Use our free retirement calculator to estimate your monthly and annual payments.
Who is Eligible for National Guard/Reserve Retirement?
All active duty servicemembers and Reserve Component (RC) members are eligible for military retirement as long as they meet certain requirements. However, the eligibility for RC military retirement differs from that for active duty military retirement, so we have different calculators for each group.
Calculate active duty military retirement pay on this page or simply click the “Active Duty” button under “Status at retirement” on this calculator.
Across the Reserve Component, the eligibility for retirement is the same for all members.
Members of the Reserve Component include:
- Air National Guard
- Air Force Reserve
- Army National Guard
- Army Reserve
- Coast Guard Reserve
- Navy Reserve
- Marine Corps Reserve
See our complete guide on Guard/Reserve Retirement here.
How to Qualify for Guard/Reserve Retirement
If you’re in the Reserve Component, you must earn 20 qualifying years of service to qualify for retirement. To have a qualifying year in the RC, you must earn 50 points, commonly referred to as a Good Year.
Additionally, as part of the RC, you cannot claim retirement pay until age 60 unless you serve enough active duty time to earn an early Guard/Reserve Retirement. Since the military
Earning Retirement Points
Reserve members earn points for various activities, such as drills, training, and active-duty service. For every day of active-duty service, you’ll receive one point. Read our detailed Guard/Reserve point guide here for a full breakdown of how to earn more retirement points.
Each point contributes to your retirement pay calculation. To find your points statement, use the following table.
| Reserve Component Branch | Where to Find Your Points Statement |
|---|---|
| Army National Guard | Go to IPPS-A Landing Page (army.mil). Select “HR Professional,” then select “View Retirement Points.” |
| Air Force Reserve and Air National Guard | Go to https://www.my.af.mil. Navigate to the Virtual Military Personnel Flight (vMPF), select “Self-Service Actions,” select “Personal Data,” and click “ANG/USAFR Point Credit Summary Inquiry (PCFARS).” |
| Army Reserve | Review your “Chronicle Retirement Point Statement DA 5016” at www.hrc.army.mil. Select the “My Record” tab to review. Note: CAC card required. |
| Marine Corps Reserve | Review your “Career Retirement Credit Report” at https://mol.tfs.usmc.mil/mol |
| Navy Reserve | Review your “Annual Retirement Point Record” (ARPR) at https://www.bol.navy.mil/ARPR/ |
| Coast Guard Reserve | Go to https://portal.direct-access.us. Click “My Reserve Points Statement” under the “Employee View” menu. |
At retirement, the total number of accumulated points is divided by 360 to convert them into equivalent years of service. This figure is then used in the retirement pay formula, which varies depending on the military retirement plan you are eligible for.
Other Factors That Impact Guard/Reserve Retirement Pay
Outside of the eligibility requirements and how pay is calculated, most retirement benefits are fairly similar between active duty members and members of the Guard/Reserve. To learn more about the impacts on your military retirement pay, like how to figure out your retirement plan and how taxes will affect your retirement pay, see the following links:
- How to Figure Out Your Retirement Plan
- How to Calculate Your TSP
- How Rank Affects Pay
- Your Retirement Date
- Retirement Pay Cost of Living Adjustments
- Military Retirement Pay Tax Deductions
- Common Withholdings
- Disability Compensation & Retirement Pay
Final Thoughts on Your Future Benefits
The biggest differences between active duty and Reserve military retirement come down to the points system and when you are eligible to receive retirement pay and other benefits. While active duty service gets you access to military retirement faster, aspects of active duty service may not interest you. Whereas being in the Reserves will give you access to those strong VA benefits, but also allow you the opportunity to seek professional growth in the civilian workforce sector.
Ryan Guina says
Hi Aaron, Just plug in your numbers:
High-36 Retirement: (total number of points / 360) * average highest 36 months of pay * 0.025
Blended Retirement System: (total number of points / 360) * average highest 36 months of pay * 0.02
That should give you a rough estimate. You can also contact your branch of service’s personnel or human resources office and they should be able to provide you with a retirement estimate.
Keep in mind any estimate will be made with the most recent pay tables, while your actual retirement will be based on the three most recent pay tables at the time you retire. So, it’s very likely your retirement pay will be higher than any provided estimates.
Best wishes!
Ryan Guina says
Hello Doug Miller, I’m not speaking for Doug Nordman, but I’ll answer to the best of my ability.
My understanding is that you need 20 years of active duty service to qualify for active duty retirement benefits and an immediate pension. All inactive points are then converted using the calculations in this article (inactive points, divided by 360, which converts to years, that are then added to your 20 year base).
In your example, 1,608 points would convert to 4.47 years. So, assuming you retired with those numbers, you would have roughly 24.5 years of retirement credit. Your personnel or human resources office can help you run an estimate to better understand your situation.
Best wishes!
Ryan Guina says
Joe, I can’t speak for Doug, but I can walk you through this. First, I wish you the best of luck in returning to the military to earn a final year and qualify for retirement. Next, you have a lot to be proud of. Definitely buy back your military service time for your civil service pension. It will be well worth it!
Regarding estimating your military retirement benefits, if you can get back in – you have the information in this article. divide 4,700 points by 360, and you get 13.05 years. To make things easier, use 13 as your time in service multiplier, which gives you 32.5%. Then multiply 32.5% by the average of your High-36 pay. I don’t know your rank, so I can’t do that for you. But you can easily do it. You will need to take the base pay for the highest held rank for the last three years and average it. Then multiply that by 32.5%. That should provide you with a rough estimate. If you get back in the service, your personnel or human resources office can run an official estimate for you. But this can serve as a back of the envelope calculation until you need a more accurate estimate. Best wishes!
Ryan Guina says
S.P.,
I don’t have a lot to go on by your comment. If you are a retiree, your military retirement pay will be offset by your VA disability compensation. You can read more about how VA disability impacts retirement pay in this article.
If you are currently serving, I encourage you to read the following two articles to get a better idea of how a VA disability rating impacts your ability to serve in the Guard or Reserves, and how to determine whether to waive military or VA compensation for the days you served in both statuses.
Regarding serving with a VA disability rating: you can only earn one type of pay on any given day. You can’t earn VA disability compensation on the same day you earn military compensation. Because there is no way for the VA to track this in real-time, you will receive a form each year outlining the days that you received compensation for both payments. You will then need to choose one to waive. These benefits are pro-rated based on the monthly compensation rate. In almost every case, it is best to waive the VA disability compensation. If you choose to do so, the VA will withhold a portion of future payments until you have repaid the debt. The above article outlines the details.
Best wishes!
Ryan Guina says
Dean, I can’t speak for Doug, but I’ll answer to the best of my ability.Your TAFMS is your Total Active Federal Military Service. This only counts your active duty time. Your PCARS should inclue all of your points, including TAFMS and inactive points. You need 20 years worth of TAFMS to qualify for active duty retirement benefits. You just need 20 good years to qualify for Guard or Reserve retirement benefits.
In your example, this person can retire with active duty benefits once he has 20 years of TAFMS. But since he will have 23 years worth of points, his retirement would be based on 23 years worth of points. And since it would be the equivalent of an active duty retirement, it would start the month after he retires, instead of him having to wait until age 60.
I hope this helps!
Dean O says
Mahalo Ryan.
It clears up a lot of confusion we have between the Air National Guard (AGR’s, Technicians, and Week End Warriors) and Active Duty Air Force and their retirements.
Ryan Guina says
SSG Ret Ballard, no, you will not generally be able to add points to your retirement total once you have retired. You can contact your branch of service’s Human Resources or Personnel office for more information on your points total. You should be able to contact DFAS to obtain an estimate for your monthly retirement pay once you become eligible. Just be aware that there will be one more cost of living increase between now and next year. Best wishes!
Doug Nordman says
You’re welcome, Matt! I’m paying it forward, and I’m glad it’s helping.
If you’re earning an active-duty military pension, then that will starts as soon as you retire from your final set of orders. The Dept of Defense will do that regardless of your civil-service career.
If you’re earning that active-duty pension from Chapter 71 of Title 10 (instead of a Reserve pension from Chapter 1223) then it’s considered a regular pension and not a Reserve (non-regular) pension. Even if you achieved this pension through declaring sanctuary, it’s still an active-duty pension.
However the federal laws (passed in the 1960s) about dual compensation will limit your ability to buy your military service credit deposit with your FERS pension. OPM enforces the dual-compensation laws.
https://the-military-guide.com/earning-military-pension-civil-service-pension/
The only waivers in that situation are for a military disability pension, or for a Reserve pension, or if you give up your active-duty pension. However you can still buy a portion of your military service credit deposit to adjust your Service Computation Date, your Reduction In Force date, and your annual leave accrual rate multiple:
http://gubmints.com/2013/04/15/military-service-credit-deposit-retired-from-active-duty/
In very general terms, it only makes sense to give up your active-duty pension if you retired at a relatively junior enlisted rank and reached a very senior civil-service rank.
Matt K says
Thanks Doug!
2 more curiosities:
Since I’ve done over 10 years of active duty as a reservist (mix of RPA, MPA, and AGR status), that reduces my retirement age to 50, right? (AGR counts toward reducing retirement age, doesn’t it?)
Lets say I’ve officially reduced my retirement age from 60 to 50. If I start collecting a pension at 50, would that be considered a reserve retirement and therefore I could buy all that time back in a civil service position?
Thank you again so much for your time and patience!
Doug Nordman says
Matt, a Reserve early retirement is completely separate from an active-duty pension, and a Reserve early retirement depends on the nature of your active-duty orders. AGR orders do not necessarily qualify. You’d have to be mobilized to a combat zone after 28 January 2008 for at least 90 days in a fiscal year. In 2013 the law was amended to add mobilizations for natural disasters, again for at least 90 days. You can read all the details at this post:
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/
Again, if you serve for 20 years of active duty and retire (at any age) on an active-duty pension, then it’s not part of the Reserve retirement system and it has nothing to do with Reserve early retirement benefits.
matt k says
Thanks so much!
Doug Nordman says
John, you’ll want to check all of your combat deployment dates since 28 January 2008 against the early-retirement requirements listed in this post:
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/
Depending on the dates you deployed, their duration, and their timing around the fiscal year, you may be eligible to start your pension three months earlier for every 90 days in the combat zone. Earlier versions of the law (which applied to you but were amended in FY 15 after you retired awaiting pay) required all 90-day periods to be served in the same fiscal year.
HRC and all of the other services have to manually review and calculate the mobilization orders, locations, and dates in order to validate the early-retirement eligibility for each 90-day period. (There’s no automated system to assist in this.) In addition, all of the DoD federal civil service staffs have been backlogged in processing these requests due to the pandemic remote-work requirements, a wave of civil-service retirements, and the slow hiring/training of new employees.
I can’t predict when HRC will approve your retirement application and send it over to DFAS, but DFAS will tell you (in their letter) that they’ll start your pension deposits within 30-45 days after they receive the ANG approval. It’s possible that you may see a status update in your MyPay account, although that depends on the timing of DFAS running the payroll/pension process around the 20th of the month. Your first deposit (at the end of the month) will be paid retroactive to the early-retirement date that you’re eligible to start your pension. Subsequent deposits will be the regular amount of your pension.
When your retirement application is approved, at your 60th birthday you can update your Tricare enrollment in DEERS. (Although you’re receiving an early pension, Tricare still starts at age 60.) You might need several weeks of lead time to get an appointment at a RAPIDS office, but your Tricare benefits will be retroactive to your 60th birthday.
Doug Nordman says
Maria, it’s a shame that HRC couldn’t make the effort to provide a regulation. I’m not familiar with their claim that you forfeit any of your points.
My understanding of the process comes from the Financial Management Regulation (DoD 7000.14-R) Volume 7B Chapter 3:
https://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_03.pdf
Your 1032 additional points are divided into 360 and added to your 20 years for a total of 22.87 years of service.
I’d recommend checking this with your command’s financial personnel (if they’re familiar with sanctuary), or HRC’s sanctuary office, or a JAG at your base legal service office. If you haven’t already talked to HRC’s sanctuary office, you can find them at:
https://www.hrc.army.mil/content/Enlisted%20Sanctuary%20Program
[email protected] or by phone at 502-613-5962.
As a side question, I’m not sure of your math for 1032 points of other than active duty from your 7797 point count. Presumably you’re working from HRC’s audit of your sanctuary request.
Doug Nordman says
Congratulations on your pending pension, Duane!
As John says, the federal law for retired awaiting pay is “… as though the member had been on active duty the entire time” during gray area. For most ranks and ages it’s the maximum longevity pay in that rank. However those who’ve joined the Reserves in their 30s (or had significant broken service) might not reach the maximum pay for their rank by age 60.
I’m not familiar with the website calculator you mention, but it probably does the math for your years of service and your age to forecast your pension at age 60. For a more relevant number you could calculate your pension in today’s dollars with today’s pay tables (using the longevity you’d have at age 60) and compare that directly to your current expenses. By using today’s dollars, you don’t have to account for inflation.
John says
I’m not sure, but if you are a gray area reservist it is the total time from your PEBD until you start drawing retired pay. All that time in between counts for longevity. For most people, this maxes them out. I guess in some situations it may not. Maybe if you didn’t start your career til very late and/or had broken service.
Doug Nordman says
Richard, as John & Keith point out above, it’s certainly possible.
Let me call your attention to a couple of critical details in the post.
First, the pension is calculated using the pay tables in effect when you start it. In your case (at age 60), it’s the High Three average of the 2021, 2020, 2019, and 2018 pay tables.
