Military retirement pay calculator and formula guide

Gross Monthly Retired Pay = Retired Pay Base × Service Multiplier Percentage

High-3 retirement system (2.5% per year)

The High-3 system (also called the High-36 plan) applies to service members who entered active military service between September 8, 1980 and December 31, 2017, and chose not to opt into the Blended Retirement System during the 2018 calendar year open season.

Under the High-3 plan:

• Service multiplier: 2.5 percent for each completed year of active service.
• 20 years of active service equals a 50.0 percent multiplier (20 × 2.5% = 50%).
• 30 years of active service equals a 75.0 percent multiplier (30 × 2.5% = 75%).
• 40 years of active service equals a 100.0 percent multiplier (40 × 2.5% = 100%).

For example, an active duty member retiring after 24 years of service with a High-36 average basic pay of $7,500 per month would calculate their gross retired pay as follows:

• Multiplier: 24 years × 2.5% = 60.0%
• Gross monthly retired pay: $7,500 × 0.60 = $4,500 per month

The High-3 system offers a guaranteed lifetime defined pension adjusted annually for inflation through full Cost-of-Living Adjustments (COLA). To verify your exact length of service dates, consult your DD-214 discharge record.

Blended Retirement System (2.0% per year)

The Blended Retirement System (BRS) was enacted by the National Defense Authorization Act for Fiscal Year 2016 and took effect on January 1, 2018. It applies to all service members who entered military service on or after January 1, 2018, as well as those who had fewer than 12 years of active service as of December 31, 2017 and voluntarily opted in.

The BRS blends a traditional defined benefit monthly pension with defined government contributions into the Thrift Savings Plan (TSP):

• Service multiplier: 2.0 percent for each completed year of active service.
• 20 years of active service equals a 40.0 percent multiplier (20 × 2.0% = 40%).
• 30 years of active service equals a 60.0 percent multiplier (30 × 2.0% = 60%).
• Government TSP contribution: 1 percent automatic contribution plus up to 4 percent matching contributions, for a total potential government contribution of 5 percent.
• Continuation pay: A one-time mid-career cash bonus offered between 7 and 12 years of service under 37 U.S.C. 356 in exchange for an additional service commitment.
• Lump sum option: Retiring service members may elect to receive a discounted lump-sum payment of 25 percent or 50 percent of their discounted future retired pay value between retirement and full Social Security retirement age (age 67).

Using the same example of 24 years of service and a High-36 average basic pay of $7,500 per month under BRS:

• Multiplier: 24 years × 2.0% = 48.0%
• Gross monthly retired pay: $7,500 × 0.48 = $3,600 per month

While the monthly defined pension is lower under BRS, the accumulated balance in the Thrift Savings Plan can equal or exceed the High-3 lifetime valuation depending on individual market investment choices and contribution habits.

The REDUX retirement system and Career Status Bonus

The REDUX retirement system was created under the Military Retirement Reform Act of 1986. Members who entered service on or after August 1, 1986 and reached 15 years of active duty service on or before December 31, 2017 were given a choice at the 15-year mark: remain under standard High-3 or elect the Career Status Bonus (CSB)/REDUX option. Congress officially sunset new elections into the CSB/REDUX program after December 31, 2017 under 37 U.S.C. 354(g) (enacted by the NDAA for Fiscal Year 2016), but many retirees remain under this plan.

The REDUX option involved the following trade-offs:

• $30,000 Career Status Bonus: Paid to the service member at the 15-year career mark in exchange for reduced retirement benefits.
• Reduced pension multiplier: Under 10 U.S.C. 1409(b)(2), the formula reduces the standard 2.5 percent per year multiplier by 1 percentage point for each full year of service under 30 years (yielding 40 percent at 20 years instead of 50 percent). For years 21 through 30, the multiplier increases by 3.5 percentage points per year, converging at 75 percent at 30 years.
• COLA cap: Annual Cost-of-Living Adjustments under REDUX are capped at the Consumer Price Index minus 1 percent.
• Age 62 recomputation: At age 62, the retiree pension is recalculated one time to restore the original High-3 multiplier (e.g., 50 percent at 20 years) and a one-time COLA catch-up is applied. Following age 62, future annual COLA increases resume at the CPI minus 1 percent rate.

