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Marine Corps Benefits – Retirement

Those servicemembers who serve at least 20 years in the Marine Corps are eligible for a variety of retirement benefits. Those benefits and requirements vary between the active and reserve components.

Pay Eligibility
Twenty years of Active duty is considered “qualifying service.” Those who have reached the 20 year active duty status, can receive retired pay that will continually increase each year. Service members who stay in for 40 years will be eligible for 100 percent of their basic pay at retirement.

Some people incur a legal obligation to the military before they come on active duty. These are mostly reservists, those who attended a military academy, ROTC cadets, midshipmen and others who enlisted under a delayed-entry program. They are eligible for the retirement system in effect at the time they first entered the armed services

Retirement pay for active duty begins immediately after separation. Eligible reservists must wait until their 60th birthday to start collecting pay, even though they may accrue the required 20 creditable years of service much earlier. Retirees who became members of the military before Sept. 8, 1980, collect monthly retirement checks based on rank and the number of years they served on active duty. Those who separate at the 20-year mark receive half their final basic pay. Retirees need to plan for their post-military life, considering options such as a good retirement community where they can enjoy their golden years comfortably.

When planning for retirement, retirees should explore details about independent living options in various communities to ensure a comfortable transition. The facilities often provide a balance of privacy and social activities, catering to retirees who value autonomy while still having access to support services.

Retirees who became members of the military before Sept. 8, 1980, collect monthly retirement checks based on rank and the number of years they served on active duty. Those who separate at the 20-year mark receive half their final basic pay.

Disability Benefits and Pension
The tax-free monthly income paid under VA disability to veterans with no children ranges from $115 for a 10 percent disability rating to $2,471 for a 100 percent rating. While VA disability payments are tax-free; most military retirement pay is not.

Veterans who do not qualify for military disability might qualify for VA disability and vice versa.
Servicemembers do not have to be retired from the military to receive disability benefits from the Department of Veterans Affairs. There are two types of compensation, VA disability and VA pension.

Pension
VA offers a pension for wartime veterans with limited income and permanent disabilities not connected to military service. he annual basic pension for a single veteran with no dependents is $10,929. A veteran with one dependent would receive $14,313. For each additional dependent child, the pension increases by $1,866.

These figures rise to $13,356 for housebound veterans ($16,740 with one dependent) and $18,234 for veterans who need aid and attendance ($21,615 with one dependent). The amount of pension to which a veteran is entitled is calculated by deducting any nonwelfare income the veteran and his family receives from these maximum limits. In most cases, the balance is then paid monthly.

Veterans’ Group Life Insurance extends renewable, five-year term insurance to members after they leave active duty or the reserves. It is available in $10,000 increments up to $400,000, although maximum coverage is limited to the maximum amount of SGLI held on active duty or in the reserves. Policyholders get a 2.5 percent discount for paying quarterly, a 3.75 percent discount for paying semiannually and a 5 percent discount for paying annually. No discounts apply for monthly payments.

Terminally ill veterans with VGLI may be eligible to receive an accelerated benefit. Under this plan, policyholders can receive up to half of their coverage amount tax-free. To qualify, VGLI policyholders must produce a doctor’s certification that they have nine months or less to live.

How is Retirement Pay Calculated?
Retired pay amounts are determined by multiplying your service factor — normally referred to as your “multiplier” — by your active duty base pay at the time of retirement. By law, the gross retired pay must be rounded down to a whole dollar amount.

Service Factor (Multiplier)

* For retirees with 30 or more years of service, the multiplier is 75 percent.
* For retirees/Fleet Reservists with less than 30 years, the service factor is 2.5 percent times years of service.

Years of service include:

  • Credit for each full month of service as one-twelfth (0.083) of a year
  • For officers:
  • All active service.
  • Periods of inactive reserve service prior to June 1, 1958
  • ROTC active duty time prior to October 13, 1964
  • Constructive service credit for Medical and Dental Corps
  • Drills performed while in the inactive reserve after May 31, 1958
  • For Fleet Reservists and all other enlisted retirements:
  • All active service
  • Active duty for training performed after August 9, 1956
  • Any constructive service earned for a minority or short-term enlistment completed prior to December 31,1977
  • Drills performed while in the Active Reserves

Base Pay at Time of Retirement
If you entered the service before September 8, 1980, base pay for retirement is the same as last active duty pay (allowances are not considered).

If you entered the Armed Forces on or after September 8, 1980, base pay is the average of the highest 36 months of active duty base pay received.

* Base pay for members having less than three years service is the average monthly active duty basic pay during period of service.
* For certain retirees who entered the Armed Forces on or after September 8, 1980, the initial Cost of Living increase is reduced.

Example:

An E-8 transfers to Fleet Reserve on July 31, 2000 with 22 years, 8 months service. The July 1, 2000 Active duty rate for an E-8 over 22 years is $3,161.10.

2.5% x 22.67 years = 56.68%

56.68% x $3,161.10 = $1,791.71

Rounded down to the nearest dollar = $1,791.00

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Source: www.dfas.mil

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