Second, it’s at the longevity as if you’d been on active duty the entire time up until you start your pension. This means that your years of service continue to accrue.
The result is that while you’re awaiting pay (gray area) your pension is boosted by annual pay raises (tied to the Employer Cost Index) and longevity pay raises (years of service in the pay tables). In general, your eventual pension more than keeps up with inflation during the gray-area years.
The tradeoff for DoD’s pension generosity is that “retired awaiting pay” Reservists are subject to involuntary recall for a total force mobilization, which last happened during WWII.
If you had a December 2019 drill weekend of $1408.44 then you were indeed an O-6 over 20 years.
https://www.dfas.mil/Portals/98/MilPayTable2019_3.pdf
Since you were an O-6>20 in 2018-19 then I’ll assume that in January 2020 you became an O-6>22. You can correct the numbers below for your actual date that you went O-6>22.
In October 2021 your High Three average becomes:
https://www.dfas.mil/MilitaryMembers/payentitlements/Pay-Tables/PayTableArchives/
2020 and nine months of 2021 as an O-6>22,
2019 as an O-6>20, and
2018 for three months as an O-6>20.
Working backwards from the 2021 pay tables to 2018, your High Three pay average is:
[(9 x $11,512.80) + (12 x $11,177.40) + (12 x $10,563.30) + (3 x $10,295.70)] / 36 = $10,983.08
Your High Three pension would be:
$10,983.08 x (2421 / 360) x .025 = $1846/month.
By the way, BUPERS N9 is backlogged due to civil-service retirements and pandemic labor shortages. You should consider applying for your October 2021 pension now. See the section “Applying for Retirement with Pay” at:
https://www.public.navy.mil/bupers-npc/career/reservepersonnelmgmt/ReserveRetirements/Pages/default.aspx
John says
Yes. The unfortunate and unfair aspect of all this is after you start getting your pension, all that work and effort and service & time you did, to earn and calculate your Service Percent Multiplier means NOTHING anymore. From then on your increases are tied to COLA’s, no longer to your EARNED percentage of your paygrade’s & time’s actual Active Duty Pay. That should be changed.
Keith McCullar says
Richard,
Your calculations aren’t correct. You improperly calculated your High 3. That number isn’t based on O6 pay at the end of your career. It’s based on O6 pay for the 36 months prior to the date you begin drawing retirement pay. Typically your 60th birthday but there are exceptions. Plus you are entirely at 06 over 20 because that’s what you were when your career ended. So you sold yourself short. Your retirement pay will be more than you calculated.
Look at it this way: your points are about one-third what an active duty retiree would have after 20 years. Their pay would be half of what they were making (not including allowances) or 15 days worth. So you will be getting paid about five days worth which is more than you got paid for a four-days-of-pay drill weekend.
Congratulations on your retirement. Go forth and do great things.
Keith McCullar
CPT (Ret.)
John says
Doug, it’s certainly possible. I was an E-5 when drilling and probably only got like $400 for a drill weekend. But now retired, (I was bumped up to E-6 upon retirement), my gross retired pay is about $1200. Of course I had over 4000 points (10+ years I was AD).
Doug Nordman says
Congratulations on your impending pension, Dave!
You’re under the Final Pay pension system (entered service before 8 September 1980), so you can try this calculator:
https://militarypay.defense.gov/Calculators/Final-Pay-Calculator/
and choose the Reserve Component options.
The factors in the Final Pay calculator are:
Monthly pension = [points / 360] x 2.5% x base pay.
Your base pay will be from the 2022 pay tables, which haven’t been published yet. (It’s reasonable to project a 1.5% pay raise.) Your pay will also be at the longevity for your rank as though you’d been on active duty the entire time that you were retired awaiting pay, which in your case is the >40 column:
https://www.dfas.mil/MilitaryMembers/payentitlements/Pay-Tables/
You can read through the retirement application instructions here:
https://www.public.navy.mil/bupers-npc/career/reservepersonnelmgmt/ReserveRetirements/Pages/default.aspx
“Applying for Retirement with Pay
1. Notification is forwarded in advance to advise you how to submit an application for retired pay at age 60. If you have not received notification four months prior to your 60th birthday, please contact PERS-912 by calling 1-833-330-6622.”
However BUPERS has been shorthanded on processing pension requests, and you may want to apply as early as June (nine months in advance).
Your Tricare options are essentially Tricare Prime or Tricare Standard, unless you’re in a rural area of the U.S. or living overseas. You can compare the various programs (and their co-pays and prescription expenses) here:
https://www.tricare.mil/Costs/Compare
We’ve been happy with Tricare Prime (especially raising an accident-prone teen) but Tricare Standard can work well if you’re not seeing a lot of doctors (and making a lot of copays).
Doug Nordman says
Don, that form lists your military training and experience. It doesn’t verify that you have 20 good years of Reserve or Guard service and has no impact on military pensions or veteran’s benefits.
I think you’re asking whether you qualify for a Reserve pension. You can learn more about that by contacting your final service (the Army Reserve?) at the Human Resources Command (https://hrc.army.mil/) to request a copy of your Notice Of Eligibility letter.
You can also discuss whether your point-count records with them include your previous active duty.
If there’s an error in your records then you could try to update the HRC database with your active-duty service, and see whether that meets the requirements for a NOE.
If you’re asking about veteran’s benefits or a VA disability claim, that’s handled by a Veteran Service Officer. You can find them through local chapters of the American Legion, the DAV, the VFW, or even MOAA. You can find them in your area through the VA’s website:
https://www.va.gov/vso/
And you can also contact your state’s office of Veteran Affairs.
Doug Nordman says
Thanks, Dean, I appreciate the support!
Doug Nordman says
Congratulations on your promotion, Wendy, and your dates satisfy the three-year requirement!
Some services allow selectees to pin on their higher rank before they actually get paid for the rank, so that sentence clarified that it depends on the date of the pay and not the selection or pinning. You started getting O-5 pay at 0001 31 Aug 2018 and you’ll retire awaiting pay at 2359 on 31 Aug 2021.
Federal law also allows the service secretaries to waive the three-year time-in-grade requirement down to two years, so you probably would’ve been good even if you fell a little short of three years.
Doug Nordman says
Zach, I’m pretty sure that does not count. It’s only for mobilizations to combat zones and (much later) national emergencies. It’s actually three months of earlier retirement for every 90 days deployed in those situations, and in most cases the 90-day period had to be within a fiscal year.
You can read the full discussion of the qualifying criteria at this post from my friend (and National Guard servicemember) Ryan Guina:
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/
Doug Nordman says
Mike, those are great questions, and I’m pretty sure that federal law (Title 10 U.S. Code section 1370) takes precedence over AR 135-180. However it looks like the Retirement Services section misread Table 4-2 on page 10 of AR 135-180. You can confirm that with a JAG or with a civilian lawyer who has military experience.
The relevant part of federal law is 1370(d)(3)(A):
https://www.law.cornell.edu/uscode/text/10/1370
“(A) In order to be credited with satisfactory service in an officer grade above major or lieutenant commander, a person covered by paragraph (1) must have served satisfactorily in that grade (as determined by the Secretary of the military department concerned) as a reserve commissioned officer in an active status, or in a retired status on active duty, for not less than three years.”
Paragraphs (B) through (F) cover some exceptions to that three years which apply to very few people. They’re essentially for situations beyond your control which prevent you from serving three years, or when you’re an O-5 select (still awaiting Congress’ approval for promotion) serving in an O-5 billet.
The part which I’m frequently asked about is paragraph 1370(d)(5)(A). It authorizes the Guard to waive that three-year requirement to two years:
“(A) The Secretary of Defense may authorize the Secretary of a military department to reduce the 3-year period required by paragraph (3)(A) to a period not less than two years.”
You have to request the waiver, they have to approve it, and two years is a hard minimum. Two years is usually approved during drawdowns when someone’s already available to take your billet.
Table 4-2 of AR 135-180 appears to match federal law with the “Voluntary separation” column for the “Officer: O5 and above” row requiring three years. The six months would only apply if you were being involuntarily retired (1370(d)(3)(B) through (F)).
From the vocabulary used during your conversation with the Retirement Services section, it’s possible that they misunderstood your question. “High Three” is a pension calculation, not a time in grade. If your Date of Initial Entry into Military Service (the date you received your very first military ID) is before 8 September 1980 then your pension is calculated using the Final Pay system. That’s pretty rare these days, and us remaining Final Pay dinosaurs who are still in uniform are either admirals/generals or Reserve/Guard members with very long breaks in service. Let me know if you have a DIEMS before that date, even for the Delayed Entry Program or by attending a service academy.
Otherwise if your DIEMS is after 7 September 1980 then your pension is High Three, calculated from the average of the highest 36 months of pay received during your career. (That’s completely separate requirement from three years’ time in grade.) For a Reserve pension you’d retire as an O-5 if you met the Title 10 U.S. Code section 1370 requirements, and then the High Three calculation would determine the pay factor in your pension. If you did not meet those time-in-grade requirements (or at least get a waiver to two years) then you’d be retired as an O-4.
Those DIEMS dates and High Three calculations are in paragraph 4-6 of AR 135-180 and also in federal law.
I’ve been crunching pension numbers for nearly 20 years, and I have no idea where that point-value system came from. (It’s certainly not in federal law or on DoD’s website.) Every time I get that question it causes confusion– even if the Guard tables are up to date. I find it far easier to manually calculate the High Three average.
As mentioned in the post above, once you have your Notice Of Eligibility letter then there are two ways to receive a pension from the Reserves or Guard. One way is “retired awaiting pay”, which almost everyone chooses. (The other option is “discharge” or “separation”, which I’ve only seen twice.) When you apply for “retired awaiting pay” then your High Three pension is calculated from the pay tables in effect at the time you start your pension. (That’s usually age 60, or possibly three months earlier for every 90 days mobilized to a combat zone or for a national emergency.) That’s because during the grey-area years of “retired awaiting pay” you’re technically subject to activation for a total force mobilization (which last happened in WWII) and you’re considered to be serving (for the longevity column in the pay tables) as though you were on active duty right up to the day your pension starts.
This means that you have to serve three years’ time in grade to retire at the rank of O-5 (waiverable down to two years) but you do not have to worry about MRD. You’re simply continued in your “retired awaiting pay” status until you reach age 60. You’re given all of the increases in the pay tables because your pension will be calculated from the pay tables in effect in 2034– and at the O-5 longevity as if you’ve been on active duty the entire time.
Doug Nordman says
Good question, Andrew, and the answer needs some math. I don’t use point valuation factors because they’re frequently approximated or even outdated. They also neglect additional expenses like health insurance.
Instead, I estimate the pensions at the different retirement dates and ranks.
From the information you’ve mentioned, it looks like you’ll turn 60 years of age in March 2021. (Please correct me if I’m wrong on that.) No matter when your pension may start, age 60 is when you’ll also be eligible for Tricare Prime or Select as a Guard retiree. That part is in federal law.
If you leave your drill billet before March 2021 then you’ll lose Tricare Reserve Select ($43/month or $218/month for member or family in 2019) and have to spend additional money for Tricare Retired Reserve ($452/month or $1083/month in 2019). You might find a cheaper health plan from a civilian employer or on the federal/state ACA exchanges but Tricare may have better copays, deductibles, and caps.
It also looks like you’re eligible to start your pension in November 2019. You’ll have to make sure that your 90-day periods are all done in the same fiscal year (up through September 2014) for deployments to combat zones. More details on those requirements are at Ryan Guina’s post:
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/
More importantly, you’ll have to make sure that HRC agrees with your 90-day accounting and will start your pension in November 2019.
If you retire in the next few months then you’ll pay for your own health insurance for about 24 months. If you continue to drill until age 60 then you’ll receive drill pay (at the E-7 or E-8 rank) and you’ll keep Tricare Reserve Select. You’ll want to do the math for those incomes and expenses as well as your pension calculations.
You’re under a High Three pension plan, and your pension will be calculated from the average of the highest 36 months of pay. Those 36 months will probably be the ones just before your pension starts, and at the pay tables in effect when your pension starts. We already know the pay tables for 2019:
https://the-military-guide.com/2019-military-pay-chart/
but we don’t know the paytables for 2020 or 2021. You can estimate those future pay tables by hoping that military pay goes up 1.5% per year.
You’ll want to run three estimates, perhaps updated for your actual point counts:
1. Retire in March 2019 as an E-7>34 with 4046 points and start your pension in November 2019. You have to pay for health insurance through March 2021.
2. Retire in March 2021 as an E-7>36 with 4146 points (50 points per year) and start your pension immediately. You have two more years of E-7 drill pay and two more years of TRS health insurance.
3. Retire in March 2021 as an E-8>36 with 4146 points and start your pension immediately. You have two more years of E-8 drill pay and two more years of TRS health insurance.
E-7>34 or >36 pay in 2019 will be ~$5430/month, in 2018 is $5291.40/month, in 2017 was $5167.50/mo, and in 2016 was $5061.30. E-8>34 or >36 pay in 2019 will be ~$6197/month.
You could estimate that E-7 pay in 2020 tops out at $5511/month and in 2021 at $5594/month.
You could estimate that E-8 pay in 2020 tops out at $6290/month and in 2021 at $6384/month.
Now let’s calculate the pensions:
1. March 2019’s High Three E-7 average has nine months in 2016, 12 months in 2017 and 2018, and three months in 2019.
That’s [(9x$5061.30)+(12x$5167.50)+(12x$5291.40)+(3x$5430)]/36 = $5204.13
The pension is (4046/360) x 2.5% x $5204.13 = $1462/month.
