2017 Review Guide: Who Has the Best Military Retirement Calculation (Air Force vs. Guard vs. Navy Retirement Calculators)


The military retirement system is one of the best retirement systems available in the US. Unlike other retirement plans, the armed forces offer a pension with benefits.

There are numerous online calculators, such as the Navy retirement calculator, National Guard retirement calculator, and Air Force retirement calculator, which can enable you to determine the exact retirement pay you will get after completion of your service.

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The pension and benefits start from the day you retire, irrespective of your age. This means that it is possible for some to begin getting a regular retirement pension even at 37 years old.

One of the greatest aspects about the military pension system is that it grows alongside the cost of living and is adjusted each year.

In this article, AdvisoryHQ will briefly go over factors that influence retired pay, variations between the different retirement systems, and formulas that can be used to compute your military retirement pay. This article will help clarify the options available to military personnel after retirement as well as figuring out how to calculate your retired pay.

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Factors Determining Retired Pay

There are various factors that determine how much pension you may receive; for example, you will receive reduced payment for a reduced service. The number of years of service also determines the pension amount that a certain member gets.

In the past 25 years, the government has made significant changes to the military retirement system. Below are the options for different retirement systems, depending on a member’s service entry date.

  • Before September 1980: you are eligible for the final pay retirement system.
  • Between September 8, 1980 and August, 1986: you are eligible for the High 36 system.
  • After August, 1986: you come under the Redux system. In this system, you can opt for the High 36 or the Career Status Bonus (CSB) retirement system. If you do not choose, you will automatically get the High 36 retirement system.
  • After December 31, 2017: you can choose to join the Blended Retirement System. For those entering service between December 31, 2005 and January 1, 2018, they can choose between the blended retirement system or the current retirement system. Members can make the choice depending on which retirement system is most beneficial to them.


Differences in the Retirement Systems

After going over the various retirement systems, you may notice a couple similarities such as if you serve in the armed forces for 20 years or more, you become eligible to receive a pension that is based on a percentage of the basic pay.

However, this is where the similarities end and the differences start, as each of the retirement systems determines the amount of pension to be paid in a different manner. Members can utilize the Air Force Reserve retirement calculator, retirement calculator for Navy personnel, and Army National Guard retirement calculator to understand these differences in pension better.

The retirement systems all differ in four main categories. If you joined the military after August 1986, it is important to understand these differences since you will need to choose your retirement plan option upon reaching your 15-year mark of service.

The major differences that you need to be aware of include:

  • Basis for determining the highest earnings
  • Multiplier
  • Cost-of-living adjustment
  • Career Status Bonus

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Basis for Determining the Highest Earnings

Although you do not have a choice in determining the basis for calculating your retirement pay, you need to be aware of the various aspects.The final pay retirement system bases the pension amount on a member’s last month of pay. The Air National Guard retirement calculator, Air Force Reserve retirement calculator, and Navy Reserve retirement calculator can make use of a member’s last month pay to determine one’s earnings.

If an individual retires after 20 years of service on the final pay retirement system, that person would receive 50% of the final months’ pay as pension. The percentage increases by 2.5% for each additional year of service.

In the High 36 retirement system, the pension of a member is based on the average of the highest 36 months of base pay. When a member retires under the High 36 system, he or she gets 50% of the highest three years (36 months) of average base pay. The pension percentage increases by 2.5% for every year of service above 20 years.

The CSB system (Career Status Bonus) bases the pension of a member on the highest 36 months of base pay, similar to the High 36 system; however, the difference is that a member receives 40% of the highest three years (36 months) of average base pay.

In addition to this, he or she gets 3.5% added for each year of service during 21–30 years and 2.5% for each year of service between 30 and 40 years. An additional bonus of $30,000 is given when the member reaches his or her 15th year of active service.

In the blended retirement system, the pension is similar to the CSB system. A member will receive 40% of the base pay after 20 years of service. Apart from this, he or she will also get a bonus at the completion of 12 years of service of 2.5% of the annual base pay.

The Blended Retirement System includes matching funds made by the government in the TSP account. The Navy Reserve retirement calculator, Air National Guard retirement calculator, and Air Force retirement pay calculator can help members understand the pension they will receive under the Blended Retirement System.



Multiplier

This is the percentage of base pay that the member receives on completion of each year of service. For the High 36 and Final Pay systems, the member gets 2.5% for each year of service. This means that members receive 50% for 20 years of service, and this can continue up to a maximum of 100%, up to 40 years.

The multiplier for the CSB system is 2% for the first 20 years of service, with an increase of 3.5% for service between 21 and 30 years and 2.5% added for each year of service between 30 and 40 years. Overall, a member will get 40% for 20 years of service and 100% for 40 years of service.

