Although military retirement can be a time of celebration, for many service members, transitioning to military retirement is also a psychologically and financially stressful time.
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How To Compute Your Military Retirement Pay Today

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Although military retirement can be a time of celebration, for many servicemembers, transitioning to military retirement is also a psychologically and financially stressful time. But it doesn't have to be.

Although understanding the parameters of military retirement pay can be confusing, military retirement should be a time when your dedication to military service pays you back, by supporting you and your military family in a successful military retirement. The best way to prepare benefit for your military retirement lifestyle is to compute your retirement pay now.

MILITARY VS. CIVILIAN RETIREMENT

Military retirement pay differs greatly from typical civilian retirement pay systems. Unlike civilian retirement plans, military retirement systems do not include "vesting," or building up credit that will be government matched.

The most simple and fundamental rule of military retirement: in order to be eligible to receive military retirement pay, you must have served for 20 full years in the U.S. military.

What also differs between military retirement and civilian retirement: as a retired military service member, there is also a possibility of being recalled to active duty. Although the chances are slim, it is a requirement that you return if you are called back to military service.

The Department of Defense qualifies three categories of military retirees: Non-disabled military retirees under age 60 with less than 5 years of retirement; Non-disabled military retirees under 60 with 5 or more years of retirement; and everyone else including disabled officers. Non-disabled military retirees with less than 5 years of completed retirement are the most likely candidates for recall to active duty.

HOW TO CALCULATE YOUR MILITARY RETIREMENT PAY

For military service members who began active duty service on or prior to 8 September 1980, your military retirement pay is calculated by multiplying your service factor (or "multiplier") by your active duty base pay at the time of your retirement.

If you began active duty after 8 September 1980, your base retirement pay will be the average of your highest 36 months of active duty base pay received.

The "multiplier" for both prior and post 8 September 1980 service is 2.5% (with a maximum of 75%).

Only basic pay is used in retirement calculations in all retirement system options. Allowances and special pays do not affect retired pay.

RETIREMENT PAY FOR AIR FORCE, NAVY AND MARINES

Navy and Marine Corps members are eligible for retirement pay after serving over 30 years of service as an enlisted member, warrant or commissioned officer.

Enlisted Navy and Marine Corps members with under 30 years service are transferred to the Fleet Reserve/Fleet Marine Corps Reserve to fulfill your requirements, where you receive pay referred to as "retainer pay" until your 30 years are completed.

For Air Force and Army members, serving over 20 years qualifies you for retirement. Retired pay amounts are determined by multiplying your service factor (or "multiplier") by your active duty base pay at the time of retirement. Your total retirement pay must be rounded down to a whole dollar amount.

For military service members who entered the Armed Forces from August 1, 1986 onward, your military retirement pay is calculated by multiplying your service factor (or "multiplier") However, there are differences in how cost-of-living increases are computed.

DISABILITY MILITARY RETIREMENT

Disability retirement is granted to military service members if you've been declared physically unfit for further military service and meet certain law-specified standards.

WHEN CAN I EXPECT MY FIRST MILITARY RETIREMENT PAYCHECK?

Your first payment for retired pay normally will arrive 30 days after your release from active duty, or on the first business day of the month after your first entitlement to pay.

Along with your military retirement paycheck will be a letter detailing deductions for SBP, federal/state income tax, and allotments.



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