Calculating Military Retirement Pay: High-3 vs. Blended Retirement System (BRS)

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Understanding the U.S. military retirement system is a critical component of financial planning for service members and their families. The Department of Defense (DoD) primarily offers two systems for current personnel: the legacy High-3 retirement system and the newer Blended Retirement System (BRS). Which system applies generally depends on a service member’s Date of Initial Entry into Military Service (DIEMS), although some members had a one-time option to switch to BRS.

This article provides a thorough comparison of the High-3 and BRS plans, explaining their structures, calculation methods, and key features to help service members navigate their potential retirement benefits. Grasping the nuances of these systems is essential for making informed decisions and achieving long-term financial security.

The core distinction lies in their structure: High-3 is predominantly a defined benefit pension, offering a guaranteed monthly payment for life based on years of service and salary, while BRS combines a smaller defined benefit pension with a defined contribution plan, the Thrift Savings Plan (TSP), which includes government contributions.

The Legacy High-3 Retirement System Explained

What is High-3?

The High-3 system, formally known as the High-36 system, is a traditional defined benefit pension plan provided by the DoD. As a defined benefit plan, it guarantees eligible retirees a specific monthly income for the rest of their lives. This predictable income stream has long been a cornerstone of military compensation for career service members.

Who Qualifies for High-3?

Eligibility for the High-3 system is primarily determined by a service member’s DIEMS. Generally, individuals who entered military service before January 1, 2018, are covered under the High-3 system.

However, there’s an important nuance for those whose DIEMS falls between January 1, 2006, and December 31, 2017. These members were automatically grandfathered into the High-3 system but were given a one-time opportunity during calendar year 2018 to irrevocably opt into the Blended Retirement System (BRS). If an eligible member did not actively choose BRS during that window, they remain under the High-3 system.

It’s helpful to understand High-3’s place in the history of military retirement. It replaced the even older “Final Pay” system for those who entered service on or after September 8, 1980. Furthermore, for personnel entering service on or after August 1, 1986, another option existed for a time: the Career Status Bonus (CSB)/REDUX retirement system, which offered a mid-career bonus in exchange for a lower pension calculation under High-3 rules. High-3, therefore, represents the “legacy” system for the majority of service members who joined between the early 1980s and the end of 2017 and did not choose REDUX or opt into BRS.

To receive retired pay under the High-3 system, a service member must typically complete at least 20 years of creditable military service. This applies to Active Duty personnel. For members of the National Guard and Reserve, eligibility is based on accumulating sufficient retirement points over their careers, which are then converted into equivalent years of service for calculation purposes.

Calculating Your High-3 Pension: The Formula

The core calculation for the High-3 pension is based on a straightforward formula:

$ \text{Gross Monthly Retired Pay} = (\text{Average of Highest 36 Months of Basic Pay}) \times (\text{Years of Creditable Service}) \times 2.5% $

Let’s break down the components:

• Average of Highest 36 Months of Basic Pay (High-36): This is the average of the monthly basic pay earned during the 36 consecutive months (3 years) in which the service member’s basic pay was the highest. Usually, this corresponds to the final three years of service, but it could be an earlier period if, for instance, a member reverted to a lower rank. Crucially, this calculation uses basic pay only; it does not include allowances like Basic Allowance for Housing (BAH) or Basic Allowance for Subsistence (BAS), nor does it typically include special pays or bonuses.
• Years of Creditable Service (YOS): This represents the total time served that counts toward retirement. For Active Duty, it’s generally the total number of years served. For Guard and Reserve members, retirement points earned through drills, annual training, active duty periods, and membership are totaled and divided by 360 to determine the equivalent years of service for retirement pay calculations.
• The 2.5% Multiplier: Each year of creditable service adds 2.5% to the percentage of the High-36 average basic pay that the member will receive as their pension. For example:
  • 20 YOS = 20 × 2.5% = 50% of High-36 average basic pay
  • 25 YOS = 25 × 2.5% = 62.5% of High-36 average basic pay
  • 30 YOS = 30 × 2.5% = 75% of High-36 average basic pay

The pension is generally capped at 75% for disability retirements, although non-disability retirement multipliers are no longer capped at 75% unless the retirement date was before Jan 1, 2007. Some older civil service computation rules mention an 80% cap, typically affecting those with over 41 years of service. For most military retirees, the practical range based on typical career lengths falls between 50% and 75%.

