Has the time come for your military retirement? Are you ready to conclude a storied and lengthy service to your country with all the well-earned perks that entails? Or maybe you’re just curious about said perks, despite having a few more years/reenlistments ahead before you receive them. Maybe you’re even a civilian, weighing the pros and cons of taking on the great responsibility of military service. Or a spouse trying to plan for all those big retirement dreams.
Whatever your particular circumstances, you’re in the right place to learn all about the key points of retiring from the US military. And the different types of retirements and military benefits related to each of them.
Types of Military Retirement
- Regular Retirement – The standard retirement setup, earned after a minimum of 20 years service on active duty. Level of retirement pay is based on time in service and rank.
- Reserve Retirement – For those who retired out of the reserves after a minimum of 20 years of service, the benefits are essentially the same. The key difference is you don’t start receiving retiree pay until you reach age 60.
- Temporary Early Retirement Authority – Often shortened to TERA, an earlier version of this retirement plan ended in 2001. The current one, which went into effect in 2012, is expected to remain open until 2025. It allows service members with less than 20 but more than 15 years in service to retire early. Retiring in this manner is up to the discretion of your service’s secretary. It’s usually only available during times of troops drawdowns to entice people to leave the military.
- Disability – Disability retirements can be temporary or permanent. If you’re disabled to the point that you can longer fulfill your duties and have a disability rating of 30% or more you are placed on the Permanent Disability Retirement List (PRDL) and receive pay and benefits for life based around your circumstances. There is also a Temporary Disability Retirement List (TRDL) for wounded or injured service members who require further assessment and rehabilitation before a final determination of their future is made. They receive retiree pay and medical care for up to five years, by the end of which the military will decide to return the person to full duty or, if their disability is rated at 30% or above, move them to the PRDL. In rare cases when the service member is deemed unfit for duty but with a rating below 20% they are discharged with severance pay.
Military Retirement Pay
As a retiree, you are still considered a member of the military and receive pay in form of a monthly pension that reflects that. The amount you receive is based primarily on your time in service and rank. Here’s the math that determines how much you’ll get based on the circumstances of your retirement.
- Final Pay – If you entered the military before September 8th, 1980, your retirement pay is based on what your pay was when you left the military. Your retiree salary is 2.5% of that pay for every year you served. So if you retire after 20 years of service, you’ll receive 50% of your former salary.
- High-36 – For those who enlisted after 1980, this system uses the same 2.5% per year served as Final Pay. It is based, however, on the average base pay over the 36 months it was highest during your career. So if your rank was reduced for whatever reason before the end of your retirement, you receive pension payments based on the higher rank you held.
- CBS/REDUX – For personnel who took advantage of the Career Status Bonus program while on active duty, the High-36 rate applies. But with reduction of one percentage point for each year short of 30 years of service. If you stayed in for 30 or more, then no worries there. If not, you can still apply to have your payments upped to the full High-36 level once you reach age 62.
- Disability – Based on your date of enlistment, Final Pay or High-36 rate applies to a disability retirement same as a standard one. However, those on the PRDL can opt to receive a payment based on the percentage of your disability rather than your time in service. So if you were critically injured relatively early in your career, taking the disability payment would be preferable to one based on time in service.
Military Retirement Pay Calculators
Wondering what your specific pension payments are going to be, or could be, under any of the above retirement types? Check out the Department of Defense’s array of retirement pay calculators and see exactly what’s in store for you after you bid the uniform farewell.
Military Medical Benefits After Retirement
For the most part, your health care coverage will continue in your military retirement in a similar fashion to how worked while you were on active duty. That said, there are some slight differences and extra steps to be aware of when you retire.
TRICARE
You are still eligible for TRICARE coverage as a retiree, either immediately upon your retirement (for active duty) or when you reach age 60 (for those retired from the reserves). But you will have to enroll in a new, retiree TRICARE plan within 90 days of your official retirement date. Bear in mind, that date is based on when your branch of service changes your status to “retired” in DEERS. You can’t register for retiree benefits before that change is made. You’re covered by the Defense Health Agency (DHA) in the meantime. But you should regularly check in with DEERS so you can get your retiree coverage as soon as it’s available.
Dental Coverage
Retirees are also eligible for dental care under the Federal Employees Dental and Vision Insurance Program (FEDVIP). And, as the name implies, it covers vision as well. But only if you’re also enrolled in a retiree TRICARE program. You can get dental benefits whether you have TRICARE or not. Check out the FEDVIP site if you’re curious about your specific eligibility for benefits.
Life insurance
As with all personnel who leave the military, retirees are eligible for the Veterans Group Life Insurance or VGLI. If you paid for an SGLI plan while you were in uniform, you have up to one year and 120 days to sign up for a VGLI. Much like the SGLI, these plans go up to $400,000 with monthly premiums based on your age and the amount of coverage. A 60 year old veteran with maximum coverage, for example, will owe $432 a month.
Finding a Job After Retiring From The Military
Whether you’re a late thirty-something finishing your twenty years on active duty or a wizened reservist finally getting your benefits at age 60, it’s never too late to find your next calling. Thanks to the new Forever GI Bill enacted in 2017, if you served honorably for at least 90 days on active duty or received a Purple Heart you are eligible for the program’s education benefits for life.
If you’ve already used those benefits, aren’t eligible for the GI Bill, or have something different in mind for a post-military career, then Vocational Rehabilitation & Employment may be for you. Also called VR&E or Voc-Rehab, the program offers a host of education and training benefits and funding for all vets with at least a 10% service connected disability rating and any discharge above dishonorable. But you’ve only got 12 years after you either separated from active service or got that disability rating. So look into it right away and see if you qualify.
Whether you’ve got a long and thrilling career ahead or you’re nearing the end of one, it’s never too soon or too late to start learning about your military retirement benefits and eligibility. Get a jump start on planning for your post-service life by learning everything that’s in store for you when you leave your uniform behind.
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