twenty and twenty-six years but not for military service over twenty-six years.
  • Military retirement pay is tied to basic pay. Bonuses and allowances are not factors in military retirement pay.
  • The maximum military retirement pay is seventy-five percent (75%) of basic pay for thirty years or more of service.
  • Active Duty military are eligible for military retirement pay immediately upon separation.
  • Reservists must wait until their 60th birthday for military retirement pay with the exception of drilling reservists who spend twenty years active duty.

The formulas for calculating twenty-year military retirement pay are:

  • Those retirees who joined the military prior to September 8, 1980 collect military retirement monthly checks based on their rank and the number of years that they served. Those who served twenty years, receive 50 percent of their final basic pay as their military retirement pay. For each year over twenty years of service, there is an increase of 2.5 percent of basic pay up to a maximum of seventy-five percent (75%) of basic pay for thirty years of active duty service to your military retirement pay benefits.
  • Those military retirees who joined the military after September 8, 1980 but prior to August 1, 1986 may use the High-3 system. Their military retirement pay benefit is based on their average basic pay over their last three years of military service. This average is then multiplied by 2.5 percent for each year of service to determine their military retirement pay.
  • Those military retirees who joined the military after August 1, 1986 may select either the High-3 System or the Career Status Bonus/Redux Option for their military retirement pay.
  • Those servicemembers who have obtained fourteen and one-half years 14 ½ years of service and agree to stay a minimum of five more years may elect to receive a $30,000 bonus either as a lump sum or installments each year at their 15th year of service. However, those who select this military retirement pay option will have twenty year retirement pay lower at only forty percent (40%) of their average base pay over the three highest earning years. This increases by 3.5 percent a year for each year over twenty years. It works out that at 30 years, the military retirement pay is the same rate as the High-3 System except that the yearly cost of living adjustments are one percent lower. At age 62, there is a one-time catch up adjustment

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