Planning for military retirement is more than filing forms—it’s
about knowing your system, timing, and the choices that shape your financial
future. Here’s a guide using the Five Ws—Who, What,
When, Where,
and Why—to help service members navigate retirement
with clarity in 2025.
1. Who: Who
is eligible and under which retirement system?
Understanding who's covered—and under what retirement rules—is the
foundation of effective planning.
·
High-3
(Legacy System): Service members who entered before January 1, 2018 can remain
under this system, where retirement pay equals 2.5%
for each year of service multiplied by the average of the highest 36 months of base pay. militarymoneybrief.comWikipedia
·
Blended
Retirement System (BRS): All recruits on or after January 1, 2018 are automatically
enrolled in the BRS. This system combines a reduced defined benefit (2.0% per
year of service) with an employer-matched Thrift Savings Plan (TSP)
contribution. WikipediaMilitary Times
o With BRS, the
DoD matches service members’ contributions—you’re
encouraged to contribute at least 5% to capture the full matching benefit. Military
Times
Knowing your system helps determine how your retirement pay will
be calculated and what resources you’ll need to leverage.
2. What: What
key benefits and features define your retirement?
Your military retirement package is composed of multiple
elements—know what each entails.
·
TSP
Contributions and Limits
o In 2025, the
TSP contribution limit is $23,500,
with catch-up contributions up to $7,500,
and a special "super catch-up" amount up to $11,250
for ages 60–63. Kiplinger
·
Continuation
Pay (for BRS members)
o At 12 years
of service, eligible service members receive a one-time Continuation Pay bonus
upon extending their service—amounts vary by branch and are taxable, and can be
taken as a lump sum or installments. Military
Times
·
Lump Sum
Retirement Option (BRS only)
o BRS retirees
have the choice to take 25% or 50% of their reduced future retirement pay
(reflecting a 6.33% reduction in 2025) as a one-time lump sum, with the
remainder paid monthly, resuming full pay at Social Security age. Military
Times
·
Cost-of-Living
Adjustment (COLA)
o For 2025,
military retirees and Survivor Benefit Plan (SBP) annuitants receive a 2.5% COLA. DFASmilitarymoneybrief.com
·
VA Disability
& Other Benefits
o Retirees
eligible for VA disability may receive tax-free
compensation, which also receives the 2.5% COLA increase. militarymoneybrief.com
o Additional
support through TRICARE, VA healthcare, and survivor protections further
define your overall benefits landscape. militarymoneybrief.comkirbyingles.com
3. When: When
should you start planning, and when do decisions matter most?
Timing can have a dramatic impact on the outcomes of your retirement
planning.
·
Two Years
Before Retirement
o Start your
planning at least 24 months prior.
This helps you complete essential steps like attending Transition
Assistance Program (TAP) courses, documenting service-connected
injuries or conditions for VA disability claims, and making life insurance
decisions. GoVA
·
One Year
Before Retirement
o Engage
retirement coordinators, initiate paperwork for things like SBP, and align your ID cards and benefits. militarymoneybrief.com
·
Post-Retirement
Period
o Review VA
claims, finalize VA benefits, and continue leveraging resources like the Retired Soldier Handbook and Army Echoes to stay informed on changing
entitlements. kirbyingles.comSoldier for Life
4. Where:
Where should you go for reliable information?
Knowing your best informational sources ensures accuracy and
access to up-to-date benefits details.
·
MyArmyBenefits
(and other service-specific portals)
o Offers
retirement calculators, fact sheets on the BRS, TSP, SBP, VA compensation, and
state benefits. Requires CAC or DS LOGON credentials. Soldier for
Life
·
Defense
Finance and Accounting Service (DFAS)
o Publishes
official pay updates, COLA changes, and SBP annuity tools. DFAS
·
Retired
Soldier Handbook & Transition Assistance Offices
o The 2025 Retired Soldier Handbook bundles everything from ID
card guidance to survivor support and legal assistance. kirbyingles.com
o Retirement Services Offices (RSOs) stand ready
to guide you—information is accessible via the Soldier for Life site. Soldier for
Life
·
VA and
Veteran Organizations
o VA’s benefits
portals, as well as veteran service organizations, can help with disability
claims, healthcare, and survivor support. militarymoneybrief.comMarketWatch
5. Why: Why
must you plan carefully in 2025?
Civilian life, complex benefits, and changing systems make
thoughtful planning essential.
·
Complex
Systems & Choices
o From choosing
between High-3 and BRS to SBP elections, your decisions have long-term
financial consequences. GoVAMarketWatch
·
Financial
Leverage and Security
o Maximizing
TSP contributions, continuity of healthcare, and understanding tax implications
can yield compounded lifetime security and support for your family.
·
Changing
Legislation & Benefits Structure
o With evolving
COLA rules, retirement systems, and survivor benefits (including VA offsets
changing), staying informed ensures you don’t lose out on entitled benefits. PlanWell
Financial PlanningWikipedia
·
Smooth
Transition to Civilian Life
o Planning
supports smoother transitions, reducing stress, ensuring coverage, and setting
you up for financial and mental well-being. MarketWatch
Final Thoughts: Your 2025 Military Retirement Checklist
|
Step |
Action
Item |
|
1. Identify
Your System |
Determine if you’re under High-3 or BRS. |
|
2. Maximize
Benefits |
Contribute at least 5% to TSP and plan Continuation Pay if
eligible. |
|
3. Plan
Early |
Begin TAP and retirement paperwork at least 24 months ahead. |
|
4. Leverage
Resources |
Use MyArmyBenefits, DFAS, RSOs, and the Retired Soldier
Handbook. |
|
5. Review
Decisions |
Focus on SBP elections, VA claims, healthcare, and survivor
planning. |
By confidently answering Who,
What, When,
Where, and Why,
you’ll navigate the 2025 military retirement landscape with clarity, purpose,
and readiness.
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