Calculating A Reserve Retirement

How To Calculate A Reserve Retirement

I recently answered a couple of questions on calculating the amount of a Reserve retirement for both Final Pay and High Three pay systems. If you’re eligible for a Reserve/Guard pension then let me repeat the questions & answers so that you can confirm your own math. If you’ve had a different experience, please post about it in the comments!  I’ve read the references and checked them with an expert, but I haven’t personally gone through the process.

When you’re in the Reserves or Guard, your time toward a pension is credited on two factors: the number of points you build up, and the number of “good years” you’ve completed. You accumulate points for drill weekends, active duty periods, and some special circumstances like online/correspondence courses or funeral honors detail. Each service is a little different in their point calculations– for example a Navy Reserve drill weekend awards two points per day because a Reserve weekend counts for four drill points.

Earning Points

Points accumulate from both active duty and the Reserve/Guard system. Each day of active duty counts as one point. Each drill counts as one point, as do the days of active duty in the Reserve/Guard for training or mobilizations. It’s possible to get points for other purposes but they’re generally limited. (It’s possible for officers commissioned from NROTC to receive points for the days they were on active duty for midshipman summer training, but they’ll need to supply the documentation.)

You’re also limited by the number of points you can get in a category– you can’t do 52 drill weekends in one year and get points for every one. Of course you can certainly be mobilized during a leap year and receive 366 points of active duty.

back to menu ↑

Good Year

A “good year” ensures that you show up each year for a certain minimum amount of work. Again each service has their individual requirements, but generally if you show up for drills on at least 10 of the 12 months (or complete enough other assignments) then you’ve met the intent of a good year. You may be required to earn a certain minimum number of points within 12 months, and to maintain your mobilization readiness (like completing the medical checklists). When you do that, you’re credited with your “good year”.

This status is tracked in your service’s Reserve/Guard databases, and you may be issued occasional updates. Every year you can earn a certain number of points and get a “good year”. However you’ll still have to verify that your service correctly credits you with that accomplishment.

You’re considered eligible for retirement when you’ve completed 20 “good years” of service. (But of course you can usually choose to continue to serve.) If you have a combination of active duty and Reserve/Guard duty, then your active-duty service time counts toward the 20 good years. There are also special circumstances (mainly medical) when you may be eligible to retire before reaching 20 good years. However for purposes of this post we’re going to assume that your retirement eligibility is based on the main requirement of 20 good years.

When you reach 20 good years, your service will eventually formally notify you that you’re eligible for retirement. (You may still have to finish other obligations like an enlistment, a minimum time in rank, or a set of orders.) When you complete those requirements (or have them waivered, or agree to retire at a lower rank) then you can apply for retirement. The key to your retirement is that “notice of eligibility”.

back to menu ↑

Retire Awaiting Pay, or Resign

There are two ways to retire, and they require you to consider a certain amount of risk. The first option is to “retire awaiting pay”. Over 99.99% of Reserve/Guard retirees choose this option. When you retire awaiting pay you’re not required to perform any duties or maintain any readiness in the “gray area” between the time you retire and the start of your retired pay, but the risk of this option is that you could still be recalled to duty for a full mobilization. A full mobilization requires the President and Congress to declare a war that’s bad enough to require the entire armed forces, and it’s more severe than the Presidential mobilization that was declared after 9/11.

Most Reserve/Guard retirees are willing to take this risk because the Department of Defense pays for it. If you retire awaiting pay then your seniority within your rank continues to accumulate, and when you reach your pension start date (generally age 60) then your retirement pay will be drawn at the active-duty pay table in effect that year. In other words, DoD covers you on both seniority and inflation.

If you’re not willing to accept the risk of a full mobilization, then the only way to completely avoid it is to resign. You’ll still receive your pension at your start date (generally age 60) but it’ll be at the seniority you had in that rank when you resigned– and in the pay scale in effect when you resigned. This may not be much of a difference if you resign at age 59, but if you resign at age 37 then you’ll be facing over two decades of inflation erosion before your pension starts.

For the purposes of this post, we’re going to assume that you “retire awaiting pay”.

back to menu ↑

Final Pay or High Three?

The next question is whether you’re retiring under the pay base system of “Final Pay or “High Three”. Both of them depend on the “Date of Initial Entry into Military Service” or “Date of Initial Entry into Uniformed Service”. For most servicemembers it’s considered the day that you first raised your hand, took the oath, and received an ID card. If your DIEMS/DIEUS date is before 8 September 1980 then you’re Final Pay. Otherwise you’re “High Three”.

One loophole to this involves commissioned officers. If your commissioning source was a service academy, then your DIEMS date is the date you started at the service academy. However when the services consolidated their pay systems in the 1990s, some members of the service academy classes of 1981-1984 were not properly credited with the correct DIEMS/DIEUS date. If you’re one of the few in this situation then make sure that your date is before 6 September 1980.

Once you determine which retired pay base system you’re under, you’re ready to calculate your service percent multiplier.

back to menu ↑

Service Percent Multiplier

If you had retired under the active-duty system, your multiplier would have been 2.5% per year of service. For 20 years of service this is the “50% of base pay” that you’ve seen so much in the media.

The Reserve/Guard retirement system calculates the multiplier from your total points. Divide your grand total career point count by 360 (because pay is based on 30-day months) and multiply by 2.5% to come up with your service multiplier. For example, 2134 points / 360 * 2.5% = 14.82%. That’s your service percent multiplier, just as an active-duty retirement at 20 years would be 50%.

back to menu ↑

Pay Scale

Now you need your pay scale. If you “retired awaiting pay”, then your pay scale is on the pay table at the maximum longevity for that rank during the year that you turn age 60. (A few Reserve/Guard veterans may be eligible to begin receiving their pension earlier than age 60. We’ll get to that near the end of this post.) The problem with this calculation is that Reserve/Guard members who “retired awaiting pay” have to wait until they turn age 60 to know exactly what amounts are on that pay table. (If you’re only 37 years old when you retire, then you’d have to wait nearly 23 years to find out.) The only suggestion I have for this situation is to assume that your pension will keep up with the current pay tables. In specific terms, you’re assuming that military pay maintains pace with the Employment Cost Index. For a spreadsheet or a calculator, you could assume that military pay grows with the rate of inflation. This is not a very accurate assumption but it’s the best available for calculating future dollars.

