MILITARY RETIREMENT
Planning for Retirement
The military offers great retirement benefits, including the Thrift Savings Plan (TSP) and a pension if you serve
long enough. The exact benefit you’ll receive from each of these programs depends on whether you’re covered
under the Legacy (also called the “High-3”) or Blended Retirement System (BRS).

The Legacy “High-3” Retirement System
Key Features:• For Service members who first entered Active Duty after September 8, 1980,
but before January 1, 2018.
• Typically requires 20 years of Active Duty service to qualify for retirement pay (pension).
• Reserve members must complete 20 qualifying years and attain age 60 (or earlier based on
qualifying active service).
• The TSP is available and is funded only by Service member contributions.
Calculating the Monthly Pension:

2.5% xYears
Servedx
Retired Pay Base

Examples:Enlisted: 2.5% X 20 X $4,900 = $2,450 per month
Officer: 2.5% X 20 X $9,400 = $4,700 per month*Reserve members divide accumulated retirement points by 360 for “Years Served,” assuming they have earned enough qualifyingyears towards retirement.

Blended Retirement System (BRS)Key Features:• For Service members who first entered Active Duty after January 1, 2018, or opted into BRS.
• Typically requires 20 years of Active Duty service to qualify for retirement pay (pension).
• Reserve members must complete 20 qualifying years and attain age 60 (or earlier based on
qualifying active service) with no break in service.
• The TSP is available and is funded by Service member contributions plus automatic and potential
matching contributions from your military branch.
• Offers both Continuation Pay and a lump-sum option.
Calculating the Monthly Pension:

2.0% xYearsServedx
Retired Pay Base

Examples:Enlisted: 2.0% X 20 X $4,900 = $1,960 per month
Officer: 2.0% X 20 X $9,400 = $3,760 per month*Reserve members divide accumulated retirement points by 360 for “Years Served,” assuming they have earned enough qualifying
years towards retirement.

Survivor Benefits
Once qualified, you will receive retirement pay for life. The amount is periodically adjusted to the cost-of-living
index. Upon your death, your spouse or other eligible beneficiary(ies) may receive payments only if you arrange
it through the Survivor Benefit Plan (SBP) before you retire.

Updated January 2022

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MILITARY RETIREMENT
Four Unique Elements of BRS
1. Branch of Service Contributions to the Thrift Savings Plan
The TSP is a defined contribution plan, like a civilian 401(k). For BRS participants, it is funded with a combinationof Service member contributions plus automatic and potential matching contributions from your military branch.
• Automatic Contributions: Your branch of service automatically contributes the equivalent of 1% ofyour basic pay to your TSP account each pay period beginning after 60 days of service. Automatic
contributions vest (meaning the money is yours to take with you when you leave the military) after twoyears of service.
• Matching Contributions: After two years of service, your military branch will begin matching yourcontributions to the TSP as outlined in the chart below. Matching contributions vest immediately.
(Roth and/orTraditional)

Coast Guard Automatic(1%) Contribution(Traditional)

Coast Guard MatchingContribution(Traditional)

TotalContribution

0%
1%
2%
3%
4%
5%
More than 5%1%
1%
1%
1%
1%
1%
1%

0%
1%
2%
3%
3.5%
4%
4%

1%
3%
5%
7%
8.5%
10%
Your Contribution + 5%

2. Automatic TSP Enrollment
As of October 1, 2020, all BRS participants are automatically enrolled in the TSP at a 5% contribution level.
Service members are permitted to reduce or increase this contribution amount. The maximum annual contribution,
known as the IRS Elective Deferral Limit, IRC 402 (g) is $20,500 in 2022*. Those deployed to a combat zone
are permitted to contribute substantially more: up to $61,000 in 2021*. An additional catch-up contribution up to$6,500 is also permitted for those age 50 and older. Service member contributions are always vested immediately.
*Subject to change annually
3. Continuation Pay
Continuation Pay is a one-time, mid-career payment in exchange for additional service. Depending on the needsof your branch of service, it can be 2.5 to 13 times your monthly basic pay for Active Duty or 0.5 to 6 times yourmonthly basic pay (as if on Active Duty) for Reserve members. This one-time payment is in addition to any othercareer field-specific incentives or retention bonuses.
4. Lump-Sum Option
The lump-sum option gives you choices at retirement. You can choose to receive a 25% or 50% discounted
portion of your monthly pension benefit in exchange for a lump-sum payment at retirement. Your pension reverts
to the entire amount at the Social Security age of full retirement, which for most is 67. You must notify your humanresources servicing office no less than 90 days before retirement if you choose to take the lump-sum option.

Updated January 2022

Military Retirement — Page 2