Reserve Military Retirement For Active-Duty Veterans With Previous Reserve Or National Guard Service

Thanks to David McDonald for sending the comment that led to this post!

This information applies to only a handful of veterans, but it may earn them a military retirement. You could be affected if you were in the Reserves or National Guard and then went on to serve an active-duty service obligation (more than a mobilization).

Servicemembers who separated from active duty before reaching 20 years of service are rarely eligible for an active-duty retirement (and then it usually involves a temporary early-retirement authorization or a medical issue). However, if you separated from active duty but had lengthy prior Reserve/Guard service, then you may still have reached eligibility for a Reserve/Guard retirement. If you’ve been in uniform for at least 20 years with a combination of Reserve/Guard service and active duty then you could be eligible for a Reserve/Guard military retirement.

Back before April 2005, Reserve/Guard retirement eligibility had to be attained in a Reserve or Guard unit. Servicemembers who reached 20 years had to serve their final six “good years” in a Reserve/Guard unit. I’m not sure why this requirement existed, but it meant that Reserve/Guard retirees were almost certain to be serving in a Reserve/Guard unit before they retired. Their service’s Reserve/Guard personnel staff had full cognizance over the tracking of their points and their good years.

When extensive military mobilizations began after 11 September 2001, it became painfully clear that Reserve/Guard personnel procedures varied significantly from their active-duty services– and varied even more widely among the services. Each service had their own stovepipe systems for tracking their Reserve/Guard personnel, and those procedures didn’t work very well for integrating individual Reserve/Guard servicemembers with active-duty units. However, Reserve/Guard servicemembers were working the same hours on the same duties under the same conditions as active-duty servicemembers. They deserved to be treated the same way.

In addition, a few active-duty servicemembers had served in the Reserve/Guard before 9/11. They might have separated from the military before 9/11 and then re-enlisted for an active-duty obligation, or they might have transferred from the Reserve/Guard to active status. They didn’t simply mobilize for active duty and expect that someday they’d demobilize. They actually left the Reserve/Guard to serve an active-duty contract.

In November 2005, DoD policy required that the same procedures be used to manage all active duty (regular duty) and Reserve duty of servicemembers. This included tracking the crediting and accounting of Reserve retirement (“non-regular retirement”) along with active-duty retirement. This also includes tracking any non-regular service credit achieved by active-duty servicemembers.

When a Reserve/Guard member qualifies for a Reserve (“non-regular”) retirement, they receive a Notification of Eligibility that their 20-year requirement has been completed. In addition to their points, they’d achieved 20 years of qualifying service– 20 “good years”. With the new DoD policy, if they reached Reserve/Guard retirement eligibility while serving on active duty then their active-duty personnel staff were now responsible for delivery of the NOE.

Another law was changed effective 26 April 2005. After this date, Reserve/Guard servicemembers could retire without serving their final six qualifying years in a Reserve/Guard unit. (Scroll down to the “Retirement Eligibility” section of that link.) This meant that a servicemember on active duty who had previous Reserve/Guard service could reach eligibility for a Reserve/Guard retirement (a “non-regular retirement” on page 3 of Encl(1) of that link) while they were still serving on active duty. I’m not sure why this requirement was changed. (Please contact me if you know!) Now active-duty servicemembers with lengthy prior Reserve/Guard service might be eligible for a Reserve pension at age 60 (with gray-area benefits before age 60).

It’s been nearly eight years since the rule change, but not all of the data has transferred over from the Reserves to the active-duty personnel staffs. Reserve/Guard units are informing their members that they no longer have to serve their final six years in a Reserve/Guard unit before retiring, but active duty personnel staff may not be passing the same information to active-duty servicemembers who have previous Reserve/Guard experience. Even worse, active-duty personnel staffs are not tracking the total “good years” of service for those members and they’re not issuing them a NOE when they qualify for a Reserve retirement.

In this post, “lengthy” Reserve/Guard service before active duty probably means at least two years. If you have two years of prior Reserve/Guard service then you’d reach non-regular retirement eligibility after 18 years of active duty, and you’d probably choose to try to do two more years of active duty for an active-duty retirement. Even if you had 4-5 years of prior Reserve/Guard service then you’d probably still try to stay on active duty for another 4-5 years of an active-duty retirement. However, you’d have a choice, and that choice could be based on personal or family priorities instead of simply the financial difference between a Reserve retirement and an active-duty one.

Eventually, the systems will be reconciled to cover this gap in tracking. However, you have to be responsible for your own career and you have to stay aware of your own benefits. If you think you’re eligible for a Reserve/Guard retirement then talk with your personnel staff or a Reserve unit, or contact me. If you had lengthy Reserve or National Guard time before you went on active duty then you may want to explore a Reserve retirement now.

Related articles:
Should you join the Reserves or National Guard?
Retiring from the Reserves and National Guard
Calculating a Reserve retirement
Military Reserve and National Guard retirement calculators
Guest Post Wednesday: “My Road to a Reserve Retirement”
Military Reserve sanctuary and active-duty retirement
Navy Reserve retirement credit for ROTC summer training

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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7 Responses to Reserve Military Retirement For Active-Duty Veterans With Previous Reserve Or National Guard Service

  1. Ryan says:

    This is something I’m sure most people aren’t aware of. Hopefully they get the records reconciled so servicemembers and veterans are aware of their benefits!

  2. Kate Horrell says:

    One of the many pieces of fine print that are so elusive. Thanks for sharing this important information!

  3. Mike says:

    I am glad I ran into this article. I participated in the Army’s Call to Active Duty Program and will be part of this handful in a couple more years on Active Duty. I am not near 60 yet but this might be my only benefit if I get passed on promotion at the next board.

    • Doug Nordman says:

      You’re welcome, Mike!

      You’ll want to keep performing at your best, but also make sure that your personnel office has an accurate record of your Reserve service as well as your active duty. Even if you don’t promote there’s the possibility of being continued on active duty until you’re eligible for an active-duty retirement, not just a Reserve one.

      Either way you’re winning the game– now you can keep running up the score as long as you’re enjoying it.

  4. Joseph Alfano says:

    Excellent article! Very informative. Active-duty personnel staffs (PSDs) are definitely not tracking the total “good years” of service for service members and are at a loss on how to correct pay issues related to it.

    • Doug Nordman says:

      Too true, Joseph, I’m sorry to say that we’ve seen a lot of that here over the last eight years.

      People have to track (and correct) their own service records— and it’s a lot easier to do that before retiring or separating!

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