The military retirement system is complicated. With multiple pay systems and complex calculations used within each one of them, figuring out where you stand in terms of retirement can be challenging. Today we’ll break down how pensions are set in simple terms.

First, look at your Join Date. That largely controls which system you will use for retirement.

MILITARY JOIN DATES AND MATCHING RETIREMENT SYSTEMS

When the Blended Retirement System (BRS) went into effect in 2018, active service members with twelve or fewer years of service on December 31, 2017 were given the option to stay in their legacy retirement system or migrate to BRS. These decisions were generally required to be made by military members between 2017-2018. 

FINAL PAY SYSTEM

This is the oldest, least flexible retirement system for service members. The breakdown for pensions is based upon two figures: 

• Monthly base pay at the time of retirement
• Number of years in service

These figures are then multiplied by 2.5% to determine a Veteran’s pension.

As with other retirement systems, the longer you stay in service, the greater your pension. 

• If a Veteran retired with 20 years of service, then they are eligible for 50% of their base pay at the time of retirement. 
• If a Veteran retired with 40 plus years of service, then they are eligible for 100% of their base pay at the time of retirement. 

The military provides a free calculator for the Final Pay System.

HIGH 36 RETIREMENT SYSTEM

This system is very similar to the Final Pay System. They differ in how the base monthly pay is set. Instead of using the base pay at the end of your service, calculations are based upon the average of the highest 36 months of pay during your YOS. Pension is then determined multiplying 2.5% by base pay and YOS.

The military provides an online calculator for this system.

REDUX SYSTEM

Slightly more complicated than Final Pay and High 36, REDUX created clear incentives for lengthier military careers. Payments also differ based upon the age of the recipient.

Prior to age 62:

• Base % is 2.5% times the number of your years of service minus 1.0% for each year of service less than that of 30 years.
• Base pay is average of your highest 36 months of basic pay.

At age 62 and after: 

• Same as the High 36 System. 
• 2.5% times the number of your years of service times the average of your highest 36 months of your basic pay.

The military provides an online calculator for the REDUX system.

Prior to December 31, 2017, members with 15+ YOS were eligible to choose a one time, Career Status Bonus (CSB) of $30,000. This is no longer an option. 

BLENDED RETIREMENT SYSTEM (BRS)

The Blended Retirement System provides several alternatives for payments, taking into account the duration of service and potential financial needs for Veterans. It provides traditional military benefits, but also ones similar to that of a 401k. Understanding the different forms of payment is key to planning a career in the military and eventual retirement.

The BRS can be broken down into:

• Defined Benefit
• Defined Contribution
• Continuation Pay
• Lump Sum

DEFINED BENEFIT

This is the simplest of options within the BRS:

• Applies to individuals with 20+ years of service (YOS)
• Benefit multiplier of 2%
• The longer you serve, the higher your benefit
• Provides full cost of living adjustment (COLA)
• You may choose traditional monthly payments or a LUMP SUM 

DEFINED CONTRIBUTION

This is the most complex of all the categories with the BRS. It involves contributions to the federal Thrift Savings Plan (TSP), an investment plan similar to a 401k. Here are the basics:

• A TSP account will be set up for you generally within 60 days of starting service.
• The military automatically contributes a matching 1% contribution to your TSP account.
• If you choose to increase your contributions to your TSP account, the military will match up to 4% on those you make.
• Contributions can be made via your service’s online pay portal.
• The TSP is a portable retirement account, meaning that upon ending service, it can be transferred to an IRA or a 401k account from a civilian employer.

For more information about the TSP, visit its website.

CONTINUATION PAY

Active service members may select to receive  a one-time, mid career bonus payment called Continuation Pay.

• You are eligible for it when you complete between eight, but no greater than twelve years of service (YOS). 
• Continuation Pay is 2.5 to 13 times your regular pay.
• How the rate of pay is set is service specific.

Also, note that:

• Opting for Continuation Pay incurs an additional service obligation of three years or greater, depending on your Service. 
• Continuation Pay is taxable income. It may change your tax bracket.

