BRS vs Legacy Retirement — Which Plan Pays More

BRS vs legacy retirement has gotten complicated with all the opinions and half-remembered briefings flying around. As someone who worked as a military financial counselor at a transition assistance office, I learned everything there is to know about this decision. Today, I will share it all with you. We’re skipping the Pentagon press release version and going straight to math — because that’s what most break room arguments never actually get to.

What Actually Changed When BRS Launched

But what is the legacy High-3 system? In essence, it’s a straightforward deal: serve 20 years, collect roughly 50 percent of your average base pay for life. But it’s much more than that — it’s also brutally unforgiving. Separate at 19 years and 11 months? Walk away with nothing. No pension. No government match. Zero.

The Blended Retirement System became the default for anyone entering service after January 1, 2018. Under BRS, the pension drops to 40 percent at 20 years — but the government starts contributing up to 5 percent of your base pay into your Thrift Savings Plan account at the two-year mark. You vest in that match at two years. The pitch is simple: BRS protects people who never reach 20. The cost is a smaller pension for those who do. That’s the whole trade. So, without further ado, let’s put dollar signs on it.

If You Serve 20 Years — the Numbers Side by Side

Take a mid-career E-7 as the baseline. As of 2024, an E-7 with 20 years has a basic pay of roughly $5,214 per month — about $62,568 annually. The High-3 calculation uses the average of the three highest-earning years, which lands right around that same figure for most people at that point.

Legacy Pension at 20 Years

Fifty percent of $62,568 is $31,284 per year. That’s your pension. It starts the day you retire, adjusts for inflation through cost-of-living increases, and runs for life. No TSP match was ever contributed, so whatever sits in your TSP came entirely out of your own pocket.

BRS Pension at 20 Years

Forty percent of $62,568 is $25,027 per year — $6,257 less annually than the legacy pension. Right away. Every single year. That said, the BRS servicemember also received up to 5 percent government TSP matching for most of their career. Eighteen years at or near E-7 pay, with enough personal contributions to capture the full match, means the government put in approximately $3,128 per year. Over 18 years at a 6 percent average annual return — realistic for a TSP Lifecycle fund — that matching alone grows to somewhere between $95,000 and $105,000 by retirement day.

So at 20 years, the legacy retiree holds a $31,284 annual pension. The BRS retiree holds a $25,027 annual pension plus a TSP balance roughly $100,000 heavier than the legacy retiree’s — assuming identical personal contribution rates. That TSP gap closes the pension gap. Eventually. We’ll get to exactly when.

If You Leave Before 20 Years — Who Actually Comes Out Ahead

Probably should have opened with this section, honestly. This is where the two plans aren’t even in the same conversation.

Under legacy, a servicemember separating at 8 years receives zero retirement benefit. No pension. No government contribution to any account. Whatever they personally put into TSP is theirs — but the government matched none of it. Total retirement benefit from the military side of the ledger: $0.

Under BRS, that same 8-year servicemember has been collecting up to 5 percent government TSP matching since year two. Six years of matching contributions. For an E-5 averaging roughly $38,000 in annual base pay across those six years, the government contributed up to $1,900 per year. Over six years at 6 percent growth, that matching alone is worth somewhere between $13,500 and $15,000 at separation — and it keeps compounding inside the TSP until withdrawal age. Left alone until 60, that $14,000 seed grows to approximately $80,000 to $90,000 depending on fund allocation. That’s not a typo.

At 12 years, the numbers get more meaningful. An E-6 earning around $47,000 annually, with 10 years of full matching contributions, exits with an employer-contributed TSP balance of approximately $35,000 to $42,000 at separation. Compounded to age 60, that’s a six-figure retirement asset built entirely from match money the legacy system never offered. Legacy at 8 years: $0. BRS at 8 years: real money. That’s not spin — that’s arithmetic.

The Break-Even Point — When BRS Catches Up to Legacy

The legacy retiree collects $6,257 more per year in pension than the BRS retiree. The BRS retiree retires with a TSP balance roughly $100,000 larger. Divide $100,000 by $6,257 and you get about 16 years. Legacy doesn’t actually pull ahead on total lifetime income until roughly 16 years after separation — around age 60 to 62 for someone who retired at 44 or 45.

That was earlier than I expected when I first ran this for a client, honestly. But here’s the catch: that break-even assumes the BRS retiree parks the TSP and never adds another dollar. Most people keep working after military retirement and keep contributing. The TSP keeps growing. The break-even drifts later — realistically toward age 67 to 70 in the average case, especially factoring in that a TSP balance offers flexibility a fixed pension simply doesn’t.

Nobody knows how long they’ll live. If you retire from the military at 44 and live to 85, the legacy system wins on raw pension dollars across a 41-year retirement. At 41 years of collection, legacy has paid out roughly $256,537 more in pension income. The math favors legacy for long-lived retirees who hit 20 years. Full stop.

How to Decide Which Plan Is Right for Your Career Plan

Stripped down to plain language, the decision looks like this.

• If you are highly confident you will serve 20 years and expect to live a normal lifespan post-retirement, legacy wins on total pension dollars. The higher monthly payment compounds over decades — at least if you actually make it to that 20-year mark.
• If there is any genuine possibility you separate before 20 — voluntary or involuntary — BRS wins. Not slightly. Decisively. Legacy pays zero to early separators. BRS does not.
• If you’re already past the choice window (most servicemembers had a one-year opt-in period ending December 31, 2018), stop relitigating the decision. You’re on whichever plan you’re on.

I’m apparently someone who spent too much early counseling time helping people mourn a decision they couldn’t reverse instead of optimizing the plan they actually had. Don’t make my mistake.

If you’re on BRS, the single highest-leverage action available is contributing enough to capture the full 5 percent government match every pay period. Leaving any of that match uncollected is turning down free money with a compounding engine attached — which is a bad trade. Open myPay, set your TSP contribution to at least 5 percent of base pay, and do it before you close this tab.

If you’re on legacy, your TSP contributions are entirely self-funded. Model your pension using the retirement calculator at militarypay.defense.gov and get a real dollar figure in front of you. Vague confidence that the pension will be “enough” is not a retirement plan.

That’s what makes this question endearing to us number-focused types — it has a real answer. It just depends on how long you serve, and that’s the number you need to be honest with yourself about.