As a former member of the United States Armed Forces, I know the sacrifices our servicemembers and their families make. Moving from active duty to civilian life can be both exciting and challenging. The Defense Finance and Accounting Service (DFAS) helps by ensuring our heroes get the pay and support they deserve.
This guide will cover the details of DFAS retired pay. We’ll look at different military retirement benefits, managing your pay, taxes, the Survivor Benefit Plan, and DFAS resources for veterans. It’s for anyone planning for retirement or already retired. This guide aims to help you make smart choices and get the most from your benefits.
Key Takeaways
- DFAS is in charge of paying military retirees and their families.
- This guide talks about military retirement benefits, managing your pay, taxes, the Survivor Benefit Plan, and DFAS resources.
- DFAS offers online tools and a customer service team to help with pay accounts and information.
- Changes like the 3.2% COLA and ending the SBP-DIC Offset affect retirees and annuitants.
- Gray Area Retirees (Guard or Reserve) can now stay in touch with DFAS before getting their retired pay through a new program.
Understanding DFAS Retired Pay
DFAS (Defense Finance and Accounting Service) Retired Pay is the monthly money military retirees get after they finish their service. It’s a key part of their pay package. It helps those who have served our country financially.
What is DFAS Retired Pay?
DFAS Retired Pay is the monthly money military members get when they retire. The pay is based on their final pay, years served, and the retirement system they were in. This includes Final Pay, High-36, or the newer Blended Retirement System (BRS).
Who is eligible for DFAS Retired Pay?
People can get DFAS Retired Pay if they’ve served at least 20 years or were medically retired because of an injury. The pay depends on their situation. It usually involves a certain rate times their base pay or the average of their highest 36 months of pay.
For more info on your DFAS retired pay, check out the DFAS website. The Military Retirement Benefits and Planning Guide also offers a detailed look at retirement benefits and life after the military.
“DFAS Retired Pay is the cornerstone of financial security for many military retirees, ensuring a stable income and a smooth transition to civilian life.”
Types of Military Retirement Benefits
The U.S. military offers different retirement benefits for its service members. These include regular military retirement, disability retirement, and the Survivor Benefit Plan (SBP).
Regular Military Retirement
Regular military retirement is for those who have served at least 20 years. Those with 20 years or more get Retired Pay, based on their basic pay. The type of retirement plan depends on when they started their service.
Disability Retirement
Disability retirement is for those who can’t do their job because of an injury or illness. It covers both temporary and permanent disabilities. The TDRL offers up to 5 years of temporary disability help, while the PDRL is for permanent disabilities.
Survivor Benefit Plan (SBP)
The Survivor Benefit Plan lets retirees give part of their pay to their spouse or kids after they pass away. This plan helps keep their families financially secure after the retiree dies.
It’s important for service members to know about the military retirement benefits they can get. Whether it’s regular retirement, disability retirement, or the Survivor Benefit Plan, these options offer financial security for those who have served their country.
DFAS Retired Pay
DFAS Retired Pay is the monthly pension for eligible military retirees from the Defense Finance and Accounting Service. The pay depends on the retiree’s service length, rank, and final pay. DFAS makes sure these payments go out right to veterans and their families.
DFAS helps military retirees manage their pay with many services and resources. You can update your info or get tax statements through the DFAS website. It’s full of tools and advice to make things easier.
The myPay system is a big help for managing your retired pay. It’s a secure online place where you can see your pay statements, change your info, and adjust your taxes. You can also get documents like the 1099-R tax form through myPay.
DFAS also has customer service for questions about military pensions and retirement income. You can call, email, or use the voice response system for help with your DFAS retired pay.
If you’re new to retirement or have been getting your DFAS retired pay for a while, DFAS has resources for you. They offer tools and support to make your retirement smooth and easy. Use what they provide to keep track of your military pensions and retirement income.
Managing Your Retired Pay Account
As a military retiree, keeping an eye on your retired pay account is key. The myPay online portal helps you manage your retired pay. It’s a great tool for handling your account.
Using myPay
With myPay, you can check your Retiree Account Statements and update direct deposit info. You can also change your mailing address and get to tax documents like the IRS Form 1099-R. It’s smart to check your account once a year for accuracy.
Look at your Retiree Account Statement (RAS) yearly and the monthly eRAS a few times. This keeps your account correct.
Updating Personal Information
It’s important to keep your personal info with DFAS current. This means your contact details and family size changes. Keeping this info updated helps avoid debts and delays in getting tax forms.
- Change your address and state tax withholding with the askDFAS Online Retiree Change of Address Tool or form DD Form 2866.
- Update your email on myPay if it has changed.