Annual Cost-of-Living Adjustments (COLA)

Military retired pay is protected against inflation through annual adjustments determined by changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W):

• High-3 and BRS: Receive the full annual percentage increase enacted by Congress and calculated by DFAS, effective December 1 and reflected in January disbursements.
• REDUX: Receives the CPI-W increase minus 1.0 percent (unless CPI-W is 1 percent or lower).

When inflation adjustments take effect, VA disability compensation rates also increase by identical percentages. Review the current VA disability pay chart to see corresponding monthly disability rates.

Concurrent receipt basics: CRDP and CRSC

Under long-standing federal statutes (38 U.S.C. 5304 and 5305), military retirees cannot receive unadjusted payments of both DoD military retired pay and Department of Veterans Affairs disability compensation. Under this rule, a retiree receiving VA disability compensation must execute a dollar-for-dollar waiver reducing their taxable DoD retired pay by the amount of tax-free VA compensation received.

Congress created two separate programs to restore waived retired pay for eligible service-connected disabled veterans:

Program                 Governing Law       Eligibility Threshold      Application Method     Tax Status
----------------------  ------------------  -------------------------  ---------------------  ----------------
CRDP (Concurrent Pay)   10 U.S.C. 1414      20+ YOS, 50%+ VA rating    Automatic via DFAS     Taxable
CRSC (Combat-Related)   10 U.S.C. 1413a     10%+ combat rating         Branch application     Tax-Free

Concurrent Retirement and Disability Pay (CRDP)

Enacted under 10 U.S.C. 1414, CRDP allows eligible military retirees to receive both full military retired pay and full VA disability compensation concurrently, effectively removing the dollar-for-dollar waiver.

• Eligibility: You must be a regular military retiree with at least 20 years of active duty service, a Reserve component retiree with 20 qualifying years who has reached retirement pay eligibility age (generally age 60), a Temporary Early Retirement Authority (TERA) retiree, or a Chapter 61 disability retiree with at least 20 qualifying years of service, AND hold a service-connected VA disability rating of 50 percent or higher.
• Application: No application is necessary. DFAS and the VA automatically verify eligibility and disburse restored payments.
• Taxability: CRDP is taxable income because it represents restored military retired pay.

Combat-Related Special Compensation (CRSC)

Enacted under 10 U.S.C. 1413a, CRSC is a distinct monthly entitlement designed to compensate retirees who suffered combat-related or hazardous-duty disabilities.

• Eligibility: You must be entitled to military retired pay and hold a service-connected disability rating of at least 10 percent that is attributable to an injury for which you were awarded the Purple Heart, or that was caused directly by armed conflict, hazardous duty, simulated war operations, or an instrumentality of war.
• Application: CRSC is not automatic. Retirees must submit DD Form 2860 directly to their specific military branch of service with corroborating medical records and incident reports.
• Taxability: CRSC payments are completely exempt from federal, state, and local income taxes.

Choosing between CRDP and CRSC

A retiree who qualifies for both CRDP and CRSC cannot receive both benefits at the same time. Each December, DFAS mails an annual Open Season notification letter for the January election period allowing eligible retirees to compare net payouts and select the program that provides the higher monthly benefit. If you are awaiting retroactive rating decisions from the VA that may affect your eligibility, use our VA back pay calculator to project retroactive timelines.

Accredited representation for military retirement and disability appeals

Disputes over military retirement credit, combat-related special compensation denials, and VA rating offsets involve intersecting military regulations and federal law. If your branch denies CRSC or if your VA disability rating fails to reflect combat injuries accurately, free accredited assistance is available through:

• Veterans Service Organizations (DAV, VFW, American Legion)
• State and County Department of Veterans Affairs offices
• VA-accredited claims agents and VA-accredited attorneys

You can search and confirm accreditation for any legal representative by using the official VA Office of General Counsel Accreditation Directory.