Computing Retired Military Pay

This calculator estimates your retirement pay flow under the Final Pay retirement system. This calculator gives you the ability to generate charts and tables based on your personal situation. In addition to tailoring the results to your expected retirement grade, years of service, and age, this calculator also allows you to change some economic assumptions, such as the inflation rate.

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• If you first entered a uniformed service* before September 8, 1980:
  Compute your retired pay based on length of service by multiplying the basic monthly pay for your retired grade at the time of retirement by the years of creditable active federal service at the rate of 2.5 percent for each whole year of service. This is called the "Final Pay" retirement system. That means you get 50% for 20 years of service up to a maximum of 100% for 40 years.**
• If you first entered a uniformed service* between September 8, 1980 and July 31, 1986:
  Compute your retired pay using the same formula as the Final Pay system above, except you use the average basic pay for your three highest paid years (36 months) rather than final basic pay. This is called the High 36. Under the High 36 system you you get 50% for 20 years of service up to a maximum of 100% for 40 years.**
• If you first entered a uniformed service* on or after August 1, 1986 you have the option to take either the High 36 or CSB/Redux Retirement:
  
  
  • High 36 Option: Compute your retired pay using the same formula as the Final Pay system above, except you use the average basic pay for your three highest paid years (36 months) rather than final basic pay. This is called the High 36. Under the High 36 system you you get 50% for 20 years of service up to a maximum of 100% for 40 years. **
  • CSB/Redux Option: Compute your retired pay by multiplying your High 36 by 2% per year for the first 20 years, and then 3.5% for each additional year passed 20. That means you get 40% of your High 36 for 20 years, but up to a maximum of 100% for 40 years.**

* Uniformed services include the National Oceanic and Atmospheric Administration (NOAA) and the U. S. Public Health Service (USPHS).

**Note: Recent changes now allow retirement pay to reach up to 100 percent of the basic monthly pay for those who serve 40 years.

Servicemembers on the Temporary Disability Retired List will receive no less than 50 percent of their basic pay or average high three earnings years. A servicemember may not receive temporary disability retired pay for longer than 5 years from the date they was placed on the TDRL.

Annual Cost of Living Adjustments (COLA)

Your retired pay may adjust each year based on the Consumer Price Index (CPI). The adjustments can affect gross monthly pay, federal withholding tax, SBP costs and annuities. However, if the CPI drops in a given year, military retirement "Cost of Living Adjustment" (COLA) will remain at zero in the following year. COLA does not drop below zero even if the CPI drops. Meaning military retirement pay is never reduced do to a negative CPI.

Note: Retired members who entered the Armed Forces on or after September 8, 1980 and who became entitled to retired pay on or after January 1, 1996 receive an initial cost-of-living increase computed, using the quarter of the retirement date, minus 1%. Cost-of-living adjustment (COLA) thereafter for members meeting the above conditions will be unreduced. Cost-of-living adjustments for retired members who entered the Armed Forces on or after August 1, 1986, are reduced by 1%.