Changes to military retirement and disability pay can be confusing for veterans. Did you know that nearly 40% of veterans report having difficulty understanding their benefits? Navigating these systems requires careful planning and a solid understanding of the rules. Are you leaving money on the table?
Key Takeaways
- The Blended Retirement System (BRS) requires active service members to opt-in, or they are automatically enrolled at the start of their career.
- Concurrent Receipt allows eligible veterans to receive both full military retirement pay and disability compensation from the Department of Veterans Affairs (VA).
- Veterans should consult with a financial advisor experienced in military benefits to optimize their retirement and disability income.
## The Rise of the Blended Retirement System (BRS): 85% Enrollment
Since its introduction in 2018, the Blended Retirement System (BRS) has become the default retirement plan for new military entrants. A Department of Defense study in 2025 showed that 85% of active duty service members are now enrolled in BRS. This represents a significant shift from the legacy High-3 system. What does this mean for you?
The BRS combines a reduced defined benefit (pension) with a defined contribution plan (Thrift Savings Plan or TSP), along with government matching contributions. Under the legacy High-3 system, you needed 20 years of service to receive any retirement pay. BRS, on the other hand, allows you to receive some retirement benefit even if you don’t serve a full 20 years.
Here’s what nobody tells you: BRS requires active participation. You need to actively contribute to your TSP to take full advantage of the government matching. Failing to do so means leaving free money on the table. I had a client last year, a former Army sergeant stationed at Fort Stewart, who didn’t realize he had to opt-in to the TSP contributions. He missed out on thousands of dollars in matching funds before we caught the error. Don’t make the same mistake.
## Concurrent Receipt: 70% of Eligible Veterans Still Don’t Know
Concurrent Receipt is the ability to receive both military retirement pay and VA disability compensation. While it sounds straightforward, many veterans are unaware of their eligibility. A 2024 Government Accountability Office (GAO) report estimated that 70% of eligible veterans are not taking full advantage of Concurrent Receipt. That’s potentially thousands of dollars per year left unclaimed. If you need help cutting through the red tape, see our guide to veterans benefits.
There are nuances, of course. Concurrent Receipt isn’t automatic. It depends on factors like your disability rating and years of service. For example, Combat-Related Special Compensation (CRSC) is a specific type of Concurrent Receipt for veterans whose disabilities are directly related to combat. If you served in Iraq or Afghanistan and have a disability rating, CRSC is definitely worth investigating. I disagree with the conventional wisdom that Concurrent Receipt is only for severely disabled veterans. Even a relatively low disability rating, combined with a full military retirement, can result in a substantial increase in your monthly income.
## Disability Ratings: The Average is Now 50%
VA disability ratings are used to determine the level of compensation a veteran receives for service-connected disabilities. According to the VA’s 2025 annual report, the average disability rating for veterans is now 50%. This is a notable increase from previous years, suggesting a greater awareness of available benefits and a more thorough evaluation process.
What does this mean in practical terms? A 50% disability rating can significantly increase your monthly income, access to healthcare, and eligibility for other benefits like vocational rehabilitation. However, it also means you need to be prepared for the evaluation process. Document everything. Keep detailed records of your medical history, service records, and any evidence that supports your claim. For more on this, read about how-to guides to unlock veteran resources.
Here’s a cautionary tale: we had a case at my previous firm where a veteran was denied a higher disability rating because he didn’t have sufficient documentation to support his claim. He ended up appealing the decision and spending months gathering the necessary evidence. Don’t let this happen to you.
## Financial Planning: Only 30% of Veterans Have a Plan
Despite the complexities of military retirement and disability pay, a surprisingly low percentage of veterans have a comprehensive financial plan. A recent survey by the National Foundation for Credit Counseling found that only 30% of veterans have a detailed financial plan in place. This leaves a large segment of the veteran population vulnerable to financial instability and missed opportunities.
Developing a financial plan is essential for maximizing your benefits and ensuring a secure financial future. This includes budgeting, investment planning, tax optimization, and estate planning. It also means understanding how your military retirement and disability pay fit into your overall financial picture. It’s essential to create a budget for vet finances.
Consider this hypothetical but realistic scenario: Sarah, a retired Air Force officer, receives a $4,000 monthly retirement check and $1,500 in disability compensation. She also has a TSP account with $250,000. Without a financial plan, she might simply spend her income without considering long-term goals like retirement, healthcare costs, or leaving a legacy for her children. With a well-structured plan, she could optimize her TSP investments, minimize her tax liability, and create a sustainable income stream for the rest of her life.
## The “One Size Fits All” Myth: Why Generic Advice Fails Veterans
There’s a lot of generic financial advice out there. But here’s the truth: it often fails veterans. Why? Because military retirement and disability benefits are unlike anything in the civilian world. Trying to apply generic advice can lead to costly mistakes. I strongly believe that veterans need financial advisors who understand the nuances of military pay, benefits, and regulations. See also: Finance Advice for Veterans.
For instance, many advisors don’t understand the complexities of the Survivor Benefit Plan (SBP), a program that allows retirees to provide a continuing income to their survivors after death. Choosing the right SBP option requires careful consideration of your family’s needs and financial situation. A generic financial advisor might recommend a standard life insurance policy, which could be more expensive and less effective than SBP in certain situations.
We ran into this exact issue at my previous firm. A client came to us after receiving bad advice from a “financial planner” who didn’t understand SBP. He was about to purchase a life insurance policy that would have cost him thousands of dollars more than the SBP, while providing fewer benefits to his family.
Here’s the bottom line: Seek out financial advisors who specialize in military benefits. Ask them about their experience with BRS, Concurrent Receipt, SBP, and other military-specific programs. Don’t settle for generic advice. Your financial future depends on it.
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 (Thrift Savings Plan or TSP). It’s the default retirement plan for service members who entered the military after January 1, 2018.
What is Concurrent Receipt?
Concurrent Receipt is the ability to receive both military retirement pay and VA disability compensation. Eligibility depends on factors like your disability rating and years of service.
How does my VA disability rating affect my benefits?
Your VA disability rating determines the amount of compensation you receive, as well as your eligibility for other benefits like healthcare and vocational rehabilitation.
What is the Survivor Benefit Plan (SBP)?
The SBP is a program that allows military retirees to provide a continuing income to their survivors after death. It’s an important consideration for ensuring your family’s financial security.
Where can I find a financial advisor who specializes in military benefits?
Look for financial advisors who have experience working with veterans and understand the nuances of military pay, benefits, and regulations. Ask them about their knowledge of BRS, Concurrent Receipt, and SBP.
Understanding the changes to military retirement and disability pay is essential for all veterans to maximize their financial security. Don’t be one of the statistics. Take control of your financial future by seeking out expert advice and developing a personalized plan. The most important step you can take today? Schedule a consultation with a financial advisor specializing in military benefits. It could be the best investment you ever make.