- For a new 1099-R, use the link in the second week of February each year.
By using myPay and keeping your info current, you ensure your retirement pay is processed smoothly and accurately.
Cost of Living Adjustments (COLA)
As a military retiree, you get an annual Cost of Living Adjustments (COLA) to your retirement pay. These adjustments fight inflation, keeping your buying power steady over time. The COLA is based on the Consumer Price Index (CPI) increase.
In 2024, there was a 3.2% COLA increase, which you saw in your December 29, 2023 payment. People getting Survivor Benefit Plan (SBP) payments also got this increase in their January 2, 2024 payment.
The COLA for retired pay is figured out by comparing the CPI of the current year to the year before. If the CPI goes down, the COLA stays at zero.
| Fiscal Year | COLA Percentage |
|---|---|
| 2011 | 3.6% |
| 2012 | 3.6% |
| 2013 | 1.7% |
| 2014 | 1.5% |
| 2015 | 1.7% |
If the COLA increase is over 1 percent, REDUX retirements get a 1 percent cut. But if the increase is 1 percent or less, the COLA is the same for all plans.
“The COLA helps ensure that your retired pay keeps pace with the rising cost of living, allowing you to maintain your standard of living during retirement.”
Tax Considerations for Retired Pay
As a military retiree, knowing about taxes on your retirement pay is key. Your monthly payments from the Defense Finance and Accounting Service (DFAS) are taxed by the federal government. You’ll get an annual IRS Form 1099-R to report your income.
1099-R Tax Statements
Your 1099-R tax statement helps you accurately file your taxes. You can find these forms on myPay, DFAS’s online system, or by mail. In myPay, you can look up up to four years of 1099-R statements.
Affordable Care Act Statements
You might also get Affordable Care Act 1095-B/C statements. These show your health insurance coverage details. You can find these in myPay too, for the Affordable Care Act’s reporting needs.
While DFAS can’t give tax advice, they suggest talking to a tax expert or the IRS about your retired pay taxes. Knowing your tax duties and using resources can help you handle your retired pay taxes well.
“Claiming retirement pay as entirely exempt from Federal Income Tax Withholding requires annual re-certification through submission of a new W-4 form; failure to do so defaults the withholding status to ‘Single’ with zero exemptions.”
- The IRS suggests using guides and a tax estimator to help figure out your W-4 claims. This can lower your taxes.
- Retirees can change their tax withholding by sending in a new W-4 or W-4P if their situation changes. This ensures the right amount is taken out for taxes.
- If taxes withheld don’t cover what you owe, retirees can choose to withhold more or set a specific amount on their tax forms.
Survivor Benefit Plan (SBP) for Spouses and Children
The Survivor Benefit Plan (SBP) is key for the financial security of military retirees’ spouses and children. It lets retirees give a part of their retired pay to their loved ones after they pass away.
Applying for SBP Annuity
Spouses and ex-spouses can apply for the SBP annuity by filling out the DD Form 2656-7. This form makes sure the retiree’s wishes are noted and starts the annuity payments. The SBP annuity for a spouse can be up to 55 percent of the member’s retired pay, giving a steady income to the surviving spouse.
SBP Eligibility Verification
SBP annuitants must check their eligibility often to keep getting the annuity payments. Starting in August 2023, DFAS made it easier for SBP annuitants to prove they’re eligible with just one yearly check. This change makes it simpler for survivors to keep their benefits.
- Spouse and ex-spouse annuitants under 55 must check every year that they’re not married.
- Spouse and ex-spouse annuitants 55 and older who get a paycheck sent to a foreign address need to update their foreign address yearly.
- The new checks include School Certification, Survivor Benefit Plan-Marital Status Update, and Foreign Address Update for Mailed Check.
By keeping up with the rules and checking their status often, SBP annuitants can keep their important benefits.
“The Survivor Benefit Plan (SBP) gives a monthly annuity payment to military spouses or children if a military member dies while active, on inactive duty, or after retiring (if they choose to buy coverage).”
Reporting a Retiree’s Death
When a military retiree dies, their family must tell the Defense Finance and Accounting Service (DFAS) right away. This step starts the process of paying out any Arrears of Pay (AOP) the retiree was owed. Now, DFAS can put these payments directly into the claimant’s bank account, so there’s no waiting for a check.
Arrears of Pay for Survivors
After learning of a retiree’s death, DFAS stops paying the retiree’s monthly pay. They then figure out the Arrears of Pay the retiree was due, up to the date they passed away. This money is given to the people who were supposed to get it, like the spouse or a chosen beneficiary.
