Calculate Your Military Retirement Pay

Good for you! You’ve served your country and you’ve done your time. You know you are getting close to retirement and you want to know how to calculate your military retirement pay.

How much you will receive in retirement pay depends on a number of factors. The first is whether you were in the regular service or in the National Guard or Reserve.

If you were in the National Guard or Reserve

If this is the case, the important thing is the number of points you’ve acquired. You will need to add up your points and then divide the total by 360 to determine equivalent years of service. As you probably know, you get points for various activities, such as battle assemblies, belonging to a unit, serving on active duty and completing correspondence courses. Your magic number is still 20 so you will need roughly 7200 points to qualify for retirement pay. When you reach that magic number, you will receive your “20 year letter” making it official that you qualify for retirement benefits.

If you were in the regular service, such as the regular Army, and entered service before September 8th 1980, you will be eligible for the retirement plan called the Final Pay Retirement System. Did you enter the service between Sept. 8, 1980 and August of 1986? Then you’re eligible for the High 36 Retirement System. And if you entered the service after August, 1986, you can choose from the High 36 Retirement System or the Career Status Bonus/REDUX (CSB) retirement system.

 

A few examples of military retirement pay

There are so many variables that it is not possible to tell you what your retirement pay will be. However, here are some examples that might help give you an understanding of what to expect.

Final Pay Retirement Calculator

Year of Retirement: 2010
Years of Service at Retirement: 20
Grade at Retirement: E-8

Retirement pay 2011: $2087

Retirement pay 2019: $2844

Retirement pay 2029: $4012

High-3 Retirement Calculator

Year of Retirement: 2010
Years of Service at Retirement: 20
Grade at Retirement: E-8

Retirement pay 2011: $2087

Retirement pay 2019: $2844

Retirement pay 2029: $4012

CSB/REDEX Retirement Calculator

Year your plan to retire: 2010
Age at retirement: 42
Years of service 20

Grade at which you will retire: E-8

Amount in Thrift Savings Plan: $10,500

Amount in Taxable Investment: $19,500

Inflation Rate: 3.5%

Annual Retirement Pay 2011: $14,981

Annual Retirement Pay 2021: $18,705

Annual Retirement Pay 2031: $23,850

(Note: These numbers do not include Cumulative Retirement Pay and Bonus Accumulation.)

A good tool – military retirement pay calculator

While these examples may help, the question of how much you will actually be paid is a complex one. However, there is a tool available that can help you calculate your military retirement pay almost to the penny. It is at http://www.military.com/kwlp04

The next step

If you will be retiring in your 40s or early 50s, odds are that you won’t want to spend the next 30+ years sitting around watching television or even playing golf. Instead, you will probably be thinking about a second career in the civilian world, especially if your retirement pay will only be a couple of thousand dollars a month. So, what will you do for a second career? Maybe you’ve already got it all figured out. If so, good for you. If not, here are some tips you might find helpful.

 

Decide how much you want to work. Do you want/need to work full time or are you interested in working only part time or part of the year? This decision will help shape the kind of second career would make the most sense for you.

Do a skills assessment. You’ve learned much in the past 20 years and need to get it all sorted out. Take out a sheet of paper or go on your computer and start making a list of your skills. Be as specific as possible. For example, don’t just write “maintained computers.” Write down exactly what you did to maintain those computers.

Start preparing a resume. Once you’ve done your skills assessment, creating a resume should be a piece of cake. Begin by writing down your jobs in the service and then add three skills you acquired in each position. Try to use action words such as “managed,” “developed,” “created,” “provided,” and “prepared.”

Choose a career path. Making a resume should go a long way towards helping you choose a second career – if you haven’t already make that decision. This is because you will now be able to match your experience and skills against specific types of jobs.

Start a job search. If you’re only a few months away from retirement, you can start at least looking at job possibilities. While the classified ad section of your local newspaper is a good place to start, don’t rely on just these listings. Newspapers and their classified ads are becoming almost obsolete.

Check websites such as www.monster.com and www.careerbuilder.com to see what kinds of jobs are being advertised in your field. These sites make it easy to find jobs that could interest you because they allow you to search by job title, by skills or by keywords, and location.

For example, if you were to search Monster.com by “Any Job Title,” the skill “computer maintenance,” and “Any location,” you could find more than 40 pages of jobs listed though many of them might be only sort of in the area of computer maintenance.

As an example of this, a recent search on the term “computer maintenance” came back with job titles that included Network Administrator, Maintenance Specialist/Relief Supervisor, and SQL Database Administrator. The lesson to be learned from this is that when you search job sites, be as specific as possible about your skills. Otherwise, you will end up spending a lot of time separating the wheat from the chaff.

In any event, thanks for your service and good luck with that new career.