A better assumption would be to convert your retirement income and expenses to today’s dollars and use today’s pay table. Take a look at the second page of the 2012 pay table. If you retired as an O-6, there are pay longevity raises at 20 years of service, 22 years, 24 years, 26 years, and 30 years. It tops out at 30. If you retired as an O-6 awaiting pay then you’d choose the maximum pay of that rank– in this case O-6>30 or $10,557.30/month. If you retired as an O-5 then it’d be $8446.20. At E-7 it’d be $4815.90.

back to menu ↑

The Final Pay Pension

Whatever max pay you find for that rank, multiply it by the service percent multiplier and round it down to the nearest dollar. That’s your monthly pension. For an E-7 with 2134 points starting their pension in 2012 it’d be $4815.90 * .1482 = $713/month.

The High Three pension

That’s a messier calculation.

Here’s what the Association of the U.S. Navy website says about High Three Reserve retirement in one of their articles (behind a membership login):

This system applies to anyone with a DIEMS of 8 September 1980 to present. Retired pay is calculated based on a figure derived from the average of the last 36 months of basic pay for the approved retired grade (highest grade satisfactorily held), and from the length of service (longevity) prior to reaching age 60. In other words, it is the basic pay in effect when you were ages 58, 59, and 60. The percentage of that figure (36-month average) you will receive is calculated by dividing your total points by 360 and multiplying that figure (equal to years and months) by 2.5 percent.

So you still start with your total points, divide by 360, and multiply by 2.5% to get the service percent multiplier.

But then the pay calculation is painful. You have to have 36 months of pay charts (the years you turn ages 60, age 59, age 58, and age 57). For each one you’ll take the max pay at that rank (max longevity) and the number of months of that year. Then you’ll add them all together and divide by 36.

Let’s say you turn age 60 in June 2012. You’d use six months (January-June) of pay for that rank at the max longevity in the 2012 pay table. For a High Three E-7 that’s $4815.90/month * 6.
Then you’d use 12 months of max pay for that rank in the 2011 pay table: $4740.00 * 12.
You’d add another 12 months of max pay for that rank in the 2010 pay table: $4674.60 * 12.
Finally you’d add another six months of max pay for that rank in the 2009 pay table: $4521.00 * 6.
Now that you have the final 36 months of pay, you add all those numbers up and divide to get the final average monthly high-three pay:

($4815.90 * 6 + $4740.00 * 12 + $4674.60 * 12 + $4521.00 * 6) / 36 = $4694.35.

Note that it’s 97.5% of the Final Pay amount– only a 2.5% reduction.

That base pay number is multiplied by the service multiple to get the monthly pension amount.

$4694.35 * .1482 = $695/month.

Seems like a lot of work to shave 2.5% off your pension, but “high three” is commonly used in today’s defined-benefit pension systems to avoid the employee syndrome of “pension spiking”, a final year of work with exceptionally high pay. Congress and DoD just took advantage of a common civilian practice that doesn’t happen to be common to the military.

AUSN’s website doesn’t even have a calculator for the High Three Reserve retirement. They have a “Contact us” form that you fill out with the pertinent data, and then AUSN’s staff calculates the pension amount by hand.

By the way, if you join AUSN you’ll have access to all their website tools for Reserve planning, including the latest on when you’ll hear from your service and the pay center. You’ll be able to use their calculators and their guides on the Survivor Benefits Plan and their articles on retiree taxes. For a fee, AUSN will even review your record to determine how much you’ll be getting and what steps to take. I haven’t researched the question, but the other services should have similar Reserve/Guard advocacy organizations with similar support.

back to menu ↑

Starting Retired Pay Before Age 60

Some Reserve/Guard members may actually be eligible for a retirement earlier than age 60. The current legislation (passed in early 2008) reduces the age 60 retirement requirement by three months for every 90 consecutive days of mobilization during a fiscal year for war or national emergency. In other words, a Reservist volunteering to deploy to the desert for a fiscal year would be eligible to start their Reserve pension at age 59. A member of the National Guard who deploys with their unit for 24 months of the next five years (at least 90 days in the fiscal years) would be able to draw their pension at age 58. But this law only applies for deployment time served after Jan. 28, 2008. Several amendments have been proposed to retroactively extend this benefit to September 11, 2001, but none of these modifications have yet been approved by Congress.

Related articles:
Retiring from the Reserves and National Guard
Estimating your retired military pay
Air Force Reserve retirement website
Army Reserve retirement website
Comparing an E-7 active-duty pension to an E-7 Reserve pension

Does this post help? Sign up for more free military retirement tips by e-mail, Facebook, or Twitter!

79 Comments
  1. Reply todd December 20, 2014 at 5:20 PM

    hi i wonder how long would i have to be in to retire and i have 5 years of active duty airforce and 1 year or army reserves so far ? can i apply my active duty points ?

    • Reply Doug Nordman December 21, 2014 at 7:51 PM

      Good question, Todd!

      You’ll have to earn a total of at least 20 good years in order to be eligible to retire from the Reserves or National Guard.

      You’ll get a good year when you earn 50 points (or whatever minimum your service requires that year), but you’ll also have to perform sufficient drills and remain current on your readiness for mobilization: medical, dental, physical fitness, and online training.

      Your active-duty service counts toward good years. If you review your point count summary online, you’ll probably see a good year for every year of active duty plus another good year for your Army Reserve time. If that’s the case then you only have 14 good years remaining until you’re eligible for retirement. Your active-duty time also accrues a point for each day, so you probably received over 1800 points for those five years.

  2. Reply Mark December 12, 2014 at 4:22 AM

    Thanks for the most informative retirement article I’ve ever read! A question for you: I’m sitting at 18 years of reserve time with around 3500 points (5 years of active duty for training and 2 years of deployments.). I’m looking at taking an AGR position. How will they calculate the reserve points in the active system? How soon will I be eligible for active retirement?

