But now I want to refer to the computation of the retired military pay on the basis of one’s length of service in the military force. In this context, there are military retirement calculators that determine the amount of the retired military pay. There a three calculators and each of them have a specific formula.

So, if you are retiring from the military based on the length of service you may elect to have your retired pay computed by either the Final Pay Military Retirement Calculator, the High-36 Retirement Calculator or the CSB/REDUX Retirement Calculator.

The logical question is which one suits you better? Well, you have to keep in mind that your choice regarding the military retirement calculator first of all will be determined by the date you actually started your military service.

Final Pay Military Retirement Calculator may be used in order to compute the retired military pay for those entering military service before September, 8, 1980. This military retirement calculator computes the retirement pay under the Final Pay retirement system.

Also this military retirement calculator gives you the possibility to create different tables and charts that would reflect your personal situation. The main elements used by this retirement system are the length of the military service, retirement grade and age. However, this military retirement calculator takes into account for example the inflation rate.

High-36 Military Retirement Calculator may be used in order to compute the retired military pay for those who entered service between September 8, 1980 and July 31, 1986.

The High-36 Month Average retirement system is the system which belongs to this military retirement calculator. As the first military retirement calculator this one also gives you the possibility to draw up some tables and charts that would reflect your own situation. The elements included into the system represent the length of service, age and the retirement grade. And it also takes into consideration the economic changes such as for example inflation.

And finally, CSB/REDUX Calculator may be used in order to compute the retired military pay only for members who entered military service after July 31, 1986.

The CSB/REDUX retirement system represents the system through which your military retired pay is determined. This military retirement calculator is for those persons who have elected CSB/REDUX.

As the previous two this calculator gives you the possibility to create charts and tables that would reflect your personal situation. The elements of this system comprise except the length of service, age and the retirement grade also the value of the CSB (Career Status Bonus), which represents $ 30,000. The economic changes are taken into account as well.

Actually, if you are still confused you can do a little bit more research on the comparison of these three military retirement calculators.

Do you know which type of military retirement calculator you should choose? There are three types of military retirement calculators. Each of them depends on the date the person entered the military service. The most important thing is to remember that all three types of military retirement calculators request a minimum of 20 years of creditable military service in order to retire from the military force. Another common thing which all three types of calculator have is that the retired pay is calculated using the base pay.

If you retired the military service from September 8 1980 onwards the most common used type of military retirement calculator is High-3.

The retired pay is calculated by using a 2.5% multiplier which is applied against the average basic pay for the highest three years of service. Usually these are the last three years, unless there was a reduction in grade due to some circumstances. A Cost-of-Living Allowance is given annually. Make sure for which COLA you qualify and make sure you find out the changes that you know the changes that the recession brought in the realm of COLA. In addition, the Cost-of Living Allowance is based on the Consumer price Index.
In case you entered the active duty before September 8 1980, then you can use the Final Pay military retirement calculator. For each year of your military service you get 2.5% towards the retirement multiplier up to a maximum of 75%. A Cost-of Living Allowance is given annually. It is based upon the Consumer Price Index.

And finally if you entered the military force from August 1 1986 onwards you may elect to use the REDUX military retirement calculator. In this case the retirement multiplier varies. So, for each year of the first 20 years of your military service you get 2% towards the retirement multiplier, and each year after 20 years of your service worth 3.5%. Then the retirement multiplier is applied against the average basic pay for the highest three years of your service. A Cost-of-Living Allowance is given annually, however it is 1% below the Consumer Price Index. Actually this military retirement calculator is less favorable from the three existent.

After retirement military men are offered to choose among three retirement plans. To be more specific based on the date of joining military service it is determined between which retirement plans can individual choose. The joining date determines if an individual has option to choose among different pension plans, or he/she has to accept certain plan without alternatives. It is noteworthy that retirement plans are available to those individuals, who have served on active duty for more than 20 years.

There are three types of retirement systems and therefore three types of military retirement calculators:

- Final Pay: this plan is assigned to individuals that started their service in the military before September 8, 1980. In this case what you need to enter in military retirement calculator are expected retirement grade, number years served at the military, individual’s age. Consequently the tool gives back projected retirement pay. This plan may also take into consideration the inflation, tax rate and other variables;

- High-3 Year Average: this plan is applicable to those who started their service between the period September 8, 1980 – August 1, 1986 or after August 1, 1986 (without requesting “career status bonus”. As in the case of Final Pay plan additional variables can be added, such as the inflation and the tax rate;

- Redux (Career Status Bonus): this plan is available to those individuals that entered into service after July 31, 1986. This plan offers career status bonus and decreased pension. In this case people have option to choose to accept High-3 Year Average plan or Redux plan. Here military retirement calculator plays a big role showing which plan is more beneficial.

