Should I take the BRS lump sum?

Almost never. The lump-sum option discounts your guaranteed lifetime pension at a high rate; for most service members the present value you give up far exceeds the cash received. Run it explicitly before deciding.

The Survivor Benefit Plan turns your pension into a survivor annuity. Treat it as life insurance: compare the SBP premium and payout against a private term policy of equivalent coverage for the years it's actually needed.

How does VA disability compensation affect my plan?

It's tax-free, inflation-indexed, and for most retirees doesn't offset the pension (CRDP/CRSC). Model it as a separate fixed, COLA-adjusted income source — it's some of the most valuable retirement income available.

I'm a reservist — when does my pension start?

Generally at age 60, based on accumulated retirement points, though qualifying active-duty time can move it earlier. Until then, the TSP and any civilian-career retirement plan carry the bridge.

By profession · Military service member

Retirement planning for active-duty and veteran service members

A profession-specific look at the retirement levers a military service member actually has — pension rules, tax-advantaged accounts, and the Social Security wrinkles unique to your job.

Last reviewed May 4, 2026

Editorial review pending — see editorial process

The retirement landscape for a military service member

Pension

Service members who entered after 2018 (or opted in) are on the Blended Retirement System: a defined-benefit pension of 2.0% x years of service x average of the highest 36 months of basic pay — about 40% at 20 years — plus government TSP contributions and matching. The Legacy High-3 system (pre-2018, no opt-in) pays a richer 2.5% multiplier (about 50% at 20 years) but provides no TSP match. Reserve and National Guard members earn a points-based pension generally payable at age 60, reduced by 90 days for each qualifying period of active duty in support of contingency operations.

Tax-advantaged accounts

The Thrift Savings Plan is a 401(k)-style account with the lowest expense ratios of any defined-contribution plan in the United States. Roth TSP is available, and contributions in a designated combat zone can go in tax-free and, in a Roth, come out entirely tax-free — one of the most powerful tax shelters in the code. The 2026 elective-deferral limit is $23,500 (under 50) or $31,000 with the age-50 catch-up. SECURE 2.0 adds a larger catch-up for ages 60-63 — confirm the exact 2026 figure on the IRS cost-of-living-adjustments page before relying on it. Under BRS, contribute at least 5% of basic pay to capture the full government match; leaving the match unclaimed is the single most expensive mistake a junior service member can make.

Social Security

All military service since 1957 is covered by Social Security through normal payroll taxes, so service members face the standard claim-age decision with no public-sector offset. VA disability compensation is entirely separate: it is federal-income-tax-free, inflation-indexed, and does not reduce the military pension for most retirees under concurrent-receipt rules (CRDP/CRSC). Because it is tax-free and COLA-protected, VA disability is some of the most valuable retirement income that exists — model it as its own fixed, inflation-adjusted source rather than folding it into the pension.

Common pitfalls

The big ones: taking the BRS lump-sum option, which trades a large slice of guaranteed lifetime pension for a deeply discounted cash payment and is rarely a good deal; under-contributing to TSP and forfeiting the match; sitting in the TSP G Fund for an entire career because it 'can't lose money' — the opportunity cost over 20+ years is enormous; and treating the Survivor Benefit Plan decision casually. SBP converts the pension into a survivor annuity and should be compared head-to-head with private term life, not auto-elected or auto-declined.

Worked example

A 35-year-old E-7 under BRS with 15 years of service, $95,000 saved in the TSP, plans to retire at 20 years (age 40). Pension at 20: roughly 2.0% x 20 x a ~$72,000 high-36, about $29,000/year, COLA-adjusted, payable immediately for life. Add a TSP that has been getting the full 5% match in the C/S/I funds and continues compounding untouched until 60. Many retirees then start a second career, so the pension and (if applicable) tax-free VA disability often cover baseline spending from 40 onward while the TSP is left to grow. The planning question becomes tax-bracket management in the second career and when to convert TSP to Roth, not whether the income exists.

Run the calculator with a typical military service member starting point

Pre-filled: age 35, savings $95,000. Adjust to your actual numbers from there.

Run my numbers

Frequently asked

Should I take the BRS lump sum?
Almost never. The lump-sum option discounts your guaranteed lifetime pension at a high rate; for most service members the present value you give up far exceeds the cash received. Run it explicitly before deciding.
What about the SBP?
The Survivor Benefit Plan turns your pension into a survivor annuity. Treat it as life insurance: compare the SBP premium and payout against a private term policy of equivalent coverage for the years it's actually needed.
How does VA disability compensation affect my plan?
It's tax-free, inflation-indexed, and for most retirees doesn't offset the pension (CRDP/CRSC). Model it as a separate fixed, COLA-adjusted income source — it's some of the most valuable retirement income available.
I'm a reservist — when does my pension start?
Generally at age 60, based on accumulated retirement points, though qualifying active-duty time can move it earlier. Until then, the TSP and any civilian-career retirement plan carry the bridge.

Primary sources

Every profession-specific rule above traces to one of these primary sources. We re-verify each link annually; current as of the last-reviewed date below.