2. March 2021’s High Three E-7 average has nine months in 2018, 12 months in 2019 and 2020, and three months in 2021.
That’s [(9x$5291.40)+(12x$5430)+(12x$5511)+(3x$5594)]/36 =$5436.02
The pension is (4146/360) x 2.5% x $5436.02 = $1565/month.
3. March 2021’s High Three E-8 average has nine months in 2018 as an E-7, three months in 2019 as an E-7, 9 months in 2019 as an E-8, 12 months in 2020, and three months in 2021.
That’s [(9x$5291.40)+(3x$5430)+(9x$6197)+(12x$6290)+(3x$6384)]/36 = $5953.27
The pension is (4146/360) x 2.5% x $5953.27 = $1714/month.
You can tinker with these formulas if you change the dates or the ranks. I hope this helps you figure out the best approach for your other considerations!
Doug Nordman says
Good questions, Harry.
DFAS calculates a pension using the DoD Financial Management Regulation (DoD 7000.14-R) volume 7B chapter 3.
https://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_03.pdf
You’d follow along in paragraphs 030201, 030203, 030205, and 030208, and 030209. Maybe you’re also covered under 030204.
First, you’d want to make sure that you’re indeed eligible for Final Pay (a Date of Initial Entry on Military Service on or before 8 September 1980). 33 years implies that you joined in 1984 (High Three) but you may have joined earlier and had some interrupted service. More importantly, you want to make sure that DFAS also has that information in your record, or else they’ll default to High Three.
Next, verify that you and DFAS are using the same point count (3837 points?). If they’re using a different number then you’d have to correct that with your drill records and your DD-214s.
Third, what year did you start your retirement? For the vast majority of Reserve & Guard retirees eligible for Final Pay, it’s your 60th birthday year. If your Reserve pension starts at age 60 and your 60th birthday was in 2017, then you base your pension on the 2017 pay tables. If your 60th birthday is in 2018 then you start with the 2018 pay tables. (A few Reserve/Guard members deployed for at least 90 days in a fiscal year to a combat zone or for a national emergency, and they’d start their pension at least three months sooner. More info on that is at:
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/ ) You’re also right that you start with the years of longevity as though you’d been on active duty all the way up to the start of your pension. At the E-7 paygrade, that tops out at E-7>26.
Finally, the Final Pay formula is
(Points / 360) x 2.5% x base pay = $/month
According to the rules in the FMR, the first division is carried to three places and rounded to two. The formula’s resulting dollar figure is rounded down.
If you started your pension (60th birthday) in 2017 then your deposit would be
(3837 / 360) x .025 x $5167.50 = 10.66 x .025 x $5167.50 = $1377/month.
If you started your pension in 2018 then your deposit would be
(3837 / 360) x .025 x $5291.40 = 10.66 x .025 x $5291.40 = $1410/month.
Let me know if I’ve made any incorrect assumptions.
Doug Nordman says
Good questions, Peter, and your retired rank is indeed based on your highest grade earned. Here’s the federal law:
https://www.law.cornell.edu/uscode/text/10/3963
Keep in mind that the NC Army NG and Army HRC have to have your Navy records on file. You already have your Notice Of Eligibility and your approval for retired awaiting pay, but you should verify with Army HRC that they also have your record of satisfactory service as an E-7.
My apologies if you already know this, but hang on to your records until your pension starts. You may have to “prove” it to HRC one more time when they contact you (around age 59.5) to do the final paperwork for your pension.
You retired awaiting pay in 2007 as a NG E-7 with 21 years of service, and your longevity advances (until your pension starts) just as if you were on active duty the entire time. By 2018 you’re an E-7>32 years whose base pay is $5291.40. Pay raises are typically 1.5%-2% per year, so a conservative High Three average of the three years of pay tables in effect when you turn age 60 would be about 96% of the latest base pay.
In today’s dollars your pension would be roughly:
(5100 points / 360) x 2.5%/year x ($5291.40/month x 96%) = $1800/month.
Doug Nordman says
You’re right, Keith, Reserve & Guard servicemembers have a lot of edge cases in a very complicated pension system.
First, make sure you get at least 35 points before December 2020. That should earn you the 15 participation points for a good year, but of course it’d be even better if you earned 50 points on your own before December 2020. As usual, you’ll have to meet all of the unit’s other requirements to be awarded that 20th good year.
Second, make sure now that your official service records are accurate. By December 2020 you’ll ideally have everything in your official Army National Guard database and updated, waiting only on your 20th good year and your Notice Of Eligibility letter. Guard units are notorious for not having the earlier Army service dates in their database.
Third, you have more than 10 years of commissioned service so you’re eligible for an O-3 pension. (That’s in federal law.) In addition your pension is calculated from the High Three average of the pay tables in the year that you reach age 60 (2020 in your case) and at the longevity as though you’d been on active duty the entire time. This is more than 37 years since February 1983, which is the >34 and >36 columns in the O-3 pay tables (for 2018, 2019, and 2020).
Finally, I’d apply for a continuation on drill status until April 2021 in order to reach 20 good years. Your Guard unit will either approve the waiver or coordinate with the Army’s National Guard Bureau to make sure you have your 20 good years logged by December 2020.
It’s worth your time to have a JAG review your service records and your waiver plan to make sure that I’m not missing any details.
Please let us know how this works out.
Doug Nordman says
As you know by now, Joseph, the Navy didn’t have the Army’s records on file and DFAS went only by the Navy’s service record.
What should be reflected on your LES right now is your Pay Entry Base Date (and Date of Initial Entry on Military Service) of July 1992. When your PEBD or DIEMS is set to that date then you’ll be paid for your current rank— and with over 26 years of longevity.
The Navy should indeed add in your six months and 26 days. Once your Army records are included in your Navy record, then BUPERS should forward the information over to DFAS.
In addition, you may have been paid at the wrong longevity rates for the last 17 years. When you joined the Navy in 2001, BUPERS and DFAS should have adjusted your PEBD and DIEMS to July 1992 and immediately started paying you at the >8 years rate. In July 2002 you would have gone >10 years. I don’t know whether there’s a statute of limitations on that. You could ask a PSD supervisor about it, but you may need to consult a JAG to find the rules and the legal references. I think the JAG could be more helpful than DFAS.
You may already know that if you have at least three good years from your Reserve service then you’re now eligible for a Reserve pension at age 60. You could hypothetically resign from active duty now, file for “retired awaiting pay” from the Reserves, and receive a pension at age 60. You can read more about that at this post:
https://the-military-guide.com/reserve-military-retirement-for-active-duty-veterans-with-previous-reserve-or-national-guard-service/
If you deployed to a combat zone after 28 January 2008 then you may be eligible to receive a Reserve pension three months earlier for every 90 days in a fiscal year.
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/
Regardless of when the Reserve pension starts, Tricare would still only start at age 60. You’d have to find other health insurance (like Tricare Retired Reserve) to cover the gap to age 60.
But before you make a retirement decision, I’d talk to a supervisor at PSD about adjusting your PEBD/DIEMS and correcting your back pay. If they can’t show you the references to explain what they should do (as described above) then your next step would be a visit to the JAG. It’s painful to fix these problems now (while you’re on active duty) but it’s even harder doing the BCNR when you’re a retiree.
Doug Nordman says
Good question, Henry, I’m sorry to say that you could have started your Reserve pension over a year ago. The good news is that you can have it paid retroactively to your 60th birthday.
The first step is applying for your pension through your military service:
http://www.moaa.org/Content/Benefits-and-Discounts/Pay-and-Benefits/Military-Pay-Issues/Guard/Reserve-Retirement-Benefits.aspx
You’ll need your Notice Of Eligibility for your pension, your point count, and your approved retirement request.
You can apply through the service’s websites (or by a phone call). If you’re near a Reserve Center or a military base then you could stop by their personnel center to start the process.
Once you have your retirement package from your service you can apply to the Defense Finance and Accounting Service to start the deposits. In your case they should also pay you for the months you’ve already missed back to your 60th birthday.
https://www.dfas.mil/retiredmilitary/apply/how-to-apply.html
You can calculate your retirement pay using the information in this post and your point count. (DFAS will also do this calculation for you.) You’re a Final Pay retiree because your Date of Initial Entry into Military Service was before 8 September 1980. Your pension will be based on the 2017 pay table (the year you turned age 60) at the longevity of your rank as though you’d been on active duty all the way up to 2017. (It’ll probably be a column like “>30”.) Because your pension system is “Final Pay”, you do not have to worry about High Three.
By the way you’re also eligible to apply for Tricare health insurance, either Tricare Select or Tricare Prime:
https://tricare.mil/
Doug Nordman says
Glad it’s helping, Wendy! This is the most popular post on the blog every week for over five years.
Your Date of Initial Entry in to Military Service is after 8 September 1980, so you’re under the High Three pension plan. With three years’ time in grade *after* you start receiving O-5 pay, then you’ll retire as an O-5.
O-5 pay in 2018 tops out at $9280.20, and your High Three average of today’s O-5 pay would be roughly 97% of that (assuming 1.5% pay raises every year).
https://www.dfas.mil/militarymembers/payentitlements/military-pay-charts.html
https://www.dfas.mil/dam/jcr:ccc8e348-187d-4bff-9e39-b113ad7fa67d/MilPayTable2018_4.pdf
High Three = points / 360 x 2.5% x High-Three average
= 5324 / 360 x 2.5% x ($9280.20 x 97%)
= $3328/month.
Your estimate is good. Many Reserve/Guard members have 3500-4500 points at retirement, so you’re a little on the higher end of the bell curve.
You’ll earn even more points (and good years) as an O-5.
Keep checking the new pay tables every year in case O-5 pay has any longevity raises past the current 22 years. The actual numbers depend on the pay tables in effect when you’re ages 57-60 to determine the average of those 36 highest months, but using the 2018 pay tables puts the calculation in today’s dollars.
The real significance of $3328/month (in today’s dollars) is that your savings/investments may only have to bridge the gap between the day you stop earning a paycheck and the day you start your Reserve pension. (Because it’s in today’s dollars, when you start the pension it should have about the same buying power.) That includes Tricare at age 60, Tricare For Life at age 65, and Social Security somewhere between ages 62-70.
Wendy Strainic says
Hi again Doug. I did make O-5 and now am less than 18 months from retirement. I was re-reading your reply and I notice you noted *after* 3 years at Lt Col. I pinned on 31 Aug 2018 and was planning on retiring 31 Aug 2021. Do I need to add a day?
Doug Nordman says
Robert, I’m not familiar with the policies of every service community, but you’ll probably need a waiver after age 60.
The best source for that is your assignment officer, who can let you know the current maximum age. Those limits change with community retention and force policy.
Robert Megerle says
Hello, I’m newly commissioned as a nurse. Usaf says MSD is age 68. I need 10 good years to retire as commissioned officer. Am I forced to apply for waivers to continue past age 60 or will they leave me alone to serve out my 10 years as officer? I’ll be 28 years in at age 67. I really want to stay till then.
Doug Nordman says
Great question, Francis!
You can stay past 20 good years in the Reserves/Guard as long as they let you stay.
However to be eligible for Tricare Reserve Select, you have to be in a drilling status (pay billet). If you go into the IRR for even one day then you technically lose your TRS insurance.
Here’s the requirement list from the Tricare site at:
https://tricare.mil/Plans/HealthPlans/TRS
“Members of the Selected Reserve (and their families) who meet the following qualifications:
Not on active duty orders
Not covered under the Transitional Assistance Management Program
Not eligible for or enrolled in the Federal Employees Health Benefits (FEHB) program
Note: Those members in the Individual Ready Reserve including Navy Reserve Voluntary Training Units do not qualify to purchase TRICARE Reserve Select.”
John says
I recently was approved for an MSD waiver to earn points past age 60 (SECAF Waiver to Title 10 USC 12308). This must be done 6-18 months before age 60 and needs justification. They are generally approved to age 62. Going past 62 would be a challenge in both AD or Reserves even in the exempted medical AFSC’s. There is information and a power point for MSD 12308 waivers past age 60 on the web.
Dave Luna says
Doug,
It seems that your the man to ask a questions concerning retirement pay and other issues concerning retirement.
I enlisted in the Navy in January 1980 and left active duty September 1997. I entered the reserve a few months later and completed my reserve time in November 2002. I am eligible for retirement pay in March 2022.
I have a couple of questions if you can please assist me with. First one concerns my pay calculator, how can i calculate my expected retirement pay?
Next, when should I file the paperwork requesting retirement. I’m looking for assistance with the paperwork and any information you can provide regarding TRI Care and if it is worth the price.
I appreciate any assistance you can provide.
Regards,
Dave
John says
I don’t mind that this whole conversation with Dave Luna is nested under my topic. But for clarity it might be better if it was moved to it’s own thread. Also Dave, yes, apply earlier than they say. I applied early July and did not get my first check until November (2019) even though I turned 60 that Sept. And that was with a big letter writing campaign I did.
Tricare Select (not standard), $300 a year now for a couple (or if you have minor children). Higher copays and deductiable. OR Tricare Prime $600 a year (I believe) for a couple (or with minor children). lower copays and no deductible. Like Doug said, if you don’t use much medical, Select may be a better choice. Angry that Select is no longer free of an “Enrollment Fee:.
Doug Nordman says
Shawn, these are excellent questions for a future blog post, and I’ve sent you a long e-mail (from NordsNords at Gmail) about the issues.
