Gray area retirees, those Guard members who choose to retire prior to reaching age 60, earn an array of benefits for a lifetime. However, those benefits differ somewhat from other categories of retirees. This paper discusses some important aspects of reserve retirement. Gray area retirement is considered to be a non-regular retirement; a regular retirement has an immediate annuity and a non-regular retirement has a delayed annuity—at age 60.

Cash. Your annuity. Your retired paycheck. It’s coming, but not until you reach age 60 and apply to receive it. [There are provisions in law for receiving your annuity prior to age 60 based on deployment time but most Guard retirees will receive their annuity starting at age 60]. Your annuity will be based on your grade/rank at time of retirement and the active duty pay scale for that grade when you reach age 60. The plan uses a multiplier percentage that is 2½% times the years of creditable service. The creditable years of service for a reserve retirement calculation is determined by the sum of all accumulated reserve points divided by 360. Sounds confusing but it makes sense once you do the math.

Health care. Once you choose to retire prior to age 60, you will lose your TRICARE Reserve Select medical coverage. Congress assumes that your employer will provide health insurance during the period of time between your retirement and age 60. If you don’t have health insurance through your employer, you can choose to enroll in TRICARE Retired Reserve. Unlike TRICARE Reserve Select, the premiums are not subsidized by the federal government. TRICARE Retired Reserve is identical to TRICARE Reserve Select except for the premiums. The monthly premiums may be a challenge to your budget. The costs adjust every year and there are deductibles and co-pays that must be paid. It’s an option but it’s not inexpensive. Once you reach age 60, and begin receiving your annuity, you will qualify for TRICARE Select or Prime and pay the premiums for whichever plan you choose.

Social Security. For most people who retire early, Social Security is not payable. Eligibility for payment of benefits for most people begins at age 62 and most financial planners will advise that you wait until at least your full retirement age (age 66 or higher) before applying for Social Security.

DEERS and ID Cards. As a gray area retiree, you will be issued an ID card that denotes your status as a retiree. You will have access to certain benefits on active duty installations such as morale, welfare and recreation facilities, commissary, exchange, and others. Once you reach age 60 and start receiving your annuity, you will get a new ID card indicating other benefits.

VA Disability. If you experienced illness or injury during your period of Guard service, you are highly encouraged to have those experiences evaluated by the Department of Veterans Affairs for disability compensation. Disability compensation is paid monthly and is tax free. There is a process to go through to determine that compensation; Veteran Service Officers from organizations like American Legion, VFW, and DAV provide free assistance in applying for benefits. You can receive VA disability during your period of gray area retirement. Once you start receiving it, your annuity may be offset by your disability compensation depending on the level of disability.

Survivor Benefit Plan. During your time spent in the gray area of retirement, you may elect to be covered by the Survivor Benefit Plan. Once you are notified that you qualify for a non-regular retirement and receive your 20-year letter, you are eligible to sign up for Reserve Component SBP, regardless of your military status, age, or health. You have a 90-day period to make an RCSBP election beginning the day you receive your 20 year letter. If you fail to complete the RCSBP Election certificate within the 90-day period, by law your eligible dependents are automatically enrolled in immediate annuity RCSBP coverage based on your full retired pay. There are two premiums associated with RCSBP. These premiums are not paid until you begin receiving your retired pay. The two types of premiums are: Basic (SBP) Premium and Reserve (RCSBP) Premium. Should you die before you start receiving your retirement annuity, your beneficiary will immediately start receiving benefits at the rate of 55% of what your annuity would have been had you reached age 60. The benefit they receive will be reduced by the RCSBP premium. If they remarry before age 55, they may lose their SBP annuity.

[presenting general info and not meant to be an exhaustive reference of every benefit]

For more information, contact your State Retirement Services Officer.

–EANGUS National Office