Actual pension paid under Final Pay and High 3 Year Average plans is increased based on the consumer price index (CPI). The Redux plan is also protected from inflation, but at lower percentage than for other pension systems.

In each of these three cases different military retirement calculators are used to arrive to correct figures. In each case input variables are slightly different that makes each plan different.

- Final Pay Plan: is applicable only to those military personnel that joined US army prior to September 8, 1980. Military retirement calculator multiplies years of service by 2.5% (however this cannot exceed 75%) and then multiplies the obtained result by final base pay. Any allowances for subsistence, housing or for any other issues are not regarded in the calculations.

So to rephrase what we just said a person, who served at the military service for 20 years, receives half of his/her final base pay. This share increases with the years of service at the military, but eventually cannot exceed 75 percent of the base pay. So in other words, people that served for more than 30 years do not get higher pension than those who served exactly 30 years;

- High-3 Retirement Plan: is for those military personnel that joined army during the period September 8, 1980 – August 1, 1986. This plan is quite similar to Final Pay Plan: the military retirement calculator first multiplies years of service by 2.5% that equals to 50% for 20 years and 75% for 30 years (the maximum is 75% as in Final Pay Plan). Afterwards finds the average base pay for those 36 months in your career that paid the highest base pay (usually last three years) and multiplies these two numbers. This will be your retirement pay.

- Redux Plan: this plan involves giving $30,000 “career status bonus” after 15 years of active duty at the military service.

This plan is applicable to those individuals that joined military service after August 1, 1986. After 15 years of service military personnel have two options: either take old High-3 Retirement Plan or take $30,000 at once and calculate retirement pay under Redux Plan.

The Redux Plan is similar to High-3 Retirement Plan, but the percentages and shares differ. In case of High-3 Retirement the military retirement calculator multiplies the years of service by 2.5%, while in case of Redux Plan first 20 years of service is multiplied by 2% and number of years at the service between 20 and 30 years by 3.5%.

Military Retirement Calculator: USA Military Retirement Plans

Retirement Systems

There are several factors that determine size of the pension that a military person may get after the retirement. One of the main factors is retirement plan that you choose or you are assigned. During last twenty five years the US government made several changes to the retirement system. For each plan there are different military retirement calculators that take into consideration specifics of each plan. Nowadays the situation is the following:

- if you joined army before September 8, 1980, then you are eligible only for Final Pay military retirement plan;

- if you joined army sometime between September 8, 1980 and August 8, 1986, then you are eligible only for High-3 Year Average plan (sometimes also referred as High 36 system);

- if you joined army after August 8, 1986 than you have a choice between High-3 Year Average retirement plan and Career Status Bonus (CSB) – Redux retirement plan. It is noteworthy that if you decline getting Career Status Bonus that is currently $30,000, you will automatically receive High-3 Year Average retirement plan;

As we already noted since retirement plans differ from each other, there are different military retirement calculators for each plan. Variables and approach is very similar for each plan, but the small difference in calculations makes the results differ substantially.

For all plans a person becomes eligible for retirement if he/she serves at the army for 20 years or more. In addition if a person stays at the service for more than 40 years he/she receives 100% of his/her basic pay.

The Cost of Living Adjustment (COLA)

The Cost of Living Adjustment is simply accounting for inflation that is highly important detail, because in many cases the Cost of Living Adjustment may double your retirement earnings. Military retirement calculators usually account for this.

It is noteworthy that the Cost of Living Adjustment for Final Pay and High-3 Year Average plans is the same. It simply uses Consumer Price Index (CPI) as an adjustment basis, while for CSB / Redux retirement plan this adjustment basis is CPI-1%.

Final Pay: available to those who joined army before September 8, 1980;

High-3 Year Average: available to those who joined US army between September 8, 1980 and August 8, 1986 and to those who joined army after August 8, 1986 and did not choose Redux retirement plan;

Redux: available to those who joined the army after August 8, 1986 and received Career Status Bonus. If an individual did not receive Career Status Bonus, than he/she falls under High-3 Year Average;

Calculations for all these plans are quite simple; however below we will discuss this issue in details.

