Service Requirements to Retire as a Commissioned Officer

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Military Officer Retirement
Earning a military retirement can be complicated, especially when your service status changes throughout your career. Complicating factors can include changing branches of the military, transitioning between active duty and the Guard or Reserves, or earning your commission after starting your career as an enlisted member. Several service members have contacted me regarding the qualifications…

Earning a military retirement can be complicated, especially when your service status changes throughout your career. Complicating factors can include changing branches of the military, transitioning between active duty and the Guard or Reserves, or earning your commission after starting your career as an enlisted member.

Several service members have contacted me regarding the qualifications for earning retirement as a commissioned officer. As you might have guessed, there are rules that guide how rank is calculated for retirees. And the amount of service time a military member has as a commissioned officer can have a major impact on their retirement.

Military Officer Retirement

This article examines the service requirements for retiring as a commissioned officer. This article primarily applies to service members who were previously enlisted, then later earned their commission and remained in the service through retirement.

Bottom Line Up Front (BLUF):

  • To retire from active duty as a commissioned officer, you must have 20 years of active duty service, with at least 10 of those years of service as a commissioned officer (the Secretary of the branch of service may waive this requirement to 8 years of service as a commissioned officer).
  • To retire from the Reserve Component as a commissioned officer, you must have 20 qualifying years of service (Good Years) and be a commissioned officer at the time of retirement.

I know this may seem contrary to what you may have read or heard elsewhere. So I’m going to dive into the details. Please read through this entire article, as we will look at examples and include references and links to Title 10 of the U.S. Code, which is the section of U.S. law that governs military service, including pay, retirement, discharges, and much more.

And, as you might have guessed, there will certainly be some exceptions to these rules. So I will try to point these out where applicable.

Keep in mind this can be a complicated topic and there can be exceptions to these rules beyond what is listed here. I recommend visiting with your Human Resources or Personnel office, or even your base JAG if you have specific questions about your career or retirement eligibility. When it comes to your career you need an expert to give you the facts in writing.

Qualifying for a Military Retirement

In most cases, military members must serve 20 years to be eligible for normal military retirement. There are some exceptions, including the Temporary Early Retirement Authority (TERA), which allows members to retire with as few as 15 years of service, and Chapter 61 medical retirements.

TERA is only offered when the military needs to selectively reduce the size of its force. It is generally only offered in specific branches, and then, usually only for targeted career fields and service classes (years of service).

Medical retirements are complicated and the situation is often unique to the individual. This type of military retirement will not be covered further in this article (you can read more about it in Ch 61 of the U.S. Code if you want the details).

There are also differences between retiring from active duty and retiring from the Guard or Reserves (Reserve Component, or RC).

Qualifying for Retirement from Active Duty

  • A normal active duty military retirement requires the military member to serve 20 years on active duty.

Qualifying for Retirement from the Reserve Component

Qualifying for Retirement as a Commissioned Officer

If you read the BLUF at the top of the page, I stated that prior-enlisted officers who retire from active duty need to serve 20 years on active duty, with at least 10 of those years being as a commissioned officer (waiverable to 8 years of commissioned service).

However, I also stated that wasn’t the case for members of the Reserve Component.

Let’s take a look at the U.S. Code that governs these types of retirements so we can see for ourselves how this works:

Active Duty Requirements

Let’s go to the source:

  • U.S. Code > Title 10. Armed Forces > Subtitle D – Air Force > Part II. Personnel > Chapter 941 – Retirement for Length of Service > §9311. Twenty years or more: regular or reserve commissioned officers
  • Note: this is the Air Force law, but it is the same for all branches.

Emphasis Mine:

(a) The Secretary of the Air Force may, upon the officer’s request, retire a regular or reserve commissioned officer of the Air Force who has at least 20 years of service computed under section 9326 of this title, at least 10 years of which have been active service as a commissioned officer.

(b)(1) The Secretary of Defense may authorize the Secretary of the Air Force, during the period specified in paragraph (2), to reduce the requirement under subsection (a) for at least 10 years of active service as a commissioned officer to a period (determined by the Secretary of the Air Force) of not less than eight years.

