Welcome to Reserve Retirement

If you're a member of the National Guard or Reserves—or considering joining—understanding your retirement benefits can seem overwhelming at first. Terms like "points," "gray area," and "High-36" might sound like a foreign language.

This guide breaks down everything you need to know in plain English. Whether you're a brand new reservist, a family member trying to understand the system, or just curious about how military reserve retirement works, you're in the right place.

1. How Reserve Retirement Works (The Big Picture)

Reserve and National Guard retirement is different from active duty retirement. Here's the key difference:

Active Duty: Serve 20+ years continuously → Retire → Start receiving pay immediately
Reserve/Guard: Serve 20+ qualifying years (can be non-continuous) → Stop drilling → Wait until age 60* → Start receiving pay

*You may be able to receive pay earlier than 60 if you have qualifying active duty service. More on that later.

The Basic Requirement

To qualify for reserve retirement, you need 20 qualifying years of service for retirement. A "qualifying year" (also called a "good year") is any retirement year where you earn at least 50 retirement points. Your retirement year is typically based on your Pay Entry Base Date (PEBD), not the calendar or fiscal year.

What You'll Receive

Reserve retirement comes with several benefits, but they don't all start at the same time:

Immediate Benefits (when you complete 20 qualifying years)

At Retirement Pay Eligibility Age (60 or earlier with qualifying active duty)

At Age 60 (regardless of when pay starts)

2. The "Gray Area" Explained

The "gray area" is one of the most misunderstood aspects of reserve retirement. Let's clear it up.

What Is the Gray Area?

The gray area is the period of time between when you stop drilling (finish your reserve career) and when you start receiving retirement pay (typically age 60).

Example: The Gray Area in Action

Sergeant Smith joins the Army Reserve at age 23. He serves for 22 years and completes his career at age 45. He has earned 20 qualifying years and is eligible for reserve retirement.

But he doesn't start getting paid at 45. He has to wait until age 60 to receive his first retirement check.

The 15 years between age 45 and 60 is his "gray area."

Why Is It Called "Gray"?

During this period, you're in a sort of limbo:

The Good News About the Gray Area

Key Point: Your time in the gray area counts toward your Years of Service for pay calculation purposes!

This is important. When you finally start receiving pay at age 60, your retirement pay is based on:

  1. The pay tables in effect when you start receiving pay (not when you stopped drilling)
  2. Your total years of service, including the gray area years

Example: How Gray Area Helps Your Pay

Master Sergeant Williams (E-8) retires from the Army Reserve:

  • He stopped drilling at age 45 with 22 years of service
  • He starts receiving pay at age 60
  • His Years of Service for pay purposes: 22 + 15 = 37 years

At E-8, pay continues increasing through 26+ years of service. He benefits from both the higher longevity step AND 15 years of pay table increases. (Note: Lower ranks may see pay cap earlier—around 16-22 years—so the gray area benefit varies by rank.)

Visual Timeline (Standard Retirement)

Age 23: Join the Reserves

Begin earning retirement points through drills, annual training, and any active duty orders.

Age 45: Complete 20+ Qualifying Years for Retirement

You receive a "20-year letter" confirming your eligibility. You stop drilling and enter the "gray area." Immediate benefits begin: base privileges (commissary, exchange, MWR), veteran status, and eligibility to purchase TRICARE Retired Reserve.

Ages 45-60: The Gray Area

No retirement pay or full TRICARE yet. You can purchase TRICARE Retired Reserve (premiums required). Your years of service continue accumulating for pay purposes. You can work civilian jobs without restriction.

Age 60: Retirement Pay & Full TRICARE Begin

You start receiving monthly retirement checks. Full TRICARE coverage (Select or Prime) becomes available—no longer need to purchase Retired Reserve. Pay is based on current pay tables and your total years of service (including gray area).

Visual Timeline (With Early Retirement)

If you have qualifying active duty after January 28, 2008, your pay may start earlier—but TRICARE timing doesn't change:

Age 45: Complete 20+ Qualifying Years for Retirement

Same as above—immediate benefits begin: base privileges, veteran status, TRICARE Retired Reserve (purchased).

Age 57: Early Retirement Pay Begins (example)

With 3 years (1,080 days) of qualifying active duty after 2008, your retirement pay can start 3 years early. However, you still cannot get full TRICARE yet. You must continue purchasing TRICARE Retired Reserve or use other coverage.

Age 60: Full TRICARE Finally Begins

Regardless of when your pay started, full TRICARE coverage (Select or Prime) only becomes available at age 60. At this point you can drop TRICARE Retired Reserve.

3. Understanding Retirement Points

Your retirement pay is calculated based on "retirement points" - not years of service like active duty. Points are the currency of reserve retirement.

How You Earn Points

Activity Points Earned
Each day of active duty (including annual training) 1 point per day
Each drill period (typically 4 per weekend = "4 drills") 1 point per drill
Membership in a reserve component (annual) 15 points per year
Correspondence courses, funeral honors, etc. Varies

What's a "Qualifying Year" for Retirement?

