Military High-3 Retirement Pay Calculator
Use this calculator to estimate your monthly and annual retirement pay under the military's High-3 retirement system. This system applies to service members who entered service between September 8, 1980, and December 31, 2017.
Understanding the Military High-3 Retirement System
The High-3 retirement system is one of the primary methods for calculating military retirement pay for service members who joined between September 8, 1980, and December 31, 2017. It's designed to provide a stable and predictable income stream for retirees.
How High-3 Retirement Pay is Calculated
The core of the High-3 system is based on two main factors:
- Years of Creditable Service: This refers to the total number of years you have served in the military that count towards retirement. Generally, 20 years is the minimum for retirement eligibility.
- Average of Highest 36 Months of Basic Pay: This is the average of your highest 36 consecutive months of basic pay during your career. This typically occurs towards the end of your service when your rank and time in service are highest. It's important to note that this only includes basic pay, not allowances like BAH (Basic Allowance for Housing) or BAS (Basic Allowance for Subsistence).
The formula for calculating your gross annual retirement pay under the High-3 system is:
(Years of Creditable Service × 2.5%) × Average of Highest 36 Months of Basic Pay
For example, if you served 20 years and your highest 36 months of basic pay averaged $5,000 per month:
- Your multiplier would be 20 years × 2.5% = 50%.
- Your monthly retirement pay would be 50% of $5,000 = $2,500.
- Your annual retirement pay would be $2,500 × 12 = $30,000.
Key Considerations for High-3 Retirement
- 20-Year Minimum: To qualify for retired pay under the High-3 system, you generally need to complete at least 20 years of creditable service.
- Cost of Living Adjustments (COLAs): Military retired pay is subject to annual COLAs, which are typically tied to the Consumer Price Index (CPI). This helps maintain the purchasing power of your retirement income over time.
- Taxation: Military retirement pay is generally considered taxable income at the federal level and often at the state level, though some states offer exemptions.
- Survivor Benefit Plan (SBP): Retirees have the option to enroll in the Survivor Benefit Plan, which allows them to provide a continuous income stream to their eligible survivors after their death. This election reduces the retiree's monthly pay.
- Disability Pay: If you have a service-connected disability, you may also be eligible for VA disability compensation. This is a separate benefit from military retired pay and is tax-free. In some cases, you may receive both, or your military retired pay might be offset by your VA disability pay (known as "VA waiver" or "offset"). Concurrent Receipt (CRDP and CRSC) programs can allow certain retirees to receive both without offset.
Understanding your potential retirement pay is a crucial step in planning your post-military financial future. This calculator provides an estimate, but for precise figures, always consult with a financial advisor or a military benefits counselor.