Military Retirement Estimator: BRS vs. High-3 Calculator Guide 2025

Look, I get it—you want the quick answer before diving into all the details. So here’s the deal:

If you’re planning to bounce before 20 years: BRS is your winner, hands down, 100%. Why? Because you’ll actually walk away with something! The government throws matching contributions into your TSP, and that money is yours to keep. With High-3? You get zilch if you leave early. Nada. Nothing.

If you’ve already got 9-10+ years under your belt and you’re committed to hitting that 20-year mark: High-3 wins from a purely financial standpoint. The numbers don’t lie—you’ll make more money in the long run.

If you’re sitting at less than 7-8 years and planning to go the full 20: BRS might actually give you more income over your lifetime, but here’s the catch—it depends on your TSP returns being solid and you actually contributing consistently. It’s not a guarantee like High-3.

The core difference? Think of it this way: High-3 gives you a bigger, more predictable paycheck every month. BRS gives you flexibility and something to show for your service even if life throws you a curveball and you can’t make it to 20 years. And let’s be real—over 80% of folks who join the military don’t hit that 20-year mark, so BRS helps a whole lot more people.

Understanding the Two Pillars of Military Retirement (What the Heck Are These Things, Anyway?)

Alright, let’s get into the nitty-gritty of what these two systems actually are. I’ll keep it simple—promise.

The Legacy Retirement System (High-3) Defined

This is the “old school” way of doing military retirement, and honestly, it’s pretty straightforward once you get it.

How they calculate your pension: They look at your highest 3 years (36 months) of basic pay—usually your last three years because you’re making the most money by then—and average it out.

The magic multiplier: You get 2.5% of that average for every year you serve. So if you retire at exactly 20 years, you’re getting 50% of your highest three years’ base pay. Not bad, right?

The 20-year payout: Yeah, so at 20 years, you’re pulling in half your base pay for the rest of your life. That’s a pretty sweet deal if you can stick it out.

TSP contributions: Sure, you can throw money into your Thrift Savings Plan (TSP)—that’s the military’s version of a 401(k)—but here’s the kicker: the government doesn’t match a single penny. It’s all on you.

The “all or nothing” problem: This is the brutal part. If you serve for 19 years and 364 days and then leave, you get exactly zero dollars in pension. You have to make it to 20 years, or you’re walking away empty-handed when it comes to that military retirement pay.

The Blended Retirement System (BRS) Defined

Now we’re talking about the new kid on the block. BRS launched in 2018, and it’s called “blended” because it mixes two types of retirement savings.

The “blend”: You get a traditional pension (like High-3, but smaller) PLUS the government actually matches your TSP contributions. It’s like having two retirement accounts working for you.

How they calculate your pension: Pretty similar to High-3—they take the average of your highest three years of basic pay, but here’s the difference…

The multiplier: Instead of 2.5%, you only get 2% for each year of service. Yeah, I know—it sounds like you’re getting shorted, but stay with me.

Payout at 20 years: This means at 20 years, you’re only getting 40% of your highest three years’ base pay. That’s 10% less than High-3. But remember, you’ve also got that TSP growing on the side.

TSP Government Matching (the good stuff): Here’s where BRS gets interesting. The government automatically dumps 1% of your base pay into your TSP—you don’t have to do anything. Then, if you contribute up to 5% of your base pay, they’ll match it dollar for dollar. That’s free money, folks! If you’re not taking advantage of this, you’re literally turning down a raise.

Key BRS Features and Financial Risks (The Stuff That Could Bite You)

Alright, now let’s talk about some of the features of BRS that sound good on paper but can actually cost you big time if you’re not careful.

The Lump Sum Benefit: Why It Costs You More (Spoiler Alert: It’s a Trap)

So BRS has this option that sounds tempting—like, really tempting when you’re staring at retirement and thinking about all the things you could do with a big chunk of cash right now.

