How to Calculate Federal USCG Retirement

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The size of your United States Coast Guard (U.S.C.G.) pension depends on when you joined, how long you spent in the Coast Guard and what rank you were when you retired. Calculating your retirement can look daunting, but if you approach armed with the correct information, you should have minimal difficulty. All these plans are annually adjusted to fit with any rise or fall of the cost of living.

Final Pay

  • Retire under the "Final Pay" program if you joined prior to September 8, 1980. This program calculates your retirement pay based on how much you made in your final month of service.

  • Look up your total years of service and multiply that number by 2.5. If you joined in 1975 and want to retire in 2010, then you should multiply 35 (number of total years in the Coast Guard) by 2.5, which is 87.5.

  • Multiply the number from step 3 by your final month's pay. In our example, a high-ranking officer making $10,000 a month will therefore make $8,750 a month ($10,000 x 87.5).

High 36

  • Retire under the "High 36" program if you joined between September 8, 1980 and August 1, 1986.

  • Calculate the average of your final 36 months of service. If you were a Lieutenant Commander making $7,000 for two years, then received a promotion to Commander and a pay bump to $8,000 a month in your final year, then the average of your 36 months is roughly $7,333.

  • Multiply your years of service by 2.5. In the example above, if a Commander joined in 1985 and wants to retire in 2010, then multiply 2.5 by 25, which yields 62.5.

  • Multiply the 36-month average by .625. In our example, $7,333 x .625=$4,583.13. Therefore, $4,583.13 is the Commander's retirement pay.

Career Status Bonus (C.S.B.)

  • Retire under the C.S.B. OR the High 36 if you joined after August 1, 1986.

  • Calculate the average of your highest 36 months of service if it is greater than the average of your final 36 months of service. For instance, if you joined in 1990, were promoted to Captain in 2005 (roughly $7,500 a month) but demoted to Commander in 2008 and decided to retire in 2010, calculate your pension payments based on the 2005-2008 period.

  • Multiply your years of service by 2.5. The above example served 20 years, so 20 x 2.5=50.

  • Multiply the above figure by the monthly average calculated prior to it. Therefore, .5 x 7,500=$3,750.

  • Multiply any years past 20 by 3.5%. In the example above, if you choose to extend your service to 2020, then you can multiply the ten years between 2010 and 2010 by 3.5%. Therefore, 3.5 x 10=35, plus the previous 20 years' 50% equals 85 percent, so $7,500 x .85=$6,375.

Tips & Warnings

  • Retire under the most financially advantageous program.
  • Stay in the Coast Guard for more than 20 years if you joined after 1986 to gain a 3.5% increase for every year.
  • Be careful not to calculate incorrectly, and therefore financially plan incorrectly.

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References

  • Photo Credit coast guard on patrol image by Elmo Palmer from Fotolia.com
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