BRS Lump Sum & Continuation Pay Calculator

Two BRS cash decisions: the retirement lump sum and mid-career continuation pay

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Personal project. Views are my own, not the Army’s or DoD’s. Educational estimates, not financial advice.
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The Blended Retirement System gives you two chances to take cash now instead of more later. At retirement you can take 25% or 50% of your pension up front, and your monthly check shrinks by the same share until age 67. Mid-career, continuation pay is a bonus for agreeing to serve longer. DoD prices the lump sum with a 6.6% discount rate for 2027, which is steep: it only pays off if you can beat that rate after inflation.

Retirement lump sum

Full BRS pension: 2% × years × high-3. Estimate yours.
Guard/Reserve: usually 60.
2027 rate (DoD memo, 7 Jul 2026). Published each June for the next year.
It is taxable income in the year paid, which can push you into a higher bracket. Up to 4 annual installments can soften that.
Lump sum before tax
$0
Monthly pay until 67
$0
Pay you give up
$0
Cents per dollar
0¢
lump sum ÷ pay given up
After tax
$0

Continuation pay

Your service sets it each year (active 2.5–13×, reserve 0.5–6×).
Traditional TSP lowers the taxable amount, within the annual limit.
Continuation pay before tax
$0

Current multiples by service

ServiceActiveReserveAdded service
Army2.5×4×4 years
Marine Corps5×1×4 years
Navy2.5×0.5×4 years
Air Force / Space Force2.5×0.5×4 years
Coast Guard2.5×0.5×4 years

Source: DoD "Continuation Pay Rates – 2024", the latest table DoD has posted. Services can change multiples by message; confirm yours with your career counselor.

Frequently asked questions

Should I take the BRS lump sum?

Usually not, unless you have a specific high-return use for the money, like paying off high-interest debt. DoD discounts the lump sum at 6.6% a year after inflation for 2027. A guaranteed, inflation-protected pension is hard to beat at that price, and a 20-year retiree at 40 typically gets well under half of the pension they give up.

Does my pension go back to normal after the lump sum?

Yes. Your monthly retired pay is reduced by 25% or 50% until you reach age 67, then it returns to the full amount, including the COLAs it earned along the way.

Is BRS continuation pay taxed?

Yes. It is taxed as supplemental wages, usually with 22% federal withholding, plus state tax where it applies. It is tax-free if you receive it while serving in a combat zone. You can put part of it into the TSP.

When is continuation pay offered?

Between 8 and 12 years of service, at a point your service chooses. You must be enrolled in BRS and agree to additional obligated service, currently 4 years in each service.

Check it against the official source

This is an estimate for planning. For a binding answer, talk to your finance office or a free Personal Financial Counselor at your installation (find yours).