    • Reply David L. McDonald December 13, 2014 at 8:58 AM

      I am three years deep into retirement on 01MAR15 and HRC still is unable to get my retirement correct. I have an active duty retirement, and have been ping pronged all over the retirement services community: RSO, HRC,G-1, NGB, to name a few. My retirement is the story of Everybody, Somebody, Anybody, and Nobody. Google everybody,somebody, anybody and nobody of the story. I expected more of a “Message to Garcia” retirement, one where people who deal with this for their job would actually do their job. Have knowledge of Title 10 USC concerning retirement, DOD FMR vol 7b, and the AR’s. Instead, I have had to educate a broken system, a scloretic bureaucracy. Don’t suggest the politician route, the service organization route both major failures. I am making progress on my own, as of Sep 2014, I have three retirement certificates and am finally going in the right direction. I am now the correct rank from SSG to CPT, but still at the wrong retirement percentages for years of service and wrong retirement. The subject matter experts went from my 20 yr AFS, non disability retirement to a reserve early drop.
      All of my time was active, with over ten years as a commissioned officer. They all had access to this info before I retired.

    • Reply Doug Nordman December 15, 2014 at 5:27 PM

      Mark, I’m having a little trouble sorting out your terminology, but I’ll give it a shot and you let me know if I’m interpreting it correctly.

      It sounds as though you’re in the Reserves now, with 3500 points on your record and credit for 18 good years. All of your five years of active duty for training and your two years of deployments should already be included in that 3500 points. You can verify that by going to your service’s online record of your good years and your point count.

      I’m not sure what type of duty your AGR position may be, but whether it’s mobilization or some other form of active duty for training then you’ll get one point for each day of duty. (If the orders are for more than 29 days then other benefits kick in, like Tricare.) For every year that you achieve 50 points (or your service’s requirements for that year) and meet all of the other readiness requirements, you’ll get another good year of Reserve credit.

      When you reach 20 good years then you’re eligible for a Reserve (“non-regular”) pension. If you’re on active duty every day of the next two years, then at the end of that time you’ll have earned another 731 points and you’ll have 20 good years. Your point total would be 4231 and your pension would be 4231 / 360 * 2.5% = 29.38% of the High-Three average of the base pay for your rank and your longevity of the pay tables in effect when your pension starts.

      Depending on the dates and locations of your deployment, your pension may start before age 60. (See the last paragraph of the post.) If you think this may apply to you then you could e-mail me the dates of your deployments and we could confirm all of the details. However first I think you’ll want to check your online records to make sure the good years and point count are accurate.

  3. […] Reader “Moondoggie” commented on the Reserve retirement post: […]

  4. […] Click here to learn how to calculate a reserve retirement. […]

  5. […] Click here to learn how to calculate a reserve retirement. […]

  6. […] servicemembers can join the Reserve or National Guard and earn credit toward retirement for their drills and active du…. (They can get retirement points for other activities, too, but drills & active duty are the […]

  7. Reply Doug Nordman August 25, 2014 at 7:01 PM

    Stephen, you’d have to spreadsheet the math to decide whether finishing 20 for an enlisted active-duty pension is better than going to the Reserves for an officer’s pension. Some of the math depends on your age at retirement and when you’d start a Reserve pension.

    Regardless of rank or the size of the pension, I think the most significant factors in a military pension are the cost-of-living adjustment and the cheap Tricare premiums. Without crunching all of the numbers, it’s probably better to take an active-duty pension sooner at a lower rank.

    Of course the key is whether you’re able to stay on active duty to finish 20 years.

    The above paragraphs assume that you’re still enjoying your time in uniform. If you’re miserable on active duty then it’s probably better to transfer to the Reserves, enjoy the improvement in quality of life, and know that your pension will pick up at age 60. The cliché “It’s only money” certainly applies here.

  8. Reply Stephen P. August 24, 2014 at 2:27 PM

    Doug,

    Once again thanks for the insight.

    It sounds like for those few that are in my situation (involuntarily separated at 17.5 and prior enlisted) the best chance at an active duty retirement is to take the revert back to enlisted option and finish off my time as a chief.

  9. Reply Doug Nordman August 24, 2014 at 1:49 PM

    Stephen,

    Not quite. See this post: http://the-military-guide.com/2014/04/10/mixed-plate-military-sanctuary-disability-and-civilian-pensions/

    Here’s a summary: the services discourage sanctuary because they have to pay big bucks for it. When a Reservist reaches sanctuary (and is retained on active duty for an active-duty retirement) then that pension funding is not supported by DoD. Each service has to pay sanctuary active-duty retirements out of their own personnel funds until the servicemember reaches age 60 (the Reserve pension start date) and the funding obligation reverts to DoD.

    If a servicemember has over 5840 points (over 16 years of points) then they’re still allowed to keep drilling and doing AT and even multiple ADTs of up to 29 days each. That’s considered training, not active duty, and that’s all approved by the local Reserve Center and the gaining command. However BUPERS N9 (and CNO N13) screen orders when the servicemember is ordered to active duty (30 days or more) via ADT, ADSW, or even mobilization. That’s considered operational active duty, and that’s only approved by OPNAV.

    Servicemembers are also required to track their point counts and ensure that they don’t exceed sanctuary without OPNAV approval. If they “somehow” reach sanctuary without that approval then they could be involuntarily released from active duty and sent back to Reserve status. See paragraph 6 of OPNAVINST 1001.27 (https://doni.documentservices.dla.mil/Directives/01000%20Military%20Personnel%20Support/01-01%20General%20Military%20Personnel%20Records/1001.27.pdf)

    I have seen a Reservist mobilized by a PACOM flag officer even though the servicemember was very close to sanctuary (17.9 years of points). The next morning BUPERS overrode the flag officer and canceled the orders, then told PACOM to submit a sanctuary request. (It was disapproved.) The Reservist was allowed to continue to do drills and ATs, and one 29-day ADT per fiscal year. They eventually retired with over 7400 points (over 20 years of points, and 25 good years) but for a Reserve pension.

  10. Reply Stephen P. August 23, 2014 at 8:40 AM

    Doug,

    Thanks for the info, and the quick response!
    If I am understanding you correctly, while it isn’t common and the military doesn’t enable it, if an individual were able to somehow put together 3 years of active points they would be eligible for active retirement? I’ve been through the Navy’s MILPERSMAN, but the language used isn’t exactly straightforward. Although, I believe there is a section that seems to indicate that if a Sailor is on active orders and reaches sanctuary, they can remain on active orders? Is there any truth to that?