As you can see, members must have 20 years of active duty service, with at least 10 years of active service as a commissioned officer.

However, the SecDef can, at times, authorize the Secretary of the branch of service to allow members to retire with as few as 8 years of commissioned service, provided they otherwise meet the retirement eligibility criteria. This is generally 20 years of service, unless they are authorized to retire early under TERA (remember from above, TERA allows members to retire with as few as 15 years of active duty service, if they are offered this by their branch of service).

Reserve Component Requirements

Let’s go to the source:

  • U.S. Code > Title 10. Armed Forces > Subtitle E. Reserve Components > Part II. Personnel Generally > Chapter 1223. Retired Pay for Non-Regular Service > §12731. Age and service requirements

Emphasis Mine:

(a)Except as provided in subsection (c), a person is entitled, upon application, to retired pay computed under section 12739 of this title, if the person—

  • (1) has attained the eligibility age applicable under subsection (f) to that person;
  • (2) has performed at least 20 years of service computed under section 12732 of this title;
  • (3) in the case of a person who completed the service requirements of paragraph (2) before April 25, 2005, performed the last six years of qualifying service while a member of any category named in section 12732(a)(1) of this title, but not while a member of a regular component, the Fleet Reserve, or the Fleet Marine Corps Reserve, except that in the case of a person who completed the service requirements of paragraph (2) before October 5, 1994, the number of years of such qualifying service under this paragraph shall be eight; and
  • (4) is not entitled, under any other provision of law, to retired pay from an armed force or retainer pay as a member of the Fleet Reserve or the Fleet Marine Corps Reserve.

Notice there is no language requiring the member to have a certain number of years of commissioned service. Members retiring as an officer in the Reserve Component simply need to meet the 20-year service requirement.

That said, members may incur a service commitment when they commission, so they may be required to fulfill this prior to voluntarily retiring. There are also time in grade requirements to retire under a certain grade (see the section below regarding retirement pay grade).

Exceptions to the Above

If you parse the above sections, you can see there are some exceptions to the rule. Members need 20 years of service unless they qualify for early retirement under TERA (minimum of 15 years of service, and this is only available in select cases and when authorized by the Secretary of the branch of service). TERA can apply to both active duty and the Reserve Component.

Additionally, active duty members need 10 years of commissioned service, unless the Secretary of their branch of service has authorized members to retire with 8 years of commissioned service.

This combination of early retirement and the required number of years as a commissioned officer can have some unintended consequences, which we will examine later.

Finally, there may be other exceptions regarding Chapter 61 medical retirements, and for certain specific situations that will remain outside the scope of this article.

What Will Your Retirement Pay Grade Be?

This is governed under 10 U.S. Code §1370. Commissioned officers: general rule; exceptions.

There is a lot of legalese in the preceding link, so I’ll translate:

Service Ending at O-4

In general, if you will retire at the rank of Major or Lieutenant Commander or lower, you must meet the retirement eligibility requirements listed above and have at least six months of satisfactory service at that rank.

Service Ending at O-5 and higher

Officers must have served on active duty in that grade for not less than three years. However, the Secretary of Defense may authorize the Secretary of a military department to reduce this period to no less than two years.

There are additional rules regarding when the Secretary of Defense may authorize members to retire with less than three years time in grade, as well as the number of individuals in each rank that can retire with fewer than 3 years time in grade in a given year.

There are additional rules for retiring at the pay grade of O-7 through O-10.

Retiring at a Lower Grade

Officers who are retiring without the required time in service for the specific rank may be retired in the next lower grade in which they served satisfactorily, for not less than six months.

This article will not cover reduction in grade for conduct unbecoming an officer, or for other administrative reasons. Speak with your JAG if that situation applies to you, as they will be able to provide personalized information specific to your case.

