Last Updated: September 28, 2026 Reading Time: 8 min

An E-7 retiring at 20 years with an assumed High-36 of $6,211.50 a month would draw an illustrative $3,106 a month under the legacy High-3 system, not an estimate of any actual 2026 retirement. If the same career had been under the Blended Retirement System, the pension would be $2,485. Military retirement pay at 20 years is a fixed formula on a published pay table, so the shape of the number is knowable today (the base is your own 36-month pay history, which no table can supply), and the gap between the two systems is exactly one-tenth of your High-36 basic pay every month, at every rank.

Quick Answers: Military Retirement Pay at 20 Years

What does an E-7 actually retire on at 20 years in 2026?

About $3,106 a month gross under the legacy High-3 system, using a High-36 proxy of $6,211.50 and the statutory multiplier, "the product … of (A) 2½, and (B) the member's years of creditable service," which is 50% at 20 years under 10 U.S.C. 1409(b)(1). That is an illustration on an assumed High-36, and it runs high: a member retiring at exactly 20 years never draws the over-20 rate, and the real 36-month window includes pre-2026 pay.

Why is the BRS number 20% smaller, not 0.5% smaller?

Because the multiplier difference compounds across every year of service. Under 10 U.S.C. 1409(b)(4)(A)(i), the formula "shall be applied by substituting '2' for '2½'." Over 20 years that is 40% versus 50% of the same base, a fifth of the pension rather than half a point.

Does my BAH count toward the pension?

No. The retired pay base is built from basic pay only. 10 U.S.C. 1407(c)(1) averages "monthly basic pay … for the 36 months," "whether or not consecutive," divided by 36. Allowances never enter it, which is why the pension can feel small next to your current take-home.

Is my High-36 just my last three years of pay?

Almost always in practice, but not by definition. The statute takes the 36 highest months whether or not consecutive. A reduction in grade triggers special retired-pay-base rules under 10 U.S.C. 1407(f), and if your last months straddle a pay-table cap for your grade, the highest 36 may not be the last 36; get DFAS's computation.

I hit 20 years in 2026. Do I get the 2.8% COLA?

No. COLAs take effect December 1 for people already receiving retired pay under 10 U.S.C. 1401a(b). The 2.8% adjustment SSA announced for December 2025 went to members already retired. Your first adjustment is the first December increase after your entitlement begins, and under 1401a(d) it is prorated by the quarter you retired in. Confirm your own proration with DFAS.

Should I be worrying about REDUX?

Not if you are reaching 20 years in 2026. The Career Status Bonus that triggered REDUX required 15 years of active duty under 37 U.S.C. 354(b) and could not be paid after December 31, 2017 under 354(g). At that date you had roughly 11 years. It was never on your menu.

How big a TSP balance does a BRS member need to erase the pension gap?

At the 4% convention, 25 times the annual gap: about $186,000 for an E-7 and $356,000 for an O-5 on 2026 pay. Measured the way the FedTools BRS calculator does it, a 30-year nominal sum with no investment return, it is 30 times the gap: about $224,000 and $427,000.

Is military retired pay taxed?

Federally, yes. "Pensions" are named in the statutory definition of gross income under 26 U.S.C. 61(a)(10). State treatment varies, so check your own state's revenue department before you plan around a number.

Why did my January pay go up twice, once for the raise and once for the COLA?

They are two different statutes on two different clocks. Basic pay adjusts every January 1 by an ECI-linked percentage under 37 U.S.C. 1009, the same percentage for every grade. Retired pay adjusts every December 1 by a price-index percentage measured over the quarter ending September 30 under 10 U.S.C. 1401a. Active members get the first; retirees get the second.

Which calculator should I use?

For the whole retirement paycheck, pension, VA compensation, SBP premium and a federal civilian salary layered on top, use the Military Retirement Income Calculator, which takes your High-3 as a monthly figure. For only the BRS-versus-legacy comparison with a TSP projection, use the BRS vs High-3 Calculator, which takes it as an annual figure.

The Formula Is Three Numbers

For a regular active-duty, nondisability retirement, retired pay at 20 years under the legacy system is the retired pay base times 2.5% times years of service. The retired pay base, for anyone who entered after September 7, 1980, is the High-36: the average of the highest 36 months of basic pay. So at 20 years, legacy retired pay is 50% of High-36 and BRS retired pay is 40% of High-36.

That produces an identity: the gap between the two systems is 2.5% minus 2%, half a point, times 20 years, which is 10 percentage points. So gap = 0.10 × High-36, every month, at every rank, with no rounding. An E-7 with a High-36 of $6,211.50 has a monthly gap of $621.15. To get your own, take your High-36 monthly basic pay and move the decimal one place to the left. Multiply by 12 for the annual figure.

Retired Pay at 20 Years, by Rank, on 2026 Pay

This is a FedTools computation from the DFAS 2026 basic pay tables (effective January 1, 2026), verified cell by cell against the DFAS tables. The High-36 proxy is the average of the over-18 and over-20 cells in 2026 dollars. That proxy is an illustration on assumed High-36 amounts, not an estimate of anyone's actual retirement: a member retiring at exactly 20 years never draws the over-20 rate, and a real highest-36-month window reaches back into 2024 and 2025 pay tables and, for some grades, the over-16 step. Every figure is a monthly gross before tax, SBP and any VA waiver. Pension cells are computed at full precision and shown to the cent; balances are rounded to the dollar.

