Retired Pay (2024)

In most cases, Soldiers who have completed 20 years of active service are eligible to receive Retired Pay at the end of their career. The Date of Initial Entry into Military Service (DIEMS) determines which of the three retirement systems a Soldier falls under. Retired Pay amount and requirements depend on whether a Soldier qualifies for active duty retired pay or non-regular retired pay (Reserve Component).

Reserve Soldiers must meet the following minimum requirements to be eligible for non-Regular Retired Pay:

have served at least 20 years of qualifying service (see Benefit Highlights), and
Soldiers who completed the years of qualifying service on or after 5 October 1994, but before 25 April 2005, the last 6 years of qualifying service must have been in a component other than a regular component, the Fleet Reserve, or the Fleet Marine Corps Reserve.
Soldiers who completed the years of qualifying service on or after 25 April 2005, there is no minimum reserve component service requirement.
The service required above does not need to be continuous years of qualifying service.
not be entitled to retired pay from an armed force, under any other provision of law other than as outlined in 10 United States Code Section 12741
be at least 60 years of age (or subject to reduction of age for receipt of retired pay- see Benefit Highlights*), and
must apply for retired pay by submitting an application to Human Resource Command Ft. Knox, KY

A Soldier in the Army Reserve must have completed 20 years of qualifying service to be eligible for non-regular retired pay at age 60. A qualifying year is a complete year in which a Soldier has earned a minimum of 50 retirement points.

A Soldier earns points for inactive duty for training (IDT), active duty for training (ADT), active duty, Reserve membership, and equivalent instruction, as follows:

One point is earned for each day of active service (active duty and active duty for training)
15 points for each year as a Soldier (based on a calendar year from the date the Soldier joins the Army (e.g., 31 March-30 March)

One point for each unit training assembly
One point for every three hours of satisfactory completion of accredited correspondence courses

In a given year a Soldier may earn up to 365 total points (366 for a leap year), however, only 130 of those points can come from inactive duty (for retirement years ending prior to September 23, 1996 to total is reduced to 60 inactive points; for retirement years ending between September 23, 1996 and October 29, 2000 the total points is reduced to 75; for retirement years ending between October 30, 2000 and October 29, 2007 the total points is reduced to 90).

Non-regular Retired pay under the Reserve system is computed by totaling all points earned during a Soldier's career, dividing by 360 (one year) and then multiplying by 2.5% to determine the benefit multiplier. The multiplier is then applied to the Soldier's basic pay rate or "high-36" (36months) average at the time the retirement request is made. For example, a Soldier who retires after 24 years of service (YOS) with a total of 3,600 points will receive 25% of their "high-36" average basic pay for retirement (3,600/360 x 2.5=25%).

The minimum number of points to be eligible for retirement at the age of 60 with 20 qualifying years of service is 1,000 (50 points per year) with a corresponding retirement pay equal to 6.94% (1,000/360 x 2.5=6.94%) of basic pay.

Note: Soldiers who separate or are discharged before age 60 will be credited for basic pay purposes only with the years of qualifying service performed up until the discharge. Soldiers who transfer to the Retired Reserve until age 60 will receive credit (for basic pay purposes only) for the years spent in the Retired Reserve.

See Also

Retirements

*Reserve Component Soldiers may qualify for retired pay prior to age 60 under NDAA 2008. Section 647 reduces the age for receipt of retired pay by three months for each aggregate of 90 days of "specified duty' performed in any fiscal year after the date the bill became law (January 28, 2008). "Specified duty" includes active duty (excluding active duty for training) or "active service" under Title 10 USC Sections 688, 12301(a), 12301(d), 12302, 12304, 12305, and 12306 and Title 32 USC, Section 502(f), if responding to a national emergency declared by the President or supported by federal funds. Retired pay eligibility age cannot be reduced below age 50, however, eligibility for retiree health care benefits remains at age 60.

Temporary Early Retirement Authority (TERA): The Temporary Early Retirement Authority (TERA) provides the Secretary of the Army temporary authority (1993 through 2001 and again 2012 through 2018) to offer retirement after completion of 15 years of active service in order to provide additional force management flexibility during times of significant drawdown of forces. The TERA retirement formula is: YOS x 2 ½ % x retired pay base with result reduced by 1% for each year short of 20 YOS.

Termination of Temporary Early Retirement Authority (TERA): Army Directive 2017-38 -signed by the SECARMY 15 Dec 2017 terminates the use of the Temporary Early Retirement Authority (TERA). Authority to approve requests for TERA from eligible Soldiers will terminate 28 February 2018. The current eligibility criteria for TERA remains in effect. Officers currently eligible for TERA must submit requests to their chain of command NLT 15 January 2018. For promotion selection boards that release after 15 January 2018, officers must submit a TERA request within 30 calendar days from the release of the board results. Requests must be approved within 45 days of receipt of the request. All officers must be retired NLT 31 August 2018.