There are three different dates which could affect your retirement pay, and I’m having trouble figuring out how to put them on the calendar. Please e-mail me what these dates would be:
1. The date of your 60th birthday.
2. The date you’d expect to start being paid as an O-5.
3. How many months early you could start your pension.
Doug Nordman says
Philip, you’ll need a couple more details when you do your calculation.
As the post says, when you retire awaiting pay then your longevity in your rank will continue to accumulate (just as though you were on active duty) until your pension starts at age 60. E-7 pay tops out in the >26 years column of the pay tables, so if you’re an E-7 retiree then you’ll probably earn the maximum pay in that retirement rank.
You’ll have to calculate your own High Three average of the future pay tables that will be in effect when you reach age 60. If you want to do the calculation in today’s dollars then just take roughly 96% of the latest pay tables for the maximum pay in your retirement rank. (That 96% assumes two years of 2% raises.) If you’re already close to age 60 (or starting your pension early) then you might be able to calculate your High Three average from the current pay tables and assume a 2% pay raise for next year.
Your deployment dates cross over a fiscal year. Your pension will start three months earlier for every 90 days during a fiscal year that you spent deployed to support combat operations in accordance with the 2008 NDAA requirements. You already know that you have 90 days before 30 September 2010, and you probably have another three 90-day periods before the end of the deployment. You’ll also have to check that your orders comply with the deployment requirement to support combat operations. If your orders were written correctly then you’ll be eligible to start your pension at age 59.
You can look at the example calculations I’ve done for David J. and Sophia below and follow the format with your numbers.
Keep in mind that although your pension could start at age 59, Tricare will still only start at age 60. You’ll have to cover your own health insurance all the way to your 60th birthday.
David J. says
I have a little bit of a unique situation too and it has been very difficult to try and figure out how much I will receive at retirement. I am an Army Reserve LTC. Initial Entry was 7/15/1982, but my PEBD is 11/8/1984. MRD is 8/21/2020. At my MRD, I will have about 4600 points and 30 good retirement years (DA Form 5016) or 36 years for pay (from LES). Additionally, I will have 4 years of qualifying NDAA (post January 2008) service. Should I retire using the NDAA service or wait until age 60?
Doug Nordman says
Great question, David J.!
First, your Date of Initial Entry on Military Service is after 8 September 1980 so your pension is High Three. Back in the days of the Final Pay dinosaurs (I’m one of them), some Reserve/Guard retirees would delay the start of their pension until after the next pay raise. They’d lose a month or three of pension deposits and they’d eventually make it up on a higher base pay number in their pension calculation. (Assuming they lived long enough.) However today’s High Three averages 36 months of base pay to start the pension calculation, so you have no benefit to delaying the start of your pension.
Second, when you’re retired awaiting pay (gray area), your longevity in your rank continues to accumulate as though you were on active duty the entire time. O-5 pay tops out at >22, which means there are no more longevity raises to affect your pension calculation. Even if you start your pension four years early (because of the 2008 NDAA deployments) you’re still maximized on the O-5 pay table. It’s possible that Congress will pass legislation in the next two years to change O-5 pay, yet the last overhaul of the pay tables was in 2007. I wouldn’t delay the start of a High-Three pension because it takes so long for the (very slightly) higher payments to make up for the skipped deposits.
Third, the early-pension accounting is finicky. The 2008 NDAA initially required each 90-day qualifying period to be served within the same fiscal year. If your deployments started on 1 October and ended the following 30 September then you had four 90-day periods. Any other combination of dates meant that you’d only accumulate three 90-day periods. This fiscal-year law was changed for deployments beginning on 1 October 2014. The details and chronology of the law are in this post by ANG servicemember Ryan Guina:
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/
You’ll need to go back over your deployment orders and your DD-214s to make sure that you have valid 90-day periods with each one before October 2014 inside the same fiscal year. Any 90-day periods after September 2014 can cross over the fiscal-year dates.
No matter how many 90-day periods you count up, it’s almost always better to take the early pension. Let’s see whether we can confirm that.
By federal law, the pension is calculated using the pay tables in effect during the month that you start your pension. In other words, you’ll be figuring out your High-Three average of the pay tables in effect at age 60 (or in your case, as early as age 56). You don’t explicitly mention the date that you’ll turn age 56, but I’m guessing that it’s before your MRD of 21 August 2020.
Your base pay is already maximized on the pay tables and the High Three average is not worth waiting for a pay raise, so the only advantage to delaying the start of your pension would be if you’re on active-duty orders all the way up to your MRD. That’s a complicated calculation but we can come up with an estimate and you can refine it.
The first issue is the future pay tables that’ll be in effect during the month you start your pension. We don’t know what the pay tables will look like in 2019 or 2020 but 2% each year is a reasonable estimate on the current 2.6% legislative proposal. You could use those estimates to calculate the 36-month average of your O-5 base pay.
The High Three Reserve pension calculation is:
(points / 360) * (36-month average of base pay) * 2.5%
https://militarypay.defense.gov/Pay/Retirement/reserve/
Calculating the 36-month average of your O-5 base pay is a little tedious. If you start your pension in September 2020 then your High Three average is eight months of the 2020 O-5>22 pay, 12 months of 2019 O-5>22 pay, 12 months of 2018 O-5>22 pay, and four months of 2017 O-5>22 pay.
https://www.dfas.mil/militarymembers/payentitlements/military-pay-charts.html
With the assumptions we’ve made on O-5>22 pay, the numbers are:
2017: $9062.70/month
2018: $9280.20/month
2019: $9280.20 * 1.02 (a 2% pay raise)
2020: [($9280.20 * 1.02) * 1.02] (another 2% pay raise)
The High Three average is
[(4 * $9062.70) + (12 * $9280.20) + 12 * ($9280.20 * 1.02) + 8 * ($9280.20 * 1.02 * 1.02)] / 36
= $9401.22/month.
Your pension would be:
(4600 / 360) * ($9401.22/month) * 2.5% = $3003/month starting September 2020.
(Federal law rounds down to the dollar.)
If you turn age 56 in August 2019 and started your pension in September 2019 then your High Three average would be about 2% lower. You’d also have less than 4600 points, so you’d have to forecast your August 2019 point count to come up with a closer estimate of your pension. Maybe the result would be $2900/month.
If you’re eligible to start your pension at $2900/month in August 2019, then the only reason you’d delay it would be to continue serving (until your MRD) for at least $2900/month of pay & allowances. The drill weekend for an O-5>22 in 2018 is $1237.36 and one drill is $309.34. You’d have to do a drill weekend plus another 5-6 days of orders or drills (every month) to get up to an average of $2900/month. That’s 65 days of AT orders or an extended ADSW, although some of that would be allowances for food & housing (BAS, BAH).
Once you verify the dates of your 2008 NDAA deployments, the start date for your pension might be later (closer to your MRD) than I’ve forecast. You’ll have to check your 90-day periods on your DD-214s to make sure it really is 48 months earlier and not a smaller number.
If you let me know your date of birth (to figure out ages 56 and 60) and your estimated point counts at those ages then we can refine the estimate.
Another caveat to the 2008 NDAA is that it applies to the pension but not to Tricare. When you retire awaiting pay (and then start your pension early) your health insurance will shift from Tricare Reserve Select to Tricare Reserve Retired. You’ll start Tricare (Select or Prime) on your 60th birthday. (Five years later, after signing up for Medicare, you’ll be eligible for Tricare For Life.) Of course you’re also free to use insurance from a civilian employer, to search for a better policy on the ACA insurance exchanges, and to use the VA for your service-connected health issues.
Doug Nordman says
I hear that, Sallie. The Reserve/Guard retirement system is so complicated that this has been the blog’s highest-ranked post every month for over five years.
The good news is that you didn’t really have a “choice” on Final Pay or High Three. Final Pay is only for those who joined the military before 8 September 1980 (with a Date of Initial Entry into Military Service before then), so you’re most likely on the High Three pension calculation.
As Dave mentions, Combat-Related Special Compensation is different from Concurrent Retirement and Disability Pay. DFAS will choose the higher amount for you when your pension starts.
https://www.dfas.mil/retiredmilitary/disability/comparison.html
Until your pension starts, you’ll continue to receive your VA disability compensation.
Since you’re retired awaiting pay, you’re also eligible to purchase Tricare Reserve Retired health insurance until your Tricare starts at age 60. TRR is not subsidized like Tricare Reserve Select so the TRR premiums are higher. You might do better with employer health insurance or from the ACA health exchange, although you can continue to seek treatment from the VA for conditions that are related to your disability rating.
Even if you’re eligible to start your pension earlier than age 60 (due to combat deployments or national emergencies of at least 90 days in a fiscal year), Tricare starts at age 60.
Dave McDonald says
Look into service connected disability rating rather than combat related for your disability; did you get checked out for sleep apnea also?
Doug Nordman says
Thanks for the update, Greg– do you happen to have a link to that reference for others to use? Would that be in the Financial Management Regulation or somewhere else?
I still get the question every few months.
Doug Nordman says
Thanks for the question, NLDekker, but the whole point of the sentence (in the intro to the post) is that most of the Reserve calculators aren’t accurate. (Even when they’re available. *) This post goes into all the details necessary to determine an accurate estimate, and (more importantly) to understand how the rules affect your pension.
[* I think you’re referring to the DoD calculators at https://militarypay.defense.gov/Calculators/ . We at The-Military-Guide are never going to try to fix that problem. You might find a service-specific calculator behind a CAC login, at a Reserve center, or at a Guard armory– but of course a lot of Reserve/Guard servicemembers don’t have CACs and might not have convenient base access. Yet everyone can do a manual calculation.]
Good retirement calculators are hard to create. (I share your frustration. I’ve been using them for over 30 years.) Accurate Reserve/Guard retirement calculators are even more difficult because of the incredibly varied and highly individual career parameters. That’s why this post shows you how to make sure that your estimate is accurate.
This has been the blog’s most popular post nearly every day for almost six years, and it’s because the manual method works better than any existing calculator.
If you want help verifying your numbers then feel free to comment here, use the “Contact me” form, or e-mail NordsNords at Gmail.
Doug Nordman says
Thanks for the update, Charles. We’d heard about the appeals but I missed that final announcement.
In case BUPERS changes that link, here’s an excerpt of the text from the FAQ:
1. How did the policy for Midshipman cruise credit for retirement pay change?
In 2009, after a legal review by both Navy Personnel Command and Defense Finance and Accounting Services (DFAS), it was determined that Title 10 U.S.C. § 2107(g) actually prohibits the awarding of any credit for NROTC midshipman time, including summer training cruises for those officers who entered the NROTC Program after the enactment of the 1964 Reserve Officers Training Corps Vitalization Act (ROTCVA).
3. How will I know if I am personally affected?
All personnel affected by this change will receive individual letters from Navy Personnel Command notifying them that their official record has been modified to indicate the correct retirement credit and/or points, as applicable. In addition, DFAS will notify each individual by separate letter of how much their retirement pay will be affected.
4. How much credit is being taken away from my retired pay calculation?
The amount of time deducted from your total active duty creditable service or retirement point credit will be equal to the time you served on active duty for training during midshipman cruise periods. The average time credited was approximately 30 days each summer.
7. What do I need to do to not have to pay the money back? I owe less than $10,000.00.
The Secretary of the Navy has requested, on your behalf, a waiver of indebtedness if less than $10,000.00.
Doug Nordman says
Good question, LTC!
Federal law requires three years’ time in grade above the rank of O-4. The service secretaries can waive that requirement down to two years. (https://www.law.cornell.edu/uscode/text/10/1370) It’s not clear whether that law requires a Reserve/Guard member to earn good years for their time in grade, but the specific answer seems elusive. Do your best to complete good years for your time in grade, and avoid the IRR if possible (because it’s so hard to get a good year in the IRR).
Once you’ve served at least two years’ time in grade (ideally two good years) then you could apply for “retired awaiting pay” status. When your retirement request is approved for the higher rank then your longevity will continue to accrue in that rank while you’re in gray area (just as if you were on active duty) until you begin drawing your pension. Even though you could apply for retirement when you’re around 23 years of service, your pension would be calculated from the maximum longevity column of the future pay tables in effect when you start drawing your pension
Doug Nordman says
Outstanding question, Steve, and an impressive service record! That’s the most points I’ve ever seen.
I think you’re correct: your Guard pension is a better deal than your active-duty pension. Let’s check a few parameters from your e-mail.
You’ve used the phrase “final basic pay”. The term “Final Pay” has a specific meaning for those who’ve entered the military before 8 September 1980. Since you also say that you have 40 good years, it would imply that your Date of Initial Entry on Military Service (the date you first received a military ID card) is in the 1970s. If that’s correct then your Reserve/Guard pension is indeed calculated from your final base pay.
You might have to educate a few pay clerks in NGB and at DFAS. If they’re struggling to calculate your pension then you’d direct their attention to the DoD Financial Management Regulation (DoD 7400.14-R, volume 7B, http://comptroller.defense.gov/Portals/45/documents/fmr/Volume_07b.pdf). You’d refer to paragraph 010102.A.1 (Final Pay) and .B (the pay tables in effect immediately before starting the pension).
Paragraph 030501 entitles you to the most favorable pay formula. This means that the calculation has to be done for both active-duty (regular) and Reserve/Guard (non-regular) retirements, and you’d get the higher amount.