  11. Reply Doug Nordman August 22, 2014 at 6:09 AM

    Good question, Stephen!

    Federal law includes a section called “sanctuary”: any servicemember, active or Reserve/Guard, who reaches 18 years of active duty must be continued on active duty to 20 years (and an active-duty retirement). The Reserve/Guard services want to avoid inadvertently letting their members reach sanctuary (and an active-duty retirement), so they track everyone with more than 16 years of points and restrict their mobilization opportunities.

    If a servicemember left active duty at 17 years for a Reserve/National Guard career, they’d already be on sanctuary tracking. They would be permitted to do drill and AT (for up to 29 days) but longer stints of active duty would require approval by the service’s personnel HQ. It was rarely approved during the last 13 years of war, and in a drawdown it would be extremely unlikely.

    Instead a Reserve/Guard member would drill (and do AT) for at least three more years to reach 20 “good years” of service, and then would be eligible for a Reserve/Guard (“non-regular”) pension. They would start that pension at age 60 or (depending on combat deployments) possibly a few months earlier.

  12. Reply Stephen P. August 21, 2014 at 3:02 PM

    Doug,

    How does it work in situations that are effectively opposite the situations mentioned in the previous comments? For example, if someone was forced out of active duty with 17 years in (after perhaps being passed over for promotion) and then switched over to the reserves and accumulated 3 years worth of active points (1095 points). Would they be eligible for active duty retirement (i.e., receive their retirement pay immediately)? Thanks in advance.

  13. […] end of 2014, reach age 60 in eight years, and start your Reserve pension on 1 January 2023. You can calculate your Reserve pension with this post (the most popular post on the blog). We’ll assume that your 14 years of enlisted Reserve […]

  14. […] up is Lisa’s question about going back on active duty to qualify for a Reserve […]

  15. Reply Gail Mollere June 7, 2014 at 9:43 AM

    Do you get paid for 30 days per month or does the retirement pay vary according to the number of days per month? Thank you.

    • Reply Doug Nordman June 8, 2014 at 5:37 AM

      That’s absolutely right, Gail, the pension is paid as a 30-day month. You’ll get the same payment each month for the calendar year.

      The new calendar year’s first payment is boosted by its cost of living adjustment– which continues at the new level for the rest of the year until the following year’s COLA. Over my 12 years of retirement, the COLA has raised my pension by a total of 27%.

      • Reply serg June 15, 2014 at 4:35 PM

        What is your recommendation between early retirement from AD or a Reserve retirement? I qualify for TERA if I get passed over for Major. I have about a total of 16 years of active duty (10 USA commissioned, 6 enlisted) and about 14 enlisted reserve years from the Navy. I’m 51 years old.

        • Doug Nordman June 16, 2014 at 3:22 PM

          Congratulations, Serg, it looks like you’re already eligible for a Reserve retirement!

          Please check the requirements at this link:
          http://the-military-guide.com/2013/04/08/reserve-military-retirement-for-active-duty-veterans-with-previous-reserve-or-national-guard-service/
          and make sure you have your Reserve Notice of Eligibility letter (confirming 20 good years) as well as an accurate Reserve point count. The Navy Reserve may not have tracked your active-duty Army time, and you may need to update their records to obtain your NOE.

          If you received your first military ID card before 8 September 1980 (Navy Reserve) then your retirement system may be Final Pay. It depends on what was entered as your Date of Initial Entry on Military Service:
          http://militarypay.defense.gov/Retirement/

          If your first military ID was issued after 7 September 1980 then your retirement pay base will be High Three.

          Then check your service’s TERA message. If you’re passed over you may still have to apply for TERA, and there’s no guarantee that you’ll be accepted. If you meet the TERA criteria then calculate your pension using the FMR TERA tables at this link:
          http://the-military-guide.com/2012/07/05/the-regulation-for-calculating-an-active-duty-pension/
          and consider the issues at this link:
          http://the-military-guide.com/2012/05/24/retire-at-17-years-of-service-or-20/

          Next, calculate your Reserve pension (assuming it starts at age 60 as an O-3) and compare it to your TERA pension. Your TERA pension may start at a smaller number but it will have an eight-year head start on your Reserve pension. I feel that the most important factor in either pension is its COLA, and your TERA pension may grow at an annual rate of 1%-2%. By the time you’re 60 years old, the COLA could make your TERA pension higher than your Reserve pension.

          Finally, talk to a military lawyer who’s familiar with Title X U.S. Code for military retirement law. You want to make sure that your retirement occurs as an O-3. It’s also possible (but doubtful) that your deployments after 28 January 2008 may make you eligible to start a Reserve retirement earlier than age 60. You need solid legal advice on both of these criteria before you can count on the numbers. The Army has retired at least one other servicemember as an enlisted, despite their service at a commissioned rank, and you want to verify that your retirement references the appropriate sections of federal law.

          Let me know if you want any help with the numbers, and please tell us how your selection board goes!

        • Doug Nordman July 10, 2014 at 5:12 AM

          Serg, here’s a more detailed answer (with dollar figures) at this post:
          http://the-military-guide.com/2014/07/10/tera-early-military-retirement-reserve-retirement/

  16. Reply Louise May 12, 2014 at 1:12 AM

    Thanks for giving a thorough explanation on reserve retirement. You shared some points that I don’t usually find in retirement blogs. Will look forward to your future posts. Thanks for sharing!

    • Reply Doug Nordman May 12, 2014 at 6:42 AM

      You’re welcome, Louise, it’s consistently one of the most popular posts on the blog!

  17. […] articles: The FMR for calculating an active-duty pension Calculating A Reserve Retirement National Guard and Reserve retirement at the maximum […]

  18. Reply Navy Reserve Benefits | Sidi of Chicago December 28, 2013 at 5:25 AM

    […] Very basically, if you reach e-7 over those 20 years, at today’s rates you’d collect $695/month as your pension. […]

  19. […] Should you join the Reserves or National Guard? Retiring from the Reserves and National Guard Calculating a Reserve retirement Military Reserve and National Guard retirement calculators Guest Post Wednesday: “My Road to a […]

  20. Reply delphinide November 4, 2013 at 11:33 AM

    Great article! Thanks. You just convinced me to get out of the reserves and sell my points to a federal job. As an 0-4 with 7 years active and 13 projected reserve years, I’ll only have 3205 points after 20 years. My multiplier is only 22.3%, which means my projected High-3 monthly retirement pay is only $2388 a month. That is only slightly more than Social Security. Thank you for saving me from 2-3 more long deployments away from my family. Anyone would do better with TSP invested into moderate stocks.

