Military Times

2012 Insider's Guide to the Guard and Reserve

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Application. Retired-pay applications for reserve component members generally are sent out at age 58, except for Air National Guard and Coast Guard members, who receive applications six months before age 60. Retired reservists and Guard members must apply for retired pay, just as their active-duty counterparts do. It does not automatically start at age 60.

Those who apply later will get pay retroactive to the day they were eligible — if they state that date as the date retired pay is to begin — until age 66. After that, a penalty of one day’s pay for each day of delay is applied.

Benefit formula. There are three ways to compute reserve retirement, which is based on when you first entered military service (not just reserve service). If you have 20 qualifying years of service and your initial date of entry is:

♦ Before Sept. 8, 1980, divide the number of retirement points by 360. That gives you the years of service (in active-duty years). Multiply that by 0.025 (2.5 percent). Multiply that by the basic monthly active-duty pay for your grade and years of service on the retired-pay effective date (normally your 60th birthday). Round that figure down to the nearest dollar to get the actual monthly retired pay.

♦ On or after Sept. 8, 1980, divide the number of retirement points by 360 to get years of service in active-duty years. Multiply that figure by 0.025 (2.5 percent). Multiply that figure by the average of the 36 highest months of active-duty base pay for your rank. Round that figure down to the nearest dollar to get the actual monthly retired pay. This formula is commonly known as the High-3 retirement plan.

Members on active duty or full-time National Guard duty who entered service on or after Aug. 1, 1986, and have completed 15 years or more of active federal military service can choose either the High-3 retirement plan or Redux.

The Redux retirement system comes with a Career Status Bonus. The Redux portion determines monthly retirement income, and the Career Status Bonus provides a one-time $30,000 payment. Members can choose either High-3 or Redux no later than their 15th anniversary of active duty, using DD Form 2839.

Although Redux provides a $30,000 bonus, monthly retirement pay under this system is less than under the other two systems. For 20 years of service, members receive 40 percent of the average of their highest 36 months of basic pay, rather than 50 percent.

Also, unlike traditional retirement that provides full annual cost-of-living adjustments for inflation, COLA raises for Redux retirees are 1 percentage point less than inflation. There is a one-time “catch-up” COLA raise at age 62 that puts Redux retirement pay on par with traditional retirement pay, but after that, annual COLA adjustments under Redux again begin to lag inflation by 1 percentage point per year.

Eligible personnel should understand and research their options before making this important decision.

Contact: The Army Human Resources Command maintains an online archive with extensive information on retirement that can be useful to reservists in any component. Visit Component Retirements.

Eligibility. Reservists must have completed 20 years of qualifying service to be eligible for retirement. A qualifying year of service is a complete retirement year in which the member earned a minimum of 50 retirement points. The service’s reserve personnel center will send the member a “Notification of Eligibility for Retired Pay at Age 60” letter — often referred to as a 20-year letter. You must maintain a current address with your Reserve Personnel Command or State Headquarters. If you believe you have 20 qualifying years and have not received a notification letter, gather your documentation and contact your reserve center.

Army reservists between ages 58 and 59 will receive from the Reserve Personnel Command an application for retired pay at age 60 if they have earned a 20-year letter and maintained a current address. Complete the application forms and submit them to the Reserve Personnel Command.

Reservists can begin drawing retirement pay three months earlier than age 60 for every 90 days of active duty under certain mobilization authorities in support of a contingency operation, down to a limit of age 50.


The annual cost-of-living adjustment for military retired pay is based on changes in the Consumer Price Index, a government measure of the cost of goods and services, although the actual increase each year must be formally approved by Congress.

Eligibility. Military retirees under the traditional and High-3 retirement plans receive full COLAs annually as determined by increases in the CPI. Redux retirees receive 1 percentage point less each year.

In a scenario that was unprecedented in the more than three decades of the current COLA system, there was no COLA increase in 2010 and 2011 because the recession had depressed the costs of goods and services — a situation known as deflation. After that two-year hiatus, however, the COLA returned, with all retirees receiving a 3.6 percent increase for 2012.