030501 also means that DFAS might have to do a Tower Amendment verification. I don’t think the Tower Amendment will affect you but I’ll describe it in case someone mentions it. It requires DFAS to check the pay table increases against retiree COLAs for the years after you made E-9. The calculation verifies that (if you’d filed for retirement at the moment you made E-9 on active duty) you’re still getting the highest pension to which you may have been entitled, especially if retiree COLAs were higher than active-duty pay raises.
Finally, check Table 3-1 Rule 13 on the FMR’s page 3-28. That describes the non-regular retirement formula (including a bunch of footnotes) for your rank and years of service. This is also the table that DFAS will use to check the amount of active-duty pension you might be eligible for, as well as any differences under the Tower Amendment.
If your Guard pension is based on Final Pay at age 60, then you have another bit of flexibility that I’ve only seen in a few people during the last decade: the base pay at which you start your pension.
A Final Pay Reserve/Guard pension uses the pay tables in effect when you reach age 60. If you’ve deployed to a combat zone since 28 Jan 2008, or mobilized for some national emergencies, then your pension could start a few months earlier. See paragraph 010208.F of the DoD FMR and read Ryan Guina’s summary here:
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/
If your pension starts in late 2018 then it’d be based on the 2018 pay tables. However if you elected to delay your pension by a few months then it could start at the pay in effect on the 2019 pay tables. If you’re turning age 60 in November or December 2018 then it might make sense to start your pension in January 2019, when the pay tables are (hopefully) 1%-2% higher. You’d lose a month or two of pension deposit but you’d make it up over the next 50-100 months of your life at a higher pension. The law which lets you do this is reflected in FMR 010801.D
And if you’re eligible to start your pension in late 2017 (because of mobilizations for an earlier retirement), then you might want to wait until January 2018 when that pay raise kicks in.
Note that this delay is only worth doing for Final Pay retirees. High Three retirees won’t notice a difference in their 36-month average. Even for Final Pay retirees, this is running up the score after winning the game. You’d need good longevity and a healthy lifestyle to make sure the delay pays off.
With those possible changes in mind, your Guard Final Pay pension is based on your longevity (40 good years) at your final rank (E-9) as though you’ve been on duty the entire time (which, in your case, you have actually done). The 2017 pay table tops out at E9>38 for $7844.70/month. An estimate of your 2017 pension is:
11,313 / 360 x 2.5% x $7844.70 = $6165/month.
Your 2018 pension may be 1%-2% higher, depending on the FY18 budget legislation.
Regardless of the age that you’re eligible to retire or when you choose to start your pension, your Tricare benefits start at age 60.
You also need to make a decision about the Survivor Benefit Program. Let me know if you have any questions, but for most Reserve/Guard members at age 60 the premiums are more expensive than the coverage is worth.
Doug Nordman says
Great question, Dennis, and I understand why you seem a little frustrated by the lack of information from people who should know how the system works. I’m not an expert on the federal law of the civil service, and if you need an expert legal opinion then you should hire a lawyer for a few hours of advice. However I can get you (and perhaps your lawyer) started with the references.
I’d suggest you begin with a current copy of the OPM FERS Handbook. Here’s a link to a sample which might be the current chapter, although it’s from 1998. You’d want to make sure you have the latest edition:
https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c022.pdf
For example, section 22A2.1-2.E on page 8 of that document goes into the detail you seek, and it essentially says that only the active-duty time of your Reserve career counts… but not every period of active duty.
Way back on page 31 of that PDF, the FERS section says that the CSRS rules in section 22A2 also apply to FERS.
I realize that you’re trying to convert points into years/months. In the Reserves, every month has 30 days. That comes from the DoD Financial Management Regulation (the FMR) which has detailed procedures for calculating the Reserve/Guard pension. Once you know your total points of active duty then you can divide by 360 and 30 to get the years & months.
For more general reading on your military service credit deposit, I recommend Ryan Guina’s interview of Eddie Wills:
https://themilitarywallet.com/military-service-credit-deposit/
Eddie also has an extremely detailed guide to the process of obtaining your military service credit deposit. Since you’ve been at USPS for so long, you may have some interest to pay on your deposit. Eddie’s post on the process can help you walk through the paperwork and decide whether it’s still a good deal:
http://gubmints.com/2013/03/26/gubmints-comprehensive-military-service-credit-deposit-guide/
If you haven’t already seen the DFAS part of the process for making your payments, here’s their page:
https://www.dfas.mil/civilianemployees/militaryservice/militaryservicedeposits.html
After you’ve read through these references, if you still have questions then I’d suggest you contact Eddie through GubMints.com. Once he’s answered your questions, then you could either take the USPS’ word for their numbers (which you’d help them calculate) or have a lawyer advise you on any details of the federal law.
I realize that you might not have enough good years to receive a Marine Reserve pension, but federal law has a specific exception to allow you to receive both a civil service (FERS) pension and a Reserve/Guard pension:
https://the-military-guide.com/earning-military-pension-civil-service-pension/
This advice has worked for other veterans with similar questions. Please let me know if you have more questions.
Doug Nordman says
That’s a tough question, Arthur! You’re going to have to contact the Defense Finance and Accounting Service directly on this one:
https://www.dfas.mil/retiredmilitary.html
You can apply from overseas, and you will need a bank account for electronic deposit of your pension. Take a look at this DFAS link for international direct deposit:
https://www.dfas.mil/retiredmilitary/apply/receive-pay.html
Doug Nordman says
I’m not aware of any limits. You could drill in the National Guard or Reserves for up to 40 years (depending on making rank) and could even get an age waiver as old as 62 years.
If you reach over 18 years of active-duty points (AT, ADSW) while mobilized on active-duty orders of at least 30 days, then you could reach sanctuary and be eligible for an active-duty pension at 20 years of service. That would hypothetically cap your point count at about 7300 points because you’d retire and immediately start an active-duty pension. The reality is that most Guard/Reserve servicemembers never reach sanctuary and continue to earn points.
Greg Potts says
Hey Doug — I know this was posted a couple years ago –but here is a addition for you regarding this question — IF a member declares sanctuary — they will complete the reserve order they are on (typically a deployment order) then be placed on Active Duty to complete their time until their 20th year of active service (think 7300 active points) — at that time, they MAY elect to go back to the reserves and continue to serve OR they can elect to take an active duty retirement — the retirement would ALSO add the value of Inactive Points the member earned as reservist, convert them to find a total value of days (points) served and add that to the 20 years of Active points — so if they had 360 Inactive points — then 21 years .. and so on.
My unit had several folks enter sanctuary and I helped all of them with this process.
Doug Nordman says
Sophia,
I’m happy to help with those numbers, although I depend on the manual calculation instead of those point charts.
I’m going to assume that you did not deploy to a combat zone after 28 January 2008 for at least 90 days during a fiscal year. If you had, that would entitle you to start your pension three months earlier for each of those 90-day segments. If that might be an issue, though, you can read more about it at this post from my friend (and ANG officer) Ryan Guina:
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/
You could wait to start your Reserve pension on 1 January 2019, but it works against you with High Three. It can work with the Final Pay pension system (it’s usually less than a 10-year payback), which is applicable to those who started active duty before 8 September 1980. However High Three averages the final 36 months of pay tables before you start your pension. If you delay the start of that pension while the older base-pay numbers are dropping out of the 36-month average, you could be missing thousands of dollars a month in pension deposits which would take decades to make up.
https://militarypay.defense.gov/Pay/Retirement/reserve/
When you start your Reserve pension in November 2018, the 36 month average uses 11 months from the 2018 pay tables, 12 months from the 2017 tables, 12 months from the 2016 tables, and December 2015. You probably retired awaiting pay with at least three years time in grade as an O-6 (or a waiver down to two years), so your pension is calculated from that rank.
If your Date of Initial Entry into Military Service is 17 March 1985 then (for pay longevity purposes) your DIEMS date puts you as an O-6>30 in March 2015. I happen to know that the pay tables top out for O-6 at 30 years (it’s the same pay for O-6>32) so it’s a little easier to look up the numbers.
https://www.dfas.mil/militarymembers/payentitlements/military-pay-charts.html
Here’s the numbers I’m using:
2018 O-6>32: $11,599.80
2017 O-6>30 and O-6>32: $11,328.00 for both
2016 O-6>30 : $11,094.90
December 2015 O-6>30: $10,952.40
The November 2018 High Three average is:
[(11 x $11,599.80) + (12 x $11,328.00) + (12 x $11,094.90) + $10,952.40] / 36 = $11,322.91
4833 points / 360 x 2.5% x $11,322.91 = $3800/month.
(The Financial Management Regulation requires DFAS to truncate the result to the lower dollar.)
https://www.dfas.mil/retiredmilitary/plan/estimate.html
If you start your pension in January 2019 and there’s a 2.0% pay raise (which seems like a reasonable compromise on the 2.6% proposal), then your High Three average would drop December 2015 and January 2016 while adding December 2018 and January 2019’s 2% pay raise.
The January 2019 High Three average would be:
[($11,599.80 x 1.02) + (12 x $11,599.80) + (12 x $11,328.00) + (11 x $11,094.90) ] / 36 = $11,361.36
and your new pension amount would be $3813/month. However you lost the entire month of December ($3800) and some days in November. Making up >$3800 at a higher pension of $13/month would take over 24 years. (It’d be an additional $126.67/day or 9.75 months per day for whatever you lost from your November birth date). Maybe you’d win that bet (it’d motivate me!) but I’m not sure it’s worth the payoff.
Regardless of when you decide to start your pension, you can sign up for Tricare Prime or Tricare Select on your 60th birthday.
Doug Nordman says
You’re welcome, Brenda, glad to help!
Let us know if you have any questions about the decision…
Doug Nordman says
Thanks, Tony, and you’ve asked a good question.
I’m not clear on the RET1 and RET2 acronyms, but let me answer the rest. Your pension amount at age 60 will be based on your total points and on High-Three average of the pay tables in effect when you’re 60 years old.
Reserve and Guard members have to get at least 20 good years to receive a Notice Of Eligibility letter certifying that they’re qualified to retire, but the extra years just give you an opportunity to rack up more points (and more promotions). Unlike the active-duty retirement formula, the extra Reserve/Guard years themselves are not part of the calculation. The multiplier is fixed and is only applied to your total points.
Because you’ll be using the newest set of pay tables at age 60, you’ll still benefit from the pay increases between now and your 60th birthday– as well as any possible longevity increases in the O-3E row. Right now you’ve maxed out that longevity, but it’s remotely possible that DoD could change the pay tables as they did in 2007.
For now, I’d calculate your pension based on your total points and today’s pay tables. I’d assume that your pension (if you started it today) will keep pace with inflation until age 60. That assumption is unpredictable (and imprecise) but it’s a reasonable approximation.
Doug Nordman says
Harold, I’m a little unclear on some of the jargon like “inactive duty”, “hip pocket orders”, and “duffel bag”. However if you were issued written orders for this duty then you could have been eligible to receive points which would be added to your total point count. That would raise your pension. The question is whether your duty status was actually earning you points or whether it was just putting you in a position to be quickly mobilized if necessary (no points until mobilized).
I’d suggest that you contact an Army Reserve center (phone or e-mail), give them a copy of your orders and your personal info (so that they can research your records), and see what they know.
Doug Nordman says
Thanks, Trish– looks like all the services are cutting back on correspondence courses. IRR may now be a very difficult place to get a good year.
trish says
Spoke with HRC for USAR just yesterday, 21 July, re: IRR earning retirement points [RPs] for correspondence courses. That option is no longer available as of spring of this year (2016) – the only way to get a ‘good year’ of 50 RPs or more this year and beyond is to become an active USAR member via acceptance of a TPU position or find an IMA/DIMA slot & affiliate with some organization and make the Unit Training Assemblies [UTAs] and/or perform Annual Training [AT]/Additional Duty/’split train’, etc. Good luck!
Doug Nordman says
Jeffery, it’s true that federal law requires military servicemembers to retire at age 60 (unless Congress grants an extension). However most services will only grant age waivers up to the late 30s, and they may be reluctant to grant both an age and a disability waiver. Trauma surgeons and linguists may be in demand, but unless you have a critical skill then the military will be more interested in younger and healthier vets.
The path is indeed difficult, but it still starts with the recruiter. You may have better luck with a Reserve or National Guard recruiter, but keep searching until you find one who’s willing to work with you.
JOHN DUFFY says
Thanks Doug. That helps a lot. I did not know that the point value was only used for a gauge of actual retirement pay. I don’t know if this is your area of expertise but I have another question. My total points is 6522 but only 6214 for retirement. I understand over the years the way retirement points are calculated has changed. In my case, is the extra 308 points used for anything?
Doug Nordman says
Another good question, John, but I’m not sure about the answer. I’m familiar with today’s Reserve retirement rules, but not the changes from earlier years. As far as I know, every point earned at drills or on orders or even through the IRR counts toward a pension. Even if a Reservist didn’t make enough points to earn a good year, those point would still count for pension credit.
If you have a point-count summary that lists a reason or reference for points that don’t “count” then I could try to research it. Another option would be contacting DFAS to make sure they’re using the correct point count total.
One recent change has been removing points earned through midshipman summer training. After a legal review of legislation, DFAS is actually recalculating pensions and planning to recoup overpayments. SECNAV has asked that the recoupment be waived for amounts under $10K.
https://the-military-guide.com/wp-admin/post.php?post=2578&action=edit
Doug Nordman says
Good question, John, and one of the most confusing issues in the Reserves and Guard.
Since you joined the service before 8 Sep 1980, you’re eligible for the DFAS Final Pay formula:
Monthly Pension = Points / 360 x 2.5% x Base Pay.