LUMP SUM

You may opt to receive 25-50% of your total retired pay up front.

There are currently two options:

• One lump sum
• Four equal payments distributed over four years

If you choose either of the lump sum payments, your monthly retirement pay will then be reduced by either 75-50% until you reach full Social Security age.

If you choose to receive any of the lump sum options, you must officially file for it at least 90 days prior to the end of your service.  

For Veterans in need of a larger amount of cash, this may be a good option. However, it may also raise your tax bracket, as it is taxable income.

The military provides an online calculator to help determine possible payments under the BRS.

For more information, visit: https://militarypay.defense.gov/BlendedRetirement/

WHAT’S NEXT?

Pension payments are only one component to post-service life.

SAVI is here every step of the way to help you transition from service-member to thriving Veteran retiree. Our retirement track can provide additional resources and coaching for that purpose. 

https://savivets.org

The military retirement system is complicated. With multiple pay systems and complex calculations used within each one of them, figuring out where you stand in terms of retirement can be challenging. Today we’ll break down how pensions are set in simple terms.

First, look at your Join Date. That largely controls which system you will use for retirement.

MILITARY JOIN DATES AND MATCHING RETIREMENT SYSTEMS

When the Blended Retirement System (BRS) went into effect in 2018, active service members with twelve or fewer years of service on December 31, 2017 were given the option to stay in their legacy retirement system or migrate to BRS. These decisions were generally required to be made by military members between 2017-2018. 

FINAL PAY SYSTEM

This is the oldest, least flexible retirement system for service members. The breakdown for pensions is based upon two figures: 

• Monthly base pay at the time of retirement
• Number of years in service

These figures are then multiplied by 2.5% to determine a Veteran’s pension.

As with other retirement systems, the longer you stay in service, the greater your pension. 

• If a Veteran retired with 20 years of service, then they are eligible for 50% of their base pay at the time of retirement. 
• If a Veteran retired with 40 plus years of service, then they are eligible for 100% of their base pay at the time of retirement. 

The military provides a free calculator for the Final Pay System.

HIGH 36 RETIREMENT SYSTEM

This system is very similar to the Final Pay System. They differ in how the base monthly pay is set. Instead of using the base pay at the end of your service, calculations are based upon the average of the highest 36 months of pay during your YOS. Pension is then determined multiplying 2.5% by base pay and YOS.

The military provides an online calculator for this system.

REDUX SYSTEM

Slightly more complicated than Final Pay and High 36, REDUX created clear incentives for lengthier military careers. Payments also differ based upon the age of the recipient.

Prior to age 62:

• Base % is 2.5% times the number of your years of service minus 1.0% for each year of service less than that of 30 years.
• Base pay is average of your highest 36 months of basic pay.

At age 62 and after: 

• Same as the High 36 System. 
• 2.5% times the number of your years of service times the average of your highest 36 months of your basic pay.

The military provides an online calculator for the REDUX system.

Prior to December 31, 2017, members with 15+ YOS were eligible to choose a one time, Career Status Bonus (CSB) of $30,000. This is no longer an option. 

BLENDED RETIREMENT SYSTEM (BRS)

The Blended Retirement System provides several alternatives for payments, taking into account the duration of service and potential financial needs for Veterans. It provides traditional military benefits, but also ones similar to that of a 401k. Understanding the different forms of payment is key to planning a career in the military and eventual retirement.

The BRS can be broken down into:

• Defined Benefit
• Defined Contribution
• Continuation Pay
• Lump Sum

DEFINED BENEFIT

This is the simplest of options within the BRS:

• Applies to individuals with 20+ years of service (YOS)
• Benefit multiplier of 2%
• The longer you serve, the higher your benefit
• Provides full cost of living adjustment (COLA)
• You may choose traditional monthly payments or a LUMP SUM 

DEFINED CONTRIBUTION

This is the most complex of all the categories with the BRS. It involves contributions to the federal Thrift Savings Plan (TSP), an investment plan similar to a 401k. Here are the basics:

• A TSP account will be set up for you generally within 60 days of starting service.
• The military automatically contributes a matching 1% contribution to your TSP account.
• If you choose to increase your contributions to your TSP account, the military will match up to 4% on those you make.
• Contributions can be made via your service’s online pay portal.
• The TSP is a portable retirement account, meaning that upon ending service, it can be transferred to an IRA or a 401k account from a civilian employer.

