Department of Defense Retirement Pay Calculator
Use this calculator to estimate your gross monthly and annual retirement pay based on your years of creditable service, average high-3 base pay, and chosen retirement system.
Estimated Retirement Pay:
' + 'Estimated Monthly Gross Pay: $' + monthlyRetirementPay.toFixed(2) + " + 'Estimated Annual Gross Pay: $' + annualRetirementPay.toFixed(2) + " + 'Note: This is a gross estimate and does not account for taxes, Survivor Benefit Plan (SBP) deductions, or Cost of Living Adjustments (COLAs).'; }Understanding Department of Defense Retirement Pay
Retirement from the U.S. military is a significant milestone, offering a pension for life to those who meet the service requirements. The amount of your retirement pay is primarily determined by three factors: your years of creditable service, your average highest 36 months of base pay (often referred to as "High-3"), and the retirement system you fall under.
The Three Main Retirement Systems
The Department of Defense (DoD) has evolved its retirement systems over time. Your eligibility and calculation method depend on when you entered service:
-
High-3 System (Legacy System):
Most service members who entered service before January 1, 2018, and did not opt into the Blended Retirement System (BRS) fall under the High-3 system. Under this system, your retirement pay is calculated as:
(Years of Creditable Service × 2.5%) × Average of Highest 36 Months of Base PayFor example, a service member with 20 years of service would receive 50% (20 * 2.5%) of their High-3 average base pay. This system offers annual Cost of Living Adjustments (COLAs) equal to the Consumer Price Index (CPI).
-
REDUX System (Legacy System – Opt-in):
The REDUX system was an option for some service members who entered service between August 1, 1986, and December 31, 2000. While the initial calculation is the same as High-3, REDUX features a lower COLA (CPI minus 1%) until age 62, at which point a one-time "catch-up" adjustment occurs, and COLAs revert to full CPI. Those under REDUX also received a $30,000 career retention bonus at 15 years of service.
-
Blended Retirement System (BRS):
Mandatory for those who entered service on or after January 1, 2018, and an option for those who entered between January 1, 2006, and December 31, 2017. BRS combines a reduced defined benefit (pension) with a defined contribution (Thrift Savings Plan – TSP) with government matching. The pension calculation is:
(Years of Creditable Service × 2.0%) × Average of Highest 36 Months of Base PayUnder BRS, a service member with 20 years of service would receive 40% (20 * 2.0%) of their High-3 average base pay. BRS also includes a mid-career continuation pay and the option for a lump-sum payment of a portion of their retired pay at retirement (which reduces future monthly payments).
Key Factors Explained:
- Years of Creditable Service: This refers to the total time you have served in the military that counts towards retirement. Generally, 20 years of active duty service is the minimum for a full retirement pension.
- Average of Highest 36 Months Base Pay (High-3): This is the average of your highest 36 months (3 years) of basic pay. For most, this will be the average of their last three years of service, as pay typically increases with rank and time in service.
- Multiplier: This is the percentage applied per year of service. It's 2.5% for High-3 and REDUX systems, and 2.0% for the Blended Retirement System. The maximum retirement factor is 75% of your High-3 average.
Important Considerations Not Included in This Calculator:
- Taxes: Retirement pay is generally taxable income.
- Survivor Benefit Plan (SBP): If you elect SBP, a portion of your gross retirement pay will be deducted to provide an annuity for your eligible beneficiaries after your death.
- Cost of Living Adjustments (COLAs): While mentioned, future COLAs are not projected in this calculator.
- Disability Retirement: If you retire due to a service-connected disability, your pay calculation may differ and could involve VA disability compensation.
- Thrift Savings Plan (TSP): For BRS members, this calculator only estimates the pension component, not the value of your TSP account.
- BRS Lump Sum: The option to take a lump sum of discounted future payments under BRS is not factored into this simple calculation.
This calculator provides a basic estimate. For precise figures and personalized financial planning, it is always recommended to consult with a financial advisor specializing in military benefits or your service's retirement services office.