Military Retirement Benefits Explained

The military has quite some useful military retirement benefits. But then again, you’d have to understand how to get them. As any governmental program, the process of understanding how to get military retirement benefits can drive any person crazy.The 3 Military Retirement Payment Systems

There are three types of military retirement payment systems.

1. The Final Pay

This military retirement payment system applies to those who entered on or before September 8, 1980. This military retirement payment is quite simple: a military personnel receives 2.5% of his basic pay for every year of service. He then receives 75% of his basic pay for 30 years of active duty, excluding special payments, or allowances.

2. The High-Three Average

The military retirement payment for those who entered between September 8, 1980 and July 31, 1986 is a bit more advantageous than the Final Pay. These retirees will receive 2.5% of the average of the best 36 months served per year. For those who served for more than 15 years and entered service after July 31, 1986, this method is available as an option (and not the REDUX, which is explained next).

3. The REDUX

This military retirement payment system was passed by Congress as part of the National Defense Authorization Act of 1986. It was then amended in 2000. Military personnel that entered the military on or after August 1, 1986 are going with the REDUX system.

Just like the retirement payment before it, the payment is made out of the average of the best 36 months served but it is more intricate than the other two. A big difference in this military retirement payment system consists of the percentage multiplier. If in the other methods the percentage of 2.5% would have been calculated normally with the years, in the REDUX military retirement method, the payment is calculated this way: 2% of the best 36 months’ pay for the first 20 years, then each year after the 20th year is worth 3.5%.

So that the REDUX method could be in line with the High-Three Average, an extra benefit was made. When reaching the age of 62, the retirees get 50% of their best 36 months’ served.

The last add-up that the last method uses is giving a $30,000 bonus for those who choose the REDUX method after 15 years of serving provided that they agree to work 30 years minimum in total.

Still Puzzled about Military Retirement Payments?

If you still have questions and concerns about military retirement payment and benefits, go to Military Benefits at http://www.military.com/benefits/military-pay/questions-about-pay.

The military retirement that you probably have been looking for, for some time now, will definitely be a more comfortable one with your military retirement benefits. But, be sure to find out which payment method suits you best so you make your service time worthwhile.