Policy vs. Law

The U.S. Navy, and by extension, the U.S. Marine Corps, follows the federal law for retirement pay grade. However, they also have their own policy regarding retirement rank. According to OPNAVINST 1811.3A, Navy Policy has the following Time in Grade requirements:

  • O-1 and O-2: 6 months
  • O-3 and O-4: 2 years (up to 18 months may be waived)
  • O-5 and higher: 3 years, subject to waivers allowed by law

In other words, the only changes are for O-3 and O-4, which require members to serve 2 years TIG instead of a minimum of 6 months required by law. However, COMNAVPERSCOM may waive up to 18 months of the 2-year period.

In short, it’s important to review the federal law, but you should also verify your branch of service’s policies.

Use This Information to Plan Your Career & Retirement

Don’t let retirement sneak up on you. Make sure you know your service class, when you will be eligible to retire, and at which grade you should retire.

This information can help you make important and valuable career decisions and help you avoid costly mistakes such as turning down orders and retiring before you have accrued the necessary service time as a commissioned officer, or the necessary time in grade to retire at that pay grade.

The difference can have a massive impact on your retirement pay.

If You Are Retiring from Active Duty

Qualifying for Active Duty Retirement:

  • You need 20 years of active duty service, with at least 10 years commissioned service.
  • Exceptions – active duty service time: you can retire with as few as 15 years of active duty service under TERA if it is offered by your branch of service.
  • Exceptions – commissioned service time: you may be able to retire as a commissioned officer with as few as 8 years of commissioned service if authorized by the Secretary of your branch of service.
  • Note: these exceptions are not always offered and are usually only available when the military is trying to reduce their force size. At the time of this writing, no branches are currently offering TERA or retirement as an officer with 8 years of commissioned service.

Active Duty Retirement Grade:

  • Your retirement grade will be the highest grade satisfactorily held.
  • If you are retiring as an O-4 or lower, you only need 6 months time in grade to retire at that grade.
  • If you are retiring as an O-5 or higher, you need to have 3 years time in grade to retire at that grade, unless your branch Secretary has authorized commissioned officers to retire with only 2 years time in grade.
  • There may be additional rules governing retirement as O-7 through O-10.

If You Are Retiring from the Reserve Component

Qualifying for Retirement from the Reserve Component:

  • You need 20 years of qualifying service (Good Years) and be commissioned at the time you retire
  • TERA rules may apply when authorized by the Secretary of the branch of service.

Note: You may incur a service commitment when you earn your commission. There may be a requirement to fulfill this service commitment before you will be allowed to voluntarily retire. Speak with your human resources or personnel office for more specific information.

Reserve Component Retirement Grade:

  • Your retirement grade will be the highest grade satisfactorily held.
  • If you are retiring as an O-4 or lower, you only need 6 months time in grade to retire at that grade.
  • If you are retiring as an O-5 or higher, you need to have 3 years time in grade to retire at that grade, unless your branch Secretary has authorized commissioned officers to retire with only 2 years time in grade.
  • There may be additional rules governing retirement as O-7 through O-10.

Real World Examples of How These Rules Can Impact Your Retirement

Again, it pays to understand the mechanics of retiring as an officer.

Example 1 – Passing Up Orders & Retiring

When you are in the latter stages of your career, you are often at the mercy of your functional or career advisor. They will often send you where the need is the greatest, whether or not it is a desirable career move or your preferred location. And since they know you need to follow orders to remain in the military, they have you in a tough spot.

This is where you need to decide whether or not to accept or decline the orders. Accepting the orders means you pick up your life and move (yet again). Declining your orders pretty much means game over for your military career. It’s actually not uncommon for military members to receive orders after they are eligible for retirement and decide they would rather retire than uproot their families for another cross-country or international move.

Diving into that decision is a topic for another day. But it’s important to understand how it will impact your retirement. If you are a prior-enlisted officer with 20 years of active duty service, but fewer than 10 years as a commissioned officer, you might want to think long and hard about the impact this could have on your retirement benefits.

Likewise, you may consider taking the orders if you recently promoted and will not have the time in grade to retire at that pay grade. Only you can decide whether or not taking those orders is worth the additional income (and stress) that comes with accepting new orders. The key is to be aware of your options and the impact of accepting or declining.

