Calculating Military Retirement: Understanding the Computation of High-36, CRDP, VA Disability, and the 20 Year Rule

by | Jul 11, 2023 | Qualified Retirement Plan | 6 comments




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Military Retirement High 36 + CRDP + VA Disability. What are the rules and how they are computed. Knowledge is Power! Let me empower you! Black Hawk Bryan “SHOWS” you were the rules are regarding military retirement pay, how the High 36 is computed and how does CRDP (Concurrent Retirement Disability Pay) come into play. Please, watch my video on CRDP.

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Military Retirement: High 36 + CRDP + VA Disability + 20 Year Rule Explained

When individuals serve in the military, they not only dedicate their lives to serving their country but also have the privilege of accessing various retirement benefits. The military retirement system can be complex, but understanding the key factors involved, such as the High 36 + CRDP + VA Disability + 20 Year Rule, is crucial. In this article, we will explain how these components are computed and what they mean for military retirees.

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The High 36 retirement system is the foundation upon which the other components are added. This system calculates the retirement pay based on the average of the highest 36 months of basic pay. It includes basic pay, special pay, incentive pay, and some bonuses received during that period. For example, if an individual’s highest 36 months of basic pay average $4,000, their High 36 retirement pay would be based on this amount.

The next component, Concurrent Retirement and Disability Pay (CRDP), is aimed at addressing a significant issue often faced by military retirees. In the past, retirees who received disability benefits from the Department of Veterans Affairs (VA) had their retirement pay offset by the same amount. This meant that disabled veterans were unable to receive both their full VA disability benefits and their military retirement pay. However, the introduction of CRDP changed this. CRDP allows veterans who have a VA disability rating of 50% or higher to start receiving both their full retirement pay and disability compensation, removing the offset.

VA Disability compensation is an important element for veterans who have service-connected disabilities. The amount of compensation a disabled veteran receives is determined by the VA, based on the severity of their conditions. This compensation is not taxable, making it a valuable financial resource for veterans who have served and sacrificed for their country.

The 20 Year Rule is an additional factor that determines retirement eligibility for those who serve in the military. After serving for 20 years, individuals become eligible for retirement benefits, including a percentage of their base pay. The percentage is determined by the number of years served, with 50% of the base pay granted for 20 years of service, and an additional 2.5% for each year beyond the 20th year. This means that after 30 years of service, an individual would be eligible for 75% of their base pay as retirement benefits.

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When calculating military retirement pay, all of these components are taken into account. For example, let’s consider a hypothetical retired soldier who served for 25 years, achieved the rank of Sergeant Major (E-9), has a disability rating of 70% from the VA, and has an average High 36 basic pay of $4,000. According to the 20 Year Rule, they would receive 75% of their highest 36 months of basic pay, which amounts to $3,000. However, due to their 70% VA disability rating, they would also receive disability compensation from the VA, which let’s say is $1,000. In this case, the CRDP would allow them to receive both their military retirement pay ($3,000) and their disability compensation ($1,000), resulting in a total retirement income of $4,000.

It is essential for military retirees to have a clear understanding of how their retirement benefits are computed. The High 36 + CRDP + VA Disability + 20 Year Rule provide a comprehensive picture of the key components that contribute to a retiree’s overall retirement income. By comprehending these intricacies, veterans can make informed decisions and optimize their retirement benefits.

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6 Comments

  1. Robert Bonilla

    I served 15 yrs active service plus 7 years National Guard, I received my 20 year letter but I have to wait until 60 yrs old to receive my military pension. my military service ended in 2005, in 2022 I was awarded 100% P&T VA disability , I'm currently 58 yrs old……. so my question is "Will I still receive my military pension at age 60 even tho I'm receiving VA Disability?"

  2. Nate Harris

    Awesome info, thanks so much! Question: I’m just over 23 years of active duty service, but where or how do I get my “20-year letter?” I’ve been to my IPERMS and now IPPS-A, and haven’t found it.

  3. J

    If you medically retire at 45 you only get VA payments until you are 60? Great channel, it’s nice to get real info

  4. RamadiTaxiDriver60M

    Great info. great channel. I'm spreading the word about your channel.

  5. Dj Vinnie

    So if i have a 20 year letter (ng) 100% va. But i am under crsc. So my question is how do you collect 100% retirement & 100% VA compensation?

  6. Todd Maek

    Do you know of any value in having combined service without retirement? What I mean is did 14years active, plus 3yrs civ/fed, resigned am currently 100% TDIU, P&T Just wondering if there is anything that I am unaware of at all that could be done with that time or is it just… The past is the past.

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