How to Calculate Your Army, USAR or ARNG Retirement Pay

So you have finally received your “Notification of Eligibility For Retired Pay at Age 60,” commonly referred to as the 20-year letter and you are ready to retire from the Army/National Guard.  Now what?  Well, we know that our years of service are worth something with respect to retirement pay and we will receive a “pension” from the military.  But, how much will we be getting?  How do we calculate our retirement pay?

Well, to be honest, it is too broad of a subject area to give a final, end all answer to that question in just one blog post.  Every Soldier is different and has different circumstances (i.e. breaks in service, dual branches of service, etc.) that make each case unique.  However, there are some basic rules that can get you started and on the right track.  Here is How to Calculate Your Army Reserve and ARNG Retirement Pay for most Soldiers:

Step 1: Calculate the number of years of service.  Every “good” year you have in the USAR or ARNG, you will acquire retirement points.  You will receive a MINIMUM of 50 points each year and a MAXIMUM of 130.  For each day of Active Duty you will receive 1 point/day.  However, in that situation you are capped at 75 points.  So even with one year (365 points worth) you can only get 75 points!  So take a look at your NGB-23 Retirement Points Statement and tally up your points.  Divide that number by 360 and you have your years of service.  For example, if I have 3,600 points then I have 10 years of qualified service (i.e. 3,600/360= 10)

Step 2: Use Your Pay Grade and Years of Service to Calculate Pay: Now, it is important to understand that there are two different calculations to use here, one if your entry date is PRIOR to 08SEP1980 and the other if you are POST 08SEPT1980.  For Soldiers prior to 08SEPT1980, then your pay will be calculated by “Final Basic Pay” where you will multiply your years of service by 2.5% up to a max of 75%.  Then, take that number and simply multiply it by your basic pay that you are receiving on the day your retire.  Pretty simple.  For Soldiers on or after 08SEPT1980, we use the “High-3” calculation where you multiply your years of satisfactory service by 2.5%, up to a maximum of 75%. Then, multiply that result by the average of your highest 36 months of basic pay. The highest 36 months for a member who transfers to the Retired Reserve at age 60 will normally be the 36 months before they turn 60. Members who request a discharge from the Retired Reserve before 60, however, can only use the basic pay for the 36 months prior to their discharge. Think carefully before requesting a discharge from the Retired Reserve!

Step 3: Adjust for COLA: Each year you should receive a boost in your pay based on the cost of living adjustment which is calculated using the Consumer Price Index or CPI.  You can google this estimate each year to guess how much your COLA adjustment will be.

Step 4: Get with your S1 or Other Personnel Staff: Like I stated before, this is a very difficult process to pinpoint just one answer.  When in doubt, ask questions.  You may be able to calculate your retirement pay, but get with your S1 shop and see if your estimates are accurate.  Talk with other retired Soldiers.  Pry and pry until you get answers… You may even get a nice breakdown of the calculations used to determine your retirement pay!

Step 5: Check Out the HRC Retirement Calculator:

FINAL THOUGHTS:  It is a good idea to try and attend as many schools as you can throughout the year to max out your retirement points for the year.  The more points, the quicker you can retire and the more money you will be making after your retire.  Things like AT, TDY, non-resident correspondence courses and Funeral Honors Details will add to the retirement points you can earn in a year!  If you have any great tips, feel free to leave a comment and let us know.

chuck holmes

Chuck Holmes
Former Army Major (resigned)

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3 thoughts on “How to Calculate Your Army, USAR or ARNG Retirement Pay”

  1. I think that’s a great idea, Greg. As large as the military is, they should definitely have something like that sent out to soldiers yearly. Calculating retirement pay can overwhelming and tedious and some won’t do it simply because it seems like a lot of work. This isn’t good, because in the event something is missing they could be selling themselves short and not getting their full retirement benefit.

    1. Maybe you know, or someone else here; who exactly could we propose this to? I would be more than willing to send out a proposal such as this, but I really do not have an idea who to send it to.

      I am just amazed they haven’t provided this yet, but it could be a soldier retention thought. Maybe they think if soldiers know what they would get if they retired, they may leave sooner.

      Any other thoughts on this?

  2. It sounds so simple, but when you start putting it all together, I suggest you double and triple check.

    It would be a good thing if the Army would break it down even further, much like the Social Security Administration does yearly for working civilians. When I receive my yearly SSA, they have it calculated as to what my estimated retirement pay would be.

    With today’s technology, I would think the Army could do the same for the soldiers who have volunteered to protect and defend our marvelous country.

    I am probably speaking to deaf ears even if top staff from the Army read this, but I had to say it anyway.

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