2022 AFBA Financial Planning Guide

(assuming attendance at 48 annual drills and two weeks of active duty training). 2–4. RETIREMENT. In general, reservists must have a minimum of 20 qualifying years of service to be eligible for retirement. A qualifying year of service is any 365 day period during which the member has earned at least 50 service points. Point totals are also important because they are used to calculate retired pay. Excluding points earned while in an active duty status (which includes annual training), reservists may not earn more than 130 points per year. Service points are normally earned in accordance with the following criteria: a. One point for each day of active duty. b. One point for each 4 hour drill period. c. 15 points for each year of service in the Guard or Reserve. d. One point for each 3 credit hours of accredited correspondence study. Eligibility to draw retired pay normally begins at age 60. However, the member may begin to draw retired pay as early as age 50 if he/she has 20 qualifying years of service including active duty service performed after January 28, 2008. Specifically, each 90 days of active service performed after January 28, 2008, entitles the member to begin drawing retired pay 3 months prior to age 60. Therefore a member with 360 days of active service would be eligible to draw retired pay at age 59 versus 60. Computation of Retired Pay. The computation of retired pay is determined based upon the DIEMS (Date Initially Entered Military Service). Those with a DIEMS before September 8, 1980 use the Final Pay System, those with a DIEMS on or after September 8, 1980 through December 31, 2017 use the High–36 System, and those with a DIEMS date on or after January 1, 2018 use the Blended Retirement System (BRS). All systems determine the years of service by dividing the total points earned in all years by 360. The result is then multiplied by 2.5% for Final Pay and High-36 or 2% for BRS which provides the percentage of base pay that will be received at retirement. For example, a member accruing 2,880 points would have a retirement rate percentage of 20% under Final Pay and High-36 (2,880/360 = 8 years; 2.5% x 8 years = 20%). Under BRS, this same member would have a retirement percentage of 16% (2,880/360 = 8 years; 2% x 8 years = 16%). The systems also differ in the determination of the base pay amount. In the Final Pay System, the pay computation is based upon the base pay for the grade and length of service

as “summer camp”) for which they receive pay and benefits. Individual Mobilization Augmentees (IMAs) are members of the Selected Reserve who participate in training activities and are eligible for unit assignment at the time of mobilization. IRR personnel are normally prior service individuals (active or Selected Reserve) who have some remaining period of obligated military service. Usually, they are not affiliated with a unit and generally do not have to satisfy an annual training requirement. ING personnel are normally members assigned to a specific Guard unit who have been excused from training requirements because of legal or contractual requirements. b. Standby Reserve. This group consists of members who have retained their military affiliation but who are excused from active participation because of hardship, “critical” civilian employment, or other legal requirements. Under certain circumstances members in this category may be involuntarily called to active duty for the duration of a national emergency plus six months. c. Retired Reserve. This group consists primarily of retired members who are drawing retirement pay (over age 60) and those retired members who are not yet eligible for retired pay (under age 60). Eligibility for mobilization is a function of category. Category I retirees are those within their first five years of retirement and are under age 60; Category II retirees are under age 60 but have been retired for more than five years; and, Category III retirees include all remaining retirees. 2–3. PAY. The pay received by members of the reserve and national guard is determined by the type of duty performed — active duty or inactive duty training. While on active duty, generally he/she receives the normal active duty pay and allowances associated with their grade and years of service. While on inactive duty training, reservists receive drill pay in lieu of normal pay and allowances. Generally, a drill is one four hour period of assembly, training, or military service. Pay for one drill period is equivalent to one day of active duty base pay. Reservists cannot be paid for more than two drills in one calendar day. Reserve units will often drill on a weekend basis performing two drills on Saturday and two drills on Sunday, thereby enabling the member to draw four days of active duty base pay for weekend service. The table on the previous page shows the monthly drill pay while the table on the next page provides an estimate of the annual pay earned by a reservist


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