A Guide to Calculating U.S. Military Retirement Pay

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The Military Compensation department, which is folded into the United States Department of Defense (DOD), aims to "develop and oversee [the] implementation of personnel policies that maintain fair and competitive compensation and entitlement systems." In addition to managing service members’ basic pay; special and incentive pay; allowances; stipends; and educational benefits, those responsibilities include overseeing the military retirement pay scale.

The DOD maintains three basic retirement plans, all of which are available to active duty (i.e. non-reserve) veterans, and two of which are available to non-regular (i.e. reserve) members. Additionally, the department maintains a disability retirement plan. Each plan has distinct characteristics and specific eligibility criteria. While our guide will go over the basics, we encourage veterans and service members with questions about their military retirement scale — or any compensation issues — to contact the Military Compensation department.