Military Retirement Calculator

Legacy vs BRS: which is better?

The honest answer is: it depends almost entirely on what you do with your TSP.

Legacy High-3 gives you a bigger pension check. At 20 years, the multiplier is 50% of your High-3 average. BRS cuts that to 40%. On $6,245.70 a month (2026 basic pay for an E-7 over 20), that's $3,122.85 vs $2,498.28 every month for life. The $624.57 monthly gap is real and permanent.

BRS closes that gap with TSP matching. If you contribute at least 5% of basic pay, the government adds 5% more (1% automatic plus a 4% match). That's 10% of your paycheck going into your TSP every month, with half of it coming from someone else. The match only starts after 2 years of service. On $4,500 a month of basic pay, 20 years of government money (1% for the first 2 years, 5% after) grows to about $87,000 at 6%.

The break-even point shifts based on your TSP contribution rate and investment growth. Someone who contributes 5% or more and stays invested in a diversified fund will almost certainly come out ahead under BRS when you count total wealth, not just monthly pension checks. Someone who contributes the minimum (or zero) will regret choosing BRS.

For anyone who entered service after January 1, 2018, the choice is already made. For those who opted in during the 2018 window, the math was specific to their years already served and their TSP habits. Use the comparison tool above to see your specific numbers.

How High-3 is calculated

High-3 is the average of your highest 36 consecutive months of basic pay. Not your final salary. Not your average across your whole career. The three best consecutive years.

For most people who receive regular promotions, that means the three years immediately before retirement. But if you had a period of higher pay, say a deployment bonus counted in base pay, or a time when you held a higher temporary grade, your High-3 window might fall earlier in your career.

What counts toward basic pay: your regular monthly pay at your grade and years of service. What doesn't: housing allowance (BAH), subsistence allowance (BAS), special pay, hazardous duty pay, or reenlistment bonuses. Those are separate from basic pay and don't factor into your retirement calculation.

This is why two E-7s with 20 years can have meaningfully different retirement checks. One spent the last three years at a higher-cost duty station with a higher base pay step; the other was at a lower step. The difference compounds over a 20-year retirement.

TSP under BRS: why the match changes the math

The TSP matching structure under BRS has four tiers. The government contributes 1% of basic pay automatically, starting 60 days after you enter service, whether you contribute anything or not. That automatic 1% vests after two years of service. Matching starts at the beginning of your 25th month of service (2 years and 1 day), vests immediately, and both government contributions stop when you complete 26 years:

• Your first 3% of basic pay: matched dollar for dollar
• The next 2% (so your 4th and 5th percent): matched 50 cents on the dollar
• Anything above 5%: no match, but still tax-advantaged growth

Contributing exactly 5% of basic pay captures the full government match for a total of 10% going into your TSP. That's the rational floor if you're under BRS. Anything less and you're leaving free money behind.

The TSP itself offers C Fund (S&P 500), S Fund (small-cap index), I Fund (international), G Fund (government securities), and F Fund (bond index), plus lifecycle L Funds that automatically shift allocation as you approach retirement. Historically the C Fund has averaged around 10-11% annually since its 1988 inception. The 6% projection in this calculator is intentionally conservative.

VA disability and retirement pay

VA disability compensation and military retirement pay are two separate systems, and the interaction between them is one of the most misunderstood pieces of military finance.

By default, if you receive both, the retirement pay is reduced dollar-for-dollar by the VA disability amount. This is called the VA waiver, and it exists because Congress historically didn't want people double-collecting. But two exceptions changed this for many retirees.

Concurrent Retirement and Disability Pay (CRDP) applies to retirees with 20 or more years of qualifying service and a VA rating of 50% or higher. Under CRDP, you receive your full military retirement pay without any reduction, plus your full VA disability compensation. DFAS starts CRDP automatically once the VA rating reaches it; there's no application.

Combat-Related Special Compensation (CRSC) is a separate program for retirees with combat-related disabilities. CRSC is tax-free, unlike regular retirement pay, which makes it attractive for retirees with high VA ratings and combat-related conditions. You can't receive both CRSC and CRDP at the same time. If you qualify for both, you can switch between them during the annual open season.

The two work differently. CRDP is automatic: Defense Finance and Accounting Service (DFAS) pays it once you're retired with 20 years and rated 50% or higher. CRSC isn't. You have to apply for CRSC through your branch of service.

Continuation pay under BRS

BRS includes a one-time cash bonus called continuation pay, paid between 7 and 12 years of service (37 U.S.C. 356). It's there to keep people in through the mid-career years, when the 20-year pension still looks a long way off.

Active duty: at least 2.5 times monthly basic pay, plus up to 13 more months at the service secretary's discretion, so 15.5 times at most. Reserves: at least 0.5 times, plus up to 6 more months. In exchange, you agree to at least 3 more years of service.

Whether to take it depends on your career plan. If you're already planning to hit 20, it's essentially a bonus you get for free by staying on a path you'd already chosen. If you're unsure about the full 20, accepting the obligation locks you in. Think through the commitment carefully.