High-3: Characteristics of a Defined Benefit Plan

The High-3 system embodies the characteristics of a traditional defined benefit plan:

• Guaranteed Income: The most significant feature is the promise of a predictable, government-backed monthly income for the retiree’s lifetime.
• Cliff Vesting: This term means that the benefit is typically “all or nothing.” Service members generally must complete the full 20 years of creditable service to be eligible for any pension benefit. Separating before 20 years usually results in receiving no military pension under this system.
• No Direct Member Contribution (to Pension): The High-3 pension fund is financed by the government. Service members do not make direct contributions from their paychecks into this specific pension fund. While they have always had the option to contribute to the Thrift Savings Plan (TSP), under High-3, there were no government contributions (automatic or matching) to their TSP accounts.
• Inflation Protection: High-3 retired pay is subject to annual Cost-of-Living Adjustments (COLAs). These adjustments are typically based on the Consumer Price Index (CPI) and are intended to help the pension maintain its purchasing power over time against inflation. It’s worth noting that the COLA applied to retired pay may differ from the annual pay raises received by active duty personnel.

The Blended Retirement System (BRS) Explained

What is BRS?

Implemented on January 1, 2018, the Blended Retirement System (BRS) is the military’s current retirement plan for new entrants. It marked a significant shift in military compensation philosophy, moving away from a purely defined benefit model.

BRS blends two main components: a reduced defined benefit pension (similar in structure to High-3 but calculated with a lower multiplier) and a defined contribution component centered on the service member’s Thrift Savings Plan (TSP) account, featuring automatic and matching government contributions. This structure was designed partly to offer portable retirement benefits, aligning more closely with common civilian retirement plans like 401(k)s, and to provide some retirement savings potential even for those who don’t serve a full 20 years.

Who is Covered by BRS?

Coverage under BRS depends on the DIEMS or an active choice made during the 2018 opt-in period:

• All service members (Active, Guard, and Reserve) with a DIEMS on or after January 1, 2018, are automatically enrolled in BRS.
• Service members with a DIEMS before January 1, 2018, who met specific eligibility criteria (generally, fewer than 12 years of active service or fewer than 4,320 reserve points as of December 31, 2017) AND who actively opted into BRS between January 1, 2018, and December 31, 2018, are also covered by BRS. This decision to opt-in was irrevocable.

BRS Component 1: The Defined Benefit Pension

BRS retains a defined benefit pension component, but it’s calculated differently than under High-3.

Calculation Formula: The formula for the BRS pension is:

$ \text{Gross Monthly Retired Pay} = (\text{Average of Highest 36 Months of Basic Pay}) \times (\text{Years of Creditable Service}) \times 2.0% $

• Highest 36 Months (High-36): This component is calculated the same way as under the High-3 system – the average basic pay during the 36 consecutive months of highest earnings.
• Years of Creditable Service (YOS): This is also determined the same way as under High-3, including the conversion of points to years for Guard and Reserve members (Points / 360 = YOS).
• 2.0% Multiplier: This is the most critical difference from the High-3 pension calculation. BRS uses a 2.0% multiplier per year of service, compared to High-3’s 2.5%. This results in a lower monthly pension payment for the same rank and years of service. For example:
  • 20 YOS = 20 × 2.0% = 40% of High-36 average basic pay
  • 25 YOS = 25 × 2.0% = 50% of High-36 average basic pay
  • 30 YOS = 30 × 2.0% = 60% of High-36 average basic pay
• Eligibility: Similar to High-3, eligibility for the BRS pension component generally requires completion of at least 20 years of creditable service. For Guard/Reserve members, non-regular retirement pay typically begins at age 60, though this age can be reduced based on qualifying active service periods.
• COLA: The BRS pension component receives full annual Cost-of-Living Adjustments (COLAs), calculated similarly to those for High-3 retirees, based on the CPI.

