How Active-Duty Service Members Can Use the High-3 and Final Pay Military Retirement Calculators
If you’re an active-duty service member who joined before 1986, then you may be considering retirement with a military pension. But, do you know how much that pension will be?
You can get a solid estimate in less than five minutes using free retirement pension calculators for both the High-36 and Final Pay legacy retirement systems offered by the Department of Defense. Here’s how to use them – and what you can do to adjust the outcomes to fund your future retirement lifestyle.
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How to use the High-3 military retirement calculator
If you joined between Sept. 8, 1980, and July 31, 1986, you can use the High-3 Calculator to figure out your estimated base pay. This retirement plan offers a pension after 20 years of service that equals 2.5% of your average basic pay for your three highest paid years, or 36 months, for each year you serve. That’s why the plan is sometimes called the “High-36.”
For example, retiring with 20 years of service means that your retirement pension will be 50% of that highest 36-month pay average. Waiting to leave after 40 years will make your pension 100% of your monthly pay average.
You may also receive additional payments from your Thrift Savings Plan, or TSP, if you have chosen to contribute.
Here’s how to use the High-3 calculator to see your total projected retirement payments.
The High-3 calculator shows your estimated retirement benefits in three different tabs.
- The first “Overview” tab shows how much you can expect to receive every year through your basic pay, your High-3 pension and any TSP withdrawals combined.
- The “TSP Summary” tab will show the total future amount of your TSP account – both as it grows through investments and shrinks as you withdraw.
- The last “All Payments” tab reviews every year of your projected service and retirement payments as a table instead of a graph. This includes your pay grades, any TSP contributions and your retirement payments – both your pension and any TSP payments.
You can change the results of this calculator by adjusting your retirement year, possible pay grades and additional contributions to your TSP account.
For example, you may have originally put in your current pay grade. However, pretend that you’ll get a promotion soon – with a higher basic pay – and stay in for another three years at that pay grade. This switch can increase your estimated retirement pay.
How to use the Final Pay military retirement calculator
Service members who entered the armed forces before Sept. 8, 1980, and are still serving can use the Final Pay Calculator to estimate their future military pension amount.
Of all the retirement plans, the Final Pay system uses the simplest formula. You’ll receive 2.5% of your final monthly basic pay for every year of service. For example, if you retire after 40 years of active service, then you can expect to receive 100% of your monthly base pay as your retirement pension.
For the Final Pay calculator, you’ll enter all the same information that the other service members did for the High-36 calculator.
You can also reset the calculator’s results by adjusting the factors. For example, delaying your retirement year may result in a higher base pay due to automatic cost-of-living adjustments, even if you don’t get a promotion. This would increase your retirement pay.
Both the High-3 and the Final Pay retirement calculators are for service members who joined before 1986 or 1980, respectively. If you joined after 2018, use the Blended Retirement System calculators for active duty or those in the National Guard or reserves.
Did you know that Military OneSource offers free financial counseling for all active-duty service members and their immediate families over the phone, by chat or secure video conference? They can review your High-3 or Final Pay calculator estimates and offer suggestions on making the most of your future retirement pensions. You can also go to your on-base finance office for free in-person help figuring out your retirement plans and payments.
Remember, the sooner you start planning for your transition to retirement, the more money you’ll have to spend when you get there.