Military retirement pay in the United States is the best in the country. If you have served in the military you can draw retirement as soon as you leave service. This means that you can receive retirement pay as early as 37 years old.

National Defense Authorization Act

Changes in military retirement pay were implemented with the National Defense Authorization Act for fiscal year 2007. Since January 1, 2007 the percentage cap that limited retirement pay to a 75% cap was lifted. This means that if one serves for more than 30 years he or she is given credit for 80% of served time. For more than 40 years credit is given for 105% of served time.

Caps for New Regulations

Military retiree
Military retiree

Generally servicemen and women who have served are subject to the new regulations. Two categories of military retirees are excluded. Servicemen or women who are disabled are still subject to the 75% cap, unless they have served for more than 30 years. Servicemen who have received the distinction of Extreme Heroism receive an additional 10% added on to the 75% cap.

Retirement Pay Systems

There are three different retirement systems. If you entered the service prior to September 1980 you are eligible for "Final Pay" retirement. For entry between September 8, 1980 and August 1986 you are eligible for the High 36 retirement, and for entry after August 1986 you are eligible to choose either High 36 or the Career Status Bonus/REDUX (CSB). If you do not make a choice, the High 36 retirement plan will be used.