Rank at 20 years High-36 proxy /mo Legacy High-3 (50%) /mo BRS (40%) /mo Gap /mo Gap /yr TSP needed at 4% (×25) FedTools 30-year nominal gap (×30)
E-6 $5,267.70 $2,633.85 $2,107.08 $526.77 $6,321.24 $158,031 $189,637
E-7 $6,211.50 $3,105.75 $2,484.60 $621.15 $7,453.80 $186,345 $223,614
E-8 $6,903.30 $3,451.65 $2,761.32 $690.33 $8,283.96 $207,099 $248,519
O-4 $10,509.90 $5,254.95 $4,203.96 $1,050.99 $12,611.88 $315,297 $378,356
O-5 $11,873.25 $5,936.63 $4,749.30 $1,187.33 $14,247.90 $356,198 $427,437

Formula per row: High-36 = (over-18 cell + over-20 cell) ÷ 2; legacy = 0.50 × High-36; BRS = 0.40 × High-36; gap = 0.10 × High-36; annual gap = gap × 12; TSP at 4% = annual gap × 25; 30-year nominal = annual gap × 30. Cells are computed at full precision and rounded to the cent at the end, so multiplying a rounded monthly figure by 12 can differ from the full-precision annual cell by several cents. Check the E-6 row, where the pay table caps at over-18 so the two cells are identical: 0.10 × $5,267.70 × 12 = $6,321.24, and $6,321.24 ÷ 0.04 = $158,031.

Two rows in that table change decisions. E-6 and O-4 basic pay stop rising at the over-18 step, so for those grades the over-20 cell is the same number. Staying to 22 years adds 5 percentage points to the legacy multiplier (4 under BRS) but does not raise the base through the longevity step; annual raises and newer months replacing older ones can still lift your High-36. And the two right-hand columns answer the same question two ways: the 4% column is a withdrawal convention this post chose; the 30-year column is how the FedTools BRS calculator measures the gap, an undiscounted sum with no return assumed. Neither calculator contains a withdrawal rate.

The BRS Column Is a Comparison, Not a Population

BRS coverage began for new entrants on January 1, 2018. A member retiring at exactly 20 years in 2026 entered around 2006 and is under the legacy system unless they opted in during the 2018 election. So the BRS column here answers "what would this pension have been under BRS," which is the question a mid-career member deciding how much to put in the TSP actually needs.

The gap is also a pension gap, not a retirement gap. A BRS member receives DoD contributions to the TSP of up to 5% of basic pay under 5 U.S.C. 8440e(e)(2), with matching starting at two years and one day of service for new entrants (members who opted in during the 2018 election began matching under the opt-in rule) and both contributions ending at 26 years, plus continuation pay at mid-career, and the legacy member received neither. The BRS vs High-3 optimization post covers the choice itself; this post only prices the pension side of it.

What Comes Off the Gross

The table shows gross retired pay. Three things reduce the deposit. Federal income tax applies, because pensions are gross income under 26 U.S.C. 61(a)(10); state treatment varies. A Survivor Benefit Plan election takes a premium off the top, which the SBP Calculator prices. And a VA disability rating can waive part of retired pay in exchange for tax-free compensation, with concurrent receipt restoring part or all of it for retirees who qualify. The Military Retirement Income Calculator models the SBP premium and the VA offset together; work out income tax separately.

Your first COLA is the first December adjustment after your retired pay begins, computed under the statute's first-adjustment rule rather than the full-year figure. Under 10 U.S.C. 1401a, retired pay adjusts each December 1 by the change in the price index measured over the quarter ending September 30. Active-duty pay moves on a different statute and a different date, January 1 under 37 U.S.C. 1009, which is why a member's last active-duty raise and first retiree COLA are rarely the same number.

Guard and Reserve, and Prior Federal Service

Reserve retired pay runs on different rules under chapter 1223, on a points-based service figure, and does not start until age 60 in most cases. The Guard and Reserve at 20 years post covers that arithmetic, and the Reserve Retirement Points Calculator converts points to years. A retiree who takes a federal civilian job afterward faces a separate question about whether to buy back the military time toward a FERS pension, which the Military Buyback Calculator prices.

Run Your Own Retirement Paycheck

Enter your retirement system, years of service, High-3 monthly basic pay, VA rating and SBP election in the free Military Retirement Income Calculator. It returns your gross monthly pension, the SBP premium and the pension after it, monthly VA compensation and any waiver, and two side-by-side totals: retiring fully, or retiring plus a GS salary. Enter the High-3 as a monthly figure here; the BRS vs High-3 Calculator wants it as an annual figure. Run your numbers →

Sources

  • 10 U.S.C. 1409(b)(1) and (b)(4)(A)(i) (retired pay multiplier; BRS substitution of 2 for 2½); 10 U.S.C. 1407(c)(1) (High-36); 10 U.S.C. 1401a(b), (d), (g)(2) (retired pay COLA, first-year proration, measuring quarter).
  • 37 U.S.C. 1009 (annual basic pay adjustment); 37 U.S.C. 354(b), (g) (Career Status Bonus eligibility and sunset); 5 U.S.C. 8440e(e)(2) (DoD TSP contributions under BRS); 26 U.S.C. 61(a)(10) (pensions as gross income).
  • DFAS, Basic Pay tables for enlisted members and officers effective January 1, 2026 (E-6, E-7, E-8 over-18 and over-20 cells; O-4, O-5 over-18 and over-20 cells).
  • SSA, Cost-of-Living Adjustment information, 2.8% COLA effective December 2025.
  • Executive Order 14368 (December 23, 2025), Schedule 8, 2026 basic pay rates.