A qualifying year (also called a "good year") is any retirement year where you earn at least 50 points. You need 20 qualifying years for retirement to be eligible for reserve retirement.

PEBD Timing: Your qualifying years for retirement are based on your Pay Entry Base Date (PEBD), not the calendar year or fiscal year. For example, if your PEBD is March 15, your retirement year runs from March 15 to March 14 of the following year. This can create complications when you have calendar-year or fiscal-year requirements from your unit—always track both separately.

Note: "Qualifying year for retirement" is different from "satisfactory participation" requirements your unit may have—those are separate standards.

Example: Typical Year of Points

A typical drilling reservist might earn:

  • 15 points - Annual membership
  • 48 points - 12 weekends x 4 drill periods each
  • 14 points - 2 weeks of annual training

Total: 77 points (well over the 50-point minimum for a qualifying year)

Point Limits

There's a cap on how many points you can earn in a single year:

Active duty points (including deployments) are not limited.

How Points Convert to Pay

Your retirement pay is calculated by dividing your total points by 360 (the number of points in a full active duty year):

Point Years = Total Points / 360

Example: 4,000 points / 360 = 11.11 point years

This "point years" number is then used in the retirement pay formula.

4. High-36 vs. Blended Retirement System (BRS)

There are two retirement systems you might be under, depending on when you joined the military:

Feature High-36 (Legacy) Blended Retirement System (BRS)
Who's covered Joined before Jan 1, 2018 (and didn't opt into BRS) Joined on/after Jan 1, 2018, or opted in
Multiplier 2.5% per year 2.0% per year
TSP Matching None Up to 5% government match
Continuation Pay None Yes, at 12 years

The Retirement Pay Formula

High-36 Formula:

(Total Points / 360) x 2.5% x Base Pay

BRS Formula:

(Total Points / 360) x 2.0% x Base Pay

Example Calculation

Let's say you have:

  • 4,500 total retirement points
  • Retiring as an E-7 with 30 years of service
  • Base pay at retirement: $7,175/month (2026 tables)

High-36 Calculation:

(4,500 / 360) x 2.5% x $7,175 = 12.5 x 0.025 x $7,175 = $2,242/month

BRS Calculation:

(4,500 / 360) x 2.0% x $7,175 = 12.5 x 0.02 x $7,175 = $1,794/month

Note: BRS members also receive TSP matching, which can significantly add to their total retirement savings.

What is "High-36"?

The "High-36" name comes from how base pay is calculated for active duty retirees (average of their highest 36 months of pay). For reservists, it's slightly different:

For Reserve Retirement: Your base pay is determined by the pay tables in effect during the 36 months before you start receiving pay, based on your pay grade and years of service. Since you're not actually serving during the gray area, it uses what your pay would have been if you were on active duty.

5. Calculator Inputs Explained

Here's what each field in our retirement calculator means and how to determine your values:

Date of Birth

Your birth date is used to calculate when you'll start receiving retirement pay. Combined with your eligible age, this determines your "pay start date."

Age Eligible for Pay

This is the age when your retirement pay begins. For most reservists, this is age 60. However, if you have qualifying active duty service after January 28, 2008, you may be eligible for pay earlier (as young as age 50). Use our Early Retirement Calculator to determine your eligible age.

Important: Even if you qualify for early retirement pay (before age 60), full TRICARE coverage still doesn't begin until age 60. You'll need to continue purchasing TRICARE Retired Reserve or use other health coverage until then.

Retirement System (High-36 or BRS)

Total Retirement Points

This is your career total of all retirement points. You can find this on your annual retirement point statement or through your service's personnel system:

Pay Grade at Retirement

This is your rank when you stop drilling. Your retirement pay is calculated using the base pay for this grade.

Time in Grade Requirement: To retire at a given grade, you generally must have served satisfactorily in that grade for a minimum period (typically 3 years for officers, varies for enlisted). If you don't meet the time in grade requirement, you may be retired at your previous grade unless you receive a waiver. Waivers may be available for service members with exceptional records or those who were unable to meet the requirement due to circumstances beyond their control. Check with your service's personnel office for specific policies.

Years of Service at Time You Receive Pay

Important: This is NOT when you stop drilling. This is your total years of service when you START RECEIVING PAY—including the gray area years!

To calculate this:

  1. Take the year you entered service
  2. Subtract that from the year you'll start receiving pay

Example

You joined in 2005 and will start receiving pay in 2045 (at age 60):

2045 - 2005 = 40 years of service

Even though you may have only drilled for 20 years, you get credit for 40 years on the pay table!