Final Pay – under this plan military retirement calculator multiplies number of years served by an individual in the US army by 2.5% (see table below for details) and the result is multiplied by the base pay. For instance, for a person, who served in the army for 30 years 30×2.5/100=0.75 or 75%. If a base pay is $2000, than the retirement pay will be $1500;

High-3 Year Average – the calculation for this plan is similar to Final Pay calculations. The only difference is that instead of base pay, military retirement calculator uses average basic pay for the highest 36 months of the one’s career is used in military retirement calculator. This is usually last three years of the service, since individual usually reaches the highest pay during last three years of his/her service;

Redux – the calculations under Redux retirement system substantially differs from calculations under previous two retirement schemes. Under Redux retirement plan an individual receives Career Status Bonus that is $30,000 and the difference is that under Redux military retirement calculator counts first 20 years of service as 2% and additional years above 20 counts as 3.5% (see table below for details). Note that for 30 years of service the percentage is 75% as in the cases of Final Pay and High-3 Year Average plans.

Usually using military retirement calculator people calculate initial retirement pay, but in real life it is necessary to account for inflation. To offset adverse effect of inflation Cost of Living Adjustment (COLA) is made every year. COLA adjustment is the same as Consumer Price Index (CPI) for Final Pay and High-3 Year Average plans. Things are a little different for Redux plan. Military retirement calculator uses CPI-1 for inflation. For instance, if CPI was 6% for 2009, Redux is adjusted by 5% (6-1).

How does CSB/Redux Retirement Plan works? Those individuals that choose CSB / Redux retirement plan are given Career Status Bonus that currently amounts to $30,000. In exchange for this bonus retirees receive decreased pension than they would have received under High-3 Year Average retirement plan. To say in other words, the government gives you some money in advance under than condition that you will accept reduced pension in the future.

Besides lower pension under CSB / Redux plan retirees also make Cost of Living Adjustment under lower rate than High-3 Years Average retirement plan participants do that makes CSB / Redux. Cost of Living Adjustment (COLA) is adjusting pension against inflation. Military retirement calculator for Redux plan uses lower rate for Redux plan than for High-3 Year Average plan. Under High-3 Year Average plan one’s pension is adjusted by Consumer Price Index (CPI) that is the same as inflation rate. Things are different for those guys, who use CSB / Redux plan. Their pension is adjusted by CPI-1% or inflation rate-1%. For instance, if inflation rate for year 2009 is 5%, the pension is increased only by 4% that means that year 2009’s pension has 1% less purchasing power than it had in 2008. On the contrary for High-3 Year Average retirement plan participants if year 2009’s inflation is 5% the pension is increased by 5% that means that year 2009’s pension has the same purchasing power as it had in 2008.

To summarize, military retirement calculator for CSB /Redux plan has following features/variables:

- $30,000 Career Status Bonus given to retirees at the day of retirement;

- At 20 years of service a pension that equals to 40% of the base pay and 3.5% increase for every additional year;

- The maximum pension is 75% of the base pay for 30 years of the service (in some cases some individuals are allowed to retire at 100% of the base pay after 40 years of service due to some special factors);

- Cost of Living Adjustment (COLA) is CPI-1 (Inflation Rate -1);

The question that always arises: which plan is better High-3 Year Average or CSB / Redux? For 30 years of service the pension rate is the same – 75%, but COLA adjustment for Redux plan is still lower, but at the same time you receive $30,000 at the day of retirement. In this case for 30 year retirees the CSB /Redux plan must be better.

But what if you are retiring after 20 years of service? In this case what you need is good calculation. This is where you need military retirement calculator for both Redux and High-3 Year Average plans. You need to check the ultimate yields from both plans in this case.

The US military retirement system is considered to be one of the most attractive ones on the globe. First of all it offers you generous pension and also does not limit you with the certain retirement age. This means that you could retire whenever you would like, even at the age of 40. Sounds attractive? Indeed. After retiring from the army you could start working somewhere else, earn salary and at the same time receive the pension from US army. It is noteworthy that military pension is subject to Cost of Living Adjustment (COLA) meaning that your pension shall not lose its purchasing power due to inflation. As you make calculations through military retirement calculator, you need to account for this detail.

There are several factors that determine the size of your pension. These are number of years in service, base pay and the military retirement plan that is applicable to you.

There are 3 military retirement plans at the moment. For each of them you need different military retirement calculators to make calculations about you retirement. These military retirement plans are: Final Pay, High 3 Year Average and Redux (Career Status Bonus) retirement plans.

