Military Retirement Benefits – Are You Eligible?
When you chose to serve your country in our Nation’s military, you may or may not have thought of it as a career move. But when it comes time to retire, you should know if you are eligible for military retirement benefits.
Who Is Eligible?
Military retirement benefits are available to all service members who have given twenty years of active service, or an equivalent number of qualifying reserve years. Those who retire from either active duty or the reserves, are still governed by the Uniform Code of Military Justice, and as such, are subject to recall into active service.
When Military Retirement Benefits Are Paid
Military retirement benefits increase to compensate for the rising cost of living between the twentieth and twenty sixth years. After the twenty six year, the benefits no longer increase. Your military retirement benefits will be roughly seventy-five percent of your basic pay, if you served thirty years or more.
Those who served twenty years of active duty, will be eligible for their military retirement benefits immediately upon their release from service. Those who served as reservists, however, must wait until they turn sixty to collect military retirement benefits.
How Are Military Retirement Benefits Calculated?
The military utilizes a formula to calculate the amount of military retirement benefits each service member will receive. It is based upon the number of years the member has served, and when each service member joined the military.
Any retiree who joined the military before September, 1980, will collect their monthly benefits based on their rank at the time of separation from duty, and the number of years they served. For example: retirees who served for twenty years, will receive fifty percent of their final base pay as their military retirement benefit.; and each year they served over twenty years, gives them an increase in their benefit amount of 2.5 percent of their base pay.
Anyone joining the military after September, 1980, but before August, 1986, will be calculated according to a different system entitled “High 3.” Their military retirement benefits will be calculated by taking their base pay multiplied by 2.5 percent for each year they served.
Anyone who joined after August, 1986, will have two different options for having their military retirement benefits calculated; they can choose either the High-3 option, or they can choose to have their military retirement benefits calculated using the Career Status Bonus-Redux option. This will allow them to retire earlier, but at a substantial reduction to their military retirement benefits.
Contact your local office of Veteran Affairs to receive more information on your military retirement benefit options.