Coast Guard Retirement: Eligibility, Pay, and TRICARE

Coast Guard retirement is available to active duty members who complete 20 years of qualifying service and to reserve members who accumulate 20 “good years,” with monthly retired pay calculated from years served and basic pay. The amount, the age you start collecting, and the extras attached to it all depend on when you first entered the military and whether you served on active duty or in the reserve.

Who Qualifies for Coast Guard Retirement

Active duty members become eligible for voluntary retirement after 20 years of service.¹ Qualifying service includes active duty, active duty for training, active duty for special work, temporary tours of active duty, full-time National Guard duty, and Active Guard/Reserve time.² Discharge must be characterized as honorable or under honorable conditions for retired pay to be authorized.

Reserve “Good Years”

Reserve members qualify for non-regular retirement after 20 good years. A good year is any anniversary year in which the member earns at least 50 retirement points.³ Points come from several sources: 15 membership points awarded automatically each year for Reserve affiliation (prorated for partial years), one point per drill period, one point per day of active service or funeral honors duty, and points from Readiness Management Periods or approved correspondence courses. Inactive points are capped at 130 per year, with an overall annual maximum of 365 or 366.

When Reserve Retired Pay Starts

Reserve members generally cannot draw retired pay until age 60. Ready Reserve members recalled to active duty or called to qualifying active service in response to a national emergency after January 28, 2008, can reduce that age by three months for each cumulative 90-day period of such service in any fiscal year.⁴ Involuntary active duty under 14 U.S.C. § 3713, such as responses to natural disasters or terrorism, also counts, though only for service performed on or after December 31, 2011.⁵

The stretch between the day a reservist stops drilling and the day retired pay begins is known informally as the “gray area.” The member holds retired status but receives no pay, and survivors receive no annuity if the member dies during this period unless the Reserve Component Survivor Benefit Plan is in place.³

Reservists submit their retirement request on form CG-2055A at least 100 days (and up to one year) before the requested retirement date, which must be the first of a month, and generally only after receiving a 20-year Satisfactory Service Letter.⁶

How Retired Pay Is Calculated

Two systems govern retired pay. Which one applies depends on the member’s Date of Initial Entry into Military Service.

Legacy High-3

Members who first entered active duty after September 8, 1980, but before January 1, 2018, fall under High-3. The formula multiplies years of service by 2.5% and applies that percentage to the average of the member’s highest 36 months of basic pay.⁷ A 20-year retiree receives 50% of that average; 30 years produces 75%, the statutory maximum.⁸

For reservists under High-3, years of service for the pay calculation are found by dividing total retirement points by 360. A reservist with 4,735 points has 13.15 equivalent years for pay purposes.⁸

Blended Retirement System

The Blended Retirement System took effect January 1, 2018, and is mandatory for anyone who entered service on or after that date.⁹ Members with fewer than 12 years of service on that date could opt in. BRS reduces the pension but adds Thrift Savings Plan contributions, a mid-career bonus, and a lump sum option:

The pension multiplier is 2.0% per year of service instead of 2.5%, so a 20-year retiree receives 40% of the High-3 average rather than 50%.¹⁰
After 60 days of service, the government automatically contributes 1% of basic pay to the member’s TSP. Beginning in year three, it matches contributions up to another 4%, so a member contributing at least 5% receives 5% from the government. Members vest in government contributions after two years of service, and contributions continue through the end of the 26th year.
Continuation pay is a one-time cash bonus tied to a service obligation. As of January 1, 2025, members become eligible at eight years of service (previously 12). The multipliers are 9 times monthly basic pay for enlisted, 6 times for officers, and 2 times for reservists, in exchange for four additional years of service. Form CG-7430A must be submitted at least 30 days before the continuation pay date or eligibility is forfeited.¹¹¹²
At retirement, BRS members may elect to take 25% or 50% of their future retired pay as an upfront lump sum, either at once or in up to four annual installments. Monthly retired pay is then reduced to 75% or 50% of the full amount until the retiree reaches Social Security full retirement age of 67, at which point full pay resumes. The lump sum is discounted to present value using a Department of Defense discount rate published each June, and the member must notify their servicing personnel office at least 90 days before retirement.¹³

Disability Retirement

Members who cannot continue serving because of a service-connected injury or illness are evaluated through the Physical Disability Evaluation System under Title 10, U.S.C., Chapter 61.¹⁴ A Medical Evaluation Board first documents the medical issues; the member has 21 days to submit a rebuttal.¹⁵ An Informal Physical Evaluation Board then determines fitness for duty and, if the member is unfit, assigns a rating using the VA Schedule for Rating Disabilities. A member who rejects the informal findings may request a Formal Physical Evaluation Board hearing with the right to present evidence, call witnesses, and be represented by counsel.

