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Direct answer: Military retired pay is your High-3 (average of your highest 36 months of basic pay) times 2.5% per year of service, or 2% under the Blended Retirement System, rounded down to the dollar. At 20 years that's 50% (BRS 40%). Example: an E-7 at 20 years gets about $3,059 a month.
By the numbers: Each year of active duty service is worth 2.5 percent toward your service percent multiplier; a 20-year retiree's multiplier is 50 percent. Source: DFAS: Estimate Your Retirement Pay
“Your gross retired pay is rounded down to the nearest dollar.” — DFAS: Estimate Your Retirement Pay (updated Sept. 22, 2023)
Updated 2026-10-17
Retired pay base x multiplier, rounded down to the dollar (DFAS). The base is your High-3, the average of your highest 36 months of basic pay (10 U.S.C. 1407), if you entered after Sept. 7, 1980. The multiplier is 2.5% per year of service (1/12 per extra month), or 2% under BRS (10 U.S.C. 1409).
50% of your High-3 under the legacy system, 40% under BRS. Using DFAS's 2026 pay table and the last 36 months in grade as High-3 (our estimate): E-7 about $3,059 a month ($2,447 BRS); O-5 about $5,803 ($4,642 BRS).
BRS uses 2% per year instead of 2.5% (so 40% at 20 years, 60% at 30), but adds TSP contributions: 1% automatic from 60 days and matching up to another 4% from 2 years, both until 26 years of service (5 U.S.C. 8440e, 8432). Members who first joined on or after Jan. 1, 2018 are in BRS automatically.
At retirement you can take 25% or 50% of your retired pay up to Social Security full retirement age as a discounted lump sum. Until that age your monthly pay is then 75% or 50% of the full amount; after it, full pay resumes. You must elect at least 90 days before retiring (10 U.S.C. 1415).
3.6% is expected, effective Dec. 1, 2026 and first paid Dec. 31, 2026 (DFAS pay schedule): the BLS CPI-W rose from 317.265 (Q3 2025 average) to 328.746 (Q3 2026), 3.6% under 10 U.S.C. 1401a. REDUX retirees get 1 point less (2.6%). DoD hadn't posted it as of Oct. 17, 2026; the Dec. 2025 COLA was 2.8%.
Survivor Benefit Plan spouse coverage costs 6.5% of the base amount you choose, up to your full gross retired pay (10 U.S.C. 1452, members who joined on or after March 1, 1990). It pays your surviving spouse 55% of that base amount (10 U.S.C. 1451). The cost is not counted as taxable income (IRS Pub. 525).
Yes. Retirement pay based on age or length of service is taxable and reported as a pension on Form 1040 lines 5a and 5b (IRS Pub. 525). VA disability compensation is tax-free; disability retirement has its own rules. State taxes on military retirement vary.
As of Oct. 17, 2026 · DFAS 2026 pay tables · 10 U.S.C. chapter 71
Military retired pay = High-3 x 2.5% per year of service (2% under BRS), rounded down to the dollar. 20 years = 50% of your High-3 (BRS 40%); 30 years = 75% (BRS 60%). An E-7 retiring at 20 gets about $3,059 a month on today's pay table, before taxes and SBP. A 3.6% COLA is expected Dec. 1, 2026.
The math:
Sources: DFAS retired pay formula · 10 U.S.C. 1409 · 10 U.S.C. 1452 · BLS CPI-W
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| Retiring as | High-3 (est.) | High-3 plan / mo | BRS / mo |
|---|---|---|---|
| E-6, 20 years | $5,243.00 | $2,621 | $2,097 |
| E-7, 20 years | $6,118.50 | $3,059 | $2,447 |
| E-8, 20 years | $6,690.20 | $3,345 | $2,676 |
| E-9, 20 years | $7,652.50 | $3,826 | $3,061 |
| E-7, 24 years | $6,398.70 | $3,839 | $3,071 |
| E-8, 24 years | $7,204.00 | $4,322 | $3,457 |
| E-9, 30 years | $9,267.90 | $6,950 | $5,560 |
| W-3, 20 years | $7,988.90 | $3,994 | $3,195 |
| W-4, 24 years | $9,522.70 | $5,713 | $4,570 |
| O-4, 20 years | $10,473.80 | $5,236 | $4,189 |
| O-5, 20 years | $11,606.30 | $5,803 | $4,642 |
| O-5, 24 years | $12,274.10 | $7,364 | $5,891 |
| O-6, 30 years | $15,188.70 | $11,391 | $9,113 |
Our estimates: High-3 = the last 36 months at that grade on DFAS's 2026 basic pay table (real careers include promotions and future raises, so your High-3 will differ). Monthly gross, rounded down to the dollar. Sources: DFAS 2026 pay tables · DFAS retired pay formula · 10 U.S.C. 1409.
