If you're a mid-career soldier enrolled in the Blended Retirement System (BRS), the rules around your continuation pay just changed. The adjustments, which took effect Jan. 1, 2026, affect when members of the Army become eligible to receive the payment and, for some, how much they’ll get.
Continuation pay is one of the three pillars of the BRS, alongside the reduced retirement annuity and government matching contributions to the Thrift Savings Plan. It functions as a one-time retention bonus paid to service members at the mid-career mark in exchange for a commitment to serve at least four more years. Think of it as the military's way of sweetening the deal right around the time many people start weighing whether to stay in or get out.
The changes were laid out in a Department of the Army memo.
Continuation pay is a DoD-wide benefit under the BRS, but each service branch sets its own multipliers, eligibility windows and timing. The changes described in this article are Army-specific, driven by Army policy guidance. The statutory minimums that apply across all branches remain the same: 2.5 times monthly basic pay for active component members and 0.5 times for reserve component members. What varies by service is whether and how far above those floors a branch chooses to pay, and when during the 8- to 12-year eligibility window the payment is offered. Service members in other branches should check their branch-specific guidance for 2026 rates and timing.
Here’s what shifted in the Army and what it means for your wallet.
The Eligibility Window Moved Up
Under the previous rules, soldiers became eligible for continuation pay after completing eight years of service, with a window to apply that extended through 12 years of service. Starting in 2026, the eligibility window opens a year earlier, at seven years of service. The window still closes at 12 years.
That means soldiers who are approaching the seven-year mark can now request the payment a full year sooner than their predecessors could. The Army has also signaled that the window will narrow again in calendar year 2027, when another change takes effect: The upper limit drops from 12 years to 10 years of service.
For planning purposes, that 2027 change is significant. A service member who waits too long to apply could wind up outside the window entirely. It also means the payment will likely be calculated on a lower basic pay amount, since the member will be earlier in their career when they receive it.
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Active-Duty Multiplier: Flat at 2.5
For active component soldiers, including regular Army, Active Guard Reserve and full-time National Guard duty personnel, the continuation pay multiplier is set at 2.5 times their monthly basic pay. That is unchanged from prior years for most active-duty soldiers, though the previous rules technically allowed the multiplier to range from 2.5 to 13 times monthly basic pay depending on specialty, retention needs and other factors. In practice, the Army had been paying at the 2.5 floor for active component soldiers, so the real-world impact is minimal for that group.
To put a dollar figure on it, an E-6 at seven years of service earning roughly $4,100 in monthly basic pay in 2026 would receive continuation pay of about $10,250 before taxes. An O-3 at the same point, earning approximately $7,700 per month, would receive around $19,250. Those are one-time payments, and they're taxable as regular income unless invested into the TSP.
The Big Change: Guard and Reserve Drilling Soldiers
The most consequential shift hits Army National Guard and Army Reserve soldiers in a drilling status. Their multiplier dropped from 2.5 times monthly basic pay to just 0.5 times, matching what most other reserve components already paid.
That is not a small adjustment. The Enlisted Association of the National Guard of the United States broke down the math: An E-6 with 10 years of service receiving the 2.5 multiplier in 2025 could have expected roughly $11,462 in continuation pay. Under the new 0.5 multiplier in 2026, that same soldier would receive approximately $2,380, a difference of more than $9,000.
There is one exception. Guard and Reserve soldiers who have served 270 or more days of involuntary mobilization within a 730-day period remain eligible for the 2.5 multiplier. That carve-out is new and appears designed to recognize the retention value of soldiers who have borne a heavier deployment burden.
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Why It Matters
Continuation pay was built into the BRS as a mid-career incentive to keep experienced service members from walking away before they hit the 20-year retirement threshold. Under the old High-36 retirement system, the pension was calculated at 50% of a member's highest three years of basic pay after 20 years of service.
Under the newer BRS, the calculation dropped to 40%, meaning the pension is smaller. TSP matching contributions and continuation pay were supposed to make up the difference.
For active-duty members, the math still largely works. The government matches TSP contributions up to 5% of basic pay, and the continuation pay, while modest, provides a cash infusion right when many families are making major financial decisions about housing, children's education and whether civilian life might offer a better deal.
For Guard and Reserve soldiers, the reduction from 2.5 to 0.5 changes that calculation substantially. A drilling soldier who built their retention decision partly around an expected $10,000 to $12,000 payout is now looking at roughly $2,000 to $2,500. That is not nothing, but it is less likely to be the factor that keeps someone in uniform for another four years.
What You Should Do
If you are approaching or currently within the continuation pay eligibility window, contact your career counselor, state incentive manager or human resources professional. Make sure you understand which calendar year your application falls under, because the multiplier and window both differ depending on when you apply.
If you're a Guard or Reserve soldier who was eligible under the 2025 rates and didn't apply, that window may have closed. Soldiers who are currently eligible should ensure they submit their requests promptly.
Remember that continuation pay can be invested directly into your TSP up to the annual IRS maximum, currently $23,500 for those under age 50. There are no government matching contributions on continuation pay invested into the TSP, but the tax advantages of traditional TSP contributions can offset some of the income tax hit.
For detailed guidance, soldiers can review MILPER 25-329 and ALARACT 100/2025, both available through the Army Publishing Directorate. The MyArmyBenefits site and the Army's Financial Frontline page also maintain updated continuation pay resources and calculators.
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