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Retirement Pay

The first step in calculating what your retirement pay will be is to add up all of the retirement points you’ve earned over the years. Next you divide the points by 360 days. That gives you the total years of service. Then you multiply the total years of service by 2.5 percent (.025) and you get what is called the “benefit multiplier.” Finally, you take your monthly basic pay at retirement and multiply it by your benefit multiplier.

Step 1 - Add the Guard member's total number of retirement points. We will use the figure 2800 for our example.

Step 2 - Divide the number of points(2800)by 360 days and the result is 7.78 years of service.

Step 3 - Multiply the years(7.78) by 2.5 percent(0.025) to get the figure of 0.195. (This figure is also called the "benefit multiplier.")

Step 4 - Multiply this figure(0.195)by the "high-three" average,or the average of highest 36-months of basic pay in one's career, which we shall say is $2,800 per month.

In this example the sergeant will begin drawing a $546 retirement check at age 60 that will continue for life

A simple version :

If a Guard member joined on or after September 8, 1980, then the “high-three” (three highest earning years) average of basic pay is the figure used—instead of your monthly basic pay at retirement. The resulting number is your monthly retirement pay for age 60.

This is a simplified version of how it works. Armed with this basic knowledge, you can make better sense of the following formulas for computing approximate monthly retirement pay.

Reserve Retired Pay Formula for members who joined on or after 08 September 1980:

The number of retirement points, divided by 360 days equals total years of service times 0.025 equals ____ (also called the “benefit multiplier”) times monthly basic pay equals the monthly retirement pay for age 60.

Reserve Retired Pay Formula for members who joined on or after 08 September 1980:

The number of retirement points, divided by 360 days equals total years of service times 0.025 equals _____ (also called the “benefit multiplier”) times average of the “high-three,” or the high 36 months of the monthly active duty basic pay equals the monthly retirement pay for age 60.

**For more information on retirement pay click on the link on the right of this this page, or copy and paste the address on your browser:

http://militarypay.defense.gov/Pay/Retirement.aspx

**For retirement pay calculator click on the link on the right of this this page, or copy and paste the address on your browser:

http://myarmybenefits.us.army.mil/Home/Benefit_Calculators/Retirement.html