However the “base pay” part is where most of the confusion comes from.
The pay table is the one in effect when your pension starts. If you began receiving your Reserve pension in 2015, then you’re using the 2015 pay tables.
The rank is the rank you retired at, but there’s a catch. When you “retire awaiting pay” instead of discharge or separation, then the longevity column is the years of service that you’d reach as if you’ve been on active duty the entire time up until your pension starts. For the vast majority of Reserve retirements, this is the maximum pay at your retirement rank (usually the >30 column).
Your “point value for rank and years” number is simply a calculation used by the services to determine roughly how much money a point is worth. It has nothing to do with the actual calculation of your retirement pay. The DFAS number is different from your number because they’re using the proper formula.
If you want to dig into the nitty-gritty of the calculation then it’s in Chapter 3 of Volume 7b of the DoD Financial Management Regulation:
http://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_03.pdf
starting with paragraph 030205 at the bottom of page 3-9.
Doug Nordman says
Sorry about that comments glitch, Jim. While I’m looking into that, here’s a link to another post on the same subject:
https://the-military-guide.com/military-retirement-with-reserve-enlisted-and-officer-service/
In your case, the key is making sure that your current service has a complete record of your officer service. As a pre-1980 servicemember with greater than 10 years of commissioned service, you’re still eligible for a “Final Pay” pension at the highest rank achieved.
Doug Nordman says
Great question, Minnie!
You’re in the window to hear from your service. Forgive me for preaching to the choir about this, but ideally you’ve already received your Notice of Eligibility and filed for retired awaiting pay (gray area) status.
If you have an online account then log in to check for any notifications. (Not many gray-area retirees have an account.) If you’re near a Reserve or National Guard center then I’d e-mail, call, or visit them to show your ID and check your status. (While you’re there, they may be able to do any additional admin online.) If you’re not near a military site then contact your service’s Reserve/Guard personnel command directly and ask them to update your file.
At some point you’ll be asked to log in to your MyPay account and verify your contact information. DoD requires that your pension be deposited directly in your financial account, so you’ll also need to check that they enter your account numbers correctly. If the pension payment doesn’t start on the date you were promised then contact DFAS directly about your Retiree Account Statement at https://www.dfas.mil/retiredmilitary/manage/ras.html
Doug Nordman says
Thanks for your question, TC!
The 2008 National Defense Authorization Act enables early Reserve retirements for combat deployments exceeding 90 days during a fiscal year. The 2015 NDAA fixed a glitch in the 2008 Act and now lets those deployments cross fiscal years.
Between 28 Jan 2008 and 30 Sep 2014, you had to mobilize and deploy to a combat zone for at least 90 days during the fiscal year. (That could be one deployment or the sum of a series of shorter deployments.) After Sep 2014, those 90 days can accumulate across fiscal years. For every one of those 90 days (or more) that you’re deployed to a combat zone (or mobilized for certain national emergencies) then your Reserve retirement starts the same number of days earlier.
To qualify for this eligibility, your mobilization orders have to cite federal law– either Title 10 or Title 32 sections 12301(a), 12301(d), 12301(h), 12302, 12304, 12305 or 12306.
Another issue is “combat zone”. Those designated areas have changed significantly over the last few years so your mobilization may no longer be eligible to qualify for an earlier retirement.
I’m not sure of the Army meaning of the phrase “TPU soldier”. (In the Navy that acronym means “Transient Personnel Unit”.) However if you’re injured during a mobilization for combat duty under these conditions (either in training or in the combat zone) then your time in a Warrior Transition Unit also counts toward the 90 days. Let me know if “TPU soldier” is a different subject.
Although your Reserve pension may start earlier, the NDAAs do not address Tricare health insurance. That still starts at age 60 regardless of deployments to combat zones.
Doug Nordman says
Great question, Luis!
Although Congress has authorized the Temporary Early Retirement Authority legislation through 2018, each service uses it at their own discretion. Your best option is to contact your service’s personnel branch to determine their policy and to request TERA. However (depending on the nature of your disability) you may also qualify for a medical disability retirement. The medical retirement will not have the pension reduction that’s part of the TERA calculation, so you should see how the MEB process turns out before requesting TERA. You should also review the MEB and the TERA questions with a military lawyer. The JAG can help you verify that you’re getting due process from the MEB and that you’ll receive all the benefits to which you’re entitled.
Even if you request TERA, your service may still turn you down.
The fastest way to calculate your days of active duty is to subtract the difference between the present date and the date you were mobilized. You can do that with most spreadsheet software or using a website like TimeAndDate.com.
Doug Nordman says
Thanks for the question, Andrew! The active time (an active-duty obligation or a Reserve mobilization) only reduces the retirement age if it occurred after 28 January 2008 in a combat zone. It reduces the retirement age by 90 days for every 90 days (in the same fiscal year) in that combat zone. There’s a rumor that the “fiscal year” phrase was removed by the 2015 legislation to allow the reduction to be any consecutive 90-day period (whether or not it crosses fiscal years), but I haven’t seen that correction yet.
The earlier retirement only applies to the Reserve pension and not to Tricare. Tricare starts at age 60 regardless of the start date of the Reserve pension.
Dave McDonald says
Here is some helpful info concerning the early drop:
Early Retirement for National Guard and Reserves. REDUCED AGE RETIREMENT AD, for this purpose, means service pursuant to a call or order to AD on orders specifying, as the authority for such orders, a provision of law referred to in section 101(a) (13)(B), and performed under section 688, 12301 (a), 12302, 12304, 12305, 12406, and chapter 15 (insurrection), or under section 12301 (d) of Title 10 USC.
WASHINGTON (Army News Service, June 5, 2013) — More reserve-component Soldiers may now be eligible to receive retirement pay before 60, if they meet certain criteria.
As of January 2013, Congress authorized more categories to the 2008 National Defense Authorization Act, which originally applied only to reserve-component Soldiers serving in overseas contingency operations like Iraq and Afghanistan, said Sheila Dorsey, chief, Reserve Component Retirements.
The way it works is that Soldiers can count 90 days of their tour toward 90 days earlier retirement
for each fiscal year deployed, according to Richard Gray, supervisor of Retired Pay.That part is still in effect.
The new categories include reserve-component Soldiers who are activated to respond to national emergencies such as natural disasters like hurricanes or earthquakes. Another category is for those in warrior transition units who were hurt while mobilized for such responses, Gray said.
The most important thing Soldiers can do to meet the criteria, Dorsey said, is to check their mobilization orders or their DD-214 discharge document. Those documents need to have any one of the following Title 10 or Title 32 U.S. codes annotated: 12301(a), 12301(d), 12301(h), 12302, 12304, 12305 or 12306.
If one of those numbers is not there, either the Soldier won’t be eligible or needs to see someone in the personnel office to get the appropriate code amended, she said.
There are some exceptions to the rule. Soldiers who’ve demonstrated substandard performance are an exception, for instance. Gray said Soldiers can check with Human Resources Command for eligibility information. The HRC can be reached by calling 502-613-8950 or by visiting https://www.hrc.army.mil/tagd/reducedageretirement.
While Soldiers who meet the criteria can receive retirement pay before age 60, they will still need to wait until their 60th birthday before they are eligible for Tricare, Dorsey said. Other than that, they will receive the normal retirement benefits such as exchange and commissary benefits.
Despite deferred medical, Dorsey said she’s already seen a number of Soldiers taking advantage of the early-age retirement option.
DOING THE MATH
Those Soldiers with the eligible U.S. codes can accrue reduced-age retirement as follows:
During any fiscal year, Soldiers can accrue 90 days of early retirement. Fewer days will not count or be carried over to the next fiscal year and more days past 90 will not count and will not be carried over to the next fiscal year.
That 90-day period does not have to be contiguous. It could be the sum of more than one mobilization, so long as it meets the U.S. codes
within that fiscal year.For instance, a Soldier might have three 30-day mobilizations
in one fiscal year. That would meet the 90-day criteria. Or, there might be six 15-day mobilizations. That too would meet the criteria. Any number of combinations that add to 90 days would count.If a Soldier is mobilized on Sept. 1 for just 90 days, that would not count because the fiscal year begins on Oct. 1, and only 30 days would accrue for the first fiscal year and 60 the next, assuming that no other mobilizations take place.
Another rule is that the 90 days can accumulate over fiscal years.
For example, if a Soldier gets 90 days credit
this fiscal year, he or she would be able to retire 90 days before age 60. Then, if a Soldier also gets 90 days creditnext fiscal year, he or she would be able to retire at age 59.5, or 180 days before age 60.The accumulative effect can continue for a number of years in 90-day blocks, with the only stipulation being that a Soldier cannot retire before age 50.
Link for computing time between two dates:
http://www.timeanddate.com/date/duration.html
Doug Nordman says
Thanks for the detailed summary, Dave!
I’ve edited your comment to reflect that the fiscal year requirement has been canceled by the 2015 NDAA. Servicemembers can earn day-for-day credit for earlier retirement without having to count across fiscal years. The rest of the legislation remains in effect.
Doug Nordman says
Good question, Todd!
You’ll have to earn a total of at least 20 good years in order to be eligible to retire from the Reserves or National Guard.
You’ll get a good year when you earn 50 points (or whatever minimum your service requires that year), but you’ll also have to perform sufficient drills and remain current on your readiness for mobilization: medical, dental, physical fitness, and online training.
Your active-duty service counts toward good years. If you review your point count summary online, you’ll probably see a good year for every year of active duty plus another good year for your Army Reserve time. If that’s the case then you only have 14 good years remaining until you’re eligible for retirement. Your active-duty time also accrues a point for each day, so you probably received over 1800 points for those five years.
Doug Nordman says
Mark, I’m having a little trouble sorting out your terminology, but I’ll give it a shot and you let me know if I’m interpreting it correctly.
It sounds as though you’re in the Reserves now, with 3500 points on your record and credit for 18 good years. All of your five years of active duty for training and your two years of deployments should already be included in that 3500 points. You can verify that by going to your service’s online record of your good years and your point count.
I’m not sure what type of duty your AGR position may be, but whether it’s mobilization or some other form of active duty for training then you’ll get one point for each day of duty. (If the orders are for more than 29 days then other benefits kick in, like Tricare.) For every year that you achieve 50 points (or your service’s requirements for that year) and meet all of the other readiness requirements, you’ll get another good year of Reserve credit.
When you reach 20 good years then you’re eligible for a Reserve (“non-regular”) pension. If you’re on active duty every day of the next two years, then at the end of that time you’ll have earned another 731 points and you’ll have 20 good years. Your point total would be 4231 and your pension would be 4231 / 360 * 2.5% = 29.38% of the High-Three average of the base pay for your rank and your longevity of the pay tables in effect when your pension starts.
Depending on the dates and locations of your deployment, your pension may start before age 60. (See the last paragraph of the post.) If you think this may apply to you then you could e-mail me the dates of your deployments and we could confirm all of the details. However first I think you’ll want to check your online records to make sure the good years and point count are accurate.
David L. McDonald says
I am three years deep into retirement on 01MAR15 and HRC still is unable to get my retirement correct. I have an active duty retirement, and have been ping pronged all over the retirement services community: RSO, HRC,G-1, NGB, to name a few. My retirement is the story of Everybody, Somebody, Anybody, and Nobody. Google everybody,somebody, anybody and nobody of the story. I expected more of a “Message to Garcia” retirement, one where people who deal with this for their job would actually do their job. Have knowledge of Title 10 USC concerning retirement, DOD FMR vol 7b, and the AR’s. Instead, I have had to educate a broken system, a scloretic bureaucracy. Don’t suggest the politician route, the service organization route both major failures. I am making progress on my own, as of Sep 2014, I have three retirement certificates and am finally going in the right direction. I am now the correct rank from SSG to CPT, but still at the wrong retirement percentages for years of service and wrong retirement. The subject matter experts went from my 20 yr AFS, non disability retirement to a reserve early drop.
All of my time was active, with over ten years as a commissioned officer. They all had access to this info before I retired.
Doug Nordman says
That’s absolutely right, Gail, the pension is paid as a 30-day month. You’ll get the same payment each month for the calendar year.
The new calendar year’s first payment is boosted by its cost of living adjustment– which continues at the new level for the rest of the year until the following year’s COLA. Over my 12 years of retirement, the COLA has raised my pension by a total of 27%.
serg says
What is your recommendation between early retirement from AD or a Reserve retirement? I qualify for TERA if I get passed over for Major. I have about a total of 16 years of active duty (10 USA commissioned, 6 enlisted) and about 14 enlisted reserve years from the Navy. I’m 51 years old.
Doug Nordman says
Congratulations, Serg, it looks like you’re already eligible for a Reserve retirement!
Please check the requirements at this link:
https://the-military-guide.com/reserve-military-retirement-for-active-duty-veterans-with-previous-reserve-or-national-guard-service/
and make sure you have your Reserve Notice of Eligibility letter (confirming 20 good years) as well as an accurate Reserve point count. The Navy Reserve may not have tracked your active-duty Army time, and you may need to update their records to obtain your NOE.
If you received your first military ID card before 8 September 1980 (Navy Reserve) then your retirement system may be Final Pay. It depends on what was entered as your Date of Initial Entry on Military Service:
https://militarypay.defense.gov/Retirement/
If your first military ID was issued after 7 September 1980 then your retirement pay base will be High Three.