For more information about the TSP, visit its website.

CONTINUATION PAY

Active service members may select to receive  a one-time, mid career bonus payment called Continuation Pay.

• You are eligible for it when you complete between eight, but no greater than twelve years of service (YOS). 
• Continuation Pay is 2.5 to 13 times your regular pay.
• How the rate of pay is set is service specific.

Also, note that:

• Opting for Continuation Pay incurs an additional service obligation of three years or greater, depending on your Service. 
• Continuation Pay is taxable income. It may change your tax bracket.

LUMP SUM

You may opt to receive 25-50% of your total retired pay up front.

There are currently two options:

• One lump sum
• Four equal payments distributed over four years

If you choose either of the lump sum payments, your monthly retirement pay will then be reduced by either 75-50% until you reach full Social Security age.

If you choose to receive any of the lump sum options, you must officially file for it at least 90 days prior to the end of your service.  

For Veterans in need of a larger amount of cash, this may be a good option. However, it may also raise your tax bracket, as it is taxable income.

The military provides an online calculator to help determine possible payments under the BRS.

For more information, visit: https://militarypay.defense.gov/BlendedRetirement/

WHAT’S NEXT?

Pension payments are only one component to post-service life.

SAVI is here every step of the way to help you transition from service-member to thriving Veteran retiree. Our retirement track can provide additional resources and coaching for that purpose. 

https://savivets.org

Contact Us

Have a question about your Veteran benefits? You can email us today! If you are within one-year pre to post-military separation, you can enroll in our FREE program by setting up a call with one of our transition coaches.

With the coronavirus pandemic affecting every country on the planet, maintaining quality healthcare is on most people’s minds. This is especially true for Veterans, who may also face life-long treatment for service-connected disabilities. Luckily, there are many healthcare options for retirees to fit a variety of needs. 

Healthcare for Veterans generally falls under two options: VA Healthcare and TRICARE Prime. We’ll walk through each of them and provide links to additional resources to help you gain access to healthcare as you retire from service. 

TRICARE PRIME

Upon retiring, Veterans have the option of continuing to use TRICARE Prime. If you wish to stay with the same team of healthcare providers, this may be a good option for you and your family. Retired service members and their family members will no longer receive zero out of pocket coverage and will be faced with enrollment costs and co-pays. When retired service members and their families become eligible for Medicare based upon age, they are no longer eligible for TRICARE Prime.

TRICARE Prime is divided into two geographical regions. Visit this page to determine whether you should enroll in the regional plans. 

VA HEALTHCARE

You may also choose to transition to VA Healthcare. Coverage within this program is dependent upon each Veteran’s specific healthcare needs. Baseline services are extended if you require care specific to injuries or disabilities sustained during service.

Visit this page for information about making the switch from TRICARE Prime during active-service to VA Healthcare upon retirement. 

TRICARE PRIME AND VA HEALTHCARE, COMPARED:

WHAT’S NEXT? 

If you do not enroll in either program and are not the recipient of private health insurance through a job, you or your dependents may still enroll in health care coverage provided by the Affordable Care Act ACA. Visit your state healthcare exchange to enroll in programs.

SAVI is here to help counsel Veterans as you make important choices regarding the future of your healthcare. Visit https://savivets.org/veterans-transition-assistance to learn about coaching services for creating your best post-service life. 

Contact Us

Have a question about your Veteran benefits? You can email us today! If you are within one-year pre to post-military separation, you can enroll in our FREE program by setting up a call with one of our transition coaches.

A community may be geographic in nature, but you can also be defined by a group of people with a common interest, purpose, or way of life.

