Military Retirement Monthly Pay Calculator


The High Three Pension

How to calculate retirement pay

Thats a messier calculation.

Heres what the Association of the U.S. Navy website says about High Three Reserve retirement in one of their articles.

Actually, the article is behind a membership login:

This system applies to anyone with a DIEMS of 8 September 1980 to present. Retired pay is calculated based on a figure derived from the average of the last 36 months of basic pay for the approved retired grade , and from the length of service prior to reaching age 60. In other words, it is the basic pay in effect when you were ages 58, 59, and 60. The percentage of that figure you will receive is calculated by dividing your total points by 360 and multiplying that figure by 2.5 percent.

So you still start with your total points, divide by 360, and multiply by 2.5% to get the service percent multiplier.

Note that the multiplier is 2.0% for the Blended Retirement System.

But then the pay calculation is painful. You have to have 36 months of pay charts . For each one, youll take the max pay at that rank and the number of months of that year. Then youll add them all together and divide by 36.

Now that you have the final 36 months of pay, you add all those numbers up and divide to get the final average monthly high-three pay:

/ 36 = $4694.35.

Note that its 97.5% of the Final Pay amount only a 2.5% reduction.

That base pay number is multiplied by the service multiple to get the monthly pension amount.

$4694.35 * .1482 = $695/month.

How To Calculate Military Retirement Pay Present Value

Let’s assume that the E7 lives for 30 years beyond his military retirement, to the age of 70. That $30,000-a-year pension paid out annually over 30 years, including adjustments for inflation over the next 30 years, amounts to a total of $778,000 . This is the amount of money that the E7 would need to have RIGHT NOW, invested in an account that’s earning at least 4% interest, in order to generate a $30,000 a year annuity.

When To Expect The First Check

Members retiring from the National Guard and Reserves dont get their retirement pay instantaneously after retirement they get their first pay at the age of 60.

Under the 2008 National Defense Authorization Act, Congress scaled down the age for receipt of Guard/Reserve retired pay by three months for every 90 days of specified duty performed during any fiscal year after January 28, 2008. Retired pay eligibility age cant be shortened below the age of 50.

Specified duty includes active duty for deployment to a combat zone and recall to active duty in reply to a national emergency declared by the president or supported by federal funds.

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How Much Does The Military Pay

The best way to figure out how much the military pays is to use the military pay calculator or check military pay charts. If you’re not yet in the service, start by looking at E-1, the amount you’ll be paid during Basic Training.

How much you get paid over time will change based on your rank, location, job and more.

Related: Learn more about military ranks

Retirement Pay Calculations Under The Temporary Disability Retirement List

army reserve pay chart for 2020

One of two options are used to calculate the benefitwhich one is used? According to the Department of Veterans Affairs, the pay is calculated at whichever method provides the greater advantage for the veteran:

  • Pay calculated on your disability percentage. This calculation uses a minimum of 50 percent while on the temporary list. This is known as Method A.
  • Pay calculated on the years of active service. This is known as Method B.

Your pay will be computed based on whichever is more beneficial for you.

While on the Temporary list, federal guidelines state you must have a physical no later than every 18 months. Those who fail to do so will have their payments suspended until the examination has been performed.

The date you were signed on to the temporary list is very important. According to the DoD, those on the temporary list prior to January 1, 2017 are allowed to remain on that list for a maximum of five years assuming there is no change in the condition.

Those who were placed on the Temporary list on or after January 1, 2017 are allowed three years maximum, providing you condition does not change during that time. According to the DoD, those who are found fit for active duty during this time may be removed from the list and returned to active duty.

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Difference Between Frozen Benefit Rule & Coverture Formula

The best way to illustrate the impact of the frozen benefit rule is with a hypothetical. Assume a soldier marries one year into his enlistment. Five years later, the couple obtain a decree of dissolution. By that time, the soldier is an Army Sergeant with 6 years of service, and there are 5 years of marriage overlapping the service.

  • Calculate Marital Percentage. First, we calculate the marital share as a percentage – that is 5 years of marriage divided by 6 years of service, or 83.33%. .
  • Calculate Hypothetical Retirement. While a soldier obviously cannot retire with just 6 years of service, we would need to calculate the hypothetical retirement of that servicemember. Assume that the E-5 had a High-3 pay of $2800/mo. And also assume that the members retirement benefits accrue at the rate of 2.5% per year . That means the hypothetical retirement amount comes to 6 x 2.5% x $2800, or $420/mo.
  • Calculate Spouses Share. The spouse receives one-half of the 83.33% marital share, or 41.67%. So her share comes to 0.4167 x $420, or $175/mo, plus COLAs. NOTE – this dollar amount is solely for planning purposes – the actual share should be expressed as a percentage to ensure the former spouse receives COLAs.
  • Multiply 8.9% x the $4760 retirement, and the former spouses share under the old system comes to $425/mo. Compare that to the $175/mo the former spouse receives under the frozen benefit rule, and the new rule cost the former spouse almost 60% of the pre-NDAA retirement.