Then check your service’s TERA message. If you’re passed over you may still have to apply for TERA, and there’s no guarantee that you’ll be accepted. If you meet the TERA criteria then calculate your pension using the FMR TERA tables at this link:
https://the-military-guide.com/the-regulation-for-calculating-an-active-duty-pension/
and consider the issues at this link:
https://the-military-guide.com/retire-at-17-years-of-service-or-20/
Next, calculate your Reserve pension (assuming it starts at age 60 as an O-3) and compare it to your TERA pension. Your TERA pension may start at a smaller number but it will have an eight-year head start on your Reserve pension. I feel that the most important factor in either pension is its COLA, and your TERA pension may grow at an annual rate of 1%-2%. By the time you’re 60 years old, the COLA could make your TERA pension higher than your Reserve pension.
Finally, talk to a military lawyer who’s familiar with Title X U.S. Code for military retirement law. You want to make sure that your retirement occurs as an O-3. It’s also possible (but doubtful) that your deployments after 28 January 2008 may make you eligible to start a Reserve retirement earlier than age 60. You need solid legal advice on both of these criteria before you can count on the numbers. The Army has retired at least one other servicemember as an enlisted, despite their service at a commissioned rank, and you want to verify that your retirement references the appropriate sections of federal law.
Let me know if you want any help with the numbers, and please tell us how your selection board goes!
Doug Nordman says
Serg, here’s a more detailed answer (with dollar figures) at this post:
https://the-military-guide.com/tera-early-military-retirement-reserve-retirement/
Doug Nordman says
You’re welcome, Louise, it’s consistently one of the most popular posts on the blog!
Terese LeFrancois, Ret USAFR says
Before deciding which rank (O or E) to retire, recommend you do the calculations for each and consider the final numbers. If O-3 for 10 years gets you more/less than E6/7 for 26 years or the opposite, then take that into account. One must also consider personal values – is it more important for you to retire as an officer with perhaps less retiree pay than a senior enlisted with more pay? Definitely check with a good attorney first!
Doug Nordman says
Jon,
Congratulations on your service– there’s not many Final Pay members still on duty!
You’re wise to consider this question before you apply for retirement. My first piece of advice is: consult a military lawyer from a base legal service office. They’re familiar with both federal law and DoD retirement rules and can figure out the details. By enlisting before 6 Sep 1980, your retirement comes under legacy rules that today’s personnel staffs may not see very often.
As I understand the DoD Financial Management Regulation (http://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/Volume_07b.pdf), you’re eligible to retire as an O-3. Sections 010501(E) and 030105 include the phrase “of the highest grade held satisfactorily at any time in the Armed Forces.” You’re over 10 years of commissioned service, so the key question will be whether your broken service affects the rules which apply to your officer or enlisted status.
The problem is that Title 10 U.S. Code sections 3914 and 3963 apply to Army Reserve enlisted who were “previously administratively reduced in grade not as a result of the member’s own misconduct” and refer to retirement in an enlisted paygrade. You’ll be retiring through the Army’s HRC, and they may not be familiar with your USAF service. It’s critical that your USAF records be reflected in the Army’s electronic database (not just your paper service record) or else the Army computers won’t recognize your commissioned service.
As you go through the determination process (which I recommend you start now), make sure the HRC staff refer you to the applicable regulations. If an Army regulation (or federal law) supersedes the FMR and Title 10 paragraphs that I’ve mentioned above, then you’ll want a lawyer to help you figure out which takes precedence. Even if HRC agrees that you’re retiring as an O-3, you still should ensure that they can quote the applicable regulation– and avoid a later unpleasant surprise. It’s absolutely essential that you resolve these questions now, before you apply for retirement, in order to avoid having to resolve them through a corrections board after retirement.
Hopefully another reader can chime in on these regulations. I’m going to check with a few other servicemembers & veterans who may be able to help with this question. If you get an answer first, please let us know!
jon robinson says
Hi Doug,
Thanks for your article, it is very informative! I enlisted in AD USMC in 1977, completing 3 years of honorable service in 1980. In 1985, I entered AD USAF as an officer and served 7.5 years – again I was honorably discharged in 1992.
In 2001, I joined the USAF reserves, again as an officer. Later I was passed over twice for promotion to Major (04) and was discharged in 2006. The absence of USAF OPRs between 1992 to 2001 (inactive USAF reserves) hindered my chances for promotion to Major. Anyway, I was honorably discharged from the USAF Reserves in 2006, and I joined the US Army reserves as an E5. I was promoted to E6, have obtained my 20 year letter and I am still serving as an IMA reservist in Korea.
My question: I have approximately 26 good years for reserve retirement, with 13 good years as an officer, 9 years as an O3. I fall under the Final Pay retirement plan (I enlisted before 6 Sept 80). Do I qualify to retire at my highest grade (O3) held, or do I retire as an E6 (that’s if I don’t get promoted in my present reserve position)?
Ok, thanks for your help.
JON
David L. McDonald says
Unfortunately I have hired a lawyer to sue the government for my benefits. Both of the elected officials I have contacted about my retirement have been dead ends. I will keep you posted on the results.
Dave
Doug Nordman says
Thanks for the update, Dave. Please let us know how the lawyer interprets the differing Title 10 sections.
The-Military-Guide says
Glad to help!
Doug Nordman says
Good to hear from you again, Dave! I just re-sent you my response to your 4 July “Contact me”; please check your e-mail (and perhaps your spam folder) for my NordsNords at Gmail address.
I’m not sure how the Army arrived at their determination of your retirement rank, and you made good points in your 4 July message. If you have not already seen a military lawyer at a local military base then that still seems to be your best option. If no military base is nearby then the next choice would be to consult a civilian lawyer (preferably a military veteran) with experience at having retirement records corrected by military review boards. You already seem familiar with the DoD Financial Management Regulation so the lawyer might be willing to offer a free hour to review your FMR references and your service record. Please let us know what you’ve learned from that and what other assistance we can offer.
Doug Nordman says
Thanks for your comment, Chris!
The definition of active federal service is in federal law. I’ll start by disclaiming that I’m not a lawyer, and your friend definitely needs the services of one. The lawyers know how to page through the federal law’s revisions, amendments, updates, and other minor changes. They also have the tools to research previous cases for legal precedents that might not be reflected in the actual text of the law. As you say, I’m sure that there have been many lawsuits in this area over the last few decades, but I’m not sure how to find them. As for finding the lawyer: they should contact their unit’s lawyer or base legal officer or even see if they can find someone in their unit who has a civilian practice. Just about any lawyer or paralegal should have the tools to research the law and the case history, although a military lawyer will be more familiar with recent precedents.
The definition of active federal service starts in Title 10 of the U.S. Code, parts 101(d)(6) and (7). In the “Notes” tab of the Cornell law website ( https://www.law.cornell.edu/uscode/text/10/101 ) it says “In clause (22), the definition of “active duty” is based on the definition of “active Federal service” in the source statute, since it is believed to be closer to general usage than the definition in 50:901(b), which excludes active duty for training from the general concept of active duty.” That’s generally the contentious issue: ADT and AT (or anything else with the word “training” in it) does not count as active duty. Even if it involved a mission supporting active-duty forces (for example, flying fuel tankers for refueling jets flown by active-duty pilots) it’s still “training”. This is how Reserve servicemembers can still conduct drills and AT/ADT (for points and credit toward “good years”) without exceeding 18 years of active duty service and reaching sanctuary.
Army National Guard active duty could also occur under Title 32 of the U.S. Code, which allows states to mobilize their Guard members with federal funds. It’s generally used to for homeland security missions but may have different definitions of “active federal service”. I’m going to immediately defer to the lawyers on this one.
To further confuse the issue, your friend could have had their orders citing the wrong federal law codes. If personnel branches cite the wrong clause in your friend’s orders then that error can’t be held against the military for pay or retirement purposes. In general, under Title 10 anything less than 30 days is considered “training” and anything 30 days or more (when a new ID card is issued) would be considered “active duty” no matter what federal law is cited in the orders. I’m not sure about Title 32 limits.
I hope this clarifies the situation without adding to the confusion. Please e-mail me more details if it would help refine the answer. I’ll also add this to a future “ask the readers” post where we might hear from others who have been in this situation.
Doug Nordman says
Excellent question, Lisa! The answer is “Yes”– you can get either one.
For the vast majority of servicemembers, 10 “good years” of Reserve duty is halfway to a retirement. When you add another 10 years of active duty to that Reserve record, you’ll reach 20 good years and have over 4000 points. At that point you’ll be eligible for a Reserve retirement.
Your Reserve retirement doesn’t start right away, but it will start no later than age 60. (For every 90 days that you deploy to a combat zone during a fiscal year then your retirement age will be reduced by 90 days.) The active-duty services may not know to send you a Notice of Eligibility, so you may have to query your Reserve force headquarters to produce one before you leave active duty for “retired awaiting pay” status. You can read more about leaving active duty for a Reserve retirement at this post:
https://the-military-guide.com/reserve-military-retirement-for-active-duty-veterans-with-previous-reserve-or-national-guard-service/
If you want an active-duty retirement then you’ll have to stick around for 20 years of active duty or a Temporary Early Retirement Authorization at 15-20 years (these are generally only used during drawdowns). Medical or disability retirements are another possibility but way beyond the scope of your question. You could also separate anytime between 10-20 years of active duty and still enjoy the extra points on your Reserve retirement, but if you take any separation incentive payments then you’ll have to repay them once you start receiving your pension.
Doug Nordman says
Dennis, please check your e-mail for a response (from NordsNords at Gmail). I’m going to write up the full response as a separate blog post.
, which I’ll link to from here.Here it is: https://the-military-guide.com/buying-your-military-service-credit-in-the-federal-civil-service/
Doug Nordman says
Glad we could help, Czinkie! Please let us know how it works out– it’d be great to tell your story as a guest post!
Doug Nordman says
Here’s a longer answer to your question, although I’m afraid GubMints has also not heard of any civil-service programs leading to earlier Reserve retirement:
https://the-military-guide.com/maximizing-your-civil-service-computation-date/
Doug Nordman says
Thanks, gotta love a comment from anyone named “Moondoggie”!
I’ve never heard of the program you describe, but I know that there are some “critical skill” civil-service or contractor jobs which require the employee to also hold a billet in the Reserve or National Guard.
Right now the only way that I’m aware of to receive a Reserve pension before age 60 is to deploy to a combat zone for at least 90 days in a fiscal year.
I’m going to forward your comment to GubMints.com. He’s also a Reservist in a civil-service billet, and if he doesn’t immediately know then answer then he’ll know where to find out. I’ll let you know the word either way.
Doug Nordman says
Thanks for your comment, ChaplainG! My response is turning into a complete blog post, so please check your e-mail for a message from NordsNords [at] Gmail.
Doug Nordman says
Thanks, Cliff!
Good point about the deadlines and the packages. Each service has their own procedures on their Reserve/National Guard websites, and they’re all just different enough (and changing frequently enough) to be extremely confusing.
The answer regarding remarried ex-spouses is “It depends”. The Uniformed Servicemembers Former Spouse Protection Act provides guidance on when an ex-spouse is entitled to a portion of a military pension, even if they (and you) have to wait until you turn 60 years old. However that’s just guidance for the state courts, and your specific situation depends on your divorce agreement.
It’s not “just” your retired pay. It’s also whether the ex-spouse is entitled to any of your other military benefits (like Tricare and base access) and whether they’re entitled to be covered by your Survivor Benefits Plan.
I recommend that you start with this post:
https://the-military-guide.com/military-retirement-and-divorce/
and follow up on all of the links. Most important of all, check your analysis with a lawyer who’s familiar with military divorce.
Doug Nordman says
The post is up at:
https://the-military-guide.com/military-retirement-and-divorce/
Please let me know if you have any questions.
I recommend that you review your divorce agreement with a lawyer to make sure you’re covered for your ex-spouse’s military disability, Survivor Benefit Plan, Tricare, and Social Security. A little time and expense now can save you thousands of dollars of frustration and litigation later.
If he has a significant degree of disability then he’ll receive a portion of his pension from the Veteran’s Administration, and your divorce agreement may not cover that situation. If that happens then you’ll get less than $1975/month. He may be able to make changes to his SBP beneficiary, too, unless that’s covered in the divorce agreement. It’s possible that you’ll be eligible for Tricare healthcare when he turns age 60, and Tricare For Life at age 65. And finally, you’ll need to check whether it makes sense for you to eventually draw Social Security benefits based on your own earnings record or his. I cover these issues in more detail in the post.
Please let me know how this works out. Thanks for asking the question– I think it’ll help a lot of readers.
Doug Nordman says
Sorry about the divorce, Margie, but the amount of the pension is a complicated and confusing question for many people. State divorce decrees and federal law (for military pensions) make it even more complicated. I’m sending you an e-mail and I’ll follow up with a full post on your question. I should have the e-mail headed your way later today.
Margie says
Thank you, I look forward to hearing from you.
Doug Nordman says
Thanks, CWOK, and congratulations on your retirement!
