To calculate retirement pay, the years of equivalent service are multiplied by 2.5 percent and this figure is multiplied by the average of the highest 36 months of pay, as stated by the Navy Personnel Command. Individuals who entered prior to September 8, 1980 use their base pay when retirement starts.
A few steps are required to calculate Navy Reserve retirement pay.
- Find the years of equivalent service
- Multiply the equivalent service figure by 2.5 percent
- Take this figure and multiply by the 36 month highest pay average or the retirement base pay
To find equivalent service years, the individual's total retirement points are divided by 360. For example, 720 total retirement points divided by 360 equals 2.
When using 2, 2 multiplied by 2.5 percent gives 5 percent.
If the 36 month high average is $30,000, $30,000 multiplied by 5 percent gives retirement pay of $1,500.