BRS Component 2: The Thrift Savings Plan (TSP) – Your Defined Contribution

The defined contribution part of BRS is managed through the Federal Thrift Savings Plan (TSP). The TSP is a retirement savings and investment plan akin to civilian 401(k) plans, offering tax advantages through Traditional (pre-tax) and Roth (after-tax) contribution options, and a variety of investment funds ranging from lifecycle funds (L Funds) that automatically adjust risk over time to individual stock and bond index funds.

The key features under BRS are the government contributions:

• Automatic 1% Government Contribution: Starting 60 days after a service member enters service, the DoD automatically contributes an amount equal to 1% of their current basic pay into their TSP account. This contribution occurs regardless of whether the member contributes any of their own money. These automatic contributions continue through the member’s 26th year of service.
• Up to 4% Government Matching Contribution: In addition to the automatic 1%, the DoD provides matching contributions based on the member’s own contributions. The matching works as follows:
  • The first 3% of basic pay contributed by the member is matched dollar-for-dollar (a 100% match).
  • The next 2% of basic pay contributed by the member (i.e., contributions between 3% and 5%) is matched at 50 cents on the dollar (a 50% match).
  • To receive the maximum possible government match of 4%, a service member must contribute at least 5% of their own basic pay. This results in a total government contribution of 5% (1% automatic + 4% matching) when the member contributes 5% or more.

For new entrants under BRS, eligibility for matching contributions begins after completing two years of service. (Members who opted into BRS in 2018 became eligible for matching immediately upon opting in). Matching contributions, like the automatic 1%, continue through the 26th year of service.

Vesting in Your TSP Funds (Understanding Ownership)

Vesting refers to ownership of the funds in the TSP account.

• Service members are always 100% vested in their own contributions and any earnings on those contributions.
• Vesting in the government matching contributions and their earnings occurs immediately for those who opted into BRS, or after two years of service for those who entered service on or after Jan 1, 2018.
• Vesting in the government automatic 1% contribution and its earnings requires the completion of two years of service.

The practical implication is significant: if a service member separates from the military before completing two years of service, they will keep their own contributions and earnings, but they will forfeit the government’s automatic 1% contributions and any associated earnings. Once vested, however, these government contributions belong to the service member.

TSP Portability (Taking it With You)

A major feature of the BRS structure is the portability of the TSP account. Unlike the traditional pension, the vested balance in a member’s TSP account belongs to them, even if they separate from the military before reaching retirement eligibility (20 years). Upon leaving service, they can keep their TSP account open, roll it over into an Individual Retirement Account (IRA), or transfer it to a new employer’s eligible retirement plan (like a 401(k)).

Enrollment Details

Service members automatically enrolled in BRS (those entering on/after Jan 1, 2018) are also automatically enrolled in the TSP. Initially, the default contribution rate was 3% of basic pay, but this was increased to 5% for participants automatically enrolled on or after October 1, 2020. Contributions are typically defaulted into an age-appropriate Lifecycle (L) fund.

Members can change their contribution percentage (up to annual IRS limits), adjust investment allocations, or even opt-out of contributing (though they may be automatically re-enrolled annually if their contribution rate is set to zero).

The structure of BRS, particularly the TSP component with its matching contributions, vesting rules, and investment choices, represents a fundamental shift. Unlike the relatively passive nature of accruing a High-3 pension, optimizing BRS outcomes requires active engagement from the service member.

Individuals must understand the importance of contributing at least 5% to capture the full government match, make informed decisions about investment allocations within their TSP account, and be aware of vesting timelines. This mirrors trends in the civilian sector towards defined contribution plans and places greater responsibility on the individual for managing their retirement savings effectively. Success under BRS is thus heavily influenced by personal financial literacy and disciplined saving habits.

BRS Component 3: Continuation Pay (Mid-Career Incentive)

BRS includes a feature called Continuation Pay (CP), a one-time, mid-career bonus payment.