These military retirement plans are in many ways similar to each other. First of all, for all plans you need to serve at the US army at least for 20 years. Also if you stay at the army for 40 years or more, then you are will get pension that will be equal to 100% of your base pay. This means that you will get pension that will be equal to salary you were receiving as you served at the US army.

There are also several differences between different military retirement plans. This is particularly important, if you joined the army after August 1, 1986. As you reach 15th year of your service, you will have to make a choice about which retirement plan you are going to use Redux or High 3 Year Average. To make an informed choice, you need to make many calculations. This is where military retirement calculator gains special importance.

Let’s see how the Career Status Bonus/Redux system works:

The most important thing is to determine the exact day you entered the military service. So, you entered military service after 31 of July, 1986 you can use the Redux/ Career Status Bonus military retirement calculator to determine your retired pay.

This military retirement calculator gives you the possibility to make tables that would illustrate your situation. When calculating the retired pay there are several variables that are used by in this calculator that is the number of years in US army, the age, the retirement grade and the sum of 30.000 US dollars, called Career Status Bonus. Moreover, the REDUX calculator permits you to change the inflation rate accordingly and the expected return that you may gain from the bonus money which were invested.

Let’s see some possible scenarios that could resemble your situation.

At the 15th year of service the Redux retirees are entitled to receive the so called Career Status Bonus of 30.000 US dollars. If you have served 20 years in the US army, your retired pay will be lower, namely, the legal formula in this case will represent 40% of the average of the base pay together with the 3 highest earnings during the years in the army.

In case of between 20 and 30 years of military service the Redux retirees’ retired pay will be calculated by using 2.5 % for one year of service, however, you should subtract 1 percentage point for each year of military service which is shorter than 30 years. For example, you have 25 years of military service, so you multiply your number of years in the US army with 2.5 % but then reduce the result with 5 points because 5 years are short of 30 years. So your retired pay with Redux plan will constitute 57.5 percent. This percentage is calculated in relation to your average basic pay together with the highest earnings gained in three years of military service.

If you have 30 years of military service then under the military retirement calculator Redux you simply have to multiply number of your years in the active service with 2.5 %, which will constitute already 75% of your average basic pay together with the highest earnings in three years in uniform.

But if you have more than 30 years of military service then you multiply your number of your years in the active service with 2.5 % for each year of service.

If your number of your years in the active service with military reaches 40 years then under the Redux system you would have 100 % of your average basic pay of those 3 years, when you had highest earnings.

Career Status Bonus / Redux plan was particularly designed to save money to the government. Since number of US Army’s military retirees increases every year, government finds it more and more difficult to cover current payments associated with military pensions. The Redux plan was created to make these payment easier.

Redux / Career Status Bonus military retirement plan works in the following way. The individuals that joined the US Army after August 1, 1986 are offered to choose among High 3 Year Average and Redux / Career Status Bonus as they reach certain point in their career. Those who choose Redux / Career Status Bonus are entitled to receive Career Status Bonus that is currently $30,000 immediately as they retire. But at the same time these individuals also receive lower salaries than they would have received, if they chose High 3 Year Average plan instead of Redux / Career Status Bonus. So in other words, the government buys you out and gives you large sum to ensure that you receive much lowered pension in the future.

One more thing that makes Career Status Bonus / Redux different from High 3 Year Average is the way how an individual’s pension is adjusted towards the adverse effects of inflation. This is also known as Cost of Living Adjustment (COLA).

In case of Redux / Career Status Bonus a military retirement calculator makes an adjustment against inflation is made by CPI (Consumer Price Index) minus 1% (CPI-1%). CPI is common measure of inflation, so we can say that pension under Redux retirement plan is adjusted by (Inflation Rate – 1%). This is bad, because inflation depletes pension’s purchasing power over time.

In case of High 3 Year Average military retirement plan military retirement calculator makes an adjustment to the pensions by CPI directly that means that adverse effect of inflation is fully accounted for, so the purchasing power of the military pension stays the same over time.

For instance, if the inflation rate for year 2009 was 5%, then pensions under High 3 Year Average military retirement plan would be adjusted by 5%, while under Redux / Career Status Bonus they would be adjusted by 4% (CPI-1%)

The retirement is one of the most important decisions that a person has to make in his / her life. On the other hand, military retirement calculator is absolutely necessary to make informed and wise decision.