Pay Table Growth

Military pay tables typically increase each year (historically 2-3.5% annually). Since your pay is based on the tables in effect when you START receiving pay (potentially decades from now), we project future pay table growth:

COLA Projection

After you start receiving retirement pay, your pay is adjusted annually for inflation through Cost-of-Living Adjustments (COLA). This projection shows how your pay might grow over time:

6. Early Retirement (Getting Paid Before 60)

Thanks to the National Defense Authorization Act of 2008 (NDAA 2008), you may be able to start receiving retirement pay before age 60.

How It Works

For every 90 days of qualifying active duty service performed after January 28, 2008, your retirement eligibility age is reduced by 3 months.

The minimum age is 50. Even with extensive active duty, you cannot receive retirement pay before age 50.

What Orders Qualify?

Not all active duty counts. Qualifying orders include:

Orders that typically do NOT qualify:

Combining Multiple Orders & Fiscal Year Rules

The rules for combining orders have evolved over time:

Combining Multiple Orders (FY2010 NDAA): You can combine multiple shorter periods of qualifying active duty to reach the 90-day threshold. Before this change, each individual set of orders had to be 90+ days on its own.
Two Consecutive Fiscal Years (FY2015 NDAA): For activations on or after October 1, 2014, you can combine qualifying days across two consecutive fiscal years to reach the 90-day threshold. Days cannot carry forward beyond two consecutive FYs.
Before October 1, 2014: For activations before this date, the 90-day aggregate had to be completed within the same fiscal year. Leftover days did not carry forward at all.

Example: Combining Orders Across Two Consecutive FYs (Post-2014 Rules)

Master Sergeant Jones has the following qualifying active duty:

  • FY2023: 45 days (October mobilization) + 30 days (March deployment support) = 75 days
  • FY2024: 60 days (contingency operation)

How it adds up:

  • FY2023: 75 days alone → not enough for a 90-day period
  • FY2023 + FY2024 combined: 75 + 60 = 135 days → 1 complete 90-day period, with 45 days remaining
  • The remaining 45 days can only combine with FY2025 days (two consecutive FYs)

Her current total: 1 complete 90-day period = 3 months early

Her eligible age so far: 60 - 0.25 = 59 years, 9 months

Reference: 10 U.S.C. § 12731(f)(2)(A) as amended by NDAA 2015

Calculate Your Early Retirement Eligibility

7. Reserve Component Survivor Benefit Plan (RCSBP)

The Reserve Component Survivor Benefit Plan (RCSBP) is an insurance program that provides continued income to your eligible survivors (usually spouse or children) after your death.

When Do You Decide?

Unlike active duty members who decide at retirement, reservists make their RCSBP election when they receive their 20-year letter (Notification of Eligibility). You have 90 days to respond.

Default if you don't respond: If you don't return your election certificate within 90 days, you are automatically enrolled in Option C (Immediate Annuity) with full spouse coverage. This is the maximum benefit level and becomes irrevocable.

The Three RCSBP Options

Option Gray Area Coverage When Survivor Annuity Begins
Option A: Decline None N/A—no coverage
Option B: Deferred Annuity Yes (limited) When you would have reached age 60, or day after death if later
Option C: Immediate Annuity Yes (full) Immediately upon your death, regardless of age
Key Point: If you elect Option B or C, your survivors ARE covered during the gray area. This is different from what many people assume.

How Premiums Work

Example: Option C Election

Chief Petty Officer Davis receives his 20-year letter at age 42. He elects Option C (Immediate Annuity) with full coverage.

  • If he dies at age 50 (during gray area), his spouse immediately begins receiving 55% of his projected retirement pay
  • He pays no premiums until age 60 when his retirement pay starts
  • At age 60, his premium is 6.5% base + ~2.5% RCSBP surcharge = ~9% of base amount
Decision Point: This is one of the most important financial decisions you'll make. If you're married and want to decline coverage (Option A), your spouse must consent in writing. Consider consulting a financial advisor.

Source: DFAS - Reserve Component Survivor Benefit Plan

8. Next Steps

If You're Currently Serving

  1. Track your points - Review your annual retirement point statement every year
  2. Understand your orders - Know which active duty orders qualify for early retirement
  3. Plan for the gray area - Consider how you'll handle healthcare and finances between drilling and receiving pay
  4. Contribute to TSP - Especially important for BRS members to maximize matching

If You're Approaching Retirement

  1. Request your 20-year letter - Confirms your eligibility for retirement
  2. Verify your points - Ensure all your service is properly credited
  3. Understand your immediate benefits - Base privileges and veteran status start right away; TRICARE Retired Reserve can be purchased during the gray area
  4. Plan your SBP decision - You'll need to decide when retirement pay begins

If You're in the Gray Area

  1. Keep your contact info updated - DFAS needs to reach you when it's time to start pay
  2. Apply for pay 6 months early - Start the application process before your eligible age
  3. Consider TRICARE Retired Reserve - Purchased healthcare option during the gray area (full TRICARE doesn't start until retirement pay begins)

Ready to Calculate Your Retirement Pay?

Now that you understand the basics, use our calculator to estimate your future retirement income.

Retirement Pay Calculator Early Retirement Calculator