• Purpose: CP is designed as a retention tool, offering a financial incentive for experienced service members to commit to additional years of service. It helps counteract the potential disincentive created by the lower (2.0%) pension multiplier in BRS compared to High-3.
• Eligibility & Timing: CP is offered to BRS members between the completion of their 8th year and 12th year of service (based on Pay Entry Base Date). The specific timing within this window is determined by each military Service branch.
• Service Obligation: To receive CP, the service member must agree to perform additional obligated service. The minimum obligation is three years, but it is often set at four years.
• Payment Amount: The amount of CP varies significantly depending on the Service branch, component (Active vs. Reserve/Guard), and potentially the member’s specific career field or skill set. The established ranges are typically 2.5 to 13 times the member’s monthly basic pay for the Active Component and 0.5 to 6 times monthly basic pay for the Reserve Component. Service members should consult official guidance from their specific branch for current rates and policies. CP is taxable income.
• Investment Option: Service members can choose to invest their CP bonus into their TSP account, along with their regular basic pay contributions, subject to the annual elective deferral limits set by the IRS. Careful planning is needed, as contributing a large bonus could cause a member to hit the annual contribution limit early in the year, potentially forfeiting some government matching contributions for the remainder of the year.

BRS Component 4: The Lump-Sum Option at Retirement

A unique feature available only to BRS retirees is the option to take a lump-sum payment at retirement.

• What it is: Upon becoming eligible for retirement (typically after 20+ YOS), BRS members can choose to receive a portion of the estimated value of their future pension payments upfront. This option is not available under the High-3 system.
• Choices: The member can elect to receive either 25% or 50% of the discounted present value of their retirement pay. This calculation considers the pension payments they would have received from their retirement date until they reach the Social Security full retirement age (currently age 67 for most).
• How it’s Paid: The lump sum can be paid out as a single payment or in up to four equal annual installments.
• The Catch (Reduced Pension): Taking the lump sum comes at a significant cost. The member’s monthly pension payments are reduced by the percentage chosen (25% or 50%). This reduction remains in effect until the member reaches the designated full retirement age (e.g., 67). At that point, the monthly pension payment is restored to its full, unreduced amount.
• Discount Rate: The calculation of the lump sum uses a specific discount rate determined by the government. This means the amount received as a lump sum is less than the simple sum of the monthly payments foregone during the reduction period. The discount rate can fluctuate and significantly impacts the actual value received.

The multifaceted nature of BRS, incorporating a pension, TSP with government contributions, Continuation Pay, and a lump-sum option, introduces more variables and decision points compared to the High-3 system. This complexity underscores the importance of financial education for service members covered by BRS.

The DoD recognized this need by implementing mandatory training and providing numerous resources like calculators and guides during the BRS rollout. Understanding how these components interact—such as how investing Continuation Pay affects TSP contribution limits or the long-term financial implications of taking the lump sum—is crucial for service members to make choices that align with their individual financial goals and circumstances.

High-3 vs. BRS: A Head-to-Head Comparison

Comparing the High-3 and BRS systems reveals fundamental differences in philosophy and structure, impacting potential retirement outcomes.

Pension Multipliers: The Core Difference

The most direct contrast lies in the pension calculation multiplier. High-3 uses 2.5% per year of service, while BRS uses 2.0%. This means that for any given rank and number of years served (beyond 20), the monthly pension payment under High-3 will be 25% larger than the pension payment under BRS (e.g., 50% of high-36 pay vs. 40% at 20 years). This guaranteed difference in the defined benefit portion is a central factor in comparing the two systems.

Retirement Savings: The Role of TSP in BRS

BRS compensates for the lower pension multiplier through the defined contribution component – the TSP with government support. High-3 provides no government contributions to TSP accounts; members could contribute, but received no automatic funds or matching. BRS, conversely, provides an automatic 1% government contribution and up to 4% in matching contributions, totaling up to 5% of basic pay from the government when the member contributes at least 5%.

This TSP component offers the potential for significant retirement savings growth over a career through the combination of member contributions, substantial government contributions, and the power of tax-advantaged compound earnings. Whether a BRS retiree ultimately achieves a comparable or better overall retirement income than a High-3 retiree depends heavily on the performance of this TSP component.

