Updated June 2026
Military Retirement: The Complete 2026 Guide
Everything you need to understand the military pension in one place — which retirement system you fall under, how your retired pay is calculated, how Reserve and Guard retirement differs, the TSP, survivor benefits, and how retired pay works alongside VA disability. Every formula here is statutory (10 U.S.C. and the DoD Financial Management Regulation, Volume 7B); for live dollar figures, each section links to the matching calculator.
The four military retirement systems
Which system you fall under is set by the date you entered service — you do not get to choose (except for the BRS opt-in window and the REDUX election):
- Final Pay (entered before Sept 8, 1980): 2.5% per year of service × your final basic pay.
- High-3 (entered Sept 8, 1980 – Dec 31, 2017): 2.5% per year × your High-3 base (the average of your highest 36 months of basic pay). 20 years = 50%; 30 years = 75%.
- CSB/REDUX (an option for those who entered Aug 1, 1986 – Dec 31, 2017): a $30,000 Career Status Bonus at 15 years in exchange for a reduced multiplier (40% at 20 years) and a reduced cost-of-living adjustment (CPI minus 1%), with a one-time catch-up recomputation at age 62.
- Blended Retirement System (BRS) (entered on/after Jan 1, 2018; 2018-era members could opt in): 2.0% per year × High-3 base (40% at 20 years), plus government TSP matching, continuation pay, and an optional lump sum — see below.
How your pension is calculated
For High-3 and BRS, the formula is simple:
Retired pay = Years of service × Multiplier × High-3 base
(Multiplier = 2.5% for High-3, 2.0% for BRS. High-3 base = average of your highest 36 months of basic pay.)
So a 20-year High-3 retirement pays 20 × 2.5% = 50% of your High-3 base; a 24-year retirement pays 60%; a 30-year retirement pays the maximum 75%. Under BRS, those same years yield 40%, 48%, and 60%. Your pension then receives an annual cost-of-living adjustment (COLA) for life.
- Military Retirement Calculator — estimate your monthly pension under High-3 or BRS.
- Final Pay Calculator — see your net retired pay after taxes and deductions.
Reserve & National Guard retirement
Reserve and Guard retirement works differently. You qualify with 20 "good years" — years in which you earned at least 50 retirement points — and your pension is based on points, not just time:
Reserve retired pay = (Total career points ÷ 360) × Multiplier × High-3 base
Pay normally begins at age 60. Qualifying active-duty service after Jan 28, 2008 can reduce that start age by 3 months for every aggregate 90 days served in a fiscal year — but not below age 50. The gap between retirement eligibility and your pay start date is the "gray area."
Reserve & Guard Retirement CalculatorTurn your retirement points into an estimated monthly pensionThe Thrift Savings Plan (TSP)
The TSP is the military's version of a 401(k). Under BRS, the government automatically contributes 1% of your basic pay and matches your contributions up to an additional 4% — a 5% total when you contribute at least 5%. Leaving that match on the table is the most common BRS mistake. Members under the legacy systems can still contribute, but receive no match.
- TSP Calculator — project your balance with contributions, the match, and growth.
- TSP fund comparison — the C, S, I, F, G, and Lifecycle funds explained.
Survivor benefits (SBP)
Your military pension stops when you die unless you elect the Survivor Benefit Plan (SBP) — an annuity that pays your surviving spouse 55% of your elected base amount for life. The premium is 6.5% of the base amount, deducted before taxes. It is one of the most important (and largely irreversible) decisions you make at retirement.
SBP CalculatorYour premium cost and the annuity your survivor would receiveRetirement pay + VA disability (concurrent receipt)
If you have both a military pension and a VA disability rating, special rules decide how much you can collect at once. CRDP (Concurrent Retirement and Disability Pay) restores full retired pay for retirees with 20+ years and a VA rating of 50% or higher. CRSC (Combat-Related Special Compensation) is a separate, tax-free payment for combat-related disabilities. Below 50%, retirees generally waive an equal amount of taxable retired pay in exchange for tax-free VA compensation.
Taxes on military retired pay
Military retired pay is taxable at the federal level, but state treatment varies enormously — the nine no-income-tax states don't tax it at all, and most other states now fully or partially exempt it.
- Military Retirement Tax by State — your state's exact rule and recent law changes.
Frequently asked questions
How many years do you need to retire from the military?
Active-duty members generally need 20 years of service to draw an immediate pension. Reserve and Guard members need 20 "good years" (years with at least 50 retirement points) and normally begin drawing pay at age 60.
What is the difference between High-3 and BRS?
High-3 uses a 2.5% multiplier (50% of your High-3 base at 20 years); BRS uses 2.0% (40% at 20 years) but adds up to 5% in government TSP matching, continuation pay around 12 years, and an optional lump sum at retirement.
Can you get both military retirement and VA disability pay?
Yes. CRDP restores full retired pay for retirees with 20+ years and a 50%+ VA rating; CRSC is a separate tax-free payment for combat-related disabilities. Below 50%, retirees generally waive an equal amount of retired pay.
Sources & verification: Retirement formulas and eligibility from 10 U.S.C. (§§ 1401–1410 active; §§ 12731–12733 Reserve), the DoD Office of Financial Readiness / militarypay.defense.gov, and the DoD Financial Management Regulation, Volume 7B. Reviewed June 2026. This is general information, not financial or legal advice; figures from the linked calculators are estimates.