Example 2 – Forced Early Retirement

In a perfect world, military members would be able to remain on duty until they were ready to move on. Unfortunately, it doesn’t always work that way, and the military does, from time to time, force people out of the military through involuntary separations and forced retirement.

For example, in 2014, the Army forced a group of prior-enlisted active duty officers to retire with 20 years of service or under TERA rules. Unfortunately, while some of them were qualified to retire, several of them did not qualify to retire as an officer because they did not have 8 years of commissioned service (the Secretary of the Army had authorized commissioned officers with less than 10 years of service to retire as commissioned officers during this period).

In effect, these Soldiers had been rewarded with career advancement for their exceptional service, then they were later forced out due to Force Shaping requirements, and were not allowed to retire as officers because they did not have the requisite service time. As you might imagine, this did not go over well.

Thankfully, enough attention was raised about this issue, and after a Congressional inquiry, the Army allowed the members to retire as officers.

Be Informed

As our good friend, GI Joe said, “Knowing is half the battle.”

Use this information to guide your career and make the right decisions. You should be able to avoid the unintended consequences of turning down orders at the end of your career and,

  • a) be forced to retire as an enlisted member because you didn’t have the requisite service time to retire as a commissioned officer, or
  • b) retire before you have the time in rank to retire at that pay grade, or
  • c) you could get a double whammy and miss out on both.

And while Example 2 is outside of your control, being aware of this situation gives you the information you need to file an appeal or work with your JAG to see if anything can be done to avoid missing out on the retirement benefits you have earned.

Photo Credit: Photo by Master Sgt. John Hughel. This work is in the Public Domain. The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

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About Ryan Guina

Ryan Guina is the founder and editor of The Military Wallet. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

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    These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

  1. Randy says

    I think the phrase “for tax purposes” is necessary in the previous comment. You don’t receive a pay reduction to your bank account, you just report a reduced amount to the IRS.

  2. Brian O'Hare says

    Hi., Great source of information here. Appreciate what you do!
    I am about to submit my military retirement as I turn 60 in November. I retired as an O-5 with 28 yrs of service (12 as enlisted) but only had 2 yrs and 3 months in grade as an LTC. I was in the NG at the time of my retirement and had served on active duty for a few tours after 9-11 as well as an enlisted man in the 1980’s. Will I be retired at the lower grade of O-4? Also I am receiving a 30% VA disability compensation that is likely to be upgraded to 50% in the coming months. Will that affect my retirement pay from the military? To confuse matters even more I am now an employee of the VA and will be able to collect a retirement from them in just a couple of years. (I bought back my MSD when I started at the VA). How does that retirement enter the mix?
    Thanks again

    • Ryan Guina says

      Hello Brian,
      Lots of questions, let’s take them one at a time.

      Will I be retired at the lower grade of O-4? 

      I believe you need 3 years to retire as a LTC unless the military had waivers at the time you filed your paperwork (the law has been temporarily amended in the past to allow service members to retire as a LTC with only 2 years time in grade). However, your pay will be based on your high-36 months of service (or final pay if you were in the final pay retirement system). So I believe your time as a LTC will factor into your retirement pay.

      Also, I am receiving a 30% VA disability compensation that is likely to be upgraded to 50% in the coming months. Will that affect my retirement pay from the military

      Yes. If you have 40% or lower, your military pay will be reduced by the amount of your VA disability compensation. Veterans with a disability rating of 50% or higher are eligible for concurrent receipt, meaning they will receive both their military pay and their disability compensation in full.

      To confuse matters even more I am now an employee of the VA and will be able to collect a retirement from them in just a couple of years. (I bought back my MSD when I started at the VA). How does that retirement enter the mix?

      FERS members can buy back their active duty military time and have it count toward both the FERS retirement and a Guard/Reserve retirement. However, they cannot have their active duty time count toward both an active duty retirement pension and a FERS pension. In your case, you should be able to count the time you bought back toward both your military retirement and your FERS pension.
      Best wishes!

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