How Do You Calculate a Military Retiree's Pay?

Military retiree pay is calculated based on either the Final Pay, High 36 or Career Status Bonus plan, notes Period of tenure in the military and years of active service dictate what plan applies to each specific retiree.

There are multiple retirement options available for a military service members, including regular retirement, reserve retirement, temporary disability retirement, permanent disability retirement and temporary early retirement authority, notes the Defense Finance and Accounting Service. The type of retirement is based on years in service and physical eligibility. Within each retirement option, there are three related payment plans. Each plan is associated with a different retirement pay calculation.

Total retirement pay is calculated by multiplying a pay base by a service percent multiplier, as stated by The pay base under the Final Pay method is generated with consideration of the final year of compensation while on active duty. For the High 36 plan, the pay base is the average compensation of the final 36 years of active duty, notes the Defense Finance and Accounting Service. Moreover, the service percent multiplier for each plan is generated based on number of years on active duty, with the percent increasing for each additional year. Certain military retirees may be eligible for the Career Status Bonus plan, which increases total military retiree pay at the age of 62.