Military Retirement Reform Act (REDUX). Those who entered military service
after Aug. 1, 1986, can elect to receive retirement pay under the "high three" system,
or choose the Career Status Bonus/Redux option.
Under that Redux plan, a service member who agrees to stay in uniform at least five
more years receives a $30,000 bonus, either a lump sum or annual installments, at
the 15th year of service. But retired pay for 20 years of service is lower — only
40 percent of average base pay over the three highest earning years.
That increases by 3.5 percent a year for each additional year beyond 20. At 30 years
of service, the retirement pay rate is the same as under the regular "high three"
system — 75 percent of average basic pay over the three highest earning years —
but yearly cost of living adjustments are 1 percent lower. A one-time "catch-up"
adjustment is made at age 62.