Maximizing contributions to capture the full government match and achieving reasonable investment returns over the long term are critical variables. BRS introduces market risk and requires disciplined saving behavior from the member, factors not present in the guaranteed High-3 pension calculation. The final retirement value under BRS is thus less predictable and more dependent on individual actions and market performance compared to High-3.

Eligibility Timelines and Opt-In Considerations

As established, the primary determinant for which system applies is the DIEMS (before or after January 1, 2018). The opt-in window for eligible legacy members closed at the end of 2018. For those who faced that decision, a key consideration was their projected career length. Staying with High-3 offered a larger pension if they completed 20+ years, while opting into BRS provided the safety net of portable TSP benefits (including government contributions) if they separated earlier.

Portability: Benefits Beyond a Full Career

The portability of the TSP component is a major advantage of BRS. Service members under BRS who separate from the military before reaching the 20-year mark for pension eligibility can take their vested TSP balance (including vested government contributions and earnings) with them. This provides a tangible retirement asset even for shorter service durations. Under High-3, separating before 20 years generally meant leaving with no government-provided retirement benefit, only whatever the member might have saved in their own TSP account without any government assistance.

This portability feature represents a significant modernization of military retirement benefits. Historically, the “cliff vesting” nature of the pension meant that only the minority of service members who completed a full career received a government retirement benefit.

BRS, through its TSP component, extends government-supported retirement savings to a much larger portion of the force—potentially around 85% of members who serve at least two years (long enough to vest in the automatic 1% contribution). This makes military service more competitive with civilian employers offering portable 401(k) plans and can serve as both a recruiting and retention incentive, particularly for individuals not initially planning on a 20-year career.

Unique BRS Features: Continuation Pay & Lump Sum

Continuation Pay and the lump-sum option at retirement are exclusive to the BRS. Members under the High-3 system do not have access to these provisions.

Continuation Pay serves as a strategic tool within the BRS framework. It’s a targeted financial incentive offered mid-career (between 8-12 YOS) explicitly designed to encourage retention during a period when service members might be weighing career options. By providing a substantial bonus in exchange for an additional service commitment, CP aims to bridge the potential motivation gap created by the lower BRS pension multiplier, thereby supporting force manning goals. The flexibility for Services to vary CP rates based on career fields further enhances its utility as a manpower management lever.

The lump-sum option offers BRS retirees increased flexibility at the point of retirement, providing immediate liquidity that could be used for various purposes like buying a home, starting a business, or paying off debt. However, this flexibility comes with significant trade-offs. The payout is discounted, meaning the member receives less than the sum of the future payments they are giving up, and their monthly pension income is substantially reduced for potentially decades—until they reach age 67.

Electing the lump sum requires careful financial analysis, considering the discount rate, tax implications, individual cash flow needs, and the long-term impact on retirement income security. It is a complex decision that may benefit from professional financial advice.

Comparison Table

The following table summarizes the key differences between the High-3 and Blended Retirement Systems:

Calculating Your Potential Retirement Pay: Examples

Estimating future retirement income is crucial for planning. While official calculators provide the most personalized projections, the following simplified examples illustrate how pay is calculated under each system.

Disclaimer: These examples are for illustrative purposes only. Actual retirement pay depends on numerous factors, including specific basic pay amounts based on rank and time-in-service across the highest 36 months, exact years of creditable service, retirement date, individual TSP contribution decisions, investment fund choices, and market performance. Service members should always use official DoD or Service-specific retirement calculators for personalized estimates.

Information Needed for Calculation: To use official calculators effectively, members typically need information such as their date of birth (DOB), Pay Entry Base Date (PEBD), current pay grade and anticipated promotion timeline, expected years of service (YOS) at retirement, planned TSP contribution rate (for BRS), and potentially assumptions about TSP investment returns. Some of this information can be found on a Leave and Earnings Statement (LES).

Example 1: High-3 Scenario

Scenario: An E-7 retires after exactly 22 years of service under the High-3 system. Assume their highest 36-month average basic pay (High-36) is $6,000 per month.

