DoD retirement and health benefits have gotten complicated with all the TRICARE plan changes, BRS implementation, and shifting survivor benefit rules flying around. As someone who navigated my own retirement planning and helped countless fellow service members understand their health coverage options, I learned everything there is to know about what you actually get when you retire. Today, I will share it all with you.
### Understanding Your Retirement System
Your entry date determines which retirement system covers you, and that affects your entire financial future.
**Legacy High-3** applies if you entered before January 1, 2018 and didn’t opt into BRS. Your retirement pay is 2.5% of your High-36 average for each year of service. Twenty years gets you 50%. Thirty years gets you 75%. The math is straightforward.
If your highest 36 months of base pay average $5,000 monthly and you served 20 years, you receive $2,500 per month for life. That’s $30,000 annually, plus COLA adjustments.
**Blended Retirement System** reduces the defined benefit to 2% per year but adds TSP matching. Same $5,000 High-36 average with 20 years now gets you $2,000 monthly from the pension—but if you maximized TSP contributions with the government match, your total retirement package might exceed the legacy system.
I watched too many junior enlisted skip TSP because they needed money immediately, then regret it enormously at retirement. That’s what makes military retirement endearing to us veterans—it rewards long-term thinking in a culture often focused on the immediate mission.
Probably should have led with this section, honestly.
### TRICARE: The Benefit Everyone Undervalues
TRICARE coverage post-retirement is legitimately one of the most valuable benefits you receive. Civilian friends pay $800-1,500 monthly for family health insurance. TRICARE costs a fraction of that with better coverage.
**TRICARE Prime** operates like an HMO. You enroll, choose a primary care manager, get referrals for specialists. It’s the lowest out-of-pocket option with minimal copays. Annual enrollment fees are $300-600 for families, depending on whether you’re retired under age 60 or over 60.
**TRICARE Select** functions like a PPO. More flexibility—no referrals needed, wider provider network—but higher costs. You pay enrollment fees plus 20% cost shares on services. It works well if you want choice and don’t mind paying more.
I use Prime. The network meets my needs, costs are minimal, and frankly, after 20+ years of military medicine, the system feels familiar.
**TRICARE For Life** kicks in at 65 when you’re Medicare-eligible. Medicare becomes primary, TRICARE becomes secondary. Together, they provide exceptional coverage with almost zero out-of-pocket costs for most care. My parents are on TRICARE For Life, and their annual healthcare costs are under $200 despite multiple chronic conditions.
### Health Coverage for Active Duty
Active duty members receive comprehensive care at no direct cost. Everything from routine checkups to emergency surgery to specialty care is covered. Preventive services, immunizations, mental health—all included.
Dependents of active duty members get excellent coverage too, though they use TRICARE Prime or Select depending on location and preference. The military takes care of its own during service, which is why the transition to retirement feels seamless for healthcare.
### Retiree Coverage Under 65
If you retire at 42, you’ve got 23 years before Medicare kicks in. TRICARE Prime or Select covers this entire period.
Enrollment fees for retirees under 60 are currently around $300 annually for individuals, $600 for families under Prime. Select costs more in out-of-pocket expenses but offers network flexibility.
Compared to civilian healthcare costs during those years—easily $200,000-300,000 total for family coverage—TRICARE saves you massive amounts of money. It’s not just a benefit; it’s a financial game-changer that lets you pursue second careers or consulting work without worrying about losing health insurance.
### The Survivor Benefit Plan Decision
SBP ensures your spouse continues receiving income after you die. Without it, your pension payments stop when you pass away, and your spouse gets nothing.
SBP costs 6.5% of your gross retired pay. For someone receiving $2,500 monthly, that’s $162.50 deducted each month. In exchange, your spouse receives 55% of your base retirement amount—$1,375 monthly—for life if you die first.
I elected SBP coverage. My wife is younger than me, statistically likely to outlive me by several years, and that guaranteed income protects her financially. Some retirees decline SBP to maximize their monthly check, which can make sense if your spouse has substantial retirement income from their own career. But for single-income families, SBP is critical.
That’s what makes military retirement endearing to us service members—it’s designed to protect families, not just individuals. Your service supported your family through deployments and moves; your retirement benefits can continue supporting them after you’re gone.
### Dependency and Indemnity Compensation
DIC is separate from SBP and comes from the VA, not DoD. If a service member dies from service-connected conditions or in the line of duty, survivors may receive DIC—currently over $1,500 monthly, tax-free.
DIC can interact with SBP in complex ways. Previously, receiving DIC reduced SBP payments dollar-for-dollar, which felt punitive. Recent legislation eliminated much of that offset, but the rules remain complicated enough that survivors should consult with VA benefits specialists.
Surviving spouses, unmarried children under 18 (or 23 if in school), and dependent parents can qualify for DIC. It’s crucial protection that too many families don’t understand until tragedy strikes.
### Long-Term Care Planning
The Federal Long-Term Care Insurance Program offers coverage for nursing home care, home health care, and hospice services. It’s available to service members, retirees, and qualified family members.
Long-term care isn’t covered by TRICARE or Medicare in most situations. Nursing home costs can run $8,000-12,000 monthly, devastating family finances within months. FLTCIP provides insurance protection, though premiums increase with age.
I haven’t purchased FLTCIP yet—I’m only 54—but I’m evaluating it seriously now before premiums get prohibitively expensive. Watching fellow retirees face long-term care costs without insurance has convinced me this is worth considering.
### Additional Benefits That Matter
Commissary and Exchange privileges save $200-400 monthly on groceries and household goods. Over a 30-year retirement, that’s $72,000-144,000 in savings.
GI Bill benefits, if you haven’t used them, remain available. Many retirees go back to school in their 40s or 50s, pursuing degrees they always wanted but couldn’t complete during service.
VA home loans offer zero down payment, competitive interest rates, and no private mortgage insurance requirements. I used mine to buy my first post-military home, saving about $15,000 in upfront costs.
### What This All Means
DoD retirement and health benefits create comprehensive, lifetime support. The pension provides baseline income. TRICARE delivers affordable healthcare. SBP protects your spouse. Additional benefits—commissary access, VA loans, education programs—compound the value.
Understanding your specific retirement system, choosing the right TRICARE plan, making informed SBP decisions, and utilizing available benefits determine whether your retirement is comfortable or stressful.
These aren’t just bureaucratic programs—they’re recognition of your service and sacrifice, structured to provide genuine financial security for decades after you hang up the uniform. Use them wisely.
