Calculating Military Retirement Pay

Military Retirement Pay Calculator

Use this calculator to estimate your annual and monthly military retirement pay based on your years of creditable service and average highest 36 months of base pay. This calculator supports both the traditional High-3 system and the pension component of the Blended Retirement System (BRS).

High-3 System Blended Retirement System (BRS)

function calculateRetirementPay() { var yearsOfService = parseFloat(document.getElementById("yearsOfService").value); var avgHigh36BasePay = parseFloat(document.getElementById("avgHigh36BasePay").value); var retirementSystem = document.getElementById("retirementSystem").value; if (isNaN(yearsOfService) || yearsOfService < 0) { alert("Please enter a valid number for Total Years of Creditable Service."); return; } if (isNaN(avgHigh36BasePay) || avgHigh36BasePay < 0) { alert("Please enter a valid positive number for Average of Highest 36 Months Base Pay."); return; } if (yearsOfService < 20) { alert("Military retirement generally requires a minimum of 20 years of service for pension eligibility."); // Continue calculation but warn the user } var multiplierPerYear; if (retirementSystem === "high3") { multiplierPerYear = 0.025; // 2.5% per year for High-3 } else if (retirementSystem === "brs") { multiplierPerYear = 0.020; // 2.0% per year for BRS pension } else { alert("Invalid retirement system selected."); return; } var totalMultiplier = yearsOfService * multiplierPerYear; var annualRetirementPay = avgHigh36BasePay * totalMultiplier; var monthlyRetirementPay = annualRetirementPay / 12; document.getElementById("annualPayResult").innerText = "$" + annualRetirementPay.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }); document.getElementById("monthlyPayResult").innerText = "$" + monthlyRetirementPay.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }); }

Understanding Military Retirement Pay

Military retirement pay is a significant benefit for service members who complete a qualifying career. Unlike civilian pensions, military retirement is calculated based on a combination of years of service and a percentage of your base pay. The specific formula depends on which retirement system you fall under.

The High-3 System

The High-3 system is the most common retirement plan for those who entered service before January 1, 2018, and did not opt into the Blended Retirement System. Under High-3, your retirement pay is calculated using the average of your highest 36 months (3 years) of base pay. For each year of creditable service, you earn 2.5% of this average. So, if you serve 20 years, you receive 50% (20 years * 2.5%) of your High-3 average base pay annually. If you serve 30 years, you receive 75% (30 years * 2.5%).

Example (High-3): A service member with 20 years of service and an average highest 36 months base pay of $72,000 would receive:

• Annual Pay: $72,000 * (20 * 0.025) = $72,000 * 0.50 = $36,000
• Monthly Pay: $36,000 / 12 = $3,000

The Blended Retirement System (BRS)

The Blended Retirement System (BRS) became effective on January 1, 2018, and applies to service members who entered service on or after that date, or those who opted in from the legacy system. BRS combines a reduced defined benefit (pension) with a Thrift Savings Plan (TSP) with government matching contributions. This calculator focuses solely on the pension component of BRS.

Under BRS, the pension multiplier is 2.0% for each year of creditable service, instead of 2.5% in the High-3 system. This means a service member with 20 years of service would receive 40% (20 years * 2.0%) of their High-3 average base pay annually. While the pension is lower, the TSP matching contributions are designed to make up the difference over a career.

Example (BRS Pension Component): A service member with 20 years of service and an average highest 36 months base pay of $72,000 would receive:

• Annual Pay: $72,000 * (20 * 0.020) = $72,000 * 0.40 = $28,800
• Monthly Pay: $28,800 / 12 = $2,400

It's important to remember that the full benefit of BRS includes the TSP, which is not calculated here. For a comprehensive BRS retirement estimate, you would also need to factor in your TSP contributions and growth.

Important Considerations

• Cost of Living Adjustments (COLA): Military retirement pay is subject to annual COLA, which helps maintain purchasing power over time.
• Taxes: Retirement pay is generally taxable income, though some states offer exemptions for military retirees.
• Survivor Benefit Plan (SBP): Retirees can elect to participate in SBP, which provides an annuity to eligible survivors upon the retiree's death, in exchange for a reduction in retirement pay.
• High-3 Average Base Pay: This is the average of your highest 36 months of *base pay only*. It does not include allowances like BAH (Basic Allowance for Housing) or BAS (Basic Allowance for Subsistence).

This calculator provides an estimate and should not be considered financial advice. For personalized retirement planning, consult with a financial advisor or your service's retirement services office.