Military Retirement: BRS vs. Legacy Pension — Which Is Worth More?

How the Two Systems Actually Compare

The legacy High-3 pension pays 2.5% of average highest-3-years base pay for each year of service, starting at retirement. At 20 years: 50%. At 30 years: 75%.

The Blended Retirement System (BRS) pays 2.0% per year (40% at 20 years, 60% at 30 years) plus: - Government TSP matching: 1% automatic, then 4% matching on contributions (up to 5% matched) - Continuation Pay: lump sum at 12-year midpoint, typically 2.5-13x monthly base pay

The present value comparison at 20 years depends heavily on: life expectancy after retirement (pension is lifetime), investment returns assumed for TSP growth, and whether the service member was going to contribute to TSP anyway.

For a 20-year retiree with $4,000/month base pay: legacy pension = $2,000/month. BRS pension = $1,600/month. To make up that $400/month gap from TSP matching over 20 years requires approximately $96,000 in additional TSP value — achievable with 5% matching contributions, but not guaranteed.

When BRS Is the Better Outcome

BRS is clearly better for service members who separate before 20 years — because legacy provides nothing at separation before 20, while BRS provides the full vested TSP balance (immediate vesting on government contributions after 2 years of service).

For those who complete 20 years, the comparison narrows. Monte Carlo analysis of the legacy vs. BRS decision at the opt-in choice point (2018-2023 window) generally showed legacy as superior for service members with 10+ years of service who were highly confident in 20-year completion.

Continuation Pay deserves modeling: it's received at the 12-year point and is often invested, adding to the BRS side. The analysis should treat Continuation Pay as an investable lump sum, not ignore it.