| Plan | Who | Base | Multiplier |
|---|---|---|---|
| Final Pay | Entered before Sept. 8, 1980 | Final basic pay | 2.5% x years |
| High-3 | Entered after Sept. 7, 1980 (through 2017, unless opted into BRS) | Highest 36 months of basic pay | 2.5% x years |
| REDUX / CSB | Joined after July 31, 1986 and took the Career Status Bonus | High-3 | 2.5% x years minus 1 point per year under 30; restored at 62 |
| BRS | Joined on or after Jan. 1, 2018, or opted in during 2018 with under 12 years | High-3 | 2% x years, plus TSP 1% + match up to 4% |
Months count as 1/12 of a year. Past 30 years, service counts only under conditions the Secretary of Defense has authorized (10 U.S.C. 1409(b)(3)). Reserve retirement converts points to years (points / 360; 7,200 points = 20 years). Sources: DFAS retired pay formula · 10 U.S.C. 1407 · 10 U.S.C. 1409 · DoW BRS page.
| You put in | Government adds | Total |
|---|---|---|
| 0% | 1.0% | 1.0% |
| 1% | 2.0% | 3.0% |
| 2% | 3.0% | 5.0% |
| 3% | 4.0% | 7.0% |
| 4% | 4.5% | 8.5% |
| 5% | 5.0% | 10.0% |
| 6% | 5.0% | 11.0% |
After 2 years of service. Contribution limits: 2026 401(k)/TSP limits.
Yes, federally: retirement pay based on age or length of service is taxable and goes on Form 1040 lines 5a and 5b as a pension. Disability retirement and VA compensation follow different rules. Source: IRS Pub. 525. State rules vary.
Twenty years is the usual minimum for regular retirement (for example, Navy and Marine Corps enlisted transfer to the Fleet (Marine Corps) Reserve after 20 or more years of active service, 10 U.S.C. 8330).
Facts and arithmetic only. VaultRubric isn't DFAS or your service's retirement office, and this isn't advice on whether to retire, take the lump sum or elect SBP. Estimates use today's pay table; your real High-3, future raises and COLAs will differ.
Retired pay base x multiplier, rounded down to the dollar (DFAS). The base is your High-3, the average of your highest 36 months of basic pay (10 U.S.C. 1407), if you entered after Sept. 7, 1980. The multiplier is 2.5% per year of service (1/12 per extra month), or 2% under BRS (10 U.S.C. 1409).
50% of your High-3 under the legacy system, 40% under BRS. Using DFAS's 2026 pay table and the last 36 months in grade as High-3 (our estimate): E-7 about $3,059 a month ($2,447 BRS); O-5 about $5,803 ($4,642 BRS).
BRS uses 2% per year instead of 2.5% (so 40% at 20 years, 60% at 30), but adds TSP contributions: 1% automatic from 60 days and matching up to another 4% from 2 years, both until 26 years of service (5 U.S.C. 8440e, 8432). Members who first joined on or after Jan. 1, 2018 are in BRS automatically.
At retirement you can take 25% or 50% of your retired pay up to Social Security full retirement age as a discounted lump sum. Until that age your monthly pay is then 75% or 50% of the full amount; after it, full pay resumes. You must elect at least 90 days before retiring (10 U.S.C. 1415).
3.6% is expected, effective Dec. 1, 2026 and first paid Dec. 31, 2026 (DFAS pay schedule): the BLS CPI-W rose from 317.265 (Q3 2025 average) to 328.746 (Q3 2026), 3.6% under 10 U.S.C. 1401a. REDUX retirees get 1 point less (2.6%). DoD hadn't posted it as of Oct. 17, 2026; the Dec. 2025 COLA was 2.8%.
Survivor Benefit Plan spouse coverage costs 6.5% of the base amount you choose, up to your full gross retired pay (10 U.S.C. 1452, members who joined on or after March 1, 1990). It pays your surviving spouse 55% of that base amount (10 U.S.C. 1451). The cost is not counted as taxable income (IRS Pub. 525).
Yes. Retirement pay based on age or length of service is taxable and reported as a pension on Form 1040 lines 5a and 5b (IRS Pub. 525). VA disability compensation is tax-free; disability retirement has its own rules. State taxes on military retirement vary.
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.
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