Military retirement pay is generally computed based on either the length of service or a degree of disability, states Military.com. If a person is retired because of a disability, he may elect to have his pay computed by either of the two methods.Continue Reading
U.S. law offers various provisions on which retirement pay is to be computed. For those entering the service before Sept, 8, 1980, their retirement pay is calculated under the Final Pay retirement system, notes Military.com. For those who enrolled in service between Sept, 8, 1980, and July 31, 1986, their retirement pay is estimated under the High-36 Month Average retirement system. Finally, for soldiers who entered Service after July 31, 1986, and chose to receive the Career Status Bonus and the REDUX retirement plan, their retirement pay is calculated using the CSB/REDUX retirement system.
Retirees whose retirement pay is calculated under the Final Pay retirement system can estimate their eventual pay based on the length of time they have been in service. This works by multiplying the basic monthly pay for their expected retirement grade at the time of retirement by the years of creditable active service at the rate of 2.5 percent for each year of service, reports Military.com.Learn more about Military