What’s the option? When you retire under BRS, you can choose to take a lump sum payment of either 25% or 50% of your estimated military retirement pay. Just imagine—tens or even hundreds of thousands of dollars dropped in your bank account the day you retire.

The catch (because there’s always a catch): If you take that lump sum, your monthly retirement check gets slashed until you hit 67 years old. Then—and only then—does it go back to the full amount.

The financial penalty (this is where it gets ugly): The military uses a crazy high discount rate of 6.99% to figure out your lump sum. What does that mean? It means you’re getting way less money than you should. They’re basically making you pay interest to get your own money early.

Real-world example (prepare to cringe): Let’s say you’re an E-8 who retires at 38 and takes that 50% lump sum. Over 29 years, you could lose—wait for it—$466,219 compared to just taking the regular monthly payments. For an O-5, that number jumps to $590,765 over 25 years. That’s more than half a million dollars you’re kissing goodbye!

Tax impact (it gets worse): That lump sum isn’t tax-free, my friend. It counts as income for that year, which could bump you into a higher tax bracket. Suddenly you’re paying 24% or even 35% in taxes instead of 12% or 22%. Ouch.

Bottom line: This option is designed to save the government money, not you. Unless you have some really specific reason to need that cash NOW—and I mean really specific—don’t do it. Just don’t. When you estimate military retirement pay, always run the numbers with and without the lump sum to see the real cost.

Continuation Pay (CP) (Free Money for Sticking Around)

Here’s something that’s actually a nice perk of BRS:

When you get it: When you hit your 12-year mark and commit to four more years, the military throws you a bonus called Continuation Pay.

How much we talking? For active duty folks, you’re looking at 2.5 to 13 times your monthly basic pay. Reservists get 0.5 to 6 times monthly basic pay. The exact multiplier varies by service and whether you’re in a high-demand job.

This is basically the military saying “thanks for committing to stick around.” It’s a nice chunk of change, and unlike the lump sum option, this one doesn’t cost you anything in the long run.

Retirement for National Guard and Reserves (Because You’re Part of the Team Too)

If you’re Guard or Reserve, the retirement rules work a little differently—but don’t worry, you still get to retire!

Eligibility: You need 20 qualifying years of service. But here’s the thing—a “qualifying year” for Guard and Reserve means you earned at least 50 retirement points that year.

How the defined benefit works: They use the same 2% multiplier formula for BRS (or 2.5% if you’re under High-3), but they have to calculate your “equivalent years” of active service because you’re not serving full-time.

When you actually get paid: This is the big difference. For most Guard and Reserve folks, military retirement pay doesn’t start until you’re 60 years old. However, if you’ve done active service since 2018, you might qualify to start as early as age 50. Every 90 days of active service knocks your retirement age down by three months.

How they calculate it (the points system): Every drill weekend, annual training, and active duty stint earns you retirement points. When it’s time to retire, they divide your total points by 360 to figure out your equivalent years of service. So if you have 7,200 points, that’s 20 years’ worth.

The “gray area”: This is what they call the time between when you retire from the Guard/Reserve and when you actually start getting paid. Fun fact: your longevity for pay purposes keeps counting during this time, which means when you do start getting paid, it’ll be based on the current pay scale, not the one from when you retired.

Critical TSP Rules & Investment Strategy (Don’t Screw This Up)

Your TSP is a huge part of your military retirement under BRS, so let’s talk about how to not mess it up.

When you can actually touch the money: You can’t withdraw from your TSP without a penalty until you’re 59½ or 60. If you try to pull it out early, you’re getting hit with a 10% tax penalty on top of regular income taxes. There are some exceptions for extreme circumstances and fancy withdrawal strategies (like SEPP), but generally speaking, that money’s locked up until you’re close to 60.

Investment risk (the double-edged sword): Unlike your pension, which is guaranteed, your TSP is invested in the market. That means it can grow like crazy—or it can shrink. It’s all about how the market performs and how you invest.