  21. Reply David L. McDonald October 21, 2013 at 10:00 AM

    Any thoughts on how to get my officer retirement? I was on active duty for over 16 years Navy, RIF’ed after Gulf War One. Joined the MN Army National Guard, as an enlisted man, deployed to Iraq for 2 years, entered Sanctuary Program, and retired from Army with over 20 years of active federal service. I have been retired for 2 years now and still cannot get anyone to explain to me why title 10 Sections: 1370, 3926 and 3911 do not apply to my situation. I held my commission for 10 years and 08 months in the Navy.
    The Army retired me under 3914 and 3964 of title 10.

    I don’t get it.
    V/R,

    Dave

    • Reply Doug Nordman October 22, 2013 at 3:34 PM

      Good to hear from you again, Dave! I just re-sent you my response to your 4 July “Contact me”; please check your e-mail (and perhaps your spam folder) for my NordsNords at Gmail address.

      I’m not sure how the Army arrived at their determination of your retirement rank, and you made good points in your 4 July message. If you have not already seen a military lawyer at a local military base then that still seems to be your best option. If no military base is nearby then the next choice would be to consult a civilian lawyer (preferably a military veteran) with experience at having retirement records corrected by military review boards. You already seem familiar with the DoD Financial Management Regulation so the lawyer might be willing to offer a free hour to review your FMR references and your service record. Please let us know what you’ve learned from that and what other assistance we can offer.

      • Reply David L. McDonald February 19, 2014 at 6:05 AM

        Unfortunately I have hired a lawyer to sue the government for my benefits. Both of the elected officials I have contacted about my retirement have been dead ends. I will keep you posted on the results.

        Dave

        • Doug Nordman February 20, 2014 at 6:19 AM

          Thanks for the update, Dave. Please let us know how the lawyer interprets the differing Title 10 sections.

  22. Reply chris colombo October 18, 2013 at 11:24 PM

    Doug,
    I have a friend who is trying to straighten out his Active Federal Service (AFS) time as an Army Reserve AGR officer. He’s looking for the regulation that defines AFS and specifies what the calculation includes. As this deals with pay and thousands of folks have gone through this process (and the DOD being a bureaucratic beast) I’d imagine this is spelled out in detail. At stake is whether he’s forced to a mandatory retirement date or gets to retire. Could use some help! Thanks,
    Chris

    • Reply Doug Nordman October 20, 2013 at 2:56 AM

      Thanks for your comment, Chris!

      The definition of active federal service is in federal law. I’ll start by disclaiming that I’m not a lawyer, and your friend definitely needs the services of one. The lawyers know how to page through the federal law’s revisions, amendments, updates, and other minor changes. They also have the tools to research previous cases for legal precedents that might not be reflected in the actual text of the law. As you say, I’m sure that there have been many lawsuits in this area over the last few decades, but I’m not sure how to find them. As for finding the lawyer: they should contact their unit’s lawyer or base legal officer or even see if they can find someone in their unit who has a civilian practice. Just about any lawyer or paralegal should have the tools to research the law and the case history, although a military lawyer will be more familiar with recent precedents.

      The definition of active federal service starts in Title 10 of the U.S. Code, parts 101(d)(6) and (7). In the “Notes” tab of the Cornell law website ( http://www.law.cornell.edu/uscode/text/10/101) it says “In clause (22), the definition of “active duty” is based on the definition of “active Federal service” in the source statute, since it is believed to be closer to general usage than the definition in 50:901(b), which excludes active duty for training from the general concept of active duty.” That’s generally the contentious issue: ADT and AT (or anything else with the word “training” in it) does not count as active duty. Even if it involved a mission supporting active-duty forces (for example, flying fuel tankers for refueling jets flown by active-duty pilots) it’s still “training”. This is how Reserve servicemembers can still conduct drills and AT/ADT (for points and credit toward “good years”) without exceeding 18 years of active duty service and reaching sanctuary.

      Army National Guard active duty could also occur under Title 32 of the U.S. Code, which allows states to mobilize their Guard members with federal funds. It’s generally used to for homeland security missions but may have different definitions of “active federal service”. I’m going to immediately defer to the lawyers on this one.

      To further confuse the issue, your friend could have had their orders citing the wrong federal law codes. If personnel branches cite the wrong clause in your friend’s orders then that error can’t be held against the military for pay or retirement purposes. In general, under Title 10 anything less than 30 days is considered “training” and anything 30 days or more (when a new ID card is issued) would be considered “active duty” no matter what federal law is cited in the orders. I’m not sure about Title 32 limits.

      I hope this clarifies the situation without adding to the confusion. Please e-mail me more details if it would help refine the answer. I’ll also add this to a future “ask the readers” post where we might hear from others who have been in this situation.

  23. Reply lisa October 13, 2013 at 6:20 AM

    I have 10 years of just Reserve time. I’m planning on going back on active duty to complete another 10 years. If I do that, will I get my retirement when I complete my 10 years of active duty time or will I have to do more time to get my retirement right when I retire?

    • Reply Doug Nordman October 14, 2013 at 4:44 AM

      Excellent question, Lisa! The answer is “Yes”– you can get either one.

      For the vast majority of servicemembers, 10 “good years” of Reserve duty is halfway to a retirement. When you add another 10 years of active duty to that Reserve record, you’ll reach 20 good years and have over 4000 points. At that point you’ll be eligible for a Reserve retirement.

