Transitioning into military service is a significant life change, filled with both pride and uncertainty. While the focus is often on serving your country, navigating the complexities of military benefits can feel overwhelming, especially when it comes to your financial future.

Understanding the Blended Retirement System (BRS) and the Basic Needs Allowance (BNA) is crucial for ensuring the well-being of you and your family.

This guide will provide you with the essential information and resources to make informed decisions about your financial security, empowering you to plan for a brighter future.

The Blended Retirement System: Your Financial Roadmap

In 2018, the US military introduced the BRS, a significant reform in military retirement benefits that merges traditional pension payments with features from modern retirement savings plans. It impacts all service members who joined the military after 2018, with those serving before this date remaining under the legacy pension plan.

The BRS integrates the traditional lifelong monthly retirement pay with contributions to a Thrift Savings Plan (TSP), similar to a private-sector 401(k). This approach provides benefits even to those who do not complete the requisite 20 years of service traditionally required to qualify for a military pension.

Notably, over 400,000 of the 1.6 million eligible troops opted into the BRS in its inaugural year, highlighting its broad acceptance.

(Image source: DVIDS)

Retirement Pay Adjustments

Under the BRS, retirement pay is calculated based on 40 percent of the average of the highest 36 months of active duty pay after 20 years of service, with an additional two percent for each subsequent year.

This represents a reduction from the 50 percent provided by the legacy system, but it includes an annual cost-of-living adjustment to mitigate inflation impacts.