Pension + TSP withdrawal + VA disability — your full monthly retirement income in one view
Three income streams, one monthly number. Most military retirees stack a pension, TSP withdrawals, and VA disability compensation. The dedicated calculators handle each in detail — this tool combines them so you can see what your actual monthly retirement income will be. Estimates only; consult a financial advisor for planning decisions.
High-3 averages your actual pay over the last 36 months. If you were a different rank earlier in that window, your real high-3 is lower than the auto-fill assumes. Enter the rank you held at each of your last 3 years.
Officers below O-5 need 3 years in grade to retire at that rank (10 USC §1370a); enlisted have no time-in-grade requirement for high-3 averaging.
⚠ Historical pay note: Calculations use 2026 pay rates throughout the 36-month window. Actual high-3 for retirements spanning multiple pay-table years (e.g., retiring late 2026 with the window starting in 2023) will be ~3-7% lower than shown. For exact precision, average your last 36 LES base pay entries and override the high-3 field above.
A 20-year military retiree typically draws from three distinct income sources after separation. Understanding how they interact — and what's taxable versus tax-free — is the foundation of military retirement planning.
Your monthly pension is calculated as a percentage of your "high-3" average base pay — the average of your highest 36 months of base pay, typically your final three years before retirement. Under High-3 (Legacy), the multiplier is 2.5% per year of service, capped at 75% (30 years). A 20-year retiree gets 50% of high-3. Under BRS, the multiplier drops to 2.0% per year — 40% at 20 years — but you also receive TSP government matching throughout your career, which is meant to compensate for the lower pension. Pension pay is fully federal-taxable but many states fully exempt military retirement income.
Your Thrift Savings Plan balance funds the second income stream. The Trinity Study popularized the 4% rule: a portfolio with 50-75% stocks can typically sustain a 4% annual withdrawal (adjusted for inflation) for 30 years without depleting. For a $400,000 TSP balance, that's roughly $16,000/year or $1,333/month. The 4% rule is a planning heuristic, not a guarantee — sequence-of-returns risk, fees, and individual longevity can push the safe rate higher or lower. Traditional TSP withdrawals are fully taxed as ordinary income; Roth TSP withdrawals after age 59½ and a 5-year holding period are completely tax-free.
VA disability is monthly tax-free compensation for service-connected conditions. Rates are set annually by Congress and adjusted by VA. Compensation scales with your combined rating (calculated using the VA whole-person formula, not simple addition) and with your dependency status — spouse, children under 18, school-age children 18-23, and dependent parents all increase the rate at 30% and above. Under CRDP, retirees with 20+ years of service and a 50%+ VA rating receive both their full pension and full VA disability concurrently. Combat-related disabilities qualify for CRSC regardless of rating percentage.
An E-7 retiring at 20 years under High-3 with a 70% VA rating (veteran alone) and a $400,000 TSP can realistically expect $3,100/month pension + $1,333/month TSP withdrawal + $1,808/month VA disability = roughly $6,149/month gross retirement income, of which $1,808 is tax-free. That's $73,790/year — above the U.S. median household retirement income — entering at age 38-42 with another 25-30 working years available if desired. Retiring at 24 instead of 20 changes those numbers materially: the pension climbs to roughly $3,910/month (a 60% multiplier on a higher high-3 average), pushing total monthly retirement income closer to $6,960. The math is why "20-year retirement" is such a financial inflection point — and why squeezing in a few more years can add meaningful lifetime income.
Yes. Under Concurrent Retirement and Disability Pay (CRDP), retirees with 20+ years of service and a VA rating of 50% or higher receive both their full military pension and full VA disability compensation. Combat-related disabilities qualify for Combat-Related Special Compensation (CRSC) regardless of rating. Prior to 2004, retirees had to waive pension dollar-for-dollar against VA disability — that offset no longer applies for most retirees.
By default this tool uses the 4% rule: monthly withdrawal equals 4% of your TSP balance at retirement, divided by 12. The 4% rule is a planning rule of thumb originating from the Trinity Study and is designed to make a portfolio last roughly 30 years. You can toggle to 3%, 5%, or 6% to model different drawdown scenarios. This is an estimate — actual sustainable withdrawal depends on your asset allocation, market sequence of returns, and retirement length.
Military pension is fully taxable at the federal level. State taxation varies — many states (including Alabama, Florida, Illinois, Pennsylvania, and Texas) fully exempt military retirement pay, while others tax it as ordinary income. TSP withdrawals from Traditional balances are taxable; Roth TSP withdrawals are tax-free if taken after age 59½. VA disability compensation is completely tax-free at both federal and state levels.
High-3 (legacy) gives 2.5% per year of service times your high-3 average base pay — 50% at 20 years. BRS (Blended Retirement System) gives 2.0% per year — 40% at 20 years — plus TSP government matching during your career. REDUX is a discontinued option that gave $30,000 at 15 years in exchange for a permanently reduced multiplier (40% at 20 years instead of 50%). Service members who entered after January 1, 2018 are automatically under BRS; those who entered before were grandfathered into High-3 unless they opted into BRS during the 2018 election window.
No — this is a present-day snapshot using 2026 rates. Military pensions adjust annually for inflation under CPI-U (REDUX uses CPI-U minus 1% until age 62). VA disability rates also adjust annually with the Social Security COLA. Over a 30-year retirement, COLA can roughly double your nominal monthly income, but real (inflation-adjusted) purchasing power stays roughly constant. The tool deliberately shows today's dollars so you can compare against today's expenses.
This calculator now supports medical retirement (Chapter 61). Select "Medical Retirement (Chapter 61)" from the Retirement System dropdown and enter your DoD disability rating from your MEB/PEB. The formula uses the higher of (years × 2.5%) or your DoD rating, capped at 75%, multiplied by your high-3. The 20-year minimum is waived, and the results panel will surface the medical-specific notes on concurrent receipt (no CRDP threshold for medical retirees), potential tax-free portion under IRC §104(a)(4), CRSC eligibility for combat-related disabilities, and TDRL vs PDRL.