Why Aren't There Military Retiree Pay Scales?

Money jar with retirement label.

Each year, the Defense Department releases new military pay charts, showing monthly pay based on the service member's paygrade and time in service. You can always find the updated pay charts here.

But one thing you won't find is a pay chart for military retirees.

Every year, hundreds of retirees ask where the chart is, and the answer is that there isn't one. Simply put, military retirement pay is unique to each retiree. There is no chart that shows how much military retirees will earn.

Let's take a deeper look at how military retirement pay is calculated, explain why each situation is unique, and then show you how you can estimate what your military retirement pay will be when the annual cost-of-living adjustment (COLA) is announced.

Calculating Military Retirement Pay

There are four retirement systems that impact military retirees, and each is calculated slightly differently.

Here are the four retirement systems:

  1. Final Pay Retirement System
  2. High 36 Retirement System
  3. CSB/REDUX Retirement System
  4. Blended Retirement System (BRS)

Military retirees fall under one of these retirement plans based on when they joined the military. Some members may have been eligible for more than one plan based on their entry date, and would have had the option to opt into one plan or the other.

Here is an article with in-depth coverage of the different retirement systems that can help you determine which retirement system you fall under, if you are unsure.

Couldn't the DoD Just Issue 4 Different Retirement Pay Charts?

Unfortunately, that won't work because each veteran's retirement pay is slightly different, even if it falls under the same system.

Military retirement pay is based on your years of qualifying service, your paygrade, and your pay at or toward the end of your career. Even serving a few extra months beyond the years listed on the pay charts would throw off the calculations.

And for the pay systems that use an average of your highest 36 months of pay, when you received your final raises can make a meaningful difference in your retirement check. For example, some veterans will retire with three years' time in grade, while others will retire with two years' time in grade. The latter group will have one year at a lower paygrade averaged into their retirement pay.

Finally, the government passes an annual COLA in most years that gets added to military retirees' paychecks. This COLA is the same measure used for annual raises to Social Security, VA disability compensation, most federal employee retirement benefits, and other government plans and programs. The annual COLA increases can have a substantial impact on your retirement pay, and the year you retire plays a large role in how COLA plays out over time.

The only way to make a military retiree pay chart would be to assume that each veteran entered the military on the same date; served the same number of years, months and days; and had the same pay raises over their final 36 months of service. And since that wouldn't take COLA into account, there would have to be a chart like this for each year that someone retired. And of course, there would have to be four versions to cover each of the four retirement systems.

In other words, there is no simple way to build a chart to cover what is truly a unique situation.

How You Can Estimate Your Retirement Pay Increases

The first thing is to sign up for a myPay account with the Defense Finance and Accounting Service (DFAS). This will give you access to your Retiree Account Statement (RAS). The RAS is a two-page document that breaks down your military retirement pay and deductions, such as Survivor Benefit Plan, taxes and Tricare premiums. Your RAS will help you understand your next retirement paycheck.

Once you have your base retirement pay, you can then add the upcoming COLA increase to this number. COLA rates are announced in October of each year and are covered here on Military.com

This should give you a rough idea of what your retirement pay will look like after the COLA has been finalized and you receive your first COLA-adjusted paycheck in the new year. Just be sure to account for any other possible changes, such as Tricare premiums, taxes and other deductions.

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