When you put time into serving your country, you get a few perks in exchange. One of those perks comes at retirement, when you’re entitled to a reward for your years of service in the form of retirement benefits. But what if you’re a member of the reserve military? Those who serve in military reserves are allowed to continue to work as a civilian, while putting in their military time one weekend a month. You’ll still be entitled to retirement benefits as a result of your service.
Air Force Reserve Benefits Qualification
You’ll need to put in 20 years of duty as an Air Force reservist to qualify for retirement benefits. If you’ve served time in other military branches, whether as a reservist or active duty, your reserve time will be combined with that to ensure you meet the 20-year minimum. If you want to take advantage of the Air Force’s retirement plan for reservists, though, your final six years in military service must have been spent in creditable reserve duty. It’s important to note, though, that 20 years is based on a points system that calculates actual time you spent in duty, along with other factors, not the number of years you were in the reserves.
In addition to minimum years of service, you’ll also have to achieve a certain age before you can retire. Even if you’ve satisfied the 20-year requirement, you’ll still need to be at least 60 to get monetary benefits or full medical. But if you’re called to active duty as a member of the Ready Reserve, you can reduce that age-60 requirement by three months for every 90 days you spend in active duty.
Estimating Your Retirement Benefits
If you’re a reservist, chances are you’ve worked for an employer, as well. Ideally, you’ll have money in a retirement plan for your primary employer, likely in the form of a 401(k) or IRA. This means your reservist retirement check will combine with your other distributions to make a living wage. Running a reserve retirement calculator can help give you a ballpark idea of what to expect. Active duty military members calculate retirement by multiplying the number of years of service by 2.5 percent. You’ll then multiply that number by your pay base, which is the average of your highest three years of pay.
The reserve retirement calculator is slightly different, though. You’ll need to know your points, which you earned through your participation. You’ll get four retirement points for a typical drill weekend, for instance, and even more points through training and correspondence courses, among other activities. To calculate your pension amount, you’ll add up all those points and divide by 360. This gives you the total years served in the military. You’ll then multiply that by 2.5 percent, then multiply that amount by your pay base, which is the average of your three highest-paid years of service.
Air Force Reserve Retirement Earnings
The amount of money you’ll see for your Air Force Reserve retirement depends on the date on which you first entered the military. If you entered before Sept. 8, 1980, your pay will be based on the last pay grade that applied to you during your military service. For those entering after that date, your retirement earnings will be based on your three highest-paid years of service.
Those entering the military after Sept. 8, 1980, also have the option of REDUX. With REDUX, you can take a $30,000 Career Status Bonus once you’ve put in 15 years. This will lower the amount you’ll receive at retirement. Experts advise against taking REDUX, so your retirement will likely be based on your highest three years of pay.
Requesting Your Benefits
It’s important to note that reservists will not see your Air Force Reserve retirement benefits automatically issued. Once you’ve reached 20 years of service, you should receive a letter from your service letting you know you’re there. However, it’s completely up to you to reach out and request your retirement benefit. If you aren’t proactive, you may miss out.
You’ll also need to keep up with your military benefits, since they’re subject to change from one year to the next. The good news is, the amount you receive on day one of retirement from the reserves isn’t necessarily your permanent take-home pay. Retirement cost-of-living adjustments are issued to all members of the military to make up for the fact that the price of everything will increase.
Medical Benefits for Reserves
Before you can start thinking about Air Force Reserve retirement benefits, though, you may want to know about other benefits you’ll get as a reservist. Military members have health care through TRICARE, and reservists are eligible for some of those benefits, as well. Your dependents will also be eligible, as long as they’re registered in the Defense Enrollment Eligibility Reporting System.
Reservists will find that their benefits are limited when compared to Guard and active duty military servicemen. But it does include health and vision benefits. It’s important to note, though, that if you’re called to active duty for 30 days or more, you and your enrolled family will be shifted to a separate medical plan. You can choose from TRICARE Standard, TRICARE Extra or TRICARE Prime. The version you’ll be on as a reservist is TRICARE Reserve Select, which does not provide dental or pharmacy benefits. You’ll be required to pay a monthly premium to participate in any military medical plan.
Air Force Reserve Housing Benefits
Obviously, as a reservist you generally won’t need housing. You’ll stay at home and live a civilian life during the time you aren’t on duty. One weekend a month, you’ll travel to your assigned area to complete your reserve duty. You’ll also spend two weeks a year on assigned duty as a reservist. During these times, your accommodations will be provided. This will be in the form of a basic housing allowance, similar to that provided to other guardsmen.
However, if you’re on active duty for 30 days or more, Air Force Reserve benefits will take care of your housing. This is the same housing allowance rate provided to those on active duty. Unlike new recruits who live on base, reservists and active duty servicemen get an allowance based on their number of dependents and pay grade. These rates are based on the national average cost for housing.
Air Force Reserve Education Benefits
Even if the reserve retirement calculator proves disappointing, the military’s education benefits may boost your retirement in ways you haven’t thought about yet. As with other military service, part of the Air Force Reserve benefits is that your time spent in service may actually help you get an education that can boost your earnings with your civilian employer. If you’re able to achieve a degree that helps you negotiate a job with a better retirement plan, in other words, you’ll actually make more in retirement than you would have had you never served in the reserves.
Your education benefits start as soon as you complete basic military training. You get four semester hours of physical education and from there, you’ll receive credits for technical school training. These credits count toward your associates of applied science degree with the Community College of the Air Force, which can transfer to a civilian college. Once you’ve completed basic and technical training, you can immediately apply for college and request funding under the GI Bill. As long as you continue to fulfill your service obligations, you’re eligible for these benefits.
- Air Force Reserve: Frequently Asked Questions
- Department of Defense: Reserve Retirement
- The Military Wallet: National Guard and Reserves Retirement Benefits Guide
- Military.com: Guard And Reserve Retirement
- Department of Defense: Retirement Cost of Living Adjustments (COLA)
- Military.com: TRICARE for Reserve & Guard
- Today's Military: MILITARY HOUSING
- Military.com: Reserve BAH
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a ghostwriter for a credit card processing service and has ghostwritten about finance for numerous marketing firms and entrepreneurs. Her work has appeared on The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30.