For Reserve and Guard service members, calculating military retirement pay is an important part of financial and life planning. Eligibility to receive military retirement pay is based on service points earned during service. Those points rely closely on the professional choices a service member makes.
Do you need to know how to calculate Reserve or Guard retirement points? Here’s how the process works:
Military Retirement: An Overview
For those serving on active duty, retirement is possible once 20 “qualifying years” of military service have been reached.
There are some cases where early retirement is possible with fewer than 20 years of service, but military early retirement is not an open-ended option. You may only be permitted to opt-into early retirement when the Department of Defense authorizes early-out programs.
These programs are often run to help the various branches of military service meet end-strength goals. In times when the DoD needs to cut the number of troops currently serving, early-out retirement options are often made available to facilitate those goals.
Active duty military members may also medically retire before 20 years of service, depending on the circumstances, but this is not an option the service member chooses. A military medical review board makes the decision (or an equivalent body) at the discretion of the government.
Definition Of Terms
For this article, you will find the term “Reserve Component” used to describe members of both the Reserve and National Guard.
Guard And Reserve Retirement
Reserve Components also need 20 years of military service, but calculating years of service differs in active-duty. In this case, it’s 20 years of “good service” and can be any combination of service between the Guard and Reserve. Reservists have a different system of doing this than the National Guard. We will examine the separate Guard and Reserve retirement systems, and what is meant by “good service” below.
Guard and Reserve members are free to retire when they are eligible, but unlike active duty retirement, Guard and Reserve members can not receive their military pay until age 60.
The Definition Of A “Good Year” For Members Of The Guard And Reserve
Since retirement points are a key factor in calculating retirement pay and eligibility for retirement, it’s good to understand the definition of a “good year.”
A good year in the Guard or Reserve represents 50 earned points by the service member. Points are awarded for a variety of activities including simple participation (15 points per year) and additional points for various types of active and inactive service:
- Active Service including Active Duty (AD), Active Duty for Training (ADT), and Annual Training (AT)
- Inactive Duty Service, including Inactive Duty Training (Paid and Non-Paid), membership, and Non-residential correspondence courses.
For active service participation, the Guard or Reserve member earns a single point for each calendar day spent in the Active Service category listed above. No double-dipping on points is allowed, meaning you can earn only one point per day with no other points possible for other activities.
Members on Inactive Duty Service may be able to earn retirement points in paid or unpaid status (depending on the type of military service). Points possible may vary depending on the nature of the duty or training performed.
Inactive Service duties can include honor guard service for military funerals, weekend Drills, attending professional development courses via distance learning or correspondence courses, and other activities.
Weekend Drill periods can earn a service member four retirement points per weekend.
How Many Points You Can Earn In A Typical Year In The Guard/Reserve
A year’s worth of Guard or Reserve service may be worth more than 70 points, including 15 points for participating each year, 48 points for monthly drill activities, another 15 points for annual training which may vary depending on mission requirements) and any extra points earned through continuing education, honor guard detail, being mobilized, etc.
The figures listed above are based on a typical year where the Guard or Reserve member serves the normal one weekend each month and two weeks per year of service.
If your Guard/Reserve unit is not as active in a calendar year, you may not be able to earn 50 points. Conversely, you may receive far more than 50 points in a year if your unit is especially active. Federal law dictates a cap on how many retirement points you may earn in a single year, which varies depending on when you began military service.
What To Remember About Retirement Points And Earning A Good Year
Reserve and Guard members may not always earn enough points (50 points per year) to qualify for a good year in any given year. The points still count toward retirement in such cases but do not increase the number of Good Years on the service member’s record.
Track Your Retirement Points
Your retirement points should be current in your military records at all times. You can access these records the way you typically would via your unit orderly room or on your branch of military service’s official site.
You should, at a minimum, review your service records once per year to make sure you have accurate information listed there. You should also maintain a physical record of your military service as a backup, just in case.
It’s not just that your electronic service records may be subject to errors, glitches, hacking, or other issues. It’s useful to have instant access to your data for both retirement purposes and for any additional benefit or application that may require it.
How Much Is Your Retirement Worth?
Active duty military retirement may be worth 2.5% of the service member’s basic pay for every year served, depending on the retirement plan selected.
If you serve the full 20 years, your active duty retirement pay would be worth exactly half of your basic salary.
For the Reserve Component member, determining how much your retirement may be worth can be calculated by dividing total retirement points by 360 and comparing the number to the current military pay charts. Rank and time-in-service will count in this calculation.
Reservists and Guard members may also be eligible for the Blended Retirement System, which became effective on January 1, 2018. Reservists with more than 4,320 retirement points do not transfer and remain in their previously selected retirement pay plan. Reservists who joined on or after January 1, 2018, are automatically enrolled in the Blended Retirement System.
However, a Reserve or Guard member who did not earn 4,320 or more retirement points as of December 31, 2017, has an option to switch to Blended Retirement or stay in the “legacy retirement system.”
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News.