Blended Retirement System: The National Defense Authorization Act (NDAA) for Fiscal Year 2016, Public Law 114-92, enacted 25 November 2015, created a new retirement system for the Uniformed Services. This new retirement system will apply to all Service members who enter the Uniformed Services with a Date of Initial Entry into Military Service (DIEMS) of 1 January 2018 or later. Referred to as the "Blended Retirement System," this new system is a combination of a defined benefit plan, similar to predecessor plans that pay monthly retired pay, plus contributions to the Federal Thrift Savings Plan (TSP).

The Blended Retirement System (BRS) combines elements of the legacy retirement system with benefits similar to those offered in many private-sector 401(k) plans. The following are the key features of the Blended Retirement System (BRS):

Defined Benefit: Monthly retired pay for life after at least 20 years of service (so if you retire at 20 years of service, you will get 40% of your highest 36 months of base pay). Retired pay will be calculated as follows: (Years of creditable service x 2.0%) x average of highest 36 months basic pay.
Defined Contribution: Government automatic and matching contributions of up to 5% of basic pay to your Thrift Savings Plan (TSP) account.
Continuation Pay: A one-time, midcareer bonus in exchange for an agreement to perform additional obligated service.
Lump Sum: An option to receive a discounted portion of your monthly retired pay as a lump sum distribution at retirement (25% or 50%).

Prior to retirement ensure DFAS Retired and Annuitant Pay has a good email address for you in myPay, not the us.army.mil since that will go away upon retirement. Use myPay to check and make changes to your pay account to include Retiree Account Statement (RAS) which includes the monthly and yearly RAS, Combat Related Special Compensation (CRSC), Pay Changes to include Allotments, Beneficiaries and Direct Deposit, Tax information to include Federal Withholding, State Withholding, and End of Year Retiree Tax Statement (1099R).

FAQs

Retired Pay? ›

By age 40, you should have accumulated three times your current income for retirement. By retirement age, it should be 10 to 12 times your income at that time to be reasonably confident that you'll have enough funds. Seamless transition — roughly 80% of your pre-retirement income.

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How much money should a 70 year old have to retire? ›

How Much Should a 70-Year-Old Have in Savings? Financial experts generally recommend saving anywhere from $1 million to $2 million for retirement. If you consider an average retirement savings of $426,000 for those in the 65 to 74-year-old range, the numbers obviously don't match up.

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What is the number one mistake retirees make? ›

Similar to the price of gas, we cannot predict future market returns; therefore, one of the biggest mistakes retirees make is failing to plan for the combination of market volatility and withdrawing money from their investment accounts, also known as sequence of returns risk.

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How do you calculate enough for retirement? ›

The first step is to get an estimate of how much you will need to retire securely. One rule of thumb is that you'll need 70% of your annual pre-retirement income to live comfortably. That might be enough if you've paid off your mortgage and you're in excellent health when you retire.

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How do I ensure I have enough money for retirement? ›

Retirement Expenses

One well-known method is the 80% rule. This rule of thumb suggests that you'll have to ensure you have 80% of your pre-retirement income per year in retirement. This percentage is based on the fact that some major expenses drop after you retire, like commuting and retirement-plan contributions.

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What is a good monthly retirement income? ›

Many retirees fall far short of that amount, but their savings may be supplemented with other forms of income. According to data from the BLS, average 2022 incomes after taxes were as follows for older households: 65-74 years: $63,187 per year or $5,266 per month. 75 and older: $47,928 per year or $3,994 per month.

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Is $600,000 enough to retire at 70? ›

As the table suggests, while $600k is generally sufficient for a comfortable retirement with annual spending up to $40,000, it may fall short if annual expenses exceed this threshold.

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What is the #1 regret of retirees? ›

Claiming Social Security too early

Unfortunately, most people don't — and many early retirees regret how soon they claimed their Social Security benefits. Research from the National Bureau of Economic Research (NBER) revealed that one-fifth of older Americans wish they had put off their Social Security claim.

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How many retirees have no money? ›

WASHINGTON—A new AARP survey finds that 20% of adults ages 50+ have no retirement savings, and more than half (61%) are worried they will not have enough money to support them in retirement.

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What percentage of retirees live solely on Social Security? ›

A plurality of older Americans, 40.2 percent, only receive income from Social Security in retirement. Roughly equal numbers of older Americans receive income from defined benefit pensions as from defined contribution plans.

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What is the $1000 a month rule for retirement? ›

One example is the $1,000/month rule. Created by Wes Moss, a Certified Financial Planner, this strategy helps individuals visualize how much savings they should have in retirement. According to Moss, you should plan to have $240,000 saved for every $1,000 of disposable income in retirement.

How long will $200,000 last in retirement? ›

Summary. Retiring with $200,000 in savings will roughly equate to $15,000 annual income across 20 years. If you choose to retire early, you will need additional savings in order to have a comfortable retirement.

Age Range	90th Percentile Net Worth
45-54	$1.974 million
55-64	$2.961 million
65-74	$2.997 million
75 and up	$2.699 million

Age	Average 401(k)	Median 401(k)
40s	$344,182	$151,274
50s	$558,740	$247,338
60s	$555,621	$209,382
70s	$417,379	$103,219