Military officers who serve at least 20 years are eligible for a pension in the military. This amount is based on the salaries of Army officers who do not include special compensation such as combat or flight salaries.
Army majors are classified as O-4 paychecks. If he retires in 2018 after 20 years, he will receive 50% of his base salary of $7,869.30, or $3,934.65 per month. At another extreme, a 4-star general with an O-10 salary and 40-year service receives 100% of his base salary of $15,800.10 per month. This is the initial retirement amount. Retired Army officers are also subject to annual cost of living adjustments.
Basis for paying pensions
Accurately calculating how much money a retired military officer receives is a two-step process.
There are two ways to determine how to calculate retirement: The final salary is used if an officer enlists in or before September 8, 1980, the basis being the last base salary he receives while in active service. A high of 36 is the basis for officers starting on a later date than the 36-month average when they receive the most money.
Suppose an officer retires to the rank of lieutenant colonel after 24 years of active service and applies the Final Pay Base. The facility in 2015 for this officer was $8,762.40.
To calculate a monthly pension, multiply the number of years of work by 2.5 percent, and then multiply the answer by the base. In 24 years of service, this figure is 60%. If the rank of officer when he retired in 2015 was lieutenant colonel, you have 60 percent of the $9,280.20. The monthly pension is equal to $5,568.12.
When an Army officer has to retire because of a service-related disability, she is eligible for a disability pension even if she has not met the requirement to serve for 20 years. She gets 50 percent of her facility or the usual retirement amount, whichever is more.
Military officers starting on or after August 1, 1986 can choose the REDUX option. The officer is awarded $30,000 after 15 years if he agrees to serve at least 20. When he retires, the monthly retirement amount is calculated according to the High-36 method. However, until he turns 62, his salary will be reduced by 1% for each year he retires before accumulating a total of 30 years of service. REDUX is only available to active-duty personnel.
Reserve duty is a part-time occupation. Reservists are still eligible for a pension after 20 years, but at a reduced rate. Points are rewarded for each day of preparatory duty. The total number of points is then divided by 360 to calculate how much time the officer has accumulated. The reservist period is added to the time spent in the military and the total amount used to calculate the pension.