Air Force Reserve Retirement Benefits
The U.S. military reserve has excellent retirement benefits, which are the same across all branches of the military. If you work exclusively for the Air Force reserve, you can expect to receive retirement payments between 50 and 75 percent of your working salary. This amount varies depending on your years of service, so you'll need to have an idea of how long you should continue working to receive the amount that's best for you in retirement.
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Eligibility
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You must have worked at least 20 years of service to receive retirement benefits, and you cannot collect your benefits until you reach age 60. Prior to your 60 birthday, you'll receive information in the mail about your retirement benefits. Although a reservist cannot collect retirement benefits before age 60, you can technically "retire" by joining the Retired Reserve after 20 years of service.
Types
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There are only two types of retirement benefits for those who have worked exclusively in the Air Force Reserve---Final Pay and High-3. You don't get to choose between the benefits. Instead, your date of entry into service determines which one you're qualified for. For Final Pay, you must have entered the service before Sept. 8, 1980. For High-3, you must have entered the service on or after Sept. 8, 1980.
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Calculations
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There are three requirements for calculating retirement pay: your salary, years of service, and your retirement multiplier. For both methods, you'll find your retirement multiplier by multiplying years of service by 2.5 and writing it as a percentage. Then, multiply your retirement multiplier percentage by your salary to find your retirement salary. For Final Pay, use your salary at the end of service for the calculation. For High-3, use your average pay through your highest three months of pay for the calculation.
Cost of Living Adjustments
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Your retired pay will factor in cost of living adjustments (COLAS), meaning that your benefit will probably be higher due to an increase in price of goods and services. Therefore, if you're close to your 60th birthday and you've made calculations based on your past salary, your benefit may actually be higher than you expect.
Exceptions
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Retirement pay doesn't automatically start at 60, so you'll need to apply for benefits close to your 60th birthday. If you apply later, you'll receive retro-pay to make up for the years you went without pay. However, if you apply at age 66 or later, you'll be penalized one day's pay for each day until you apply.
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References
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