      Your Reserve retirement doesn’t start right away, but it will start no later than age 60. (For every 90 days that you deploy to a combat zone during a fiscal year then your retirement age will be reduced by 90 days.) The active-duty services may not know to send you a Notice of Eligibility, so you may have to query your Reserve force headquarters to produce one before you leave active duty for “retired awaiting pay” status. You can read more about leaving active duty for a Reserve retirement at this post:
      http://the-military-guide.com/2013/04/08/reserve-military-retirement-for-active-duty-veterans-with-previous-reserve-or-national-guard-service/

      If you want an active-duty retirement then you’ll have to stick around for 20 years of active duty or a Temporary Early Retirement Authorization at 15-20 years (these are generally only used during drawdowns). Medical or disability retirements are another possibility but way beyond the scope of your question. You could also separate anytime between 10-20 years of active duty and still enjoy the extra points on your Reserve retirement, but if you take any separation incentive payments then you’ll have to repay them once you start receiving your pension.

  24. […] need some clarification regarding your article that describes the calculation of a Reserve/Guard retired pay benefit. I’ve relied on this description in the past, but am troubled by one aspect of the […]

  25. […] Tom Philpott) Military Reserve retirement overview Retiring from the Reserves and National Guard Calculating a Reserve retirement Reserves and National Guard Should you join the Reserves or National Guard? Reserves and National […]

  26. […] as an O-5 he had roughly 2935 points. (Most Reserve officers retire with between 2500-4000 points.) Under the rules in effect in 1995, his service multiplier is […]

  27. […] of the amount of his pension. You (and maybe your lawyer) will want to see that estimate and the Reserve retirement pension calculations as well. If he’s already age 60 (or if he’s going to turn 60 during 2013) then I can […]

  28. Reply Dennis G. Allison August 7, 2013 at 5:24 PM

    My name is Dennis and I served 12 years in the Marine Reserves and I got out with 4.5 years time in grade as a E-6 Staff-SGT back in 1988. I worked a non-goverment job until I was hired at the United States Postal Service on Dec. 1st,2000. No one anywhere can tell me how or who can help me calculate my retirement points into time so that I can buy back this time towards my federal retirement. I am only intending to work 6 more years and retire and the time served in the military can make a difference. I had all good years and never missed any drills and also pulled extra duty as well.

  29. […] articles: Calculating a Reserve retirement Military retirement from the Individual Ready Reserve Should you join the Reserves or National […]

  30. Reply czinkie July 23, 2013 at 3:12 AM

    Thank you so much for all the useful and interesting information! I’m 2 years away from age 60 and trying to calculate whether I can retire from my civilian job (high school teacher at a private school – no pension) a little earlier so I can spend my time volunteering to teach adults to read. Your blog helps enormously!!!!

    • Reply Doug Nordman July 23, 2013 at 7:04 AM

      Glad we could help, Czinkie! Please let us know how it works out– it’d be great to tell your story as a guest post!

  31. Reply Moondoggie July 16, 2013 at 12:29 PM

    Great article! Plain English is very appreciated. Perhaps you can help with this issue… I heard a Reservist’s “grey period” could be reduced (start receiving retirement pay before age 60) by becoming a Civil Servant employee after separating from Active Duty (but transitioning into the Reserves with no break in service). Is there any truth to this? Thanks!

    • Reply Doug Nordman July 17, 2013 at 2:40 PM

      Thanks, gotta love a comment from anyone named “Moondoggie”!

      I’ve never heard of the program you describe, but I know that there are some “critical skill” civil-service or contractor jobs which require the employee to also hold a billet in the Reserve or National Guard.

      Right now the only way that I’m aware of to receive a Reserve pension before age 60 is to deploy to a combat zone for at least 90 days in a fiscal year.

      I’m going to forward your comment to GubMints.com. He’s also a Reservist in a civil-service billet, and if he doesn’t immediately know then answer then he’ll know where to find out. I’ll let you know the word either way.

  32. Reply ChaplainG July 11, 2013 at 5:17 PM

    So I have gotten conflicting information. I commissioned in 1994. I spent three years as a designation 1305 in the Chaplain Candidate program. All three years were 50-point years. In April 1998, I had to raise my hand again. I served 4.5 years on active duty. I left active duty, had one bad year in the reserve, and have since had all good years. I am over 18 for seniority and pay. One person says that my three years as a chaplain candidate count towards pay and seniority, but not towards retirement. Another says that a good year is a good year. Both know policy inside and out. Both are very senior reservists.

    Your thoughts? Chapter and verse would be helpful.

    R/Chaplain

    • Reply Doug Nordman July 14, 2013 at 7:27 PM

      Thanks for your comment, ChaplainG! My response is turning into a complete blog post, so please check your e-mail for a message from NordsNords [at] Gmail.

  33. […] Rate Questions on the 4% “safe” withdrawal rate Is the 4% withdrawal rate really safe? Calculating a Reserve retirement The regulation for calculating an active-duty pension Military Reserve and National Guard […]

  34. Reply Cliff Coburn May 22, 2013 at 11:06 AM

    Excellent article, thank you. It cleared up my retired pay questions One thing I didn’t see mentioned was that about 4 months before a gray area naval reservist turns 60 they should receive a package to be completed and returned to NPC. These can be obtained (if they don’t get them like I didn’t) from http://www.public.navy.mil/bupers-npc/. One should look for the DD108, W4, 1059 2656 and the instruction NAVPERS 1800.

    I have another question. Is a remarried ex-spouse entitled to any of my USNR retired pay.

    • Reply Doug Nordman May 23, 2013 at 6:17 AM

      Thanks, Cliff!

      Good point about the deadlines and the packages. Each service has their own procedures on their Reserve/National Guard websites, and they’re all just different enough (and changing frequently enough) to be extremely confusing.

      The answer regarding remarried ex-spouses is “It depends”. The Uniformed Servicemembers Former Spouse Protection Act provides guidance on when an ex-spouse is entitled to a portion of a military pension, even if they (and you) have to wait until you turn 60 years old. However that’s just guidance for the state courts, and your specific situation depends on your divorce agreement.

      It’s not “just” your retired pay. It’s also whether the ex-spouse is entitled to any of your other military benefits (like Tricare and base access) and whether they’re entitled to be covered by your Survivor Benefits Plan.

      I recommend that you start with this post:
      http://the-military-guide.com/2013/05/06/military-retirement-and-divorce/
      and follow up on all of the links. Most important of all, check your analysis with a lawyer who’s familiar with military divorce.