For more information or to request a retirement application form, contact:

Air Force Reserve and Air National Guard. Air Reserve Personnel Center Retirements Branch (HQ ARPC/DPPR), 800-525-0102;

Army Reserve and National Guard. U.S. Army Human Resources Command, 800-318-5298; DSN 892-0000;

Coast Guard Reserve. Coast Guard Pay and Personnel Center, 800-772-8724; 785-339-3415;

Marine Corps Reserve. Marine Individual Reserve Support Group,

Navy Reserve. Navy Personnel Command, 866-827-5672;


Reservists can qualify for military disability retirement pay or disability compensation. Service members who retire before the 20-year mark because of a permanent or temporary disability are referred to as “retired with a disability.”

Reservists who retire or leave the service with disabilities caused while on duty also can receive disability compensation from the Department of Veterans Affairs.

Permanent disability. Members officially rated by the military as at least 30 percent permanently disabled are entitled to disability retirement pay. To qualify, they must have spent at least eight years in the military or the disability must have been incurred in the line of duty. The degree of disability is determined using the VA Schedule for Rating Disabilities.

Temporary disability. Some veterans have medical problems that prevent them from carrying out their military duties, but their disabilities may not be permanent. These individuals may be placed on the Temporary Disability Retired List, and their disabilities will be re-evaluated every 18 months. Within five years, doctors must determine whether the disabilities are permanent.

VA disability compensation. VA offers disability payments to former military members with disabilities incurred or aggravated during active service. This compensation is separate from the military permanent and temporary disability payments and is tax-free.

Veterans with service-connected disabilities rated at 30 percent or more are entitled to additional allowances for their dependents. Veterans who do not qualify for military disability may qualify for VA disability, and vice versa. Some qualify for both. Military retirees who have disabilities should apply to the Defense Department and for VA disability compensation as well.

Military retirees with 20 or more years of service and a 50 percent or higher VA-rated disability no longer have their military retirement pay reduced by the amount of their VA disability compensation. This change is being phased in from 2005 through 2014 for those with disabilities rated at 50 percent to 90 percent. Congress has eliminated the offset entirely for those rated 100 percent disabled. (See “Concurrent Retirement and Disability Pay,” in the next section.)

Veterans classified as 100 percent disabled, as well as their spouses and any dependent children, may use military exchanges, commissaries and other base facilities. However, they are not eligible for military medical care. VA provides medical care for eligible veterans, spouses and dependents.

VA pension. VA also offers a pension for wartime veterans with limited income and permanent disabilities that result from nonservice-connected disabilities. The pension varies according to veterans’ income, number of dependents and ability to care for themselves.

Disabled American Veterans, a private nonprofit organization, offers assistance to former troops with suspected disabilities.

Contact: Disabled American Veterans,

Veterans service organizations, which are private nonprofits, offer assistance to military veterans with disabilities. Visit


Qualified military retirees may receive both full military retirement pay and full VA disability compensation. Retirees with 20 or more years of service and a 50 percent to 90 percent VA-rated nonservice-connected disability no longer will have their military retirement pay reduced by the amount of their VA disability compensation. Eligible individuals will have their retirement pay increased by approximately 10 percent each year until the phase-in is completed in 2014.

For those rated 100 percent disabled, the offset has been eliminated, with no phase-in period.

Those eligible include National Guard and reserve members with 20 or more years of service, including medical retirees. CRDP is taxable.


Qualified military retirees with any VA-rated disabilities of 10 percent or higher that are the result of combat or combat-like training are eligible for this monthly payment, which replaces their retirement pay offset and, in effect, gives them concurrent receipt of their full retirement and disability payments.

Unlike Concurrent Retirement and Disability Pay (see previous section), CRSC is open to all Chapter 61 retirees, even those medically retired by the military with fewer than 20 years of service. Those retirees still must meet the other qualifying criteria.

