Retirement pay for Navy captains is a **percentage of the base monthly salary** he gets while on active duty. Extra compensation such as flight pay is not counted. Monthly basic pay depends on a captain's years of service. The amount of basic pay and therefore retirement pay is determined by Congress.

## Retirement Pay Basis

A Navy captain must serve at least **20 years** to qualify for retirement pay unless he is forced to retire early because of a service-related disability. Before calculating the retirement pay amount, you must determine the basis. There are two methods to do this:

**Method A: Final Pay**. If the Navy captain entered the service on or before Sept. 8, 1980, the basis is his final basic pay rate.**Method B: High-36**. If he joined the Navy after Sept. 8, 1980, the basis is the average basic pay for the 36 months he was paid the most money.

Suppose the Final Pay method applies and a Navy captain retires after 24 years service. The basic pay in 2014 was $10,226 monthly. If he waits to retire until he has put in 30 years, as of 2014, the base rises to $10,952.40. Naval retirement pay is adjusted annually for inflation.

## Retirement Pay Calculation

Calculate retirement pay by multiplying the basis by a percentage called a multiplier. To determine the multiplier, multiply the years of service by 2.5 percent. Thus, if a Navy captain serves 24 years of active duty, the multiplier equals 2.5 percent times 24, or 60 percent. Her retirement pay comes to: 60 percent of $10,226, or $6,135.60 per month

If she retires after 30 years the multiplier rises to 75 percent of a basis of $10,952.40 and the monthly amount is $8,214.30.

## Service-Related Disability

If a Navy captain retire because of a service-related disability, he receives disability retirement pay even if he has not put in the minimum 20 years. The amount is either 50 percent of his basic pay at the time of separation from the Navy or retirement pay calculated in the usual manner, whichever is greater.

## Retirement and Naval Reserve

A Navy captain may spend time serving in the Navy reserve. She still qualifies for retirement pay after 20 years, but at a lower rate because reserve duty is part time. Reserve service is credited using a point system. In general, one point equals one day. To figure reserve duty time, divide the number of points by 360. Add the result to active-duty years of service to determine the number of years to use to figure retirement pay.