Pension Calculation: $ \text{Monthly Pension} = $6,000 (\text{Avg High-36 Basic Pay}) \times 22 (\text{YOS}) \times 0.025 (\text{Multiplier}) $ $ \text{Monthly Pension} = $3,300 $

Result: This E-7 would receive a gross monthly pension of $3,300 for life, subject to annual COLAs. This amount is before taxes and any deductions, such as premiums for the Survivor Benefit Plan (SBP). Any personal TSP savings would be separate and accessed according to TSP rules.

Example 2: BRS Scenario (Same Rank/Service)

Scenario: An E-7 retires after exactly 22 years of service under the BRS. Assume the same High-36 average basic pay of $6,000 per month. Also assume this member consistently contributed at least 5% of basic pay to TSP throughout their eligible service period, receiving the full government match.

Pension Calculation: $ \text{Monthly Pension} = $6,000 (\text{Avg High-36 Basic Pay}) \times 22 (\text{YOS}) \times 0.020 (\text{Multiplier}) $ $ \text{Monthly Pension} = $2,640 $

Result (Pension): This E-7’s gross monthly pension under BRS is $2,640. This is $660 less per month than the High-3 pension for the same service ($3,300 – $2,640 = $660).

Result (TSP Component): In addition to the pension, this BRS retiree would have accumulated a balance in their TSP account. The exact amount would depend heavily on their specific contribution history, the timing and amount of government automatic (1%) and matching (up to 4%) contributions received over ~20 years (match starts after 2 YOS), and the investment performance of their chosen TSP funds.

Official BRS calculators, like those available at the DoD Military Compensation website, can project this TSP balance based on user inputs. Assuming consistent 5% contributions, full matching, and historical average market returns (e.g., 7% annual return pre-retirement), the TSP balance at retirement could potentially reach several hundred thousand dollars.

This TSP account provides a second source of retirement income, accessed via withdrawals, which must be considered alongside the pension when evaluating the total BRS retirement package against High-3.

Example 3: Impact of Rank and Service Length

Rank and length of service significantly influence retirement pay under both systems. A higher rank generally means higher basic pay, leading to a larger High-36 average. Longer service increases the YOS multiplier.

Consider a hypothetical E-9 retiring at 30 years versus the E-7 at 22 years:

• The E-9’s High-36 average basic pay would be substantially higher than the E-7’s.
• The YOS multiplier would be larger:
  • High-3: 30 × 2.5% = 75%
  • BRS: 30 × 2.0% = 60%

The resulting pension under both systems would be significantly higher for the E-9 at 30 years compared to the E-7 at 22 years, reflecting the rewards for promotion and extended service. Pay differences between grades and longevity steps can be substantial.

Key Factors for Your Retirement Planning

Navigating military retirement requires careful consideration of several factors, particularly given the differences between High-3 and BRS.

The 20-Year Mark: Implications for High-3 and BRS

The 20-year service milestone holds different weight under each system:

• High-3: Reaching 20 years of creditable service is the critical threshold. It unlocks eligibility for the defined benefit pension. Separating before 20 years generally means forfeiting any government-provided military retirement pension.
• BRS: While the pension component of BRS also requires 20 years of service for eligibility, the TSP component provides value regardless of career length. Service members who separate before 20 years can still leave with potentially significant retirement savings in their portable TSP account, including vested government contributions. This was a key factor for those eligible to opt into BRS: if uncertain about completing a 20-year career, the portable TSP benefit offered by BRS provided a valuable safety net compared to the all-or-nothing High-3 pension.

Maximizing BRS: The Value of TSP Contributions and Matching

For service members covered by BRS, actively managing their TSP account is paramount to maximizing their overall retirement benefit.

