Military Retirement Benefits

Military retirement marks a point in transitioning that requires a bit more planning and preparation than other milestones. Luckily, the military is on your side and does its best to prepare military and families for

Military Retirement benefits
Photo by 2nd Class Benjamin Wooddy

that ultimate transition to civilian life: military retirement. After all, it has likely been at least 20 years since families of a career-driven service member lived in one location for more than three years.

While a few VA retirement benefits will overlap with common veteran’s benefits, retirees receive a few extra benefits that only 20 years time in service can grant.

First things first: don’t forget to apply for a veterans retirement ID card. Unlike veterans serving less than 20 years, who have limited options in obtaining a veterans ID card, retired military veterans can be eligible to receive a DD Form 2 ID card, which is blue in color. See the Military and Veteran ID cards page for more information.

Next are military retirement benefits. Detailed information about these VA benefits can be found at the U.S. Department of Veterans Affairs. Anything that requires a form for enrollment, such as VA Health Care and the GI Bill, can be found at eBenefits.

Retirement Pay – Military retirement pay is dependent on the number of years served and when the service member enlisted. A breakdown of how military retirement pay is calculated can be found at “Understanding Military Retirement Pay.” This also includes a breakdown of retirement COLA and CBS/Redux. Military retirement pay can be managed on the DFAS website.

Disability – All disability is calculated on a per case basis. Disability claims must be submitted to the VA and processed; one claim per separate injury.

Veterans Group Life Insurance – The VGLI is just one type of life insurance available to retired veterans. The VA also offers Service-Disabled Veteran Insurance, or S-DVI, as well as Veterans Mortgage Life Insurance, which aids in the settling of a mortgage in the event of death. There is also Financial Aid Counseling for beneficiaries as well as assistance in online will preparation.

VA Home Loan The VA Home Loan is not only available to veterans, but to their surviving spouses as well. Active duty service members may also be eligible for this loan, which may be something to consider when approaching retirement.

VA Health Care – Enrollment can be done online or in person at a local VA Medical Center, at which time eligibility is determined. This health care is only coverage for the veteran. Additional health insurance would be necessary for dependents.

VA Dental Care – Although dental care through the VA is limited, it is available to veterans with a service-connected dental disability. A single visit is also available through for veterans within 180 days of discharge if a full dental examination was not conducted prior to discharge.

GI Bill® – Education benefits are available for eligible veterans, or for their family members should they choose to transfer benefits. More information on the GI Bill can be found on our Veterans Education Page. Most likely, if you are a retired military veteran, you will receive 100% of your GI Bill benefits. This can be an opening step to your civilian career post military.

Veterans Discounts – Many businesses offer discounts that favor retirees. We’ve compiled lists of the most popular military and veterans discounts, which vary based on the business and the location.

For more information on veterans benefits available to you, visit the websites of the city, county, and state you reside in. These should have information on state and local benefits offered to veterans and retirees who live in those areas.

About The AuthorNatalie Zummo is a US Army veteran and wife of a Marine Corps veteran. She is currently living with her husband and son in New Hampshire, writing and studying in her free hours. Natalie holds a Master’s degree in Psychology and is underway to a Doctorate in Clinical Psychology, with a focus on Military Counseling.


Understanding Military Retirement Pay

Military retirement pay is intended to recognize the selfless dedication to a career in the military. While important, calculating Military retirement pay benefits depend on individual circumstances determined by the circumstances below. 

Photo by Lance Cpl. Thomas DeMelo
Photo by Lance Cpl. Thomas DeMelo

Those who served in the military (Active Duty, Reserves or Guard), for a typical length of at least 20 years, will receive military retirement pay. This benefit begins immediately and is based upon a specific calculation determined by the Department of Defense. Length of service, disability percentage, year the member entered the service, and type of retirement are all factors that pertain to retirement benefits equation.

In essence, retirement pay amount can be calculated by multiplying the service member’s Retired Base Pay by the Percentage Multiplier. Retired Base Pay is configured using either Final Pay or High-3.

  • Final Pay: Military who started serving before September 8, 1980 (via active duty or reserve), will receive retirement pay based on their final basic pay.
  • High-3: Military who started serving after September 7, 1980 (via active duty or reserve), will receive retirement pay equaling the average of the highest 36 months of basic pay. If their time in the service accounted for less than three years, base pay would be the average monthly active duty pay during the servicemember’s length of service.