    How Do I Calculate Fers Retirement

    A FERS disability retirement pay calculator works just as any other calculator does. You give the calculator a set of inputs and parameters, and the calculator gives you an answer.

    The output could be your annual payment .

    Or it could be your monthly or weekly payment. On the other hand, your output could be the total amount of money you will receive over X amount of time .

    It all depends on what you ask the calculator to give as its output. It is up to you.

    Many of the calculations depend on your high-3 salary. OPM defines your high-3 as the highest average basic pay you earned during any 3 consecutive years of service. Your basic pay is your basic salary paid for your position.

    This includes salary increases for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc. Further, if ones total service was less than 3 years, the average salary is figured by averaging basic pay during all periods of creditable Federal service.

    The best way to find your high-3 average salary is to get a FERS benefit to estimate from your Agency. This report will show the official figures that will be sent to OPM.

    While the OPM website does not have a specific calculator webtool, they publish information on how they make the calculations .

    Here, we summarize those guidelines.

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    Lets Put Everything Together

    Lets look at a fictional scenario using the numbers I outlined above. My estimated pre-tax, pre-deduction pension was approximately $4,048, give or take. Below are the costs that I would take into consideration:

    Military Retirement Pay Breakdown
    Expected take-home pay: $2,501.00

    As you can see, this would be quite a shock if youre not expecting ita 40% drop, right when youre getting used to not having a full job. This doesnt take into consideration all of the other items.

    Your best bet is to do the math in advance, budget for it, and move on. You can try to cut out some of these items to make the most out of your pension. However, VGLI, Tricare, & SBP are all very important insurance aspects of your post-military life, and you should consider the cost of replacing them or going without before you make your decision.

    Computation Of Retired Pay

    How Do I Use The Military Retirement Calculator

    To determine how much retired pay you may be eligible to receive, the first step is to calculate the number of equivalent years of service. The formula for computing equivalent years of service for Reserve retired pay at age 60 is fairly simple:

    Total number of Creditable Retirement Points, divided by 360.

    The formula computes the number of equivalent years of service the soldier has completed . For example, 3,600 points equals 10 years.

    Military Personnel will notify the Defense Finance & Accounting Service Cleveland Center of the number of years service youve earned.

    Guard and Reserve members who separate or are discharged before age 60 will be credited for basic pay purposes only with the years up until their discharge. Members who transfer to the Retired Reserve until age 60 will receive credit for the years spent in the Retired Reserve.

    Depending on the date you initially entered military service, also called your DIEMS date, your monthly Reserve retired pay will be calculated under the Final Basic Pay or High-3 formula as follows:

    DIEMS date before 8 September 1980 Final basic pay. Multiply your years of satisfactory service by 2.5%, up to a maximum of 75%. Multiply the result by the basic pay in effect on the date your retired pay starts.

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    Expert Insight On Maximizing Military Retirement And Benefits

  • What are some of the common mistakes service members make concerning their retirement?
  • What are other ways besides maximizing pay to get the most out of one’s military retirement pay?
  • How is BRS different from the Legacy programs? What does this difference mean for service members enrolled in BRS now?
  • Is there anything else service members should be aware of when approaching retirement?
  • Director of Business Development at PARCO. Military – Separated in 2016 at the rank of Captain with a total of eight years of service, which included three years of enlisted time before attending Officer Training School at the rank of A1C.

    Calculating The Survivor Benefit Amount

    In many other articles in the US VetWealth education center, we talk a lot about other military pay and benefits such as the Blended Retirement System and the Survivor Benefit Plan.

    The confusion that often occurs when deciding which of these options to Opt-Into or Opt-Out of is because normally the focus is on cost. And when present value calculations are done properly using realistic interest rates then you’ll be sure that you have the most up-to-date net present value of your pay before your retirement date.

    This is important in case you decide to replace the survivor pay benefits with a modern insurance alternative such as the Spouse Benefit Plan. You don’t want to risk this decision to an investment firm who is more interested in the stock market.

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    What Is The Average Pension Of A Federal Employee

    The average civilian federal employee who retired in fiscal 2016 was 61.5 years old and had completed 26.8 years of federal service. The average monthly annuity payment for workers who retired under CSRS in fiscal year 2018 was $ 4,973. Workers who retired under FERS received an average monthly annuity of $ 1,834.