Doug Nordman says
Sean,
You’re absolutely right, there is something specific that says you can get credit. But it’s buried in BUPERSINST 1001.39F of 17 Sep 07, “Administrative Procedures for Navy Reservists”. I’m looking this up on website of the Association of the U.S. Navy (AUSN.org), which is an excellent advocacy group for Navy Reserve servicemembers. According to the Navy Personnel Command website, 1001.39F is undergoing major revision. If you’re on active duty or in the Reserves then you’ll probably have a better chance than me of figuring out when .39G will be released. (Or an alert reader will let us know here on the blog.) What I’m about to describe is from .39F, and I sincerely hope it’s fixed in .39G.The “problem” is that most officers are given an active duty service date (the date that they actually started active duty as an officer) of the day they’re commissioned. (If they’re in ROTC then that date may be even later– the day that they start their first active duty.) Since this date doesn’t count ROTC midshipman training that happened before their starting date, officers have to submit a record of that earlier training.Article 2600.3 (Chapter 20, page 20-8), says:3. ROTC Summer Training Credit. Per 10 U.S.C., section 971, graduates of the U.S. Naval Academy (or other service academies) are not eligible for summer training credit. Members that participate in ROTC Midshipman/Cadet summer training are eligible for retirement point credit (one point per day under orders). Because the actual number of days served on summer training can vary, it is necessary that training be properly documented as a prerequisite to awarding retirement point credit. Proper documentation consists of one or more of the following and should be submitted to NAVPERSCOM (PERS-911):
a. Standard ROTC Summer Cruise/Training Orders (prior to 1978 – NAVPERS 2500, after 1978 – NAVEDTRA 1320/1) issued for each period of a midshipman summer training and endorsed upon
the member’s arrival and departure.
b. Leave and Earning Statements (LES) or NAVCOMPT 2120, Pay Voucher.
c. Ship’s Deck Logs or Ship’s Diaries, which show the dates the member (by name) embarked and debarked.
d. A letter from the ROTC Unit CO certifying the actual dates of summer training.
e. A letter from DFAS Cleveland, OH, certifying the actual dates of summer training.
f. NAVPERS 1070/613 (Administrative Remarks) prepared by the ROTC unit, which states that the member is being discharged to accept a commission. These standard Administrative Remarks usually list the summer training completed while enrolled at that particular ROTC unit.
Most officers find out about this opportunity years (even decades) after their NROTC summer training. They may no longer have their midshipman orders or their LESs, and there’s just no easy way to get a certification letter from an old CO or DFAS. It’s remotely possible that they still have their page 13 admin remarks. After those options are exhausted, though, the only remaining opportunity to obtain credit is the ship’s deck log. By this point you’re praying that the command recorded your report/detach dates in the deck log, and that the deck log is legibly filed at the Naval Archives.Hope this helps. I’ve been around the block a few laps and I have the spare time to research this information. However if any of you other readers have an update, I’d appreciate it!September 2017 update: Here’s the link where the Navy has canceled credit for midshipman summer training:
http://www.public.navy.mil/bupers-npc/career/retirement/OfficerRetirements/Pages/Mid-Shipman-FAQ's.aspx
Doug Nordman says
Steve, thanks for your question and my apologies for my delayed response. FINCON12 is sucking up all my brainpower this week.
I don’t know the answer to the ID card, but it depends on whether that decision is made by the DEERS staff (who furnish the info for the ID card) or the DFAS pay system (which decides what rank is used for your retired pay).
My guess is that if you retire before time in rank that you’d have a gray-area ID with your final rank, but when you reached age 60 then your new ID card would reflect the lower rank.
Reaching TIG may be easier than you think. In a drawdown, the services will frequently waive their TIG requirements from three years down to two or even one. Keep an eye on your service’s Reserve personnel website or ask them about it.
If you’re Navy then I’d join the Association of the U.S. Navy (AUSN.org) and e-mail their staff with the ID card question. Or maybe one of the other readers will chime in with the answer!
Doug Nordman says
Excellent website, thanks! I’ve heard those numbers being thrown about at drill weekends, but they’re a great way to project your benefits out 5-10 years…
Doug Nordman says
Tara, you might want to start with BUPERS Online for your point count. (https://www.bol.navy.mil/) If that’s not accessible then you could try BUPERS’ Reserve help desk at 866-827-5672. (http://www.public.navy.mil/BUPERS-NPC/CAREER/RESERVEPERSONNELMGMT/Pages/PointsFAQ.aspx)
The DD-214 is a tougher problem. I think you’re going to have to get that directly from PERS-912 at 866-827-5672 again. If that’s not working then you could try the PERS-9 directory at http://www.public.navy.mil/BUPERS-NPC/CAREER/RESERVEPERSONNELMGMT/Pages/ContactInformation.aspx .
Hope this helps. Please let us know how it works out so that we can spread the word in an updated blog post!
Doug Nordman says
Jim, your civil service time will not count toward a military pension.
However your military service can count toward earning a higher civil-service pension (when you meet the requirements of the civil-service pension). It can also help you earn a higher rate on your leave.
Here are two posts with more info:
https://the-military-guide.com/buying-your-military-service-credit-in-the-federal-civil-service/
https://the-military-guide.com/maximizing-your-civil-service-computation-date/
Doug Nordman says
Sorry to read about the confusion, Gary.
The six-month time-in-grade requirement for retirement is in federal law, but only for the ranks of O-4 and below. At O-5 and above, the same federal law requires three years time in grade to retire in that rank. That three-year requirement can be waived to two years by the service secretary.
https://the-military-guide.com/reserve-retirement-time-in-rank-and-high-three-pay/
The High-Three pension calculation takes the average of the highest 36 months of pay. For a Reserve or National Guard retirement the pension is typically calculated from the rank for which you met the time-in-grade requirement. The pay base for that pension is calculated from the average of the highest 36 months of pay in that rank using the pay tables in effect when you start that pension. For the vast majority of Reserve/Guard retirees, the pay tables in effect at the start of the pension (usually at age 60, and as though they’d been on active duty the entire time) are higher than the pay they were actually receiving at the time they filed for retired awaiting pay.
By retiring at MRD and immediately starting your Reserve O-5 pension (instead of starting it years or decades later), you had months of O-6 pay which were higher than your O-5 retirement rank. The Defense Finance and Accounting Service used the Tower Amendment to calculate the High-36 average to give you the higher pay base to use in the Reserve pension calculation. That’s the average of the 18 months of O-6 pay and the 18 months of O-5 pay for the pay tables in effect at the time you started your pension.
In other words, even though you had to retire at an O-5 rank, the immediate start of your pension reflects the benefit of your months of O-6 pay… and that benefit stays in your pension for the rest of your life.
Here’s the references on the Tower Amendment.
Federal law Title 10 U.S. Code section 1401.a(f)(2):
https://www.law.cornell.edu/uscode/text/10/1401a
The Financial Management Regulation (DoD 7000.14-R article 0304:
https://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_03.pdf
Public Law 103-337 (search for the keyword “Tower”):
https://uscode.house.gov/view.xhtml?path=/prelim@title10/subtitleA/part2/chapter71&edition=prelim
Doug Nordman says
Thanks, Tom, it’s been the blog’s most popular post for nearly eight years!
You’ve asked a great question. Your PEBD is used to calculate your Reserve pension, but it might not make a difference to you. I’ll tell you how it’s used and then you can check the numbers.
Once you have 20 good years and your Notice Of Eligibility, then you can retire awaiting pay. When you retire awaiting pay (not “discharge” or “separation”) then your pension is calculated for:
1. The future pay tables that will be in effect when your pension starts (age 60 for most retirees),
and
2. At the pay columns in effect for your longevity when your pension starts as if you’d been on active duty the entire time. This is when your Pay Entry Base Date is used.
For most ranks, today’s pay tables top out at longevity for 18 years of service, 20, 22, 24, 26, or 30 YOS. (It’s more than 30 if you’re a a flag officer, a W-5, or an E-9.)
https://www.dfas.mil/Portals/98/Documents/militarymembers/militarymembers/pay-tables/2020%20MilPay%20General.pdf?ver=2020-04-22-114904-720
Figure out how many years of service you’d technically have at age 60, check the numbers in the pay table for your retirement rank, and see whether that incorrect PEBD date gives you a different pay amount.
The last major change to the pay tables was in 2007, and it might happen again in the next 10 years. It’s possible that future pay tables (when you’ll be 60 years old) would change the longevity years for the maximum pay. If your PEBD error is even close to affecting this calculation then it’s worth correcting it to the right date.
If your PEBD is wrong by a few days or weeks then it might not matter. If your PEBD is wrong by months or years, though, then it’s worth correcting. It’s a lot easier to correct it when you’re in uniform than when you’re in the gray area after retiring.
LTC(R) Gregory Davis says
Your PEBD would be updated when you reentered the military. For instance my initial PEBD was 10 Jul 1974; after my three year tour and one year in the USAR, I had a 8 year break in service. I then reentered the military in 1986 and my new PEBD became 1980
LTC(R) Gregory Davis says
USAR Command would have all of your records, including your RPAS statement.
Doug Nordman says
Thanks, Gregory!
Doug Nordman says
You’ve asked great questions, Todd, and the law about 10 years of commissioned service only applies to active-duty retirements.
The only rule for Reserve officer retirements is that you’ve served satisfactorily in the billet for at least six months. (O-5 and above require three years’ time in grade, which can be waived down to two years, in order to retire at that higher rank.) As near as I’ve been able to learn, that can be accomplished in the IRR.
Returning to drill status from the IRR can be difficult, but it varies by service and by specialty. You’d have to check with your community for specific statistics.
Doug Nordman says
Cori, the federal law for early Reserve retirements applies only to Reserve and National Guard members. Those two deployments don’t count for an early Reserve retirement if you were part of the active-duty forces during those two deployments and not a Reserve or Guard member who was mobilized on Title 10 orders.
However you might be eligible for some 90-day periods after the law was modified in 2013 and late 2014. You can read this post for the details:
https://themilitarywallet.com/national-guard-and-reserve-early-retirement-age/
Doug Nordman says
Joe, here’s a summary from DFAS:
https://www.dfas.mil/RetiredMilitary/plan/separation-payments/voluntary-separation-incentive/
You’re always eligible to collect a pension that you earn through service (or qualify for through disability), but when you receive a pension then you have to pay back the gross amount (pretax) of the VSI.
It’ll be recouped from your pension payments at a default amount of 40%, although you can repay it more quickly:
https://www.dfas.mil/retiredmilitary/plan/separation-payments/vsi-ssb-recoupment/
Joe says
Thanks Doug!
David McDonald says
You need to contact your branch. HRC Start here: Christopher L Hill
LTC, AG
Chief, Gray Area Retirements Branch (GAR)
U.S. Army Human Resources Command
1600 Spearhead Division Avenue
Fort Knox, KY 40122
Work Desk: (502) 613-8452
Good luck I am still trying to straighten out my 2012 retirement fiasco.
V/r,
David L McDonald
Doug Nordman says
I’m sorry to read about this, Margaret.
Have you tried reviewing your Retiree Account Statements for notes about upcoming changes?
https://www.dfas.mil/RetiredMilitary/manage/ras/
Doug Nordman says
You’re welcome, Megumi, I’m glad it’s helping!
I’ll describe your process for tracking an estimate until age 60.
You’ll use today’s pay tables for your estimates because that produces results in today’s dollars. It helps simplify your retirement spending plans because you don’t have to adjust for years of inflation, and using today’s dollars for pension income & retirement expenses feels more realistic than future dollars.
50 points per good year is conservative as the minimum. (Your annual points will probably be a bit higher than that over the next 12 years.) I’d start with your current point count (as of 2020) and then project at 50 points/year. Every year or two you could update this estimate with your current point count.
The federal law for a Reserve pension says that when you retire awaiting pay (“gray area”) then your longevity at your retirement rank continues to accrue as if you were on active duty all the way up through age 60. Your commissioning at age 21 means that at age 60 you’d be considered to have longevity of >38 years in the pay tables at your retirement rank. You’d essentially use the pay table’s columns for the highest O-4 or O-5 pay. Keep an eye on the pay table’s >38 column in case Congress changes the rules for the pay tables over the next three decades.
Although you won’t have pay stubs after you retire awaiting pay, your pension calculation (at age 60) assumes that you’d earned whatever the future pay tables over the years have at your highest 36 months of pay. For most retirees that would be your ages 57-60.
To do an estimate in today’s dollars, you could average the highest 36 months of pay in today’s pay tables for O-4 or O-5 in the >36 and >38 columns. To simplify that calculation you could also assume that the High Three average of those months is 96% of today’s pay, which reflects annual pay raises of roughly 2%/year.
When you update your estimate, you’d project your latest point count at 50 points/year through 20 good years. Then you’d use today’s pay tables for the highest O-4 or O-5 pay, and estimate its High Three average as 96% of that pay table’s numbers. Put those numbers into the Reserve pension formula, and that would give you a pension estimate in today’s dollars.
When you retire awaiting pay then you’d continue updating your estimate every year or two with your final point count and the latest future pay tables.
Doug Nordman says
I appreciate the logic, John, and the federal law would have to be changed. Currently, pay raises are based on the Employer Cost Index (for retention) and COLAs are based on the Consumer Price Index.
The best way to do that is working with your local veteran’s organizations and elected representatives.
John says
Thanks, BTW I just noticed your a fellow bubblehead. I was on George Bancroft Gold from 1981 to 1984, ET/Reactor Operator. It just seems like it is such a waste and so unfair, all this effort going into figuring a retiree’s Service Percent Multiplier, then one year later it means NOTHING. (The way to COLA’s are currently figured).
Doug Nordman says
“Submarines once!” In 1984 I was just arriving at USS JAMES MONROE BLUE.
I understand the frustration about the world’s most complicated retirement system, but the federal laws are designed around military retention in the shorter term. Only 15% of servicemembers qualify for a pension, and DoD is more focused on retaining people for the first decade of service.
If you decide to advocate for change, here’s several examples of how to boost your efforts:
https://themilitarywallet.com/how-to-be-your-own-advocate/