If you are a U.S. Reserve or National Guard member, you must meet the following minimum requirements to be eligible for retired pay at age 60:
- be at least 60 years of age; and
- have performed at least 20 years of qualifying service computed under Section 12732, Title 10, United States Code; and
- have performed the last six years of qualifying service while a member of the Active Reserve; and
- not be entitled, under any other provision of law, to retired pay from an armed force or retainer pay as a member of the Fleet Reserve or the Fleet Marine Corps Reserve; and
- must apply for retired pay by submitting an application to the branch of service you were assigned to at time of your discharge or transfer to the Retired Reserve.
As a Reserve/National Guard soldier, you must have 20 “qualifying” years of service to be eligible for retired pay at age 60. A “qualifying year” is one in which you earn a minimum of 50 retirement points. For a full explanation of how retirement years are established see AR 140-185, Unit Technician, Regional Support Team or Army Reserve Personnel Command or State Retirement Point Accounting Management NCO.
In very general terms, a soldier establishes a retirement year ending (RYE) date by entering the Active Reserve. The date you enter the Active Reserve is your retirement year beginning (RYB) date. As long as you have no break in service, your RYE will be one year later. For example, a soldier who joins the Active Reserve on 2 July 1986 would have a RYB of 2 July 1986 and a RYE of 1 July 1987.
By law, members may receive credit for up to 60 inactive points for retirement years that ended before 23 Sep 1996, up to 75 inactive points for retirement years ending on or after 23 Sep 1996 and before 30 October 2000, and up to 90 points in the retirement year that includes 30 October 2000 and in any subsequent year of service. However, for retired pay calculation purposes, soldiers can’t use more than 60 inactive points per year (for Reserve years ending before 23 September 1996) or 75 inactive points per year (for reserve years ending on or after 23 September 1996 through 29 October 2000) or 90 inactive duty points per year (from 30 October 2000 forward).
Points from these sources may be added to points earned from active duty and active duty for training for a maximum total of 365 (or 366 in a leap year) per retirement year. Points are credited on the following basis:
- One point for each day of active service (active duty or active duty for training).
- 5 points for each year of membership in a Reserve Component.
- One point for each unit training assembly. (max 2 per calendar day, of 4-hours duration.)
- One point for each day in which a member is in a funeral honors duty status. (minimum of 2 hours.)
- Satisfactory completion of accredited correspondence courses at one point for each three credit hours earned.
COMPUTATION OF RETIRED PAY
To determine how much retired pay you may be eligible to receive, the first step is to calculate the number of equivalent years of service. The formula for computing equivalent years of service for Reserve retired pay at age 60 is fairly simple:
The formula computes the number of equivalent years of service the soldier has completed (comparable to full time service). For example, 3,600 points equals 10 years.
Guard and Reserve members who separate or are discharged before age 60 will be credited for basic pay purposes only with the years up until their discharge. Members who transfer to the Retired Reserve until age 60 will receive credit (for basic pay purposes only) for the years spent in the Retired Reserve.
Depending on the date you initially entered military service, also called your DIEMS date, your monthly Reserve retired pay will be calculated under the “Final Basic Pay” or “High-3” formula as follows:
- DIEMS date before 8 September 1980 – “Final basic pay.” Multiply your years of satisfactory (equivalent) service by 2.5%, up to a maximum of 75%. Multiply the result by the basic pay in effect on the date your retired pay starts.
- DIEMS date on or after 8 September 1980 – “High-3.” Multiply your years of satisfactory (equivalent) service by 2.5%, up to a maximum of 75%. Multiply the result by the average of your highest 36 months of basic pay. The highest 36 months for a member who transfers to the Retired Reserve until age 60 will normally be the 36 months before they turn 60. Members who request a discharge from the Retired Reserve before 60, however, can only use the basic pay for the 36 months prior to their discharge. Think carefully before requesting a discharge from the Retired Reserve!
For years the services had difficulty accurately establishing when a member of a reserve component had completed 20 qualifying years of service. Many soldiers stopped participating when they believed they had completed 20 qualifying years only to discover, much too late (at age 60), that they did not meet the requirements for retired pay.
In 1966, PL 89-652 imposed a requirement on the Service Secretaries to notify members of the reserve components when they had completed sufficient years for retired pay purposes. A letter with the subject “Notification of Eligibility for Retired Pay at Age 60,” commonly referred to as the 20-year letter (or 20YL), does this. You should receive this letter within one year of completing 20 qualifying years of service for retired pay purposes.
RETIRED PAY PROCESS
Once you receive your 20-year letter, eligibility for retired pay based on non-regular service may not be denied or revoked on the basis of any error, miscalculation, misinformation, or administrative determination of years of service performed, unless it resulted directly from fraud or misrepresentation. Administrative errors, such as the awarding of too many points, can be corrected; however, eligibility for retired pay cannot be withdrawn. The 20-year letter is a valuable document and should be stored in a safe place with other documents pertaining to your estate.
You should receive a retirement packet in the mail on your 58th birthday. You have 90 days to return it. NOTE: If you have not kept your address current, you won’t receive the packet. Once you return the packet, they will certify you for retired pay and notify DFAS to establish your retired pay account.
Retired pay normally begins on the retiree’s 60th birthday. Even if application is made after age 60, pay is retroactive. There is, however, a six-year statute of limitations. If the retired pay application is filed more than six years after age 60, one day’s retired pay is deducted for each day’s delay.
Your retired pay will be increased annually by a cost-of-living allowance (COLA) based on the change in the Consumer Price Index (CPI) from the third quarter of one calendar year to the third quarter of the next. COLAs are normally effective 1 December and payable the first working day in January.