BRS Calculator 2026 — Blended Retirement Lump-Sum & Continuation Pay

What BRS is and who's on it

The Blended Retirement System was created by Public Law 114-92 (NDAA FY16, Sections 631-635) and took effect January 1, 2018. It replaces the legacy High-3 system for everyone entering active duty on or after that date. Members already serving on 31 Dec 2017 were grandfathered under their legacy system; only those with fewer than 12 years of serviceon 31 Dec 2017 (or, in the Reserve Component, fewer than 4,320 retirement points in a paid status) had a one-time opt-in window during 2018, and that window has since closed (DoD FMR Vol 7B, Ch. 2, ¶ 1.1).

BRS has three distinct pieces:

Defined-benefit pension at retirement: 2.0% × YOS × high-3 (vs 2.5% under legacy High-3 — a 20% reduction).
Defined-contribution (TSP): Automatic 1% agency contribution after 60 days + matching up to 4% (after 2-year vesting for the auto 1%, starting at the 25th month of service).
Continuation Pay: A one-time bonus at the 12-year point (2.5× to 13× monthly base pay, service-specific). Requires a 3–4 year additional service obligation.

Plus an optional lump-sum election at retirement under 10 USC § 1415 — covered in detail below.

Lump-sum election — the 10 USC § 1415 math

At retirement, a BRS member may elect to receive an immediate lump-sum payment equal to the present value of 25% or 50% of their monthly retired pay that they would otherwise receive between retirement and age 67. Monthly retired pay is correspondingly reduced by 25% or 50% for that period. At age 67, the reduction ends and the retiree returns to the full unreduced amount.

The present-value calculation uses the annually-published Lump Sum Discount Rate (LSDR) from the DoD Office of the Actuary. For calendar year 2026, the rate is 6.46% per the DASD(MPP) memo dated 2025-05-22. This rate is fixed for the year — every BRS member retiring in CY2026 uses the same rate.

What the LSDR means in practice: A higher discount rate produces a smaller lump sum (more aggressive discounting of future payments); a lower rate produces a larger lump sum. At 6.46%, the lump sum works out to roughly 5–13× the annual pension amount you give up — about 12.4× if you retire at 42 (25 years to age 67) and about 5.6× if you retire at 60 — because the multiple depends entirely on how many years of payments are being cashed out.

The rate is built from the 7-year average of the 23-year-maturity Treasury High Quality Market (HQM) Corporate Bond Yield Curve, adjusted for inflation using the Treasury Breakeven Inflation curve, then increased by a fixed 4.28 percentage points and rounded to the nearest 0.01 percentage point (DoD FMR Vol 7B, Ch. 3, ¶ 6.4.1). Because it averages 84 months of yield data (the March curve of the publication year plus the preceding 83 months, ¶ 6.4.2), it moves slowly year to year. The inaugural CY2018 rate, published 1 June 2017, was 6.99 percent (¶ 6.4.2) — so 2026's 6.46 percent sits slightly below where the rate started.

When the lump sum makes sense

The lump sum trades long-term inflation-protected income for an immediate cash payment. It can win in these scenarios:

You have a higher private-investment return target than 6.46%: If you can reliably earn >6.46% on the lump sum, you come out ahead. Long-run U.S. stock returns have historically averaged near 10% nominal, but with substantial volatility and sequence-of-returns risk.
You face a major near-term capital need: paying off a high-interest debt, starting a business, buying a home outright in a high-cost area.
You have shortened life expectancy: known terminal illness, very poor health.
Tax-rate arbitrage: The lump sum is taxable in the year received (potentially pushing you into a higher bracket); the monthly pension is taxed gradually. Strategic placement during a low-income gap year can reduce total tax.

And it loses in these scenarios:

You can't reliably earn the LSDR rate: The discount math assumes you can earn 6.46% on the money — if your realistic after-tax return is below that, the trade works against you and the monthly pension is worth more than the lump.
COLA on the monthly pension: The standard pension receives full CPI-W COLA (10 U.S.C. § 1401a). The lump sum locks in today's dollars; over 30 years of 2.5% inflation, the monthly stream gains substantial purchasing-power value the lump escapes.
SBP premium bite: the lump sum does not shrink your SBP base amount. Per 10 USC § 1447(6)(A) and DoD FMR Vol 7B Ch 3 ¶ 6.9.1, the full base amount is your unreduced monthly retired pay, "without regard to the required reduction in monthly retired pay pursuant