{"id":81259,"date":"2025-03-06T19:30:00","date_gmt":"2025-03-06T19:30:00","guid":{"rendered":"https:\/\/one.sightlinemg.com\/armytimes\/uncategorized\/2025\/03\/06\/what-service-members-need-to-know-about-retirement-pay-in-2025\/"},"modified":"2026-08-18T20:55:07","modified_gmt":"2026-08-18T20:55:07","slug":"what-service-members-need-to-know-about-retirement-pay-in-2025","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/armytimes\/news\/your-army\/2025\/03\/06\/what-service-members-need-to-know-about-retirement-pay-in-2025\/","title":{"rendered":"What service members need to know about retirement pay in 2025"},"content":{"rendered":"\n

Note: Whether it\u2019s health care, retirement benefits, family support and child care, VA benefits or other programs, getting smart about the rewards you have earned is worth your time. Although it is not yet clear to what extent federal cuts will affect DOD programs \u2014 including quality-of-life initiatives \u2014 these benefits were in place as of this writing.<\/i><\/p>\n\n\n\n

Visit this page for all of our latest coverage surrounding military and veteran pay and benefits<\/i><\/a>.<\/i><\/p>\n\n\n\n

All service members entering the military are automatically enrolled in the Blended Retirement System, or BRS. Only those who served before 2018 remain in the legacy, all-or-nothing 20-year pension plan.<\/p>\n\n\n\n

BRS combines the traditional monthly retirement checks of the legacy system with new features that let military members take some government benefits with them, even if they don\u2019t serve for 20 years to qualify for a pension. Historically, only 19% of active duty troops and 14% of Guardsmen and reservists in the legacy system stayed in uniform long enough to earn retirement benefits.<\/p>\n\n\n\n

More than 400,000 eligible service members opted into the new BRS in 2018, out of the 1.6 million current active duty and Reserve troops who were eligible to choose between the legacy system and the new option.<\/p>\n\n\n\n

Whether opting into the BRS or automatically enrolled, it\u2019s important to pay attention to the key elements of the BRS \u2014 a critical part of your financial future.<\/p>\n\n\n\n

Retirement pay<\/b><\/h2>\n\n\n\n

Under the BRS, you\u2019ll get the traditional monthly retirement pay for life if you serve for at least 20 years to earn a full retirement from the military. But monthly payments under the BRS are 20% smaller than in the legacy system.<\/p>\n\n\n\n

For BRS participants who retire after 20 years of active duty service, retirement pay is tallied by averaging the 36 highest months of active duty pay received while in uniform, then calculating 40% of that average. <\/p>\n\n\n\n

That percentage increases by 2% for each additional year of service. (The legacy benefit provided 50% of the highest 36 months of pay.)<\/p>\n\n\n\n

Retirement pay also includes an annual cost-of-living adjustment.<\/p>\n\n\n\n

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A Vietnam War veteran salutes during the playing of Taps at a Veterans Day ceremony at the World War Two Memorial. (Win McNamee\/Getty Images)<\/figcaption><\/figure>\n\n\n\n

Thrift Savings Plan<\/b><\/h2>\n\n\n\n

The Thrift Savings Plan, or TSP, is like a private-sector 401(k) retirement savings account. The government began matching user contributions in 2018. While troops always have ownership of the money they put toward a TSP, they can\u2019t access the funds contributed by DOD until they\u2019ve served for at least two years.<\/p>\n\n\n\n

Here\u2019s how it works: A TSP account will be created after you have served for 60 days, and 3% of your basic pay is automatically deducted from each paycheck to fund it. You can change that amount, but by law, you will be reenrolled at 3% each year.<\/p>\n\n\n\n

The Defense Department will automatically match 1% of that base pay, but can kick in as much as 5%. To make the most of your benefits, make sure you\u2019re contributing at least 5% to your TSP to get the matching federal contribution of 5% as well. Why turn down free money?<\/p>\n\n\n\n

If preferred, troops can contribute more than 5%, up to a limit of $23,000 in tax year 2024. For those with civilian retirement accounts such as a 401(k), as well as a TSP, contribution limits apply to the combined amounts.<\/p>\n\n\n\n

Continuation pay<\/b><\/h2>\n\n\n\n

When troops hit 12 years of service, they qualify for another source of money: Continuation pay. <\/p>\n\n\n\n

To receive that one-time payout, which is similar to a retention bonus, a person must commit to stay in their service branch for four more years.<\/p>\n\n\n\n

Here\u2019s what that means for active duty, Guard and reserve troops in each service in 2025:<\/p>\n\n\n\n