The amount military retirees receive depends on a few things, but largely it comes down to which retirement system was in place when you enlisted:
Final Pay Retirement System
Those who first entered the military before Sep. 7, 1980 are eligible for the Final Pay retirement system.
This system works out your retirement sum by multiplying your final monthly base pay when you retire by 2.5% for every year that you served.
If you retired after 20 years of service, this would result in 50% of your base pay, or 100% of your base pay if you retire after 40 years.
High 36 Retirement System
This system applies to those who entered the military between Sep. 8, 1980 and July 31, 1986. It’s very nearly identical to the Final Pay system except that your retired pay is worked out using the average base pay for your three highest-paid years rather than your final monthly base pay.
CSB/REDUX Retirement System
Those who entered the military between Aug. 1, 1986 and Dec. 31, 2017 qualify for the CSB/REDUX Retirement System OR the High 36 system, and the CSB/REDUX system is a little more complex to explain.
The only similarity between the two is that they both base your retirement pay on your average base pay for your highest-paid 36 months in service.
With the CSB/REDUX system, you’re also eligible for a "Career Status Bonus" (CSB) when you reach your 15th year service anniversary, but the CSB then reduces your pension amount.
So while you’ll get a $30K cash bonus (approximately $21K after taxes) under this system, your retirement percentage drops from 2.5% for each year of service to 1% for each year of service less than 30 years. So if you retire after 20 years, your pension will be 40% of your base pay. You should note that if you serve 30 years of service or more, this reduction won’t happen.
You should also bear in mind that all retirement systems have an annual cost of living adjustment, which can make a big difference to your final sum, depending on which system you fall under.
For example, the COLA for the Final Pay and High 36 systems relies on the national Consumer Price Index, whereas the COLA for the CSB/REDUX systems is the Consumer Price Index minus 1%. This means that a High 36 retiree could see COLA increase their retirement check by 1.7%, whereas a CSB/REDUX plan pensioner would only get a rise of 0.7%.
As we said, this gets pretty confusing, so you’re best to discuss it with your personnel office.
Blended Retirement System (BRS)
Recent enlistees who entered the military after Jan. 1, 2018 are eligible for the BRS system, which is similar to the CSB/REDUX system in the sense that you get 40% of your base pay after 20 years of service.
As well as this, you get a bonus after 12 years of service which is based on 2.5% of your annual base pay. During your service, the military will contribute 1% of your base pay to your Thrift Savings Plan (TSP).
You will be automatically enrolled in the TSP to contribute 3% of your base pay, though you can increase, decrease, or stop this contribution at any time. After 2 years of service, the military will then match your TSP contribution up to 5%.
Can you live off military retirement?
The answer to this question is influenced by several variables because your pension amount depends on how long you stay in the military, the years in which you served, and any supplemental savings you or your family has.
It will also depend on your living costs after you’ve retired.
Why would someone be medically retired from the Air Force?
Military medical retirement is a form of compensation received if somebody’s military career is cut short due to a disability. This would have to be a severe medical condition that has impeded your performance and ability to carry out your military duties.
If a military doctor determines that your medical condition is interfering with your ability to carry out your duties, they will refer the case to a Physical Evaluation Board (PEB) which consists of active-duty physicians who will review your clinical file and determine whether you’re fit enough to return to your duties, or whether you should medically retire from the military.
How much is medical retirement from the Air Force?
If you cannot return to duty, the board will decide whether you should be medically separated with or without severance pay, or permanently or temporarily medically retired, and this judgment will influence the amount you’re entitled to.
Check out the VA Disability Compensation table on the VA website.
Separation without severance benefits
If you are granted separation without severance benefits it means that your medical condition existed prior to your enlistment, wasn’t permanently aggravated by military service, and you have less than eight years - or equivalent - of active-duty service.
This also occurs if you suffered your disability or medical condition while you were absent without leave (AWOL) or while involved in wilful negligence or any act of misconduct.
Separated with severance pay
Separated with severance pay occurs if you’re found unfit for duty, have served for less than 20 years of service, and have a disability rating of less than 30 percent.
Severance pay equates to 2 months of basic pay for each year of service that doesn’t exceed 12 years.
Permanent medical retirement
Permanent disability retirement is given to those who are found unfit with a disability rated at 30% or higher that is predicted to be permanent and stable.
If the VA considers your condition to be service-connected, you may be eligible for VA disability compensation.
Temporary medical retirement
This occurs if the board determines that you are unfit, but your disability is considered unstable and cannot be rated. This means that the disability could change over the next five years which would warrant a different disability rating.
Because you can’t be considered permanently medically retired, you will instead be added to the temporary disability retirement list (TDRL).
On the TDRL, you are subject to medical reevaluation every 18 months. After 5 years, you are removed from the TDRL and either declared fit and returned to duty or considered permanently medically retired, if this has not been determined in a prior evaluation.
Your compensation amount for permanent retirement or TDRL is based on the higher of two computations:
- Your disability rating times your retired pay base, or
- Two and a half times your years of service times your base pay at retirement
Those on the TDRL receive 50 percent of their retired pay base or more.
What benefits can I claim if I am medically retired?
If you are a medically retired veteran you could be entitled to many different benefits. You can find a list and more information on Military.com.