Members rated below 30% are separated with severance pay rather than retired. Those rated at 30% or higher, or who already have 20 or more years of active service, are medically retired. If a qualifying condition is not yet stable, the member may be placed on the Temporary Disability Retired List for up to five years with reevaluations every 18 months.¹⁵

Disability retired pay is the retired pay base multiplied by the higher of two figures: the disability percentage or 2.5% times years of creditable service. The multiplier is capped at 75%, and members on the Temporary Disability Retired List receive a minimum multiplier of 50%.¹⁶

Applying for Retired Pay

Retired pay does not start on its own. Members establish their retired pay account with the Coast Guard Pay and Personnel Center in Topeka, Kansas, by submitting DD Form 2656 (Data for Payment of Retired Personnel) at least 90 days before the retirement date.¹⁷ The same form records the Survivor Benefit Plan election and spousal concurrence. Failing to submit a signed DD-2656 before the retirement date triggers automatic SBP enrollment for at least 24 months.⁸

Retirement requests themselves go through the Personnel Service Center: PSC-EPM-1 for enlisted, PSC-OPM-1 for officers, and PSC-RPM-1 for reservists. Members also submit form CG-2045 (Career Intentions Worksheet) to their Servicing Personnel Office at least 60 days before departure.

Annual Cost-of-Living Adjustments

Retired pay and Survivor Benefit Plan annuities receive an annual COLA tied to the Consumer Price Index, effective each December 1. If the CPI decreases in a given year, the COLA is set to zero rather than reducing pay, and the following year’s calculation references the last year that produced a positive increase.¹⁸ The adjustment effective December 1, 2025, was 2.8%.¹⁹

VA Disability and Concurrent Receipt

By law, retirees who also receive VA disability compensation must waive a dollar-for-dollar portion of their retired pay equal to the VA payment. Two programs restore some or all of that offset:

Concurrent Retirement and Disability Pay (CRDP) is available to retirees (active duty, or reservists at age 60) with a combined VA rating of 50% or greater. It restores the retired pay that would otherwise be offset, is calculated automatically once the VA notifies the Pay and Personnel Center, and is taxable.²⁰
Combat-Related Special Compensation (CRSC) is for retirees whose VA-compensated disabilities are combat-related. It requires an application on DD Form 2860 to the Coast Guard and is not taxable.

A retiree who qualifies for both receives only one; the Pay and Personnel Center generally pays whichever is greater.²¹

Survivor Benefit Plan

Retired pay stops when the retiree dies. The Survivor Benefit Plan lets retirees provide a monthly annuity to survivors, elected at retirement on DD Form 2656. The annuity pays 55% of a chosen base amount ranging from $300 per month up to full retired pay.²² Premiums are deducted from gross retired pay and set by the Defense Finance and Accounting Service based on individual circumstances. SBP annuities receive the same annual COLA as the underlying retired pay.

Reserve Component SBP

Reservists who qualify for non-regular retirement must make an irrevocable RCSBP election within 90 days of receiving the 20-year satisfactory service letter, using DD Form 2656-5.²³ Three options are available:

Option A declines to make an election until retirement age. No annuity is payable if the member dies before then. Notarized spousal concurrence is required.
Option B provides a deferred annuity. If the member dies before age 60, payments begin on the date the member would have turned 60. Notarized spousal concurrence is required.
Option C provides an immediate annuity beginning the day after the member’s death, regardless of age.

Missing the 90-day window results in automatic enrollment in Option C at the maximum level.²⁴ No premiums are collected until the reservist begins drawing retired pay, but Options B and C carry an additional Reserve Portion Cost for coverage during the gray area.

Healthcare and TRICARE

Retiring is a Qualifying Life Event that opens a 90-day window to enroll in a TRICARE health plan. Enrollment is not automatic, and retirees who miss the window are limited to care at military hospitals and clinics on a space-available basis.²⁵ The main options are TRICARE Prime for retirees living in a Prime Service Area, TRICARE Select regardless of location, TRICARE For Life for those entitled to Medicare Part A and enrolled in Part B, and the US Family Health Plan in certain stateside areas.

Retirees pay enrollment fees, premiums, deductibles, and copayments that differ from active duty rates, and these costs are paid retroactively to the retirement date to keep coverage continuous. Retirees also update the Defense Enrollment Eligibility Reporting System and get new Uniformed Services ID cards. Dental and vision coverage is purchased separately through the Federal Employees Dental and Vision Insurance Program; the TRICARE Dental Program is provided by United Concordia; pharmacy benefits come with TRICARE enrollment, with most maintenance medications required through home delivery.²⁶

Exchange, Commissary, and Space-A Travel

Retirees keep several non-pay benefits tied to their ID card. Retired members and dependents are eligible to shop at Coast Guard Exchanges and commissaries, both of which offer tax-free pricing.²⁷ Retirees are also eligible for Space-Available travel on military aircraft in Category 6, the lowest-priority tier. Flights on military aircraft are free; seats on commercially chartered flights cost a nominal fee.²⁸

Rules That Continue After Retirement

Retirees remain subject to recall. A voluntary retired recall is considered only when a mission-critical position cannot be filled by a member of the Ready Reserve.²⁹ Involuntary recall is authorized in time of war or national emergency, and any recalled member must pass an approved physical before returning to active status.

All retired Coast Guard officers and enlisted members are prohibited from working for any foreign government, foreign government agency, or foreign-government-controlled entity without prior written approval from both the Department of Homeland Security and the Department of State. The approval process can take up to six months, and unapproved foreign employment can result in recoupment of retired pay for the period involved.³⁰

State tax withholding is one detail that catches retirees off guard: changing a mailing address does not automatically update or stop state tax deductions, so retirees who move to a different state must request the change themselves.³¹ The PPC Retiree and Annuitant Services branch can be reached at 1-866-772-8724 or ppc-dg-customercare@uscg.mil.³²

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