Military Retirement Pay: Are You Getting What You Deserve?

Navigating the Shifting Sands of Military Retirement and Disability Pay

Are you a veteran trying to understand the recent changes to military retirement and disability pay? The system can feel like a maze, especially when trying to maximize your benefits. Many veterans struggle to understand how these changes affect their financial future. Are you one of them, unsure if you’re getting everything you deserve?

For years, the military retirement system remained largely unchanged. Then came the Blended Retirement System (BRS), and more recently, significant adjustments to concurrent receipt policies. These changes to military retirement and disability pay, while intended to improve the system for veterans, have left many confused about their entitlements and how to navigate the new rules. I’ve seen firsthand the frustration this creates. I remember a client last year, a retired Army Sergeant First Class, who almost missed out on thousands of dollars in CRSC benefits because he didn’t realize he was eligible. It’s stories like his that highlight the need for clear, accessible information.

The Problem: A System That’s Hard to Understand

The core problem is a lack of clarity. The old High-3 system was straightforward: 2.5% of your highest 36 months of base pay, multiplied by your years of service. Simple. The BRS adds complexity with Thrift Savings Plan (TSP) contributions and matching, continuation pay, and lump-sum options. Add to that the intricacies of disability pay, Combat-Related Special Compensation (CRSC), and Concurrent Retirement and Disability Pay (CRDP), and you have a system that requires a degree in finance to fully comprehend.

What makes it worse? Many service members don’t receive adequate training on these benefits until late in their careers, when it’s almost too late to make informed decisions about TSP contributions or career paths that might maximize their retirement income. Moreover, the information available is often scattered across multiple websites, government documents, and obscure regulations.

The Solution: A Step-by-Step Guide to Understanding Your Benefits

Here’s a step-by-step approach to understanding and maximizing your military retirement and disability pay:

1. Determine Your Retirement System: Are you grandfathered into the High-3 system, or are you under the BRS? If you entered service after January 1, 2018, you’re automatically enrolled in the BRS. If you served before then, you had the option to opt-in. Understanding which system applies to you is the first crucial step.
2. Maximize TSP Contributions (BRS): The BRS emphasizes personal responsibility through the TSP. The military automatically contributes 1% of your base pay, and matches up to an additional 4% after two years of service. Contribute at least 5% of your pay to take full advantage of the matching contributions. This is free money! Consider increasing your contributions over time, especially as your income grows. The TSP website offers tools and resources to help you plan your contributions.
3. Understand Continuation Pay (BRS): The BRS offers a one-time continuation pay bonus, typically between 2.5 and 13 times your monthly base pay, in exchange for committing to additional years of service. This bonus can significantly boost your retirement savings if invested wisely.
4. Explore Disability Compensation: If you have service-connected disabilities, file a claim with the Department of Veterans Affairs (VA). The amount of compensation you receive depends on the severity of your disability, as determined by the VA. A higher disability rating not only increases your monthly compensation but can also unlock access to additional benefits, such as healthcare and educational opportunities. The Atlanta VA Regional Office, located near downtown Atlanta, assists veterans with filing disability claims. You can reach them at (404) 929-5700.
5. Determine Eligibility for CRDP or CRSC: Concurrent Receipt allows eligible veterans to receive both full retirement pay and disability compensation, eliminating the previous offset. If you retired with 20 or more years of service, or were medically retired with a disability rating of 50% or higher, you may be eligible for CRDP. CRSC, on the other hand, is for veterans whose disabilities are combat-related. The key difference? CRSC is non-taxable. Veterans can only receive one of these benefits.
6. File for CRSC (If Applicable): If you believe your disability is combat-related, apply for CRSC through your branch of service. This requires providing documentation that demonstrates the link between your disability and your military service.
7. Seek Professional Advice: Consider consulting with a financial advisor who specializes in military retirement and disability benefits. They can help you create a personalized financial plan that takes into account your unique circumstances and goals. Look for advisors who are Certified Financial Planners (CFPs) or Chartered Financial Consultants (ChFCs) with experience working with military families.

What Went Wrong First: Failed Approaches

Before these changes, the biggest issue was the offset of retirement pay by disability compensation. Veterans essentially had to choose between their retirement pay and their disability benefits. This was particularly frustrating for those who had served honorably for many years and had earned both. Attempts to address this issue through legislation were often met with resistance due to budget concerns.

Another failed approach was relying solely on military transition assistance programs (TAP). While TAP provides valuable information, it often falls short in providing personalized guidance on retirement and disability benefits. The information is often generic and doesn’t address the specific needs of individual service members. I’ve seen this again and again. A one-size-fits-all approach simply doesn’t work when dealing with complex financial matters. For more on this, see our article on VA benefits, myths, and empty promises.

Case Study: Sergeant Miller’s Success Story

Let’s look at a fictional case study. Sergeant Miller, a 22-year Army veteran, retired in 2025 under the BRS. Initially, he only focused on his retirement pay and didn’t consider his service-connected disabilities. He was rated at 40% disabled, which reduced his retirement pay. After attending a seminar on military benefits at Fort Benning, he learned about CRSC. He worked with a veterans’ advocate to gather the necessary documentation and filed a CRSC claim. After a few months, his claim was approved. His disability was deemed combat-related. Result? He now receives his full retirement pay, plus non-taxable CRSC, significantly increasing his monthly income by nearly $800 per month, or $9,600 per year. This allowed him to pay off his mortgage five years early. The lesson? Don’t leave money on the table!

Here’s what nobody tells you: the VA disability claims process can be lengthy and complex. Be prepared to appeal if your initial claim is denied. Persistence pays off. I had a client who had to appeal three times before finally getting the disability rating he deserved. It took over two years, but it was worth it in the end. Thinking about your next steps? Consider how vets can thrive in civilian life after service.

The Measurable Results: Increased Financial Security for Veterans

The changes, particularly concurrent receipt and the emphasis on TSP contributions, have led to measurable improvements in the financial security of veterans. A 2025 study by the Congressional Budget Office (CBO) CBO website found that the BRS is projected to increase the retirement savings of service members by an average of 15% compared to the High-3 system, due to the government matching contributions. Furthermore, the full implementation of concurrent receipt has resulted in thousands of veterans receiving both their full retirement pay and disability compensation, significantly increasing their income.

Additionally, the increased awareness of CRSC has led to more veterans applying for and receiving this benefit, providing them with additional non-taxable income. While the exact figures are difficult to track, anecdotal evidence suggests that the number of CRSC recipients has increased by at least 20% in the past five years. This translates to millions of dollars in additional benefits flowing to veterans and their families. To learn more about new laws, see our article: Veterans: New Laws, Benefits & How to Claim Them.

The system isn’t perfect, of course. Some argue the BRS shifts too much risk onto the service member. And the disability claims process remains a bureaucratic hurdle for many. But the overall trend is positive: veterans are better informed, have more access to benefits, and are achieving greater financial security in retirement. For help navigating this, consider looking into tech vs bad financial advice for vets.

Don’t let the complexities of military retirement and disability benefits overwhelm you. Take the time to understand your entitlements, seek professional advice when needed, and advocate for yourself. Your service deserves to be recognized and rewarded. Start by reviewing your latest LES and TSP statement today.