For veterans, understanding the changes to military retirement and disability pay can be daunting. These benefits are essential, and staying informed is critical for financial stability. Will the latest policy shifts leave you better off or create unexpected challenges for your post-service life?
Key Takeaways
- The Blended Retirement System (BRS), implemented in 2018, affects retirement pay by offering a Thrift Savings Plan (TSP) with government matching contributions, impacting those who entered service after January 1, 2018.
- Concurrent Receipt allows eligible veterans to receive both full military retirement pay and disability compensation, phasing out the offset that previously reduced retirement pay.
- Veterans with a disability rating of 50% or higher may be eligible for Combat-Related Special Compensation (CRSC), which restores retirement pay that is offset by disability payments.
Sergeant Major (ret.) Anya Petrova thought she had it all figured out. After 22 years of service, including two tours in Afghanistan, she was looking forward to a comfortable retirement in her hometown of Columbus, Georgia. She planned to use her retirement pay to supplement her income from a small consulting business she hoped to start, advising local businesses on leadership and team building. But then, the changes started rolling in, leaving her scrambling to understand how they would affect her financial future.
Anya wasn’t alone. Many veterans face similar confusion when trying to decipher the intricacies of military retirement and disability pay. The system is complex, and understanding the nuances is key to maximizing benefits.
The Blended Retirement System (BRS): A New Era
One of the most significant changes to military retirement and disability pay in recent years is the implementation of the Blended Retirement System (BRS). This system, which went into effect on January 1, 2018, represents a fundamental shift from the traditional defined benefit retirement plan. Anyone entering service after that date is automatically enrolled in BRS. Veterans who joined before 2018 had the option to opt-in.
The BRS combines a reduced defined benefit (pension) with a defined contribution plan through the Thrift Savings Plan (TSP). Under the traditional system, a service member typically needed to serve 20 years to receive retirement pay. With the BRS, even if you don’t reach that 20-year mark, you still get to keep the government contributions to your TSP after only a few years of service. This is a huge advantage for those who don’t make a career out of the military.
According to the Department of Defense (DoD)(https://militarypay.defense.gov/Pay/Retirement/BRS/), the BRS provides a government contribution of up to 5% of a service member’s basic pay to their TSP account. This includes an automatic 1% contribution, even if the service member doesn’t contribute anything themselves, and matching contributions for up to 4% of their pay when they contribute. The reduced defined benefit means that instead of receiving 2.5% of your average high-3 basic pay for each year of service, you’ll receive 2.0%. For Anya, who opted into the BRS after carefully considering her options, this meant a slightly smaller pension check each month, but the potential for greater long-term growth through the TSP.
Expert Analysis: The BRS is generally considered a more portable and flexible retirement system, especially for those who don’t serve a full 20 years. The TSP component allows for tax-advantaged savings and investment growth, and the government matching contributions can significantly boost retirement savings over time. However, it’s crucial to understand the investment options within the TSP and to make informed decisions about asset allocation. We often advise clients to consult with a financial advisor to develop a personalized retirement plan that takes into account their individual circumstances and risk tolerance.
Concurrent Receipt: Receiving Both Retirement and Disability Pay
Another significant change impacting veterans is the expansion of concurrent receipt. Previously, many veterans saw their military retirement pay reduced by the amount of their disability compensation. This offset, known as the “VA waiver,” was a source of frustration for many who felt they were being penalized for their service-related disabilities. The good news is that concurrent receipt is now a reality for many veterans, allowing them to receive both full military retirement pay and disability compensation.
The phased implementation of concurrent receipt began in 2004 and has expanded over the years. Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Pay (CRDP) are the two main programs that allow veterans to receive both types of pay. According to the Defense Finance and Accounting Service (DFAS)(https://www.dfas.mil/retiredmilitary/disability/crdp/), CRDP is designed for retirees with 20 or more years of service and a disability rating of 50% or higher, while CRSC is for those whose disability is directly related to combat.
Anya discovered that she was eligible for CRSC due to injuries she sustained during her deployments. This meant that a portion of her retirement pay that had been previously offset by her disability compensation would now be restored. This was a significant boost to her monthly income and allowed her to invest more in her business.
Expert Analysis: Navigating the eligibility requirements for CRDP and CRSC can be complex. It’s essential to carefully review your military records and disability rating to determine if you qualify. The application process can also be challenging, and it may be beneficial to seek assistance from a veterans service organization or a qualified attorney. I remember a case where a client was initially denied CRSC because they didn’t properly document the connection between their disability and their combat experience. We helped them gather the necessary evidence and successfully appealed the decision.
