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.

In this context, it is important to mention that there are three plans. Each plan has separate military retirement calculator. Remember that regardless which retirement plan covers you, you will be entitled to collect your retirement payment immediately upon retirement. In order to determine which plan covers you it is necessary to look up for your starting day with the military service. So, in case you entered the military service before September 8, 1980 then the “Final Pay” retirement plan is applicable to you. If you entered the military service between September 8, 1980 and July 31, 1986 then the “High-3” military retirement plan is applicable and finally in case you started your military service on or after August 1, 1986 you can choose between two military retirement plans, that is “High-3” or “Career Status Bonus (CSB) Redux”.

All in all there are three military retirement plans “Final Pay”, “High-3” and “Career Status Bonus (CSB) Redux”. Each of these three military retirement calculators have their own retired pay formula through which your military retired pay is calculated. So, if you use “Final Pay” retirement calculator in order to determine how much you are entitled to receive then know that your monthly basic pay times 2.5% for each year of military service. In case you are covered by the “High-3” military retirement calculator your retired pay will be calculated on the basis of the following retired pay formula, namely the average pay for highest 36 months of military service times 2.5% for each year of your service. And finally, if “CSB/Redux” military retirement calculator applies to you then your retired pay will be calculated on the basis of the average pay for highest 36 months of military service times 2% for the first 20 years of service and 3.5% for additional years of your service.

In addition, to your military retired pay you are entitled to collect the military disability compensations to which you are entitled according to relevant legislations.

The important aspect of military retirement is that the military personnel retire much earlier than usual retirees do. In other words army people can save necessary money for retiring much earlier than ordinary people can do. So after retiring from the US Army military personnel can start working elsewhere and earn salary. When making calculations with the military retirement calculator, this point should be taken into consideration to receive the accurate results.

The military retirement calculator service is usually available to the military personnel through banking institutions and credit unions that they use during their active military service. After retirement people usually use the same bank or credit union after they used during active service. Moreover these financial institutions even help their clients to plan their retirement and making right decisions.

Military people can contact their personal bankers to use military retirement calculator. Bank personnel are usually well-aware of the special status of their clients and they do their best to help them make the best choice possible. One may think that military retirement calculator is some kind of device line ordinary calculator with bunch of buttons and a display. This is not true. The military retirement calculator is usually in the form of simple Excel file with several formulas in it.

Military people are very special indeed and they also enjoy many special benefits that are unavailable to others. For instance, a typical person serving at the US Army does not have a place of permanent residence. After retirement he / she has to choose a place, where he / she will spend rest of the life. In many cases military retirees choose to pick the residence near large military base or facility, where he / she may day his / her shopping and save large sums of money due to subsidized prices in the shop. Also military bases offer military retirees car repair, grocery and gardening services that many retirees find very attractive and beneficial. When making calculations with military retirement calculator one should take into consideration these factors.

Military retirement calculator

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.

Now how to calculate how many of so called credible years of service you accumulated? Let me remind you that only after this you will be able to know for sure if you qualify for the benefits and use the reserve military retirement calculator to find out actually the amount of those benefits. This can get confusing. What you have to remember is that one credible year of service is a year in which you accumulate at least 50 points during your retirement year. Now you can calculate the years, but do not forget also about the inactive points.

Now you can use the reserve military retirement calculator in order to estimate how much you can get per month as retired pay after you reach the age of 60 (do not forget about the exception).

The reserve military retirement calculator is based on two reserve retirement systems for those who were on active duty. These systems are the Final Basic Pay System and the High-Three System. The main difference in these two systems represents the date a person was first enrolled and became a member of the military service.

There are also several formulas through which the reserve military retirement calculator can estimate a retired pay.

So as I said above, the most important thing in determining which calculating system applies to you is your first day of enrollment. If you were enrolled and became a member of the military service before 8 September 1980 then you have to compute your pay by doing the following: multiply the amount of pay per month according to your grade at the time of your retirement by the “qualifying” years of active military service at the rate of 2.5% for each year from the whole year of service. This represents the Final Pay system. You will get 50 to 75% for 20 years of service.

If you started your service on 8 of September 1980 and 31 of July 1986 then do the following: do the same as described above but instead use the average basic pay that you have got for your highest paid 36 months.

An estimation of a retired pay per month can be done by multiplying the retirement points that you accumulated by the approximate value of a point.

So once you determined if you qualify for a retired pay and used the reserve military retirement calculator to see the amount you are entitled to, do not forget to apply for it.

As stated above if a person belongs to the military then his/her retirement plan can be calculated by using a special tool called the military retirement calculator. The military calculator allows to choose parameters that will lead to ideal retirement terms. Overall, the military retirement calculator provides a detailed information so that the military retirees can make an informed choice. As a rule such kind of calculators are provided by banks and credit unions that military servicemen use during their active duty.

Usually people tend not to change their banks once they retire. In order to access a military retirement calculator a military retiree have to contact his/her bank or credit union. These financial institutions are specialized on providing services to the military retirees and they can help to plan the entire retirement plan.

At the same time, a person has the opportunity to access the military retirement calculator online. They are available on the net and one of them even on our site. Check it here.

A military retirement calculator is a powerful tool that can be very useful for those who can use it properly. It is very important to emphasize that the accuracy of the calculations highly depends on the accuracy of the inputs entered into the military retirement calculator. If all the benefits that a person is eligible for are entered then the figures will be characterized with a high accuracy. Otherwise, the military retirement calculator cannot determine by itself which are the benefits for which one is entitled to. So the golden rule is that one must be careful and enter all the benefits correctly.The benefits of the military people can be numerous. For instance, if after retirement the retiree makes the decision to have his/her permanent residence near a large military base, the base may provide for him/her some major cuts in expenses. For example, the military base may provide car repair services and gardening facilities.All these benefits has to be included when calculating the retirement plan with the military retirement calculator.