In the Blended Retirement System, a member receives 2% for each year of service. In some rare instances, members that stay in service beyond 40 years may get a retirement benefit that is above 100%. The retirement calculator for Navy personnel, National Guard retirement calculator, and Air Force retirement calculator can be used by members crossing 40 years of service.

Cost-of-Living Adjustment

The annual cost-of-living adjustment is available for all three retirement systems. This is important as, during a member’s retirement period, this can more than double the pension check. The consumer price index determines the cost-of-living adjustment for the High 36 and Final Pay retirement systems.

For the CSB system, it is the consumer price index minus 1%. The other important change in the CSB system is that when the member reaches 62 years of age, the multiplier and cost-of-living adjustment are altered in such a way that High 36 and CSB members get the same pension.

The Navy retirement calculator, National Guard retirement calculator and Air Force retirement calculator can be used by members above 62 years of age to determine adjustments to their pension.



Career Status Bonus

The CSB (Career Status Bonus) system is more complicated than the other retirement systems. When a member reaches 15 years of service, he or she can choose between taking a CSB with a $30,000 bonus and a 40% pension check or the member can choose the High 36 retirement system with a 50% pension check and no bonus.

Members can make use of retirement calculator for Navy personnel, Army National Guard retirement calculator and Air Force retirement pay calculator to gain a better understanding of CSB.

The retired pay that the member receives is usually computed on the length of service or a percentage of disability that the member suffers from. If a member is retired due to a disability, he or she can choose to get the pay commuted by any one of the methods that are available.

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Calculating Retirement Pay

If you’re still uncertain over how much you will receive upon retiring from the military, the Military Pay website has a list of calculators that you can utilize, including an Air Force retirement pay calculator, Air National Guard retirement calculator, and Navy Reserve retirement calculator.

The final pay retirement system is for those members that joined the service before September 8, 1980. The Navy retirement calculator can be used by Navy personnel to estimate the retirement pay flow that they may get under this system. The calculator provides all the details in the form of tables and charts.

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In addition to this, the Navy retirement calculator can provide information by using the expected retirement grade, age, and years of service. Members can also change economic indicators, such as inflation, and factors that affect the retirement pay can also be altered.

The High 36 retirement system is for members that have entered service between September 8, 1980 and July 31, 1986. National Guard members can make use of National Guard retirement calculator to determine the pay flow under the average retirement system. Members can tailor the results as per their years of service and age.

CSB applies to members that joined the service after July 31, 1986. Air Force members can make use of the Air Force retirement calculator to compare the REDUX retirement plan and CSB retirement plan so that they can choose the plan that will benefit them most.

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What Are the Formulas for Computing Retirement Pay?

Many formulas are used to calculate military retirement pay and depend on certain factors, such as the following:

  • If the member joined service before September 8, 1980, the retirement pay is computed based on the length of service. The total length of service is multiplied by the basic monthly pay at the time of retirement, and this is divided by the total years of creditable service at 2.5% for each completed year of service. The retirement grade at the time of retiring is also taken into account. This is based on the final pay retirement system.
  • If the member joined the service between September 8, 1980 and July 31, 1986, the average basic pay for three years is taken into account instead of the final basic pay. This method of calculation is known as the High 36. In this system, the member gets 50% on the completion of 20 years of service and 100% on completion of 40 years of service.
  • If a member joins service on or after July 31, 1986, he or she can opt for the CSB or REDUX retirement system or the High 36. If the member opts for CSB, the pension is calculated by multiplying the High 36 by 2% each year for the first 20 years, by 3.5% for 21–30 years, and 2.5% for each additional year during 31–40 years.


The Air Force retirement calculator, Navy retirement calculator, and Air National Guard retirement calculator can be used by members to compute all the formulas within seconds. All military retirement funds are protected from inflation by the cost-of-living adjustments.

The retirement pay is subject to dollar to dollar offset when the retired member also receives veteran’s disability compensation. Also, all retired members can choose to participate in the SBP (Survivor Benefit Plan) or RCSBP (Reserve Component Survivor Benefit Plan). This enables members to provide annuity to their family even after death. The annuity is based on the retired pay.

The date on which the member first joined duty needs to be determined correctly to calculate the different types of retirement systems available. The date of initial entry to military service (DIEMS) is the date when the member joins active service or when he or she enlists or joins the reserves.The date is fixed and does not change – even when a member leaves service and then rejoins, the entry date is not affected. This date needs to be entered into the Air Force retirement calculator, Navy retirement calculator, and National Guard retirement calculator to determine the retirement system that the member qualifies for.


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Conclusion

We hope you have found this article helpful in determining your post-military retirement options, including which retirement system(s) you qualify for as well as how to calculate your retired pay – either through using the formulas given in the article or by using an online calculator, such as the Air Force Reserve retirement calculator, Air National Guard retirement calculator or Navy Reserve retirement calculator. Armed with the information provided above, you can now face the prospects of retirement with greater ease and peace of mind.

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