  35. Reply Margie Wilson May 2, 2013 at 6:20 PM

    I forgot to mention his rank he is an O-6

    • Reply Doug Nordman May 3, 2013 at 5:50 AM

      Sorry about the divorce, Margie, but the amount of the pension is a complicated and confusing question for many people. State divorce decrees and federal law (for military pensions) make it even more complicated. I’m sending you an e-mail and I’ll follow up with a full post on your question. I should have the e-mail headed your way later today.

      • Reply Margie May 3, 2013 at 6:13 AM

        Thank you, I look forward to hearing from you.

        • Doug Nordman May 6, 2013 at 5:16 AM

          The post is up at:
          http://the-military-guide.com/2013/05/06/military-retirement-and-divorce/
          Please let me know if you have any questions.

          I recommend that you review your divorce agreement with a lawyer to make sure you’re covered for your ex-spouse’s military disability, Survivor Benefit Plan, Tricare, and Social Security. A little time and expense now can save you thousands of dollars of frustration and litigation later.

          If he has a significant degree of disability then he’ll receive a portion of his pension from the Veteran’s Administration, and your divorce agreement may not cover that situation. If that happens then you’ll get less than $1975/month. He may be able to make changes to his SBP beneficiary, too, unless that’s covered in the divorce agreement. It’s possible that you’ll be eligible for Tricare healthcare when he turns age 60, and Tricare For Life at age 65. And finally, you’ll need to check whether it makes sense for you to eventually draw Social Security benefits based on your own earnings record or his. I cover these issues in more detail in the post.

          Please let me know how this works out. Thanks for asking the question– I think it’ll help a lot of readers.

  36. Reply Margie Wilson May 2, 2013 at 5:28 PM

    If my ex husband was active duty for 10 years and 20 years reserve and he has 5300 retirement points how much will he receive, I will receive 50%

  37. Reply CWOK April 16, 2013 at 9:30 AM

    Nice article. Just oficially hit “Retired awaiting pay” this 1Apr. Whata PITA to calculate. I’d just like my reduced pension rate now please, instead of at 60. Ahh well. Last deployment was in 05, so I missed the ‘early pay’ too. A couple years is a big deal. The Green Weenie strikes again.

    • Reply Doug Nordman April 17, 2013 at 3:28 AM

      Thanks, CWOK, and congratulations on your retirement!

  38. […] “forceful backup”. The Reserve and National Guard retirement system is complex, and figuring out your retirement pay can be even more difficult. A calculator helps you make sure that you understand your military […]

  39. […] other source. In fact, if you Google the phrase “Navy Reserve retirement calculator”, my post on calculating a Reserve retirement is the #2 result of over 32,500 hits. (NavyReserve.com is still #1.) Even “Air Force Reserve […]

  40. Reply Sean October 4, 2012 at 9:55 AM

    Can anyone show me in writing where it says you can or cannot get credit for your Midshipmen summer cruise? You are on active duty orders, wearing a uniform, and getting paid. So unless there is something specific that says you can’t get credit, I don’t see why you can’t?
    Thanks!

    • Reply Doug Nordman October 4, 2012 at 8:41 PM

      Sean,

      You’re absolutely right, there is something specific that says you can get credit. But it’s buried in BUPERSINST 1001.39F of 17 Sep 07, “Administrative Procedures for Navy Reservists”. I’m looking this up on website of the Association of the U.S. Navy (AUSN.org), which is an excellent advocacy group for Navy Reserve servicemembers. According to the Navy Personnel Command website, 1001.39F is undergoing major revision. If you’re on active duty or in the Reserves then you’ll probably have a better chance than me of figuring out when .39G will be released. (Or an alert reader will let us know here on the blog.) What I’m about to describe is from .39F, and I sincerely hope it’s fixed in .39G.

      The “problem” is that most officers are given an active duty service date (the date that they actually started active duty as an officer) of the day they’re commissioned. (If they’re in ROTC then that date may be even later– the day that they start their first active duty.) Since this date doesn’t count ROTC midshipman training that happened before their starting date, officers have to submit a record of that earlier training.

      Article 2600.3 (Chapter 20, page 20-8), says:
      3. ROTC Summer Training Credit. Per 10 U.S.C., section 971, graduates of the U.S. Naval Academy (or other service academies) are not eligible for summer training credit. Members that participate in ROTC Midshipman/Cadet summer training are eligible for retirement point credit (one point per day under orders). Because the actual number of days served on summer training can vary, it is necessary that training be properly documented as a prerequisite to awarding retirement point credit. Proper documentation consists of one or more of the following and should be submitted to NAVPERSCOM (PERS-911):
      a. Standard ROTC Summer Cruise/Training Orders (prior to 1978 – NAVPERS 2500, after 1978 – NAVEDTRA 1320/1) issued for each period of a midshipman summer training and endorsed upon
      the member’s arrival and departure.
      b. Leave and Earning Statements (LES) or NAVCOMPT 2120, Pay Voucher.
      c. Ship’s Deck Logs or Ship’s Diaries, which show the dates the member (by name) embarked and debarked.
      d. A letter from the ROTC Unit CO certifying the actual dates of summer training.
      e. A letter from DFAS Cleveland, OH, certifying the actual dates of summer training.
      f. NAVPERS 1070/613 (Administrative Remarks) prepared by the ROTC unit, which states that the member is being discharged to accept a commission. These standard Administrative Remarks usually list the summer training completed while enrolled at that particular ROTC unit.

      Most officers find out about this opportunity years (even decades) after their NROTC summer training. They may no longer have their midshipman orders or their LESs, and there’s just no easy way to get a certification letter from an old CO or DFAS. It’s remotely possible that they still have their page 13 admin remarks. After those options are exhausted, though, the only remaining opportunity to obtain credit is the ship’s deck log. By this point you’re praying that the command recorded your report/detach dates in the deck log, and that the deck log is legibly filed at the Naval Archives.

      Hope this helps. I’ve been around the block a few laps and I have the spare time to research this information. However if any of you other readers have an update, I’d appreciate it!

  41. Reply Steve Tyahla September 6, 2012 at 4:11 AM

    Thanks for putting this in English, but I do have one particular question:
    If you enter the retired reserve well before 60 (“gray area”) but have not achieved the minimum time in grade at your retirement rank in order to qualify for that retirement pay, do you actually lose the rank you were promoted to? I’m guessing not-seems illogical, but…never know. Basically, I want my ID card to still show the rank I reached even though I realize I’ll receive retired pay based on the next lower rank at which I did meet TIG.