To get the AOP, the survivors must fill out a SF 1174 form, “Claim for Unpaid Compensation of Deceased Member of the Uniformed Services.” They also need a death certificate and two more people to sign the form. Plus, they must fill out a Direct Deposit Authorization (DFAS-CL Form 1059) for the payment to go straight into their bank account.
“Reporting a retiree’s death quickly is key to getting any payments owed to the deceased. This helps the surviving family get the financial support they need.”
Some surviving spouses might also have to apply for the Survivor Benefit Plan (SBP) if the retiree was signed up. They’ll also get the retiree’s final tax document, the IRS 1099-R, with their AOP payment.
Survivors can send in their forms and documents online, by mail, or by fax to DFAS. Getting the paperwork in on time helps make sure the family gets their survivor benefits without delay.
DFAS Customer Service and Resources
As a military retiree, you have access to many customer service resources from the Defense Finance and Accounting Service (DFAS). These include the easy-to-use myPay online tool and dedicated customer support. DFAS helps make sure your retirement benefits are taken care of.
Online Tools and Form Wizards
The DFAS website has lots of online tools and form wizards to help you with retirement. You can use the askDFAS feature to ask questions, upload documents, and find checklists and guides. These tools let you manage your account easily from home.
Contact Information
For personal help, DFAS has a toll-free customer service phone number (888-332-7411) where experts are ready to talk to you. There’s also the DFAS Hotline (1-800-330-8720) for reporting fraud, waste, abuse, or mismanagement. With these contact information options, you can be sure your DFAS customer service needs will be met quickly and professionally.
“DFAS provides a wide range of resources to help military retirees manage their retirement benefits with ease.”
Need to update your info, ask about your pay, or report a loss? DFAS has the tools and support for you. By using these online tools and contact information, you can take charge of your DFAS retired pay. This ensures a smooth transition into your retirement.
Gray Area Retirees: Staying Connected
As a gray area retiree, you’ve earned your military retirement benefits. But waiting for your retired pay can feel long. Luckily, the Defense Finance and Accounting Service (DFAS) offers a way to keep you informed during this time.
DFAS has a “Future Retiree” myPay account for those in the gray area. This includes National Guard and Reserve retirees waiting for their pay. It lets you update your info and keep track of your future retired pay benefits.
With your myPay account, you’ll get news, updates on policy changes, newsletters, and alerts about your retired pay application. DFAS will email you when they receive, process, and complete your application.
If you’re a gray area retiree, setting up your myPay account is key. It’s a simple way to manage your retirement pay. This tool keeps your info current and connects you during this phase.
Accessing Your myPay Account
Setting up or accessing your myPay account is easy with DFAS’s help. They consider your past use, job status, and any extra help you might need. Call the myPay Customer Support Unit at 1-888-332-7411 or 317-212-0550 for personalized help.
It’s important to update your mailing address with DFAS. This ensures you get timely updates and help with your myPay account. With these tools, gray area retirees can stay informed and manage their retirement pay smoothly.
Disability Compensation and Special Pay
If you’re a military retiree, you might get extra pay beyond your regular retired pay. Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Pay (CRDP) are two such programs. They aim to give back the retired pay you lose because of your service-connected disability.
Combat-Related Special Compensation (CRSC)
CRSC is a tax-free payment for retirees with disabilities from combat. You need to apply for CRSC through your branch of service. The Defense Finance and Accounting Service (DFAS) pays it out on the first business day of each month, just like your regular pay.
Concurrent Retirement and Disability Pay (CRDP)
CRDP helps restore your retired pay if you have a service-connected disability. Unlike CRSC, CRDP is taxed and goes to eligible retirees automatically. DFAS and the VA work together to give you any back pay or disability compensation you’re due.
For more info on these special pay programs, call DFAS at 800-321-1080 or the VA at 800-827-1000. Don’t forget, the CRDP/CRSC Open Season is from January 1 to January 31, 2024. Make sure to check your options during this time.
“The purpose of these entitlements is to recover the retired pay that military retirees waive for VA disability compensation.”
Conclusion
DFAS Retired Pay is key to the financial security of our nation’s military veterans. This guide has covered the different retirement benefits, tools, and customer service resources. These help military retirees and their families manage their DFAS retired pay smoothly.
We looked into the details of DFAS Retired Pay. We covered eligibility, types of benefits, managing your account, and tax and survivor benefits. By keeping up with the latest info, retirees can make the most of their benefits and stay financially stable.
If you’re in the military or already retired, this guide has given you the knowledge to handle DFAS retired pay well. Use the resources and benefits to secure your financial future. You’ll get to enjoy the rewards of your military service. Check out our Store for more on military benefits and retirement planning.