The G Fund Mistake (seriously, don’t do this): If you’re still serving and your TSP money is sitting in the G Fund, you need to change that like, yesterday. The G Fund is the “safe” option—it’s basically government bonds—but “safe” also means “barely growing.” Over 20 or 30 years, you’re leaving massive amounts of money on the table.

The C Fund (tracks the S&P 500) and I Fund (international stocks) have way higher growth potential. Yeah, they’re riskier, but when you’ve got decades until retirement, you have time to ride out the market ups and downs. The younger you are, the more aggressive you can be. A common strategy is to go heavy on C and I Funds early, then gradually shift to more conservative funds as you get closer to retirement.

Think about it—if your military retirement estimator shows you’re going to get 40% of your base pay as a pension, that TSP might need to make up the difference if you want to maintain your lifestyle in retirement.

Maximizing Financial Health: Avoiding Common Pension Estimate Mistakes (Because Errors Happen)

Let’s talk about how to make sure you’re not getting screwed on your estimates—either by accident or by someone not doing their job right.

Verify everything: Those agency estimates you get? They’re only as accurate as the data someone typed in. And guess what? People make mistakes. I’ve seen estimates that were off by tens of thousands of dollars.

Know your Official Personnel Folder (OPF): This is where all your career data lives. Your agency and the Office of Personnel Management (OPM) use this to calculate your pension. You need to know how to access it and check it regularly. Think of it as your military/federal resume that determines your paycheck for the rest of your life.

Review your SF-50s: These are your official personnel action forms. Check the effective date of your very first SF-50 to make sure they’re counting all your creditable service. Every time you changed positions or agencies, there should be an SF-50. If one’s missing, your service might not be counted correctly.

Watch out for these service types:

• Temporary service might not count
• Intermittent service has special rules
• If you bought back military service time for your civilian retirement, make sure it’s documented so you don’t end up paying twice
• Leave without pay for more than six months in a calendar year might not count toward retirement

Coverage continuity (the 5-year rule): If you want to keep your FEHB (health insurance) and FEGLI (life insurance) in retirement, you MUST be covered for the five years immediately before you retire. Don’t let this lapse, or you’ll lose the option to keep these benefits.

Calculate your NET pension: Here’s a mistake I see all the time—people look at their gross pension estimate and start making retirement plans. But that’s before taxes, before your health insurance premiums, before survivor benefit payments, before everything. Your actual take-home (net) pension could be 20-30% less than the gross number. Always calculate what you’ll actually have hitting your bank account every month. When you estimate military retirement pay, the net number is what really matters.

The Rising Cost of Retiree Healthcare (Because Nothing Stays Cheap Forever)

Real talk: your healthcare costs are going up. They go up pretty much every year, and you need to factor this into your military retirement planning.

Annual increases: In 2025, Tricare costs are going up by about 2% to 3%. That might not sound like much, but it adds up over 20 or 30 years of retirement.

Groups A vs. B: Your costs depend on which Tricare group you’re in, and that’s determined by when you entered service. Group B is anyone who entered after January 1, 2018. Generally, Group B pays more.

2025 retiree enrollment fees (some examples):

• Group A retiree families on Tricare Select: $364.92 per year
• Group B retiree families on Tricare Prime: $900.96 per year

That’s a pretty big difference just based on when you joined!

Deductibles: If you’re on Tricare Select, you pay deductibles. For Group B families (E-5 and above), the family deductible is jumping from $377 to $386 in 2025.

Premium increases for Reserves and Young Adults: If you’re Reserve or using Tricare Retired Reserve, your premiums are going up significantly. Same goes for the Tricare Young Adult Program if you’ve got kids aged 21-26 on your plan. Those premiums are climbing pretty steeply.

Catastrophic cap: This is the maximum you’ll pay out of pocket in a year, and even that’s going up. For Group B retirees, it’s rising from $4,399 to $4,509.

Why am I telling you all this? Because when you’re using a military retirement estimator to plan your future, you need to account for healthcare costs. They’re not optional, and they’re not going to get cheaper. Build them into your budget from day one.

