Social Security Benefits & Military Retirement Pay

by Wilhelm Schnotz

    If you serve your country long enough to qualify for a military pension, you can count on the U.S. government to provide you with a portion of your active-duty salary for the rest of your life. Because you paid Social Security taxes on your military earnings, you’re also entitled to a Social Security retirement benefit once you reach retirement age. In most cases, you’ll be able to draw both benefits simultaneously without any reduction.

    You may begin drawing your Social Security retirement pension as soon as you turn 62, although you won’t receive your full amount until you reach retirement age, which ranges from 65 to 67 depending upon the year in which you were born. The Social Security Administration adjusts your lifetime earnings for inflation, then determines your average monthly wages during the 35 years with the highest earnings. Military personnel who served since 1956 receive additional earnings for their work. In most cases, your Social Security benefit isn’t reduced because of your military pension.

    Military members who joined before Sept. 8, 1980, are eligible to receive a pension based on a final basic pay formula, which pays a benefit based on your monthly earnings as outlined by your pay and time in service. You qualify after 20 years in the service, and receive 50 percent of your final monthly earnings as a retirement benefit, as of publication. For each additional year of service, you receive an additional 2.5 percent of your base pay. After a 40-year career, you would retire with full benefits.

    All service members who joined after Sept. 8, 1980, may retire under the High-3 plan after 20 years of service. The Defense Department averages your base pay over the final three years of your career to serve as your retirement benefit. You’ll receive 50 percent of this figure if you retire after 20 years, and an additional 2.5 percent for each year for each additional year you served. After 40 years of service, you receive 100 percent of the average of your final three years’ pay.

    If you joined the military after Aug, 1, 1986, you may opt to retire under the Career Status Bonus/Redux plan rather than the High-3 plan. In this plan, when you’re halfway through your 14th year of service, you can commit to staying in uniform for another six years and receive a $30,000 bonus. When you reach retirement after 20 years of service, your base retirement is based on the average of your salary your final three years of service. For each year of service, you receive 2.5 percent of this figure, less 1 percent for every year less than 30 you served. For example, if you retire after 22 years of service, you receive 47 percent of your base pay, or 22 x 2.5 – 8.

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    About the Author

    Wilhelm Schnotz has worked as a freelance writer since 1998, covering arts and entertainment, culture and financial stories for a variety of consumer publications. His work has appeared in dozens of print titles, including "TV Guide" and "The Dallas Observer." Schnotz holds a Bachelor of Arts in journalism from Colorado State University.

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