From The Mailbag: Continuation Pay Details

Updated 27 November 2017 to include 2018 Air Force Continuation pay amounts.

One of the changes in the military’s Blended Retirement System (BRS) is the introduction of continuation pay, a bonus paid to all service members mid-career in exchange for an additional service commitment. The BRS legislation allows the branches of the military to determine specific continuation pay amounts, within the guidelines established by law. Many people have been anxiously waiting for the services to announce the continuation pay amounts.

Dear Kate,

When are they going to announce the continuation pay amounts? It’s important for my decision whether to opt-in to BRS.

Thanks,
K.E.G.

To the best of my knowledge, all the branches except the Air Force have announced their continuation pay amounts for 2018.

Dear K.E.G.,

So far, only the Army, Navy, and Marine Corps have announced their 2018 continuation pay amounts. These branches will, for 2018, to offer the lowest amount allowed under the BRS legislation. That means 2.5 times a full month’s pay for active duty component members, and one half a full month’s active duty pay for reserve component members, to be received at 12 years of service in exchange for a four-year service commitment.

While I agree that it doesn’t hurt to consider the amount of continuation pay, please don’t base your decision on this factor. In the greater scheme of things, this bonus is a small amount of money. We’re looking at, very roughly, $10,000 for enlisted members and $20,000 for officers. Compared to the value of your total retirement package, it’s not a lot. As I said to someone recently, “It’s like the sprinkles on top of the icing on top of the doughnut.” You wouldn’t pick an otherwise yucky doughnut because you liked the color of the sprinkles, would you? Be sure to consider the entire packages before making a decision whether to opt-in to the BRS.

I hope that helps,

Kate

I’ll keep y’all updated as soon as I hear something from the Air Force, NOAA, and USPHS.

Update 27 November 2017: The Air Force has announced 2018 continuation pay rates, and they are exactly the same as the other branches: 2.5 times one month’s base pay for active component members, and .5 times one month’s active base pay for reserve component members.

If you are looking for more reading on BRS, check out these articles:

Blended Retirement: Continuation Pay

Blended Retirement: Government Contributions to TSP

Latest Blended Retirement System Updates

Ten Things About The Military’s New Blended Retirement System

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.