Defense Force Accounting Services retirement pay is calculated by multiplying the retiree's base pay by the service multiplier. The service multiplier is calculated by multiplying the time the retiree served by 2.5 percent, according to DFAS.milContinue Reading
The base pay is calculated differently depending on when the retiree's service started. If the retiree entered the military earlier than Sept. 8, 1980, the base pay is equivalent to the final basic pay rate, as stated by DFAS.mil. If the retiree entered the military after Sept. 7, 1980, the base pay is the average of the retiree's highest 36 months of basic pay or the average basic pay for the whole duration of service if the retiree served less than three years.
Reserves are generally entitled to retirement pay after 20 years of service, and the service multiplier is calculated differently for them. They are credited with one point for each day of active service, one point for each attendance at a drill period, one point for each day performing funeral honors duty and 15 points for each year of membership in a reserve component. These points are dived by 360 and then multiplied by 2.5 percent to calculate the service multiplier, according to the Military Pay and Benefits websiteLearn more about Financial Planning