Next Steps and Trusted Resources (Time to Actually Do Something)

Alright, so you’ve read all this—now what? Here’s what you need to do:

Calculate your options: Stop guessing and get real numbers. Head over to the official DoD BRS Comparison Calculator at http://militaypay.defense.gov/Calculators/BRS. They’ve also got High-3 and Final Pay calculators. Plug in your actual information and see what your military retirement could look like under each system.

Play around with different scenarios. What if you retire at 20 years vs. 22 years? What if your TSP returns average 7% vs. 9%? What if you take the lump sum vs. don’t? Run all the numbers so you know exactly what you’re looking at.

Get professional help (the free kind): Military OneSource offers free financial counseling. These folks can sit down with you (virtually or in person) and walk through your estimates. They’ve seen thousands of service members’ situations, and they can spot issues you might miss.

Check out FINRED: The Office of Financial Readiness has tons of resources at https://finred.usalearning.gov. We’re talking articles, calculators, courses—everything you need to make smart financial decisions about your military retirement.

Talk to people who’ve done it: Find someone who’s recently retired under the system you’re considering. Buy them coffee and pick their brain. What do they wish they’d known? What would they do differently? Real-world experience is invaluable.

Understanding BRS vs. High-3: A Simple Analogy

Still confused? Let me break it down with an analogy that’ll make this crystal clear.

Choosing between BRS and High-3 is like picking between two vehicles for a 20-year cross-country road trip:

High-3 is like a reliable, high-mileage bus. It only completes the trip if you stay on board for the entire 20 years—no exceptions. If you jump off at year 15? Too bad, you get nothing. But if you stick it out and stay on that bus for the full ride, you get a big, comfortable monthly paycheck (your pension) for the rest of your life. It’s predictable, it’s stable, and it’s substantial. The bus might not be exciting, but man, it gets you where you need to go.

BRS is like a hybrid car. It’s got a reliable gas engine (that 40% pension) that’ll get you there, but it’s a bit smaller than the bus engine. However—and here’s where it gets interesting—the car also hands you cash every single month to invest in building up a secondary electric motor (that’s your TSP match). If something happens and you have to exit the trip early, you don’t lose everything. You keep that growing electric motor and all the money you’ve invested in it.

But here’s the warning: if you get tempted by that lump sum option and take a bunch of quick cash upfront, you’re basically depleting the gas tank of your primary engine. Sure, you’ve got money in your pocket right now, but you’re going to be crawling along real slow in your later years, and by the time you hit 67 and the tank refills, you’ve already lost years of comfortable cruising.

Which vehicle would I choose? Honestly, it depends on your plans. If you’re pretty sure you’re doing the full 20 years and you started early enough, I’d probably lean toward High-3 for the pure financial math. But if there’s any doubt—if life might throw you a curveball, if you might need to leave early for family or health reasons, or if you just want the flexibility—BRS is the way to go.

And if you’re Guard or Reserve? BRS is almost always the better call because the likelihood of hitting a full 20 qualifying years is lower, and you want to make sure you’re building that TSP account regardless.

Final Thoughts: Your Retirement, Your Choice

Look, military retirement is one of the best benefits out there. Whether you’re looking at High-3 or BRS, you’re building something that most Americans don’t have—a guaranteed income stream in retirement. That’s huge.

But here’s the thing: you’ve got to actually plan for it. Use that military retirement estimator. Run the numbers. Be honest with yourself about whether you’re really going to do 20 years or not. Talk to your spouse or partner about what retirement looks like for your family. Max out that TSP match if you’re under BRS—seriously, it’s free money.

And whatever you do, don’t take that lump sum unless you’ve run the numbers with a financial advisor and you have a really, really good reason. I can’t stress this enough—it looks tempting, but the math almost never works out in your favor.

Your military service is valuable. Your retirement should reflect that. So take the time to understand your options, make an informed choice, and set yourself up for a comfortable future. You’ve earned it.

Now get out there and start planning. Your future self will thank you.