The Percentage Multiplier is accounted for by the service member’s years of service. Typically, the percentage will be 2.5% per year of service. For example, a service member who has served 20 years would be given a 50% multiplier since 20 multiplied by 2.5% equals 50%.

When accounting for time of service, DIEMS (Date of Initial Entry to Military Service) is an important factor. There are a few circumstances to note when considering DIEMS. First, DIEMS for those who joined, separated, and then rejoined the military will be based on the first date of initial military service. Secondly, the DIEMS for members who

Photo by Petty Officer 2nd Class Ace Rheaume
Photo by Petty Officer 2nd Class Ace Rheaume

enlisted under the delayed entry program will be the date in which they entered into the program as opposed to the date of when they reported for duty. Finally, if a person changes their status such as from reserve to active duty, DIEMS will be the initial joining date of service for the reserves.

Also, keep in mind that the years of service are calculated differently for a full time active duty service member versus a reserve service member. Retirement points are divided by 360 for those who served in the reserves. These points are converted to years of active duty service, and thus can be applied to the standard retirement pay formula.

Additional factors to consider when configuring retirement pay is Career Status Bonus/REDUX and Disability.

  • CSB/REDUX: If you retired under the CSB/REDUX plan, which is an option available to active duty members who entered service on or after August 1, 1986 and includes a $30K bonus, the retired pay multiplier will be decreased by 1% of each year served. Additionally, this plan utilizes the High-36 retirement method.
  • DISABILITY: Disability Retired pay is either 2% per service year OR a disability percentage assigned by the service at the time of retirement. By law, the multiplier cannot exceed 75%.

Regardless of the many factors and equations, it’s reassuring to know that military retired pay is considered one of the best and basically, the longer you serve, the higher your pay will be.

Social Security Rates in 2016: The Good and The Bad

Social Security profoundly affects millions of Americans and the cost is astronomical. In fact, the Social Security Administration reports that in fiscal year 2016, they will pay out one trillion dollars in benefit payments.  

Along with this cost, the Administration mentioned a few noteworthy items within their budget request pertaining to Social Security for (FY) 2016:

1. The number of disability appeals hearings pending will be reduced. A record number of hearings will be completed thus, decreasing the amount pending. However, reduced processing times will not be feasible until fiscal year 2017.

2. An effort will be made to increase the reduction of improper payments; combat fraud, waste and abuse; and invest in efforts which will enable the SSA to provide more modern, efficient service.

3. The 2016 fiscal year budget request level will help SSA build upon their current progress. It will allow them to accomplish their goals that they are currently focusing on during the 2014-2018 Strategic Plan which includes:

  • Enhancing service delivery through innovation and collaboration
    • Handling a record number of retirement claims
    • Improving national 800 number service
    • Increase number of processed disability appeals
    • Reduce hearings backlogs for the future
    • Employ video technology for interpreter services and face-to-face services to remote and rural areas
  • Strengthening the integrity of the SSA programs
    • Continue a reduction of improper payments and fraud
    • Decrease the Continuing Disability Reviews (CDR) backlog
  • Focusing on quality and efficiency for the disability program
    • Invest in quality improvements that will allow SSA to make right decisions at the right time
    • Continue to reduce improper payments
  • Invest in the SSA employees
    • Investing in training opportunities allowing the employees to gain knowledge and tools necessary for their work
    • Continuing to foster an inclusive culture that promotes well-being of employees
  • Continuing to maintain safe and secure technology services
    • Information will continue being accessible to a broad population
    • Online services will continue to be secure and easy to use
    • A robust IT operation will be maintained which allows the support for large demands of the Social Security program and other government programs

There will not be a cost-of-living increase this year, which is due to a calculation figuring the increase and/or lack of increase for benefits. This calculation is done by the SSA, which takes an average from the Consumer Price Index for July, August, and September. The average is then compared to the number from the previous year. The end result is the percentage to which Social Security benefits are adjusted. This is referred to as the Cost of Living Adjustment (COLA).