Many veterans aren’t aware of how to maximize retirement and disability pay, so it’s worth taking the time to investigate.
| Factor | Pre-2018 (High-3) | Post-2018 (Blended Retirement) |
|---|---|---|
| Retirement Multiplier | 2.5% per year | 2.0% per year |
| Pension Access | 20 Years of Service | 20 Years of Service |
| Thrift Savings Plan (TSP) | Optional; No Matching | Automatic Enrollment; Matching Contributions |
| Lump Sum Option | None | Option to receive 25% or 50% at retirement. |
| Disability Offset | Pension reduced by disability pay. | Disability pay does NOT reduce pension if retired. |
Disability Ratings and the VA Claims Process
The process of obtaining a disability rating from the Department of Veterans Affairs (VA) is often a critical step in accessing benefits. Your disability rating determines the amount of compensation you receive and can also impact your eligibility for other programs, such as healthcare and educational benefits. The VA disability system uses a scale from 0% to 100%, in increments of 10%, to rate the severity of a service-connected disability. A higher rating translates to greater compensation.
Anya, like many veterans, found the VA claims process to be daunting. “It felt like I was reliving some of the worst moments of my life, having to explain the impact of my injuries and trauma,” she said. “And the paperwork was endless.”
The VA uses the Schedule for Rating Disabilities to determine disability ratings. This schedule provides detailed criteria for evaluating various medical conditions and assigning a corresponding rating. According to the VA website(https://www.benefits.va.gov/compensation/rates-veteran-increase.asp), as of 2026, a veteran with a 100% disability rating and no dependents can receive over $4,000 per month in compensation. The amount increases with dependents.
Expert Analysis: The VA claims process can be lengthy and complex, and it’s not uncommon for claims to be initially denied. If your claim is denied, you have the right to appeal. It’s crucial to gather as much evidence as possible to support your claim, including medical records, service records, and statements from doctors and other healthcare providers. The American Legion and Veterans of Foreign Wars are two organizations that offer assistance with the VA claims process. One thing nobody tells you is that you have to be persistent. Don’t give up after the first denial.
Anya’s Resolution and Lessons Learned
After months of research, consultations with financial advisors and veterans’ advocates, and a successful CRSC application, Anya finally gained clarity on her financial situation. She was able to adjust her business plan, factoring in the increased income from her restored retirement pay. Her consulting business, Petrova Leadership Strategies, is now thriving in the Columbus area, helping local businesses improve their leadership skills and build stronger teams. She even volunteers her time to mentor other veterans transitioning to civilian life.
Anya’s experience highlights the importance of staying informed about changes to military retirement and disability pay. While the system can be complex, understanding your rights and benefits is essential for securing your financial future. Don’t be afraid to seek help from qualified professionals and veterans’ organizations. Your service is valued, and you deserve to receive the benefits you’ve earned.
The BRS offers a more flexible retirement option, and concurrent receipt provides much-needed financial relief for disabled veterans. The VA claims process, while challenging, can lead to significant benefits. By staying informed and seeking assistance when needed, veterans can navigate these complexities and achieve financial stability in their post-service lives. What’s the alternative? Falling behind and missing out on benefits you’ve earned. That’s not an option.
For veterans looking to secure your financial future, understanding these changes is paramount.
It’s also important to remember that veterans can unlock benefits and build support by staying informed.
What is the Blended Retirement System (BRS)?
The BRS is a retirement system that combines a reduced defined benefit (pension) with a defined contribution plan through the Thrift Savings Plan (TSP). It applies to service members who entered service on or after January 1, 2018, and those who opted in.
What is Concurrent Receipt?
Concurrent Receipt allows eligible veterans to receive both full military retirement pay and disability compensation, without a reduction in retirement pay due to the VA waiver.
What is Combat-Related Special Compensation (CRSC)?
CRSC is a program that restores retirement pay that is offset by disability payments for veterans whose disability is directly related to combat.
How does the VA determine disability ratings?
The VA uses the Schedule for Rating Disabilities to determine disability ratings, which are based on the severity of a service-connected disability. The ratings range from 0% to 100%, in increments of 10%.
Where can I get help with the VA claims process?
You can get help from veterans service organizations such as The American Legion and Veterans of Foreign Wars, as well as qualified attorneys and financial advisors specializing in veterans’ benefits.
Don’t just assume your retirement and disability benefits are set in stone. Take the initiative to understand how the changes to military retirement and disability pay apply to you. A few hours of research today could mean thousands of dollars in your pocket tomorrow.
