Retirement Choice: 2012
Military personnel who entered service after July 31, 1986, and who are eligible and intend to serve for 20 years must choose between two retirement plans at their 15th year of service. Once the final selection is made, the choice is irrevocable. The two options are defined below:
- High-3 retirement plan: Retirement pay is based on the highest average basic pay for 36 months of a servicemember’s career. These are usually the last 3 years.
- REDUX retirement plan plus a $30,000 bonus paid at the 15th year of service: In return for accepting the bonus, REDUX provides smaller retirement checks.
How should Marines, Sailors, Airmen, and Soldiers decide which option to take? The Department of Defense (DOD) has a website that provides information and examples to help servicemembers. We have used a different approach that many have found useful in evaluating these retirement choices. Here, we update that work for those making the retirement choice in 2012.