How to Calculate Navy Retirement Pay

Members of the Navy and the other military branches can retire after at least 20 years of service. Retirement benefits can provide an ongoing income for life, but the initial payments amount to less than the sailor's monthly salary at the time of retirement. Some retirees may need to supplement their retirement pay with additional income. Sailors can calculate Navy retirement pay with a military retirement calculator. This is an important step in preparing a transition back to civilian life.


    • 1

      Determine the Navy sailor's retirement options. Navy retirement pay includes three retirement systems. (See References 1) If the sailor had an enlistment date before Sept. 8, 1980, he must choose the Final Pay system. Sailors enlisting after Sept. 7, 1980 must choose the High-3 system if they enlisted before Aug. 1, 1986. Finally, sailors enlisting on or after Aug. 2, 1986 may choose either the Career Status Bonus/Redux system or the High-3 system.

    • 2

      Select which Navy retirement calculator applies to the sailor's situation. (See References 2) Sailors who choose either the Career Status Bonus/Redux or High-3 system can use the Retirement Choice calculator to determine the best option. The Career Status Bonus/Redux system provides a $30,000 bonus but has a lower retirement pay rate. (See References 1)

    • 3

      Fill out the information for the chosen calculator. The Career Factors in each calculator depend on the sailor's personal situation. Sailors must make educated guesses because plans may change, and future promotions are not certain. The Department of Defense has included default factors for the Economic Factors section. (See References 3) Sailors choosing the bonus must also decide how to allocate the bonus among personal expenses, contributions to a Thrift Savings Plan and taxable investments.

    • 4

      Calculate estimated retirement pay by clicking the "Calculate" button. The first graph displays expected monthly retirement pay before deducting taxes. Sailors can compare this to their expected cost of living to determine the need for a job or other income after retirement. The second graph shows the cumulative expected retirement pay for each year after retirement.

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