Continuation pay is a cash payment for mid-career service members participating in the Blended Retirement System. The payment is used as an incentive for these service members to remain in the service until they reach the traditional 20-year mark needed to qualify for monthly military retired pay. The amount, length of additional service required, and payment eligibility for continuation pay differ for each branch of service. The rates of continuation pay can change every year based on the needs of the military.
As of March 2, 2023, the following rates apply:
| Branch | Continuation Pay Multiplier |
When Payable | Number of Additional Years Required |
|---|---|---|---|
| Army Active | 2.5 | 8-12 years | 4 |
| Army Reserve | 4 | 8-12 years | 4 |
| Air Force Active | 2.5 | 12 years | 4 |
| Air Force Reserve | 0.5 | 12 years | 4 |
| Coast Guard Active | 2.5 | 12 years | 4 |
| Coast Guard Reserve | 0.5 | 12 years | 4 |
| Marine Corps Active | 5 | 12 years | 4 |
| Marine Corps Reserve | 1 | 12 years | 4 |
| Navy Active | 2.5 | 12 years | 4 |
| Navy Reserve | 0.5 | 12 years | 4 |
Continuation pay is calculated by multiplying your monthly basic pay by the applicable multiplier for your branch and status.
You can receive continuation pay along with any other applicable skill, retention or other bonuses you may qualify for. Continuation pay is taxable.
Continuation pay -- and other specialty pay, bonuses and incentives -- can be invested along with basic pay in your Thrift Savings Plan (TSP) account, up to the annual maximum allowed by the IRS. Note that if you hit the maximum before the end of the calendar year, you could lose out on matching contributions.
Related: Current IRS contribution limits to the Thrift Savings Plan.
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