Reader questions on Reserve retirement Tricare and points

I see that Reserve retirement is a popular search term on the blog again, even more popular than financial independence or military retirement. Here are the recent top three searches:

  • Navy Reserve retirement calculator
  • Air Force Reserve retirement calculator
  • Navy personnel drawdown

I thought I’d learned everything I needed to know about the subject, but two reader questions have taught me even more.

Tricare for Reservists before age 60

First, here’s one about the starting date of retiree Tricare health insurance for Reservists, regardless of when the Reserve pension actually starts:

“Greetings. I have a question from a briefing I attended about early Reservist retirement and health insurance. It would seem that while mobilizations can trigger earlier annuity payments under the new provision, they do not allow for early health insurance. The briefer (who is married to a retired Reservist) insisted that you had to be age 60 to get the cheap retiree Tricare insurance, deployments or not. Of course, you can still get the high cost Tricare Retired Reserve health insurance prior to age 60. If you can find anything to prove this briefer wrong, I’d love to see it. Thanks for what you’re doing and for the encouragement you provide the military folks.”

Congress’ 2008 National Defense Authorization Act lets a Reservist perform 90 days of qualifying duty in a fiscal year to start receiving their pension three months earlier. Today, if you’re mobilized for an entire fiscal year then your Reserve pension would start at age 59 instead of the usual age 60.

Normally a Reserve retiree’s Tricare health insurance benefits start at age 60 with the pension. So if their pension starts earlier, when does their Tricare start?

Sometimes the Congressional enabling legislation is implemented differently by the individual services. DoD may implement the policy for all the services, or an Air Force policy may be different from a Navy rule. I checked the Air Force Reserve personnel website:

“Airmen will receive all retired pay benefits (e.g., commissary, base exchange, base services, etc) except medical benefits are deferred until age 60.
ID cards will show Airmen are not entitled to medical until age 60. At age 60, they will need to go to nearest military facility to obtain another blue ID card bestowing the medical benefit.”

A Marine Corps Reservist reports from his Notice of Eligibility letter for Reserve retirement (PDF):

“I have attached my 20-year letter dated 31 July. It just says ‘it is important to note that eligibility for certain retired TRICARE options do not begin until age 60.’ Ref (b) is 10 USC 12731, which doesn’t say anything about TRICARE.”

Finally I checked with Terry Howell, columnist and author of the latest edition of The Military Advantage (the military’s best benefits reference manual):

 “That is correct. TRICARE doesn’t kick in until after the “Gray Area” has passed at age 60. Then at age 65 retirees have to go on TRICARE For Life.”

So unfortunately no matter when the pension starts, Reserve retiree Tricare health insurance benefits still start at age 60. The 2008 NDAA enabling legislation only addresses retirement pay and not medical benefits. In other words the pension check can start before age 60, but Reservists are still not eligible for Tricare until they turn age 60. Of course Reservists are still eligible for gray-area Tricare Retired Reserve health insurance until age 60, but that’s a lot more expensive than retiree Tricare.

By the way, that 2008 NDAA has a few nasty little flaws:

  • The 90-day mobilization has to be consecutive days, not two or more separate mobilizations.
  • The 90 days have to occur all in the same fiscal year for it to count toward early retirement. If 82 days are served in one fiscal year and eight days in another, then it’s two different fiscal years of less than 90 days and none of it counts.
  • Even worse, the legislation was not retroactively funded for the more than 600,000 Reserves and Guard mobilizations since 9/11. If you were mobilized eight days before the effective date of the 2008 NDAA, and your mobilization was for a period of 90 days, then only 82 of them were eligible for consideration and didn’t make the cutoff for early retirement benefits.

Congress has repeatedly considered corrective legislation to extend this benefit retroactive to 9/11, but they haven’t figured out how to fund it yet. If you meet the other conditions of the 2008 NDAA but your mobilization was before the NDAA’s effective date of 28 January 2008, then hang on to your records. You might need them someday to document your eligibility for early retirement.

Earning Reserve points while retired awaiting pay

Here’s the second Reserve retiree question:

 “Can I still earn points as a gray area “retired awaiting pay” using the distance education programs of the various military branches like the Marine Corps Institute?”

Hey, if you’re going to do the work anyway, wouldn’t it be nice to have the credit?

It sounds like a great idea. When Reserve/Guard servicemembers are approved for retirement, they regain personal control over at least a weekend a month and two weeks a year. (Usually more time than that!) They have a rare opportunity to pause for reflection, perhaps to improve their knowledge. They’re subject to full mobilization during the “gray area” portion of their retirement (before their pension payments start), so why not have some incentive to keep up their skills?

A cynic would expect the answer to be “No!”, because the military gains nothing by giving points to gray-area retirees. They’re already retired and they’re only coming back ifs Congress mobilizes them. The military’s Reserve/Guard bureaucracy would have to keep re-opening a retiree record to add more points, yet the military personnel computer networks lock the electronic files of retiree records to avoid this type of data-entry “mistake”.

DoD has no reason to let you earn a few more dollars in your pension, either. However, there are differences among the services’ Reserve and National Guard programs, and there could be some niche provision for this situation.

I started with the Navy Reserve. The BUPERS website says that their instruction is being revised, but the website of the Association of the U.S. Navy has an archive copy. Page 1-2 of BUPERSINST 1001.39F , “Administrative Procedures for Navy Reservists”, chapter 1 section 102.2.b, says:

“3. Retired Status. Members in the Retired Reserve are in a retired status. Unless recalled to Active Duty, they may not receive retirement point credit. They may not be advanced or promoted. See section 103 of this chapter; chapter 5, section 507; and chapter 10, section 1008 for further information.”

