How Guard and Reserve retired pay is figured

The formula

Monthly retired pay is your retired pay base times 2.5% of your years of service, and for Guard and Reserve retirement the years come from points.

Section 12739(a) of title 10 says the monthly retired pay for non-regular service is the product of the retired pay base and "2½ percent of the years of service credited to that person under section 12733." In one line:

Retired pay = High-3 × 2.5% × (points ÷ 360), rounded down to the dollar

The retired pay base is the High-3 if you first entered service on or after September 8, 1980 (10 U.S.C. 1407). If you entered earlier, it is the monthly basic pay of the highest grade you held satisfactorily, at the rates in effect when retired pay is granted (10 U.S.C. 1406; DoD FMR Vol 7B, Ch 3, ¶2.5.1.1). The rest of this guide covers the High-3 case.

Step 1: points become years

For retired pay, your years of service are your creditable points divided by 360.

Section 12733 computes years of service "by dividing 360 into the sum" of your creditable days and points. DoD's pay regulation says to carry the result to three decimal places and round to two, and gives its own example: 4,735 points ÷ 360 = 13.152, or 13.15 years (DoD FMR Vol 7B, Ch 3, ¶2.5.2).

What goes into the sum (10 U.S.C. 12733):

• Every day of active service, at full value.
• Every day of full-time Title 32 service performing annual training or attending a service school, at full value.
• Funeral honors points, at full value.
• Drill (inactive duty) points, the 15 membership points and a few other non-active points, but only up to a yearly cap: 130 a year for every year of service that includes October 30, 2007 or comes after it (60, 75 or 90 in earlier years). The points guide has the full table.

Points from a year that didn't count toward your 20 good years still count here: section 12733 adds up your creditable days and points without limiting the sum to qualifying years. The 50-point test only decides whether a year counts toward the 20 years you need to be eligible (10 U.S.C. 12731(a)(2), 12732).

Step 2: years become a percentage

Multiply the years by 2.5%, or by 2.0% if you're under the Blended Retirement System.

The 2.5% comes from 10 U.S.C. 12739(a)(2). Under the Blended Retirement System, which covers anyone who first joined on or after January 1, 2018 and anyone who opted in, the rate is 2% (12739(f)(1)). The total can't exceed 75% of the retired pay base, apart from a narrow exception for some service beyond 30 years (12739(c)).

Step 3: the High-3

The High-3 is the total of your 36 highest months of basic pay, divided by 36, priced as if you had been on active duty in every one of those months.

For non-regular retirement, the law counts the monthly basic pay you were entitled to in your high-36 months, "or to which the member or former member would have been entitled if the member or former member had served on active duty during the entire period" of those months (10 U.S.C. 1407(d)(1)). So a month with only a drill weekend counts at a full month of active-duty basic pay for your grade and years of service.

Which 36 months? The statute says the 36 highest months before you became entitled to retired pay (1407(d)(4)). DoD's pay regulation says this "will generally be the 36 months immediately preceding receipt of retired pay even though the member may not have been in an active status during such time" (DoD FMR Vol 7B, Ch 3, ¶2.5.1.2), priced at the rates you would have been paid on active duty just before retired pay begins (Ch 1, ¶2.2.2). So if you wait in the Retired Reserve for pay at 60, the pay raises during the wait generally count.

The discharge trap. If you take a discharge after earning your 20 good years instead of transferring to the Retired Reserve, the rates are the ones in effect when you were discharged, and your High-3 stops growing (DoD FMR Vol 7B, Ch 1, ¶2.2.2; Ch 3, ¶2.5.1.3).

Step 4: round down to the dollar

The monthly amount is rounded down to the next lower whole dollar.

"Amounts computed under this section, if not a multiple of $1, shall be rounded down to the next lower multiple of $1" (10 U.S.C. 12739(d)). Each later cost-of-living increase is rounded down the same way (DoD FMR Vol 7B, Ch 3, ¶2.9.1).

Worked example

Where the High-3 comes from

The 36 months before October 2026, priced at the official basic pay tables for an E-6 with this pay date. A longevity step that lands mid-month is prorated on a 30-day month.

This High-3 uses the pay tables through September 2026, as if pay started now. The real figure uses the 36 months before pay actually begins (Step 3). If this member's pay starts at the reduced age in Feb 2044 and basic pay rises 3.0% a year after 2026 (an assumption, not a forecast), the High-3 would be about $8,476.71 and the first check about $1,157 a month. See the reduced retirement age guide for how that date is worked out.

What one point is worth

Each point adds 1/360 of a year at 2.5% of the High-3. In this example that's $5,001.98 × 2.5% ÷ 360, or about $0.35 a month, so 100 points that never posted would be worth about $35 a month for life. That's why the points guide is worth an evening with your orders.

When pay starts

Pay starts on application once you have 20 good years and reach the eligibility age: 60, or earlier with reduced-age credit.

You're entitled "upon application" to retired pay under section 12731 once you reach the eligibility age and have at least 20 years of service computed under section 12732 (10 U.S.C. 12731(a)). The age is 60, reduced by 3 months for each 90 days of qualifying active duty after January 28, 2008, down to 50 (12731(f)). DoD's rules let pay start on the date you meet the age and service requirements, "or on the first day of any later month that the retiree may elect" (DoD FMR Vol 7B, Ch 1, ¶9.1.4).

What to check on your own record

• The total points for retirement on your points statement, and whether any year's drill and membership points run over that year's cap.
• Your pay date and grade history. They set the pay-table cell for each of your High-3 months.
• Whether you're under the legacy system or the Blended Retirement System.
• If you're leaving drilling status: whether you're transferring to the Retired Reserve or being discharged (the discharge trap above).

If something on your statement doesn't match your own records, take the statement and your orders to your RSO or MPS. The personnel center's figures are the official ones.

General information, not advice. This guide explains the published rules and shows the arithmetic with a worked example. It isn't legal, financial or tax advice, and it can't tell you what your own record says. Your personnel center, your unit personnel section and DFAS make the official determinations.