The following chart summarizes the differences between the four retirement plans.

At age 62,

1) retired pay made equal to High-36

2) future multiplier made equal to High-36

3) future COLA continues at CPR - 1%

The below chart provides the basic criteria to determine which retirement plan applies to you.

Service members who remain on active duty or serve in the Reserves orGuard for a sufficient period of time (usually a minimum of 20 years)may retire and receive retired pay. Members who become disabled while onduty may be medically retired and receive a disability retirement.There are four basic retirement plans; Final Pay, High-36 Month Average,REDUX and Disability.

All four of the retirement plans determine initial monthly retiredpay by taking the member's retired pay base and subjecting it to apercentage multiplier:

Retired Pay Base X Multiplier %

There are two methods for determining the retired pay base. They arethe final pay method and the high-36 month average method. The final paymethod, as the name implies, establishes the retired pay base equal tofinal basic pay. The high-36 method is the average of the highest 36months of basic pay divided by 36. This is generally the last 3 years ofservice and is sometimes called high-3. The method used depends uponwhen the member first entered military service.

To decide which method applies to you, you must determine the datethat you FIRST entered the military. This date is called the DIEMS (Dateof Initial Entry to Military Service) or DIEUS (Date of Initial Entryto Uniformed Services). The date you first entered the military is thefirst time you enlisted or joined the active or reserves. This date isfixed---it does not change. Departing the military and rejoining doesnot affect your DIEMS.

Some individuals have unique circumstances that complicate determining their DIEMS. Here are a few examples:

Be aware that your pay date may be different than your DIEMS. Also,your DIEMS does not determine when you have enough time in the serviceto retire---it only determines which retired pay base method applies toyou.

Not all Services have their DIEMS dates properly defined in theirpersonnel records. If you have unusual circumstances and are unsure ofwhen your DIEMS date is or believe your records show an incorrect DIEMSdate, contact your personnel office to discuss your particularsituation.

Now, based upon the date you initially entered the military, you can determine which retired pay base method applies to you.

For both the Final Pay and High-36 retired pay plans each year ofservice is worth 2.5% toward the retirement multiplier. For instance, 20years of service would equate to a 50% multiplier. The years of servicecreditable are computed differently depending upon whether retirementis from full time active duty or from a reserve career. Thesedifferences are explained under the Active Duty Retirement and Reserve Retirement pages.

For the REDUX retirement plan, which applies only to an active dutyretirement, the High-36 multiplier is reduced by one percentage pointfor each year that the member has less than 30 years of service atretirement. For instance, 20 years of service would equate to a 40%multiplier. This is discussed more fully under the Active Duty Retirement page.

For the Disability retirement plan, the multiplier may be the higherof 2.5% for each year of service or the disability percentage assignedby the Service at retirement. However, note that the disabilityretirement multiplier is capped at 75%.

In any case, the longer an individual serves, the higher the multiplier and the higher the retirement pay. For example:

All military retirements are protected from inflation by annual Costof Living Adjustments (COLAs), based on changes in the Consumer PriceIndex (CPI) as measured by the Department of Labor. Under the Final Pay and High-36 retirement plans, the annual COLAis equal to percentage increase in the CPI year over year. This is adifferent index than the one used for active duty annual pay raises. Theindex used for active duty pay raises are based upon average civilianwage increases. Thus, retirement pay COLAs and annual active duty payraises will differ. Also note; the annual COLA for the REDUX retirementmethod is reduced by one percentage point below the increase in the CPI.

Military retired pay is subject to a dollar for dollar offset whenthe retired member is also in receipt of VA disability compensation.However, there are two programs that restore partial or full retired paywhen a member is eligible for concurrent DoD and VA payments. See the Concurrent DoD and VA Payment page for details.

Additionally, all retirees may choose to participate in the Survivor Benefit Plan (SBP) or the Reserve Component Survivor Benefit Plan (RCSBP),which enable the member to provide a continuing annuity to their familyafter death, based on the retired pay. The SBP and RCSBP programs arediscussed in the benefits section.

Finally, remember that after age 62, Social Security will likely provide additional retirement benefits.

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military retirement calculator - Military Compensation