Also unlike CRDP, CRSC is not being phased in over 10 years. Upon determination of eligibility, qualified retirees immediately receive their regular retirement pay plus a sum based on their VA disability rating equal to the previous offset in retired pay as their CRSC payment.

Eligibility has been expanded to include disabilities due to armed conflict, hazardous duty, conditions simulating war and instrumentalities of war. CRSC is not taxable.

A comprehensive Defense Department information paper on Concurrent Retirement and Disability Payment and Combat-Related Special Compensation programs is online at


Every reservist earns points toward retirement. All points earned while on active duty, up to 365 per year (366 in a leap year), count toward retirement.

By law, members may receive credit for up to 60 inactive points for retirement years that ended before Sept. 23, 1996; up to 75 inactive points for retirement years ending on or after Sept. 23, 1996, and before Oct. 30, 2000; and up to 90 points for retirement years ending on or after Oct. 30, 2000, and before Oct. 27, 2007.

A provision of the 2008 Defense Authorization Act increased to 130 the number of inactive-duty points that reservists can apply to their retirement pay for the year of service that includes Oct. 30, 2007, and any subsequent year.

Points from these sources may be added to points earned from active duty and active duty for training in any given year to increase the total points applied toward retirement.

Leave-and-earnings statements, correspondence course information and other documents can prove service or work that counts for retirement points. Orders are not proof of points earned.

Each service notifies members annually of their total points. If your Reserve Personnel Center does not have your current address, you will not receive the statement.

Discrepancies can be resolved by providing documentation of your service record or personnel files. Individual service members have primary responsibility for their personnel records.

Accrual. Points can be accrued in the following ways:

♦ One point for each day served on active duty up to a maximum of 365 per year (366 in a leap year).

♦ Fifteen points for each year of membership in a reserve component.

♦ One point for each unit training assembly or drill. Reservists normally get four or five points for a reserve weekend, depending on when it starts (i.e., Friday night or Saturday morning). Two points are the maximum for any one calendar day.

♦ One point for each day in which a member is in a funeral honors duty status.

♦ One point for every three hours of nonresident instruction or correspondence courses documented as successfully completed.

Qualifying year. The day you enter reserve status is considered your anniversary date and retirement year. From that point, you must accrue a minimum of 50 retirement points in a retirement year to make that a “qualifying year” toward retirement.

As long as you do not have a break in service, this anniversary date will remain the same even if you go from active to inactive status and back. Once a break occurs, your anniversary date is the day you sign up again.

Once reservists reach 20 or more qualifying years, they have three options:

Remain in the Ready Reserve. If qualified and able to stay in an active drill status, a reservist can continue to drill for pay and points. Accumulating more points will raise total retirement pay, increase the possibility for promotion and boost time in service for the purpose of longevity pay raises.

Transfer to the Retired Reserve. By requesting transfer to the Retired Reserve, a member enters a status in which retirement points no longer can be accumulated. Time in the Retired Reserve counts toward longevity service for retired pay.

In the event of full mobilization, retired reservists can be recalled to active duty. Such a recall would allow reservists to accumulate more points for retirement. While in the Retired Reserve, members have the same rights and entitlements that they had as drilling reservists.

Request discharge from the reserve components. By doing this, retired reservists are no longer subject to any kind of recall or mobilization. From time of discharge until they start collecting benefits at age 60, however, they cannot increase their benefits. At age 60, they will have access to base/post exchanges and unlimited commissary visits.

Nonqualifying year. A nonqualifying year (one in which a reservist does not earn at least 50 points) counts toward total time in service but not retirement. Points earned in a nonqualifying year also count toward the final total. Points cannot be carried from year to year to claim a qualifying year.

Status. You do not have to be in an active, drilling or paid status with a Reserve unit to earn points. Reservists in many categories can earn points and gain qualifying years toward retirement. These include: Participating Individual Ready Reserve, Individual Mobilization Augmentees, Navy Volunteer Training Units and Standby Reserve-Active Status List.

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