Blended Retirement System (BRS) Explained

The Blended Retirement System (BRS) is the military retirement plan that covers everyone who joined the armed forces on or after January 1, 2018, plus servicemembers who opted in during the 2018 opt-in window. It replaces the older High-3 pension-only system with a smaller pension paired with matched Thrift Savings Plan (TSP) contributions and a mid-career continuation pay bonus. If you joined recently, BRS is your retirement plan — here’s how it actually works.

Why the switch happened

Under the pre-2018 High-3 system, only about 17% of servicemembers stayed in long enough (20 years) to collect a pension. The other 83% left with no retirement benefit at all — no matching, no rollover, nothing. BRS was designed to give something to the 83% who separate before 20 years, while keeping a pension (smaller) for those who do stay.

The tradeoff: BRS retirees who serve 20+ years get less pension than High-3 retirees would have gotten, but they also get years of TSP matching they can take with them if they leave early.

The three components of BRS

1. The reduced pension

BRS pension = 2.0% × years of service × High-3 average base pay. High-3 = the average base pay from the highest 36 consecutive months of pay, usually your last three years.

Compare to the older High-3 system: 2.5% per year instead of 2.0%. A 20-year retiree at $8,000/month High-3 gets:

• Legacy High-3: 2.5% × 20 × $8,000 = $4,000/month
• BRS: 2.0% × 20 × $8,000 = $3,200/month

That $800/month difference is the “cost” of BRS at the 20-year mark. But most servicemembers don’t stay 20 years — and everyone who separates earlier gets the TSP match they’d otherwise have missed.

2. TSP automatic and matching contributions

The Thrift Savings Plan is the federal 401(k). Under BRS, DoD makes two types of contributions:

• Automatic 1% contribution: starts after 60 days of service, regardless of whether you contribute anything yourself. Free.
• Matching contributions: starts at your 2-year service anniversary. DoD matches dollar-for-dollar on the first 3% you contribute, then $0.50 on the dollar for the next 2%. Contribute at least 5% and you get the full 5% match.

So the total DoD contribution when you’re doing this right = 5% match + 1% automatic = 6% of your base pay going into TSP. That compounds over a career.

Important: matching only applies to your base pay contributions, not incentive pay or bonuses (though you can and should contribute those too, they just don’t get matched).

3. Continuation pay

At around your 12-year mark, DoD offers you a lump-sum bonus called continuation pay in exchange for a 4-year commitment. The multiplier is 2.5x to 13x your monthly base pay depending on service and career field — Air Force cyber and pilots get higher multipliers, general infantry gets lower.

Continuation pay is a big deal. On a $6,000/month base pay with a 3x multiplier, that’s $18,000. You can take it as a lump sum, spread over 4 installments, or roll it into TSP tax-deferred (usually the smartest move if you don’t need the cash).

The opt-in vs grandfathered question

Servicemembers who joined before January 1, 2018 had the option to stay on Legacy High-3 or opt into BRS during 2018. If you had less than 12 years of service on January 1, 2018, you were eligible to opt in. That window is closed — you’re now on whichever plan you chose (or Legacy High-3 by default if you didn’t opt in).

Wondering which plan you’re on? Log into MyPay or your service branch’s personnel system — your retirement plan is listed on your Leave and Earnings Statement (LES).

Getting the most out of BRS

1. Contribute at least 5% to TSP from day one. Not doing so leaves money on the table — the DoD match is instant 100% return on the first 3% and 50% on the next 2%. There is no better return anywhere.
2. Consider Roth TSP vs Traditional TSP. Roth (post-tax) makes sense for junior servicemembers in low tax brackets; Traditional (pre-tax) makes more sense for higher-rank members. See our Roth TSP vs Traditional TSP comparison for the full breakdown.
3. Pick low-cost funds. The C Fund (S&P 500) and L Funds (target-date) are the workhorse picks. TSP fund expenses are among the lowest in the industry.
4. Roll continuation pay into TSP if you don’t need the cash. Rolled contributions are tax-deferred; taking it as a lump sum is fully taxable in the year received.
5. Understand the vesting cliff. DoD automatic 1% contributions vest at 2 years of service. Match contributions vest immediately. If you separate before 2 years, you lose the automatic 1%.

What BRS doesn’t cover

BRS is a retirement plan, not a full financial picture. It doesn’t include:

• VA disability compensation — separate from BRS pension; can be combined at retirement
• Servicemembers’ Group Life Insurance (SGLI) and later Veterans’ Group Life Insurance (VGLI) — separate life insurance
• TRICARE Retired — the healthcare benefit for retirees is separate from BRS pension
• Survivor Benefit Plan (SBP) — the survivor annuity option is elected separately at retirement

Common BRS mistakes to avoid

• Not contributing to TSP. Junior enlisted often skip TSP thinking they’ll “start later.” That misses years of matching and compounding.
• Contributing less than 5%. Anything less than 5% leaves match money uncollected. It’s not free money — it’s earned pay.
• Putting everything in the G Fund. The G Fund is the safest option but grows slowly. For a 20+ year career, most financial advisors recommend growth-oriented funds (C/S/I or Lifecycle funds targeted 30+ years out).
• Skipping the continuation pay rollover analysis. Taking the lump sum in cash means immediate taxation. Rolling it into TSP defers taxes and adds to compound growth.

The bottom line

BRS is the retirement plan for the vast majority of current servicemembers. The pension is smaller than Legacy High-3, but the TSP matching plus continuation pay make up much of the difference — and give something to the majority who don’t stay for a full 20-year career. The single biggest lever you control: contribute at least 5% to TSP starting your third year to capture the full match, and stay in growth-oriented funds until you’re within a few years of retirement.

Veteran Money Guide is educational and is not legal, tax, or financial advice. Every situation is different — verify current rules with the VA, DFAS, IRS, or a qualified professional before making a decision.