How to Calculate Your Retirement Pay

Ahhh, military retirement. No work, no early morning PT, no cares and you still get a monthly paycheck!

Yeah, you do. But the early mornings are likely to keep coming for many years.

The military currently offers one of the most lucrative retirement programs in the country. Service members who stay at least 20 years can receive up to 50 percent of their active duty pay during retirement. But, unfortunately, the numbers are not that simple and that amount can get eaten away pretty quickly.

The amount paid to each retiree differs greatly depending on their personal circumstance: years of service, retirement grade and whether or not the service member received the bonus REDUX pay at their 15 year mark.

The DOD's website,, has a great calculator to help compute retirement pay based on those numbers. Find it at

Once you put in your specific details, that website will spit out an amount that is pretty accurate. But, don't break your alarm clock yet. That is not the amount you will receive each month.

Retirement pay is taxable. So that monthly amount on your screen is before taxes are withdrawn. Start subtracting.

Also, the military's healthcare program is available to retirees and their families, but it is not free. You will pay an annual premium and you can opt for that amount to be withdrawn from your retirement check. Subtract again.

The same is true for the military dental program, which retirees can also participate in. Subtract again.

If you currently pay child support, alimony or any other court-ordered, monthly payments, the military's financial department will transfer the paperwork to allow those monies to be directly withdrawn from your monthly retirement  check once your active duty paycheck stops coming. Subtract again.

Now, each of these withdrawals are, in most cases, necessary expenses. I was pretty excited to have all of our annual healthcare premiums withdrawn from my husband's retirement. It saved me from tracking yet another paper trail to another company.

However, it was a shock to see the final amount of his first retiree check. Not exactly the huge monthly windfall I think he envisioned during his 24 years slogging it out in uniform. And it certainly isn't enough to support all of our family's expenses each month like he hoped.

So, the alarm clock will ring again. There will be work and early mornings. But hopefully, no more PT!

For Military Spouses
Apply for the Salute to Spouses scholarship today and begin your education! You’ll be on the way to your dream career.