    • Reply Doug Nordman September 8, 2012 at 1:33 AM

      Steve, thanks for your question and my apologies for my delayed response. FINCON12 is sucking up all my brainpower this week.

      I don’t know the answer to the ID card, but it depends on whether that decision is made by the DEERS staff (who furnish the info for the ID card) or the DFAS pay system (which decides what rank is used for your retired pay).

      My guess is that if you retire before time in rank that you’d have a gray-area ID with your final rank, but when you reached age 60 then your new ID card would reflect the lower rank.

      Reaching TIG may be easier than you think. In a drawdown, the services will frequently waive their TIG requirements from three years down to two or even one. Keep an eye on your service’s Reserve personnel website or ask them about it.

      If you’re Navy then I’d join the Association of the U.S. Navy (AUSN.org) and e-mail their staff with the ID card question. Or maybe one of the other readers will chime in with the answer!

  42. Reply Bimmerbill August 20, 2012 at 9:44 AM

    Nords, don’t forget the “APPROXIMATE Point Value For Retirement Benefits” charts (https://www.hrc.army.mil/Calculators/ValueOfAPoint.aspx).

    For instance, I have 1826 points and have point value of .426 (O3 with 22 years). So1826* .426 = $777 a month (estimated- before tax, SBP, RCSPB, etc). If I recall correctly, a point was valued at .38 when I retired in 2007 so you can see the yearly COLA raise we enjoy as gray area retirees.

    • Reply Doug Nordman August 21, 2012 at 10:13 AM

      Excellent website, thanks! I’ve heard those numbers being thrown about at drill weekends, but they’re a great way to project your benefits out 5-10 years…

  43. Reply Tara July 31, 2012 at 3:45 AM

    Great article. I think you did a much better job of explaining these issues than the actual Navy Reserves! So, maybe you can assist me with a couple problems. 1. Where can I get my calculations for points earned (14 Active/14 Reserve). Also, I need to get a copy of my DD214 for my Active time (2001-2002) but only have a Member’s copy and my Federal job won’t accept this for credit. Any ideas? Thanks again. Tara

  44. […] Retire at 17 years of service or 20? Military drawdown brings new career, pay, and benefits changes Calculating a Reserve retirement Military pay & benefits cuts Congress changes military careers and retirements Military careers […]

  45. Reply Deserat March 1, 2012 at 1:46 PM

    Excellent article – one of the best explanations I’ve seen…I never knew how they came up with that multiplier – thanks!

    • Reply Doug Nordman March 1, 2012 at 5:30 PM

      Thanks, Deserat!

      It’s amazing what retirement gives you the time to research…

      • Reply jon robinson February 18, 2014 at 5:36 PM

        Hi Doug,

        Thanks for your article, it is very informative! I enlisted in AD USMC in 1977, completing 3 years of honorable service in 1980. In 1985, I entered AD USAF as an officer and served 7.5 years – again I was honorably discharged in 1992.

        In 2001, I joined the USAF reserves, again as an officer. Later I was passed over twice for promotion to Major (04) and was discharged in 2006. The absence of USAF OPRs between 1992 to 2001 (inactive USAF reserves) hindered my chances for promotion to Major. Anyway, I was honorably discharged from the USAF Reserves in 2006, and I joined the US Army reserves as an E5. I was promoted to E6, have obtained my 20 year letter and I am still serving as an IMA reservist in Korea.

        My question: I have approximately 26 good years for reserve retirement, with 13 good years as an officer, 9 years as an O3. I fall under the Final Pay retirement plan (I enlisted before 6 Sept 80). Do I qualify to retire at my highest grade (O3) held, or do I retire as an E6 (that’s if I don’t get promoted in my present reserve position)?

        Ok, thanks for your help.

        JON

        • Doug Nordman February 19, 2014 at 3:43 PM

          Jon,

          Congratulations on your service– there’s not many Final Pay members still on duty!

          You’re wise to consider this question before you apply for retirement. My first piece of advice is: consult a military lawyer from a base legal service office. They’re familiar with both federal law and DoD retirement rules and can figure out the details. By enlisting before 6 Sep 1980, your retirement comes under legacy rules that today’s personnel staffs may not see very often.

          As I understand the DoD Financial Management Regulation (http://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/Volume_07b.pdf), you’re eligible to retire as an O-3. Sections 010501(E) and 030105 include the phrase “of the highest grade held satisfactorily at any time in the Armed Forces.” You’re over 10 years of commissioned service, so the key question will be whether your broken service affects the rules which apply to your officer or enlisted status.

          The problem is that Title 10 U.S. Code sections 3914 and 3963 apply to Army Reserve enlisted who were “previously administratively reduced in grade not as a result of the member’s own misconduct” and refer to retirement in an enlisted paygrade. You’ll be retiring through the Army’s HRC, and they may not be familiar with your USAF service. It’s critical that your USAF records be reflected in the Army’s electronic database (not just your paper service record) or else the Army computers won’t recognize your commissioned service.

          As you go through the determination process (which I recommend you start now), make sure the HRC staff refer you to the applicable regulations. If an Army regulation (or federal law) supersedes the FMR and Title 10 paragraphs that I’ve mentioned above, then you’ll want a lawyer to help you figure out which takes precedence. Even if HRC agrees that you’re retiring as an O-3, you still should ensure that they can quote the applicable regulation– and avoid a later unpleasant surprise. It’s absolutely essential that you resolve these questions now, before you apply for retirement, in order to avoid having to resolve them through a corrections board after retirement.

          Hopefully another reader can chime in on these regulations. I’m going to check with a few other servicemembers & veterans who may be able to help with this question. If you get an answer first, please let us know!

        • Terese LeFrancois, Ret USAFR April 2, 2014 at 10:09 AM

          Before deciding which rank (O or E) to retire, recommend you do the calculations for each and consider the final numbers. If O-3 for 10 years gets you more/less than E6/7 for 26 years or the opposite, then take that into account. One must also consider personal values – is it more important for you to retire as an officer with perhaps less retiree pay than a senior enlisted with more pay? Definitely check with a good attorney first!

Comment? Question? What's on your mind?