Here's a quick guide to determining your military retirement benefits as of July 2011. Use this as the touchstone to compare against to any new plans or changes that may come into effect for the military retirement system on or before the end of your military career.
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How to Determine Your Military Retirement Pay in a Changing System

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How can you determine if your 2011 military retirement pay plan compares favorably to proposed or mandated changes to the military retirement plan? Here's a quick guide to determining your military retirement benefits as of July 2011. Use this as the touchstone to compare against to any new plans or changes that may come into effect for the military retirement system on or before the end of your military career.

Eligibility for Final Pay, High 36, and Career Status Bonus/REDUX Retirement Systems

If you entered the service:

-- Prior to September 1980 you are eligible for the Final Pay retirement system.

-- Between September 8th, 1980 and August 1986 you are eligible for the High 36 system.

-- After August 1986 you are eligible to choose either the High 36 retirement system, or the Career Status Bonus/REDUX (CSB) retirement system. If you decline to make a choice you will automatically receive the High 36 retirement plan.

Formulas for Computing Retirement Pay

Several factors determine your military retirement pay. The following formulas should help you understand how your military retirement pay is calculated.

-- If you first entered a uniformed service* before September 8, 1980:
Compute your retired pay based on length of service by multiplying the basic monthly pay for your retired grade at the time of retirement by the years of creditable active federal service at the rate of 2.5 percent for each whole year of service. This is called the "Final Pay" retirement system. That means you get 50% for 20 years of service up to a maximum of 100% for 40 years.

-- If you first entered a uniformed service between September 8, 1980 and July 31, 1986:
Compute your retired pay using the same formula as the Final Pay system above, except you use the average basic pay for your three highest paid years (36 months) rather than final basic pay. This is High 36. Under High 36 you get 50% for 20 years of service up to a maximum of 100% for 40 years.

-- If you first entered a uniformed service on or after August 1, 1986 you have the option to take either the High 36 or CSB/Redux Retirement:

High 36 Option: Compute your retired pay using the same formula as the Final Pay system above, except you use the average basic pay for your three highest paid years (36 months) rather than final basic pay. This is called the High 36. Under High 36 you get 50% for 20 years of service up to a maximum of 100% for 40 years.

CSB/Redux Option: Compute your retired pay by multiplying your High 36 by 2% per year for the first 20 years, and then 3.5% for each additional year beyond 20. That means you get 40% of your High 36 for 20 years, but up to a maximum of 100% for 40 years.



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