• Capture the Full Match: Consistently contributing at least 5% of basic pay is essential to receive the full 4% government matching contribution. Failing to contribute enough means leaving “free money” on the table – the government match represents an immediate 100% return on the first 3% contributed and a 50% return on the next 2%. Over a career, maximizing this match significantly boosts the TSP balance and helps compensate for the lower BRS pension multiplier.
• Start Early: The earlier a member starts contributing, the longer their money (and the government’s contributions) has to potentially grow through compound earnings.
• Contribution Type: Members should consider whether to make Traditional (pre-tax) or Roth (after-tax) contributions, based on their current income, expected future income, and anticipated tax situation in retirement.

Long-Term Financial Health: Integrating Retirement into Your Goals

Military retirement benefits, whether High-3 pension or BRS pension plus TSP, should be viewed as components of a comprehensive personal financial plan.

• Consider other potential income sources in retirement, such as savings in IRAs, a spouse’s retirement plan, post-military employment earnings, and Social Security benefits.
• Factor in anticipated retirement expenses, including housing, healthcare (understanding TRICARE options for retirees), insurance, and desired lifestyle costs.
• Make an informed decision about the Survivor Benefit Plan (SBP), an annuity for eligible survivors purchased via deductions from retired pay.

The BRS structure, with its greater reliance on individual TSP management, underscores the need for proactive financial planning. BRS members bear more direct responsibility for their retirement outcomes due to the influence of contribution rates and investment performance on their TSP balance. Developing financial literacy regarding investment concepts, risk tolerance, and withdrawal strategies is vital for navigating BRS successfully.

Considering the BRS Lump Sum Carefully

The BRS lump-sum option provides upfront cash but requires careful deliberation.

• Weigh the immediate benefit of the cash against the long-term impact of significantly reduced monthly pension payments until age 67.
• Understand the discount rate used in the calculation and how it affects the amount received versus the total value of the foregone monthly payments.
• Consider the tax implications of receiving a large lump sum.

Service members contemplating this option should strongly consider seeking personalized advice from a qualified, fee-only financial advisor to analyze the specific numbers and determine if taking the lump sum aligns with their overall financial situation and long-term goals.

Official Resources and Calculators

When planning for military retirement, relying on official sources is crucial for obtaining accurate and current information. Numerous resources are available:

Department of Defense (DoD) & Defense Finance and Accounting Service (DFAS)

• DoD Military Compensation – Retirement: General information on military retirement plans.
• DoD Blended Retirement System: The official DoD portal for BRS information, fact sheets, and guides.
• DoD Calculators: Access to official calculators for High-3, BRS, BRS Comparison, Final Pay, and REDUX systems.
• DFAS Retired & Annuitant Pay: Information for military retirees from the Defense Finance and Accounting Service.
• DFAS Estimating Retired Pay: Details on how retired pay is calculated.

Military OneSource

• Main Website: A comprehensive resource hub for service members and families.
• Financial Counseling: Offers free, confidential financial counseling services 24/7 via phone (800-342-9647) or online chat. Eligibility extends for 365 days after separation or retirement.
• BRS Information: Specific guides and resources on the Blended Retirement System.
• Retirement Calculators Guide: Information on using military retirement calculators.
• Transition Assistance: Resources for service members transitioning out of the military.

Thrift Savings Plan (TSP)

• Official TSP Website: The primary source for TSP account management, fund information, forms, and planning tools.

Service-Specific Resources

• Army: MyArmyBenefits Calculators; Army Retirement Services Office (RSO) Locator
• Air Force: MyAirForceBenefits Calculators; Air Force Personnel Center (AFPC) Retirement Section; Service-specific BRS pages may exist on the AF Portal.
• Navy: Check MyNavy HR or official Navy Personnel Command websites for BRS resources.
• Marine Corps: Marine Online (MOL); Check official USMC Manpower & Reserve Affairs or MCCS websites for BRS resources.
• Coast Guard: Check official USCG Pay & Personnel Center (PPC) or Direct Access resources; Coast Guard BRS resources (via https://www.dcms.uscg.mil/).
• National Guard: National Guard Bureau BRS Page.

Financial Literacy Resources

• DoD Office of Financial Readiness (FINRED): Offers financial education resources and tools.

Our articles make government information more accessible. Please consult a qualified professional for financial, legal, or health advice specific to your circumstances.