The New Military Retirement

On Nov. 25, 2015, the president signed a new military retirement system into law as part of the National Defense Authorization Act. The new system, which goes into effect on Jan. 1, 2018, calls for a 20 percent reduction in retirement pay in exchange for automatic and matching Thrift Savings Plan (TSP) contributions, a mid-career continuation pay bonus and options to receive a portion of retirement as a lump sum.

Proponents say the new structure will offer greater financial flexibility to young service members and point to the fact that a much higher percentage of service members will leave the military with at least some retirement savings. Look a bit deeper, though, and you’ll find that this enhanced flexibility comes at the cost of significantly less financial certainty for the next generation of retiring service members, whose success in the new system will depend – far more than ever before – on making prudent financial decisions at several key junctures of their careers.


First Command News & Media

First Command launches analyzer tool for military families considering new retirement system

First Command launches analyzer tool for military families considering new retirement system

Amid growing demand for professional advice on the government’s new military retirement system, First Command Financial Services, Inc. is rolling out a new planning tool designed to help current active-duty families decide between opting in to the new, blended retirement plan and sticking with their traditional pension.

Military Families Prefer Traditional Retirement Pension Over New Benefits

Military Families Prefer Traditional Retirement Pension Over New Benefits

Service members who expect to make a career out of the military prefer to stick with a traditional pension rather than opt for the newly-approved retirement reforms in the 2016 National Defense Authorization Act, reinforcing the value of guarantees in ensuring lifetime financial security.

TSP Participation Strongest Among Military Families With A Financial Advisor

TSP Participation Strongest Among Military Families With A Financial Advisor

Career military families who work with a financial advisor are more likely to participate in the federal government’s Thrift Savings Plan (TSP), reinforcing the value of professional guidance in amassing retirement assets.

To read more, visit the First Command News & Media page.

Scott Spiker

“Military retirement is about to get more complicated and less guaranteed.”

Read CEO Scott Spiker’s perspective on the new military retirement.

The New Military Retirement Analyzer

Understand your decision points. Run different scenarios. Make informed choices.

Our Advisors have important tools to help you understand the financial impact of your retirement decisions.

What has changed?

Get an informative breakdown of what the new military retirement looks like.

In the News

DoD Ramps Up Training on Blended Retirement System

DoD Ramps Up Training on Blended Retirement System

The Defense Department’s new retirement system will affect some 2.2 million people who all need to get smart on what it will mean.

Military Pension Changes Worry Personnel

The new military retirement system has major flaw, financial experts warn

Top financial experts are worried about a key piece of the military's new blended retirement system and are urging the Pentagon not to shortchange career troops — especially enlisted service members.

Military Pension Changes Worry Personnel

Military Pension Changes Worry Personnel

Most military families are concerned about additional changes proposed by Congress for the military retirement system, which underwent a complete overhaul just last year, says First Command.

Military not impressed with retirement reforms

Military not impressed with retirement reforms

Career military service members don’t think much of the new retirement option.

Service Members Need Nudging with New Retirement System

Service Members Need Nudging with New Retirement System

Retirement outcome success with the new military retirement system will depend much on participants making best savings decisions.