Various Communities:

• Veteran-centered organizations (like SAVI) 
• Religious organizations affiliated with your church, temple, or mosque
• LGBTQIA organizations
• Educational  organizations
• Organizations that help the homeless 

Additional Benefits of Volunteering

Just because you’re helping out your community, doesn’t mean you don’t have to receive benefits in return. Volunteering may give you a new purpose during your transition to civilian life, but there are other benefits you may find in it.

Benefit one: Meeting New People

A great way to make new friends is to engage an activity that you enjoy with like-minded people. Volunteering can provide openings for new friendships, strengthen existing relationships, and overall increase your support network. 

Benefit Two: Increase Your Social Skills

If you’re an introvert or someone who tends to be shy, volunteering can be a way for you to hone your social skills. Engaging in conversations with strangers is a lot easier if you have a central topic to talk about. (With the added bonus that you won’t have to resort to talking about the weather.) The more practice you have, the easier it will be for you to talk to strangers in non-volunteering situations.  

Benefit Three: Better Your Mental Health

Volunteerism may have a positive impact upon your mental health by reducing negative feelings. Connecting with other people and giving yourself tasks to focus on that are outside of your normal life are ways to reduce stress, anger, and anxiety, 

Conversely, volunteering may also increase certain positive feelings. Accomplishing goals for a community organization may give you a sense of pride and increase your self-confidence. This may in turn have a ripple effect, leading to an overall positive outlook on life. 

Benefit Four: Career Advancement

Volunteering is a great way to test drive a new career field without actually quitting your job. It can also give you valuable experience to add to your resume and provide opportunities to meet other professionals in the field. Volunteering can also increase your professional skills, depending on the type of training you are provided for your role.  

If you’re not considering a new career, changing careers, volunteering can provide opportunities for you to hone skills that are valuable in your given profession. Interacting with people outside your workplace, you can try out new approaches to teamwork, project management, and problem solving. Once you feel more confident in your skills, you can take what you’ve learned and apply it to your job. 

Benefit Five: R & R

Just because you’re helping out with your community, doesn’t mean you can’t have fun at the same time! 

If your volunteerism follows your personal interests, then it can provide a needed outlet outside of work and family commitments. If you enjoy being creative, then volunteer with an arts organization. If spending time outside brings you happiness and relaxes you, then consider participating in a local garbage clean-up service or non-profit that plants trees. If nothing calms you like petting a dog or cat, then volunteer with a local animal shelter. 

With many states involved in some form of lockdown during the pandemic, volunteering for an organization geared toward your personal or creative interests might be able to recharge you in much needed ways.

What If I Don’t Know Where to Start?

If you’re unsure of where to volunteer or find the prospect of approaching an organization to be daunting, we suggest using a service that will match you with organizations in need of individuals like you. The skills you acquired while serving in the military may seem niche in nature, but you’ll be surprised to discover the wide variety of skill sets and tasks needed by non-profits. This is particularly true now, during the coronavirus pandemic, when so many people are in need to aid. 

Services that connect volunteers with organizations also have numerous work from home opportunities. So if you’re disabled or want to stay home due to concerns about contracting coronavirus, there are still many ways that you may volunteer from the comfort of your living room.

SAVI recommends the following services for connecting with volunteering opportunities:

• VolunteerMatch
• The Taproot Foundation
• Catchafire

Every little bit may help your community, but also give you a reason to get out of bed or get out the door.

I Want to Help, But…

There is a possibility that you already care about a community, but there are currently few to no organizations assisting it. That’s where your leadership skills from the military kick in. SAVI’s founder, Adrianne Phillips, started SAVI because she saw a need for coaching to help service members transitioning from the military. 

You, too, can start a new initiative. It doesn’t have to be a herculean task that you take on in entirety. It can start simply with coffee between a few like minded people.

Contact Us

Have a question about your Veteran benefits? You can email us today! If you are within one-year pre to post-military separation, you can enroll in our FREE program by setting up a call with one of our transition coaches.