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The Three Military Retirement Systems
Final Pay
For members who entered before September 8, 1980. Retirement pay equals 2.5% × years of service × final month's basic pay. A 20-year retiree receives 50% of final pay.
High-36
For members who entered between September 8, 1980 and December 31, 2017 (and did not opt into BRS). Uses 2.5% × years × average of the highest 36 months of basic pay. A 20-year retiree gets 50% of their average.
Blended Retirement System (BRS)
For members who entered on or after January 1, 2018, or who opted in. Uses 2.0% × years × average of highest 36 months. The lower multiplier is offset by government TSP matching (up to 5% of basic pay) and continuation pay.
Retirement System Quick Comparison
| Feature | Final Pay | High-36 | BRS |
|---|---|---|---|
| Multiplier per year | 2.5% | 2.5% | 2.0% |
| Base for calculation | Final month pay | Avg high-36 months | Avg high-36 months |
| TSP matching | None | None | Up to 5% |
| 20-year payout | 50% final pay | 50% avg pay | 40% avg pay |
| Continuation pay bonus | No | No | Yes (12 yrs) |
Frequently Asked Questions
Is military retirement pay taxable?
Federal income tax applies to military retirement pay. However, many states fully or partially exempt military retirement from state income tax. Some states like Texas, Florida, and Nevada have no income tax at all. Disability retirement pay may be partially or fully tax-free depending on the percentage.
When does military retirement pay start?
Retirement pay begins the first day of the month after your retirement date. There is typically no gap — DFAS (Defense Finance and Accounting Service) begins payments automatically once your retirement is processed. You can manage your pay and tax withholding at myPay.
Does military retirement affect VA disability compensation?
Traditionally, VA compensation was offset dollar-for-dollar from retirement pay. However, Concurrent Retirement and Disability Pay (CRDP) allows veterans rated 50%+ to receive both in full. Combat-related disabilities may qualify for CRSC instead. Learn about concurrent receipt →
What is the Survivor Benefit Plan (SBP)?
The Survivor Benefit Plan is an annuity program that continues a portion of your retirement pay to your surviving spouse or dependents after your death. The standard SBP costs 6.5% of your covered base amount and pays 55% of that amount to survivors. SBP and VA Dependency and Indemnity Compensation (DIC) can now be received concurrently.
Can I retire with less than 20 years?
Generally, regular military retirement requires at least 20 years of active service. However, medical/disability retirement (Chapter 61) is available regardless of years served if you are medically unfit for duty. Reserve/Guard retirement works differently, using a points system, and typically begins at age 60.