How much will I make in monthly retired pay under the Blended Retirement System? While the true amount will be calculated by your service’s pay branch (like the Defense Finance and Accounting Service for most branches [except the Coast Guard, Public Health Service, and the National Oceanic and Atmospheric Administration]), I can show you a quick way to get a basic idea of what your pay will be.
This article will only cover how to estimate your pay under the new retirement plan.
The basic formula is:
(Points ÷ 18,000) X Base pay
Here’s how it works. As I said before, find the creditable points you have earned and write it down. Divide that number by 18,000. This will give you a percentage. Write this percentage into your notes.
Now, find your rate of monthly base pay for your pay grade and years of service on the 2017 military pay chart. There is a link to this chart below. Put that rate of pay into your notes.
Finally, multiply the rate of pay by the percentage you determined earlier. Drop any cents you have in this answer so you only have whole dollars. The result is a relatively close estimate of your retired pay.
Let’s see an example of this formula.
Sergeant First Class Jackson (which is the pay grade of E7 for those of you in other services) has 2,437 retirement points and twenty-six years of service. His base pay is $5,167.50 per month.
The formula in this case would look like this.
(2,437 ÷ 18,000) X $5,167.50
If we divide 2,347 by 18,000, we get 13.04%. Now we multiply his base pay of $5,167.50 by 13.04%. The result is $673.86. When we drop the pennies, we get $673.00. This is an estimate of his monthly retired pay based on this year’s pay scale.
Now, I have obviously left out some factors such as whether SFC Jackson falls under the high-three or final pay categories and a few other details. This was intention because I’m focusing on simplicity here. The intent is to get a rough estimate not an exact calculation like DFAS would give you.
Here are a few other bits of trivia that are nice goals to have before you walk out the door. For these assumptions, I’m going to assume you have at least three years of time in your highest pay grade.
If you have 2,400 creditable retirement points, your monthly retired pay, regardless of grade, will be equal to what you would earn in a monthly four-period (or one weekend) drill. Not bad for a part-time job, is it?
If your branch’s typical annual training is fourteen days long and you have 3,100 creditable points, your monthly pay will be equivalent to drill pay plus one-twelfth of annual training pay (meaning you will have twelve months of drill pay and full AT pay at the end of the year). If your branch’s annual training is fifteen days long, you will need 3,150 points to get this same result. As you can see, each additional fifty points you earn will equal another day of pay in your monthly retirement.
That’s the simple formula, guys. Give it a shot with your own numbers and see what you get.
Thanks for joining me today and, of course, thank you for your service.