    How Can My Retirement Pay Continue To Go To My Family If I Die

    Us Military Retirement Pay Calculator

    The Survivor Benefit Plan allows a retiree to ensure a continuous lifetime annuity for their dependents after they die. The annuity, based on a percentage of retired pay, is paid to an eligible beneficiary. Unlike some other annuities, payments can never run out. If you die before your spouse, they will continue to get monthly checks until they pass away.

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    How Much Is My Military Pension Worth

    When it comes to planning for their financial future, many veterans don’t realize what their service is really worth. They don’t know how to calculate military retirement pay present value properly because they aren’t focusing on the bigger picture. At US VetWealth, we can help you protect the true value of your service.

    The typical veteran approach to salary negotiations during the standard post-military job hunt reflects this. So does their acceptance of the status quo military financial planning benefits when they retire. In both cases, many veterans are cheating themselves. The total value of their military retirement pay is actually much higher than they think it is.

    There are two issues that many military and veteran families don’t understand:

    Contribute To Your Thrift Savings Plan

    The Thrift Savings Plan is offered to all military retirees under the Blended Retirement System retirement plan. It’s a federal government-sponsored retirement saving and investment plan that operates similarly to a 401 and offers the same kind of savings and tax benefits that many private companies provide for their employees.

    Offered initially only for federal civilian employees, the TSP was extended as of October 9, 2001, to make the military more attractive to those who were thinking about entering the Army, Navy, Air Force, Marines or Coast Guard.

    The TSP is for long-term retirement savings, and there are penalties for early withdrawals. Retirement income from a TSP account depends on the amount contributed to an account during your working years and the earnings on those contributions.

    The money you contribute to your TSP is always yours. You own the Department of Defense contributions after you serve at least two years.

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    Components Of Military Pay

    Base Pay

    The amount paid to each employee is determined by his or her rank and duration of employment. The basic wage is taxable, whereas allowances are not.

    Basic Allowance for Housing

    A housing allowance for members of the military. BAH is determined by the region of duty, pay grade, and dependency status.

    Basic Allowance for Subsistence

    The cost of a meal is offset by the BAS benefit. Enlisted personnel is eligible for the full BAS benefit, although they must pay for all meals regardless of whether or not they come from the government.

    Duty Station Zip Code

    BAH is an amount of money that the military pays to you. It is based on where you live, not where you work. Your BAH will be higher in urban areas than in rural areas.

    Special Pay

    Special Pay may be earned through specialized duties or operations. Special Pay is limited to two additional earnings per month and must be used by the end of each month.


    A system of letters and digits to distinguish pay for military personnel.

    • E = Enlisted Member
    • W = Warrant Officer
    • O = Commissioned Officer

    The number reveals the level of pay for each letter, where 1 is the starting level of pay

    Pay Scale Year

    Military compensation typically rises each year. Choose a different pay scale year to see current, present, and future compensation.

    Years of Service

    The number of years a member has served in the military.


    For the pay and allowance purposes, a dependent is:

    • Spouse
    • Unmarried Child

    Under 21

    Potential Issues With The Frozen Benefit Rule

    Military Retirement Pay

    In the example above where the E-5s wifes share of military retirement was based only upon the member being an E-5, but if the wife were a GS-6 at the time of dissolution, and had been promoted to GS-13 by the time she retired, the military member would share in all of her promotions, but the opposite would not be true, and she would be excluded from his those promotions.

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    How To Calculate Military Retirement Pay

    Everyone who serves in a branch of the United States military long enough and is honorably discharged is eligible for military retirement pay.The minimum service time required is 20 years unless retirement is due to a service-related disability. The process of calculating retirement pay is the same whether you serve in the Army, Navy, Marines, Air Force or Coast Guard.

    Enrollment In The Brs Depends On When You Joined The Service

    • If you joined before January 1, 2006, you remained in the legacy retirement system.

    • If you joined the service on or after January 1, 2018, you were automatically enrolled in the BRS.

    • If you joined between January 1, 2006, and December 31, 2017, you could stay in the legacy system or enroll in the new one. The last day to enroll in the BRS plan was December 31, 2018.

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    What’s The True Value Of Your Service

    Status quo military financial planning options do not know how to calculate military retirement pay present value in a way that reflects its true value. It’s important to not just rely on what an active duty retirement caluclator spits out. Consider this scenario.

    A 40-year-old retiring male E7 with 20 years of service has an active duty RMC of $104,000 a year This E7’s military retirement pay will be roughly $30,000 a year. If his spouse elects the SBP and he predeceases her, she would receive 55% of the pension. That’s $16,500 a year or about $1,375 per month until she, also, passes.

    So what is the true value of the E7 military retirement pay? Will the veteran and the spouse receive that true value in this scenario?

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