It is important to remember that COLA cannot be reduced to an amount less than what the Veteran or the survivors were receiving at the effective date of allowance. In other words, this means that the beginning allowance amount will be guaranteed for life at a minimum. Although 2016 COLA is not changing because of recent estimates, the lack of increase this year can be challenging for recipients because retirees have already had to adjust to minimal cost of living increases in their benefits over the past years.  

Usually, the CPI will increase from year to year, and as a result, COLA adjustments are applied as “increases” and Social Security payments will then increase. However, it is possible for the COLA adjustment to be applied as a “decrease” if the CPI decreases from one year to the next.

Unfortunately, the cost of living will most likely always rise. And although Social Security payments will not decrease, it still may be financially straining not to have the increase many were hoping for. That’s why it is beneficial to effectively budget for the year ahead without including an increase in Social Security, considering it does not always rise.

Transition Assistance Program – TAP Overview

The Transition Assistance Program (TAP) is a partnership with the Departments of Defense (DoD), Veterans Affairs (VA), Transportation and the Department of Labor’s Veterans’ Employment and Training Service (VETS).  It was established to meet the needs of separating service members during their period of transition into civilian life by offering job-search assistance and related services.

TAP helps service members and their spouses in the following ways:

  • Training and employment information to armed forces members within 180 days of separation or retirement.TAP Transition Assistance Program
  • Provides comprehensive workshops at select military installations with professionally-trained workshop facilitators from the State Employment Services, military family support services, Department of Labor contractors, or VETS’ staff present the workshops.
  • Attendees learn about:
    • Pre-separation counseling
    • Relocation assistance
    • Career decision-making
    • Job searches
    • Current occupational and labor market conditions
    • Resume and cover letter writing
    • Interviewing techniques
    • Evaluation of employability relative to the job market
    • Information on veterans benefits including education and training, health and life insurance
  • Services members separating from the military with a service-connected disability are offered the Disabled Transition Assistance Program (DTAP).
  • Attendees at DTAP learn about:
    • Everything included in TAP
    • Additional instruction to help determine job readiness
    • Address any special needs of disabled veterans

For more information on the TAP program visit the Department of Labor.

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Thanksgiving Resources for Veterans

Military veterans have so many benefits even after leaving the service and Thanksgiving is no exception.  During the holiday season there are special events that include veterans’ and not just active duty, family members and government employees.

Military Base Thanksgiving– On Thanksgiving Day all branches of the military prepare an incredibleThankgiving turkey for Veterans feast on base.  It’s not free, however it is usually very inexpensive compared to dining off base in a restaurant and  if you have no family or friends to celebrate with it’s the perfect place to feel at home.  Veterans can also sign guests in to enjoy the meal with them.  According to recent military regulations, Thanksgiving is considered a “special meal’ and open to retired military personnel/veterans when a dining facility does not exceed 100 percent utilization rate.  This is up to the installation commander to authorize this benefit in the form of morale improvement, good community relations and facility efficiency.  Check with your local military base to see what they have planned for Thanksgiving.

Local Veterans of Foreign Wars (VFW) and American Legion (AL) Posts  – Every years most of these posts prepare Thanksgiving meals for free.  You do need a valid membership or can be signed in as a guest of another veteran.  This provides an excellent opportunity to socialize with fellow veterans in the community.  Also, Bingo is often played after the meal for entertainment!  Contact your local VFW or AL for their specific event, volunteer assistance needed and/or meal price and/or food donations needed.  The camaraderie alone can boost anyone’s spirits during the Thanksgiving holiday.  These also accept donations from the general population in support of these events.

Other Veterans Service Organizations – There are many veterans service organizations both nationally and locally.  You can find an accredited VSO list here but there are many great organizations, especially local, that provide services to veterans as well.  A quick Google of Veterans organizations plus your city name should get you there.

You Can Assist a Veteran on Thanksgiving Too!

Veterans who have given a portion of their life to military service to uphold the freedoms and benefits of the United States of America (USA) can be very thankful that they served as well as thanked.  If you know a veteran who will be alone on this Thanksgiving Day, invite them to join you, family and friends to celebrate or accompany them to nice thanksgiving meal.  Most important thing to remember is that somewhere in all communities, states, clubs or other social groups, there is a nice Thanksgiving meal waiting to be shared with a veteran.

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