Updated August 2, 2026. Quick answer: military retired pay is your high-3 average basic pay multiplied by a percentage: 2.5% per year of service under the legacy system, 2.0% under the Blended Retirement System. Guard and Reserve service converts retirement points ÷ 360 into years first. This reproduces the regulation’s own published examples.
Your number
It matches the regulation’s own examples
The Financial Management Regulation publishes worked examples, and a calculator that cannot reproduce them is not worth using. This one does, on both:
| Example | The regulation | This page |
|---|---|---|
| 25 years of service at 2.5% | 62.5 percent | 62.5 percent |
| 4,735 retirement points | 13.152, rounded to 13.15 years | 13.15 years |
High-3 is not your final pay
The base is defined by statute as the average of the 36 months — “whether or not consecutive” — in which your monthly basic pay was highest, divided by 36. Two consequences people miss: a promotion in the last year lifts the average by roughly a third of the raise rather than all of it, and allowances are not in it at all. BAH and BAS do not count, which is why retired pay lands lower than people expect against take-home.
The BRS trade, stated plainly
At twenty years the legacy multiplier gives 50% and BRS gives 40%. On a $9,000 high-3 that is $900 a month less pension, for life, COLA’d.
What you got in exchange is real and arrives decades earlier: an automatic 1% of basic pay into the TSP from your 60th day of service, and matching of up to 4% more once you pass 24 months. The regulation’s own table is worth reading closely, because the match is not linear — at a 4% contribution the match is 3.5%, and only at 5% do you get the full 4% and a 10% total going into the account. Contributing 4% instead of 5% gives up half a percent of pay every year, permanently.
The automatic 1% vests at the start of your 25th month. The matching vests immediately.
Guard and Reserve: the two rules that decide everything
Points divided by 360. The regulation is precise about the arithmetic: carry to three decimals, round to two. Its example is 4,735 points becoming 13.152 and then 13.15 years. A drilling year of roughly 75–90 points therefore buys about a quarter of a year of multiplier, which is why twenty good years of Reserve service produces a much smaller pension than twenty years active.
Sixty, minus your deployments. The default age is 60, but the statute reduces it “by three months for each aggregate of 90 days” of qualifying active service in a fiscal year after 28 January 2008. Two years of mobilisation moves the date by two years. Almost nobody tracks this themselves, and it is worth checking against your own orders before assuming 60.
The lump-sum election
What this does not include
Disability retirement percentages, REDUX, the SBP premium if you elect it, and the VA offset if you receive disability compensation. The survivor election is the largest of those and has its own page: what SBP costs and what it buys.
If a federal civilian career followed the uniform, the two systems meet: the FERS annuity and how a federal pension sequences against Social Security and the TSP. And the TSP question is the same one either way — whether to keep it or roll it.
Multipliers from DoD 7000.14-R (Financial Management Regulation) Volume 7B, Chapter 1; the high-3 definition from 10 U.S.C. § 1407(c)(1); BRS TSP contributions and Table 51-4 from Volume 7A, Chapter 51; the points formula and its rounding from Volume 7B Chapter 3 and 10 U.S.C. § 12733; the eligibility-age reduction from 10 U.S.C. § 12731(f). Read August 2026. General information, not advice, and not a DFAS estimate.
Military service changes two of these rules: prior active service can be bought into a FERS annuity for 3% of the pay you earned then — usually requiring you to waive military retired pay, though reserve retirees are excepted — and at 65 TRICARE requires Medicare Part B or it ends.
What the benefit means for the rest of the plan. An inflation-adjusted pension starting in your forties reduces the portfolio’s job rather than increasing it — financial advisor for military retirees.