Military Retired Pay: High-3 (2.5%) vs Blended Retirement (2.0%) Compared
How military retired pay is calculated under High-3 and the Blended Retirement System, with a worked 20-year example and a cost-of-living projection.
Military Retired Pay: High-3 vs Blended Retirement
Two systems decide how much a military retiree is paid each month. The older High-3 system gives 2.5 percent of average base pay for every year of service. The Blended Retirement System gives 2.0 percent, but adds contributions to the Thrift Savings Plan. The Military Retired Pay Calculator shows the pension of both systems side by side.
The formula in one line
Retired pay = years of service × multiplier × average base pay of the highest 36 months. Years include completed months, so 20 years and 6 months is 20.5 years. The percentage is capped at 100 percent in the tool.
Legacy High-3
The multiplier is 2.5 percent. After 20 years that is 50 percent of High-3; after 30 years it is 75 percent. It applies to members who entered service before 2018 and did not choose to move to the new system.
Blended Retirement System
The multiplier is 2.0 percent. After 20 years the pension is 40 percent; after 30 years it is 60 percent. BRS members also receive an automatic government contribution of 1 percent of basic pay to the Thrift Savings Plan from their first pay, matching contributions up to 5 percent that vest at 2 years, and the option to take part of the pension as a lump sum. These parts are not in the calculator; it compares the pension only.
What is in High-3
High-3 is the average of the highest 36 months of basic pay. It does not include housing or subsistence allowances, special and incentive pays or bonuses. The figure to enter is monthly. If you are a few years from retirement, use the projected average from your pay chart, and update the number as you get raises.
The cost-of-living adjustment
Retired pay is increased every year to follow inflation. The projection table uses the percentage you enter, 2.5 percent by default, to show the monthly pay in years 1 to 5 and later checkpoints along with the total received. It is an assumption you can change, not a forecast.
A worked example
A member retires after 20 years with a High-3 of $6,200 a month. Under High-3 the pension is 50 percent, or $3,100 a month ($37,200 a year). Under BRS it is 40 percent, $2,480 a month ($29,760 a year). The gap is $620 a month, $7,440 a year. After ten years of 2.5 percent adjustments the High-3 pension would be about $3,873 a month. Whether the BRS contributions to the Thrift Savings Plan can make up the gap depends on how long the member serves, how much is contributed and how the funds grow, which is a separate calculation.
Who benefits from which system
BRS gives something to members who leave before 20 years, since the contributions are theirs once vested, which is a large change from the old system where such members got nothing. The legacy system pays a larger pension to those who stay for a full career. The right comparison therefore depends on career length.
Limits of the estimate
The tool does not include disability offsets, the Survivor Benefit Plan premium, reserve retirement points or taxes. Use the official calculators and your retirement services office for final numbers. This page is educational.
Questions to ask your retirement office
Before you decide on a retirement date, ask for an official estimate that shows your High-3 on the date you plan to retire, the Survivor Benefit Plan cost for the coverage you choose, and any effect of VA disability pay on your retired pay. Ask which system you are under and, if you are under BRS, how much you have in your Thrift Savings Plan. Then use this calculator to test more than one date, because each extra month adds to both the years of service and the High-3 average. The difference between retiring at 20 years and at 21 years is often larger than people expect.
