Retirement · guide
REDUX and the career status bonus
What members who took the $30,000 career status bonus give up in retired pay, how much, and what changes at age 62.
REDUX: the multiplier cut and what age 62 restores
REDUX retired pay until 62
$2,480
| REDUX multiplier | 40.0% |
| High-3 instead | $3,100 |
| From age 62 (recomputed) | $3,100 |
REDUX is the retirement option that comes with the career status bonus. Members who entered service after July 31, 1986 and before January 1, 2018 and remained under High-3 can elect, at fifteen years of active service, to receive a $30,000 bonus in exchange for a smaller pension, according to DFAS. The trade-off has two parts. First, the High-3 multiplier of 2.5% a year is reduced by one percentage point for each year short of thirty, so 40% instead of 50% at twenty years, 57.5% instead of 62.5% at twenty-five, and no difference at thirty. Second, the yearly cost-of-living adjustment is one point lower: 1.7999999999999998% instead of 2.8% for December 2025. At 62, retired pay is recomputed to the amount High-3 would have paid, with the full adjustments to date, but the reduced adjustment applies again in the following years. For an E-7 retiring at twenty, the pension is about $2,471 a month instead of $3,089 until 62.
Checked by Radif Partners · Editorial policy · How we calculate
REDUX against High-3 for an E-8
| Years at retirement | REDUX multiplier | High-3 multiplier | REDUX until 62 | High-3 |
|---|---|---|---|---|
| 20 | 40% | 50% | $2,724 | $3,406 |
| 22 | 47% | 55% | $3,288 | $3,847 |
| 24 | 54% | 60% | $3,946 | $4,385 |
| 26 | 61% | 65% | $4,564 | $4,863 |
| 28 | 68% | 70% | $5,378 | $5,536 |
| 30 | 75% | 75% | $5,932 | $5,932 |
The gap is largest at twenty years and disappears at thirty, because the REDUX cut is one point per year short of thirty. A member who planned to serve thirty years from the start lost little by taking the bonus, apart from the lower adjustments; a member who retires at twenty loses a fifth of the pension for the years until 62.
The cost of the lower adjustment
The second part of the trade-off is less visible but lasts for life. Each December, REDUX retired pay rises by the change in consumer prices minus one point. Over twenty years of retirement before age 62, that compounding gap grows: with prices rising 2.8% a year, a pension that rises 1.7999999999999998% falls about 18% behind a High-3 pension over two decades. The recomputation at 62 restores the High-3 amount once, then the gap starts to build again.
What the bonus is worth
The $30,000 bonus is paid at fifteen years, in one payment or in installments, and is taxable unless received in a combat zone. Members who elect it agree to serve to twenty years; leaving earlier can mean repaying part of it. In exchange, an E-7 retiring at twenty gives up about $7,413 a year until 62, before the effect of the lower adjustments. Over the fifteen to twenty years between a typical retirement and age 62, that is many times the bonus.
A worked example over a retirement
Take an E-8 retiring at twenty-two years at age 41. Under REDUX, the multiplier is 47% instead of 55%, so the first-year pension is about $3,288 a month instead of $3,847, a difference of $6,716 a year. For the twenty-one years until 62, that difference keeps growing because of the lower adjustment. At 62 the pension jumps back to the High-3 amount, then lags again for the rest of the retiree's life. Against that, the member received the bonus at fifteen years of service, seven years before retiring and about twenty-eight years before the recomputation at 62. Whether the bonus, invested, could have matched the loss depends on returns that few investors achieve over such a long period.
Who could elect it
DFAS describes the option as open to members who entered service after July 31, 1986 and before January 1, 2018, when they reach their fifteenth year of active service, and who are under High-3. Members under the Blended Retirement System, which includes everyone who entered from 2018, have no career status bonus; BRS offers continuation pay at mid-career instead. A member who elected REDUX keeps it for good; the election cannot be reversed.
Using the calculator
The mini calculator above compares REDUX and High-3 for your high-36 average and years. The military retirement calculator includes REDUX among the systems and shows the recomputed amount at 62. For the High-3 base itself, see the High-3 page; for the alternative of new members, the BRS calculator.
REDUX retirees who later receive a VA rating of 50% or more are treated like other retirees for CRDP: the restored amount is their REDUX retired pay. For Chapter 61 retirees who had elected REDUX, DFAS notes that the CRDP exemption is limited to what their non-disability retired pay would be with the REDUX reduction, which can make it smaller than the disability retired pay itself.
If you are unsure whether you elected REDUX, the retiree account statement and the LES before retirement show the retirement plan; the bonus also appears on the tax records of the year it was paid.