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    How to Make the Most of the Military's Blended Retirement System

    The Blended Retirement System, or BRS, took effect January 2018.

    Those that had more than twelve years of service were grandfathered into the old system while those who had less than twelve years of service were given a choice between either retirement plan. And anyone new to the military was and is enrolled into the BRS now.

    Last year, in an effort to better understand this new system, I reached out to Michael Meese, Retired Brigadier General and COO of American Armed Forces Mutual Aid Association (AAFMAA). After speaking with him,  I wrote the basics of the BRS in Understanding the New Blended Retirement System.

    But it’s been a while since many of us made the decision between the old and the new, and so I think it's time to revisit the topic and make sure that we’re making the most of the BRS.

    The Blended Retirement System: What It Is and How to Make the Most of It 

    How to Make the Most of the Blended Retirement System

    Why the BRS Changed

    The first question I asked myself when they announced the new Blended Retirement System (BRS) was, why change the one already in place? Meese explained it like this:

    The old retirement system was established shortly after World War II, back when people were loyal to one job for the duration of their career. The old retirement system worked really well for those who committed a full career to the military. Today, however, only 20 percent of service members stay in a full 20 years, which means the old system doesn’t provide for the other 80 percent. It is for this reason the decision was made to implement the new BRS.

    The Basics of the BRS

    The BRS breaks down into three parts.

    Thrift Savings Plan (TSP)

    This portion of the retirement system operates like a civilian 401K. You put a percentage of your income into TSP, which is invested by TSP for your retirement. The DOD will automatically contribute 1% for everyone in the new plan automatically, and will match up to 5% of your monthly savings in TSP.

    Continuation Pay

    Somewhere between 8 and 12 years of service, members are offered a mid-career bonus in return for an additional three-year commitment.

    Full Retired Annuity

    This portion of the BRS is given for life after completion of 20 years of service. It is calculated by 2% x number of years served x retired base pay. The difference between this portion of the BRS is that now it is 2%, instead of 2.5% under the old system.

    Visual learners may want to view this PDF of the Blended Retirement System.

    Who the BRS Affects

    The BRS affects everyone that signed after December 31, 2017. Every current service member who’s served less than twelve years had the option to join the BRS and must make the decision by December 31, 2018. Those who'd served longer than twelve years upon the enrollment period for the BRS were not eligible (nor would they have likely wanted to).


    How to Make the Most of the Blended Retirement System

    Invest the full 5% into your TSP investments. Since the largest criticism of the new retirement system is that service members won’t see as large of a payout upon a full 20 year or more military career, the TSP is the best way to ensure that you do receive the largest financial benefit you can.

    What’s more, there's the peace of mind that if you can’t or don’t want to stay in the military for a full 20 years, you still walk away with your TSP investments (more than if you got out of the military early with the old system.)

    Take Initiative

    There is more you can do to plan for your retirement than investing 5% of your monthly income into the TSP.  We don’t like to think about it, but military careers are not perfect. There is promotion pass over, injury, and death that could alter your retirement with either of the systems. So it’s important that you diversify your investments and rely not solely on either system.

    Mike suggests looking at additional life insurance policies through companies like AAFMAA, USAA, and Navy Federal.

    You should also consider investments outside the TSP, including real estate. MilitaryByOwner Advertising is here to help you buy, rent and sell properties, so let us help make your real estate investments a success!

    9 Steps to Plan Ahead for Military Retirement

    Danielle Keech


    Danielle Keech

    Danielle Keech is a writer and content creator for MilitaryByOwner Advertising. She writes on military life topics, highlights clients’ open houses on social media, and manages the Military PCS Facebook group. She especially enjoys covering financial topics and helping military families exercise financial responsibility and plan for the future. Danielle has been a Marine Corps spouse for ten years (and counting!) and is a momma to four littles and one fur baby. She and her pilot spouse have lived in Virginia, Florida, Texas, California, Hawaii, and, most recently, Okinawa, Japan. And yes, you guessed it, Hawaii is her favorite duty station to date! Find MilitaryByOwner's Millitary PCS group here.

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