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Military Retirement Benefits

When a person is set to retire from the military services, one will probably have worries about the medical benefits, pay after retirement, and living adjustment. These are the obvious questions that arise in one's mind when such a huge change is impending. It does not matter what your "full" retirement age is. You might start receiving benefits as early as age 62. But, if you start your benefits early, they are reduced five-ninths of one percent for each month before your "full" retirement age. Therefore, suppose, your full retirement age is 65 and four months and you sign up for Social Security when you're 64, you would receive 91.1 percent of your full benefit. At the age of 62, you would get 80 percent. The reduction is greater for people born after 1938, as the full retirement age increases. A person who is retiring at the age of 62 in the year 2003, sees a reduction of 23 percent. A person who was born in 1960 whose full retirement age would be sixty seven, sees a thirty percent reduction when retiring at the age of 62.

Who is Eligible

There are both disadvantages and advantages to taking the PPM aid of military retirement plans before your full retirement age. The disadvantage is that your benefit is permanently decreased, and there is no way of increasing it. The advantage is that the perks are enjoyed by you for a longer period of time. Since each person's situation is different, so make sure you contact Social Security before you decide to retire. Luckily, even after retirement, the medical benefits can be enjoyed by you and your family members like your spouse, an unremarried widow(er), an unmarried child, including an adopted child or a stepchild under the age of twenty one, or under twenty three if still enrolled full-time at an educational institution, a dependent parent, or parent-in-law (dependency requirements have to be verified though) or unremarried former spouses, under specific conditions. The former spouses should not have other medical coverage under an employer-sponsored plan. A person who would qualify as an eligible family member from a previous marriage can also avail of the benefits.

Military Active Duty Retirement System

The military active duty retirement system is the best deal. Since, unlike most retirement plans, the Armed Forces offer a pension which is technically a "reduced compensation for reduced services" with benefits, that starts the day you retire, irrespective of the age you retire at, which implies you could start collecting a regular pension as early as when you are 37 years old. The pension amount would keep growing with the cost of living adjustment each year. However, there are many factors that determine the exact amount of your pension. For the past twenty-five years, the government has made some significant changes to the retirement system. One of the significant changes made was the lifting of the 75 percent cap used in the calculation of retired pay, for members eligible for service retirements. Anyone retiring after over 30 years of total active service will receive credit for service over 30 years.

How to Find Out Your Retirement Payment Rate

If you had entered the service prior to September 1980, you are considered eligible for the Final Pay retirement system. If you joined between September 8, 1980 and August 1986, you are considered eligible for the High 36 system, and if you joined after August 1986, you are considered eligible to choose either the High 36 retirement system, or the Career Status Bonus or REDUX (CSB) retirement system. If you do not want to make Pension a choice, you will automatically receive the High 36 retirement plan. The retired pay is sent by EFT to the financial institution if you continue with the same institutions before retirement. But, if you change, the details of the new institution are to be provided to the Military Finance Administration. If the concerned individual lives overseas, the check is directly mailed out to him.



These are the benefits that you would receive when you are retiring from the services. But, every year, the retirement pay is adjusted to meet the increased cost of living which, in turn, is based on the Consumer Price Index. The Cost of Living Adjustment for the retired pay in the year 2007 was 3.3%. Considering all the above points will help in taking a well-informed decision on retirement from the military.