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Guide to Military Retirement Benefits
The following was compiled from the Department of Defense website. As benefits may change with time, please visit the website for updates & additional information including a FAQ section.
Which System Applies to You
To decide which system applies to you, you must determine the date that you first entered the military. This date is called the DIEMS (Date of Initial Entry to Military Service) or DIEUS (Date of Initial Entry to Uniformed Services). The date you first entered the military is the first time you enlisted or joined the active or reserves. This date is fixed—it does not change. Departing the military and rejoining does not affect your DIEMS.
| Retirement System |
Criteria to Receive |
| Final Pay |
Entry before September 8, 1980 |
| High-3 |
Entry on or after September 8, 1980, but before August 1, 1986 OR
Entered on or after August 1, 1986, AND did not choose the Career Status Bonus and REDUX retirement system
|
| CSB/REDUX |
Entered on or after August 1, 1986, AND elected to receive the Career Status Bonus (if you do not elect to receive the Career Status Bonus, you will be under the High-3 retirement system) |
Final Pay Retirement System
Final Pay applies to those who entered the Service before September 8, 1980. Each year of service is worth 2.5% toward the retirement multiplier. Hence, 2.5% x 20 years = 50%, and 2.5% x 30 years = 75%. The longer an individual stays on active duty, the higher the multiplier and the higher the retirement pay, up to the maximum of 75 percent. This multiplier is applied against the final basic pay of the individual's career.
| Years of service |
20 |
21 |
22 |
23 |
24 |
25 |
26 |
27 |
28 |
29 |
30 |
| Multiplier |
50% |
52.5% |
55% |
57.5% |
60% |
62.5% |
65% |
67.5% |
70% |
72.5% |
75% |
High-3 Year Average Retirement System
This system applies to members who first entered Service after September 8, 1980, but before August 1, 1986. It also applies to individuals who entered on or after August 1, 1986, who do not select the REDUX retirement system with the Career Status Bonus at their 15th year of service. Each year of service is worth 2.5% toward the retirement multiplier. Hence, 2.5% x 20 years = 50%, and 2.5% x 30 years = 75%. The longer an individual stays on active duty the higher the multiplier and the higher the retirement pay, up to the maximum of 75 percent. This multiplier is applied against the average basic pay for the highest 36 months of the individual's career.
| Years of service |
20 |
21 |
22 |
23 |
24 |
25 |
26 |
27 |
28 |
29 |
30 |
| Multiplier |
50% |
52.5% |
55% |
57.5% |
60% |
62.5% |
65% |
67.5% |
70% |
72.5% |
75% |
CSB/REDUX Retirement System
The CSB/REDUX retirement system applies to those who entered Service on or after August 1, 1986, and elected to receive the $30,000 Career Status Bonus at their 15th year of service. The REDUX retirement system and Career Status Bonus is a "package deal." The REDUX portion determines retirement income (the longer one's career, the higher that income), and the $30,000 Career Status Bonus provides current cash—available for investing, major purchases, or setting up a business after retirement.
| Years of service |
20 |
21 |
22 |
23 |
24 |
25 |
26 |
27 |
28 |
29 |
30 |
| Multiplier |
40% |
43.5% |
47% |
50.5% |
54% |
57.5% |
61% |
64.5% |
68% |
71.5% |
75% |
In precisely the same way as High-3, this multiplier is applied against the average basic pay for the highest 36 months of the individual's basic pay.
Retirement Choice
Members who entered the service after July 31, 1986, will be given a choice of retirement plans at their 15th year of service. There are two options:
- Take the pre-1986 retirement system (High-3 Year Average System).
- Select the post-1986 retirement system (Military Retirement Reform Act (MRRA) of 1986, commonly referred to as REDUX) and take a $30,000 Career Status Bonus (CSB).
The following chart summarizes the differences between the three current retirement systems.
| System |
Basis |
Multiplier |
COLA |
Readjustment |
Bonus |
| Final Pay |
Final basic pay |
2.5% per year up to 75% |
CPI |
None |
None |
| High-3 |
Average of highest 36 mos. of basic pay |
2.5% per year up to 75% |
CPI |
None |
None |
CSB/
REDUX |
Average of highest 36 mos. of basic pay |
2.0% per year for the first 20 years; 3.5% for each year beyond 20, up to 75% |
CPI – 1% |
At age 62: (1) changes multiplier to 2.5% per year up to 75% and (2) adjusts COLA to full CPI for past retired years.
|
$30,000 at 15th year of service with commitment to complete 20 year career |
|