Section 103 says:

Retired Reservists may not receive retirement point credit for the performance of any duty (except while authorized to serve on Active Duty) after the effective date of their transfer to retired status.”

I consulted the Reserve/Guard servicemembers on, who provided additional reference. The “Army Reserve Non-Regular Retirement Information Guide”, chapter 3-1 c.2.b, page 8, says:

2. Transfer to the Retired Reserve. A member in this category may participate in inactive duty training provided:

a) Such training is at no expense to the Government.
b) Members are not entitled to pay or retirement points.
c) No official record of such participation is maintained.”

If you have links to the Air Force, Marine Corps, and Coast Guard Reserve references then I’ll post them here, but the answer seems pretty clear: No points after retirement, unless you’re mobilized.

Whether you’re mobilized or not, when your Reserve/Guard pension starts it’ll be at a higher pay scale than your last paycheck.

You have two choices when you decide to act on your Notice of Eligibility for retirement. The first option is to resign from the military and have nothing further to do with the service. The (only) advantage of this choice is that you’re no longer subject to recall during a full mobilization. You’re a civilian, and you can’t be brought back to active duty. However, the military also washes its hands of you until age 60– you have no access to any military benefits. Even worse, when your pension starts at age 60 it starts at the pay scale that was in effect when you resigned from the service. It also starts at the same seniority you had then. It could have been over two decades since that pay scale was in effect, and it would be significantly eroded by inflation. You pay a heavy price for your total independence.

The other option, and the one that DoD hopes you’ll choose, is to “retire awaiting pay. You’re taking the (minimal) risk of being recalled to active duty for a full mobilization. However, you also have access to military benefits like Tricare Retired Reserve mentioned above. In addition you continue to accrue pay and seniority benefits. When your pension starts, it’ll be at the pay scale in effect during that year. (If your pension starts in 2025 then you’ll use the 2025 pay table to determine your base pay amount to use in calculating your pension.) Not only will you receive the current pay scale, but you’ll receive it at the maximum longevity for your rank. Now that the pay tables go to 40 years, everyone uses the 40-year pay tables. For your years of qualifying service, no matter how long that was, you’d use the “Over 40” pay column for your retirement rank. Right now the “Over 40” column may not make a difference– the only ranks that see pay increases after 30 years are E-9, W-5, and flag officer. If you’re in one of these ranks then congratulations! You’ve earned the pension boost. If you’re not in one of these ranks then your pension’s base pay amount is the same whether you have 30 years of service or 40.

However, the 40-year pay tables only started in 2007, so not very many servicemembers have retired under them. The reason for the change was to encourage senior active-duty ranks to stay to 40 years. It’s possible that the rules will change again before you begin receiving pay, so it’s worth keeping an eye on the military news about the latest pay changes. You’ll also be able to project your future retirement pay, which will help you determine when you’ve reached financial independence!
(Click here to return to the top of the post.)

Related articles:

Expanding Reserve Early Retirement ( columnist Tom Philpott)
Military Reserve retirement overview
Retiring from the Reserves and National Guard
Calculating a Reserve retirement
Reserves and National Guard
Should you join the Reserves or National Guard?
Reserves and National Guard: Tricare Reserve Select and Tricare Retired Reserve health insurance

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About Doug Nordman

Author of "The Military Guide to Financial Independence and Retirement" and co-author of "Raising Your Money-Savvy Family For Next Generation Financial Independence."
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4 Responses to Reader questions on Reserve retirement Tricare and points

  1. Kerry Krause says:

    My spouse has filed for divorce. I am a Reservist, on active duty until 2016, and am over 60. I will not collect my Reserve retirement until I leave active duty in 2016. Is my spouse entitled to retirement pay before I officially retire? Secondly, if she is, does that mean I pay it until I retire?

    • Doug Nordman says:

      Kerry, those are tough questions to answer because the Uniformed Servicemembers Former Spouse Protective Act is a federal law that guides the states on dividing military pensions during divorces. USFSPA doesn’t tell the states exactly how to do it, but it tells them that it’s property which can be divided during a divorce. The actual division is up to the state law and the divorce negotiations.

      The first question your divorce lawyer will want to address is what percentage of your pension your spouse is entitled to, along with other possible benefits like the Survivor Benefits Program or healthcare or military base access. The amount of your pension that falls under USFSPA may also be reduced by any VA compensation for physical disability, which won’t be known until you retire in 2016.

      The next question, as you mention, is when. You and your lawyer would have to negotiate that during the divorce proceedings, and I can’t predict which way the state law would be interpreted. Depending on the divorce decree, your spouse might be eligible to request that DFAS start the allotment from your pay– whether that’s active-duty pay now or your pension in 2016. But again that decision is guided by the state law and the court’s decision.

      You’re probably already seeking advice from a lawyer, preferably a military veteran, who understands your pension, active-duty status, and VA disability– and who can help you navigate your state’s laws.

      More links to the USFSPA and other regulations are at this post:

  2. Tim says:

    What about returning to duty after you retire? How is this done? I know it’s been said to contact a recruiter but I’d like to have this information before I call them.

    • Doug Nordman says:

      Tim, the recruiter is the first stop in the screening process. Unless you’ve been personally contacted by your service’s personnel branch, the recruiter has to figure out whether there’s a mobilization billet for your skills. The next step would be determining whether you’re medically and physically qualified, perhaps including an overseas duty screening. After that there’s the actual mobilization process.

      It’s a highly individual situation, and it depends more on the needs of the service than on your interest in serving. The best way to figure out your next step is to contact the recruiter.

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