Understanding the High-3 Military Retirement System
The High-3 retirement system is a benefit for U.S. service members who entered active duty on or after September 8, 1980, and completed at least 20 years of qualifying service. This system calculates retirement pay based on the average of the highest 36 months of basic pay, multiplied by a percentage determined by years of service. It's a defined benefit plan, meaning your retirement income is predetermined by a formula.
Unlike older systems, the High-3 does not have a "final pay" component that can be artificially inflated just before retirement. Instead, it uses a three-year average, providing a more stable and predictable retirement income.
How the High-3 Retirement Pay is Calculated:
Identify the Highest 36 Months of Basic Pay: The system looks at your basic pay (not including special pays, bonuses, or allowances) over your career and identifies the average monthly basic pay for the 36 months that result in the highest amount. This is what we refer to as the "Average of Highest 36 Months Basic Pay".
Determine the Retirement Multiplier: This is a percentage based on your total qualifying years of service. The formula is:
Multiplier = (Total Years of Service x 2.5%)
However, this multiplier is capped at a maximum of 75% for 30 or more years of service. For example, 20 years of service would yield a 50% multiplier (20 x 2.5%), and 25 years would yield a 62.5% multiplier (25 x 2.5%).
Calculate Annual Retirement Pay: Annual Retirement Pay = (Average of Highest 36 Months Basic Pay) x (Retirement Multiplier)
Average of Highest 36 Months Basic Pay: $7,500 per month
Calculation:
Retirement Multiplier = 25 years * 2.5% = 62.5%
Annual Retirement Pay = ($7,500 x 12 months) x 62.5% = $90,000 x 0.625 = $56,250
Monthly Retirement Pay = $56,250 / 12 = $4,687.50
This means the service member would receive an estimated $4,687.50 per month in retirement pay.
Important Considerations:
This calculator provides an estimate based on the High-3 formula. Actual pay may vary due to specific pay charts, career progression, and potential legislative changes.
This calculator does not account for Cost of Living Adjustments (COLA) that retirement pay may receive after retirement.
It's crucial to consult official military pay charts and your branch's retirement services for precise figures.
This calculator is for informational purposes only and does not constitute financial advice.
function calculateRetirementPay() {
var yearsOfService = parseFloat(document.getElementById("yearsOfService").value);
var high3Average = parseFloat(document.getElementById("high3Average").value);
var resultDiv = document.getElementById("result");
var annualPayElement = document.getElementById("annualPay");
var monthlyPayElement = document.getElementById("monthlyPay");
if (isNaN(yearsOfService) || isNaN(high3Average) || yearsOfService < 0 || high3Average 0.75) {
multiplierPercentage = 0.75; // Cap at 75% for 30+ years
}
var annualRetirementPay = (high3Average * 12) * multiplierPercentage;
var monthlyRetirementPay = annualRetirementPay / 12;
// Format as currency
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style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2,
});
annualPayElement.textContent = formatter.format(annualRetirementPay);
monthlyPayElement.textContent = formatter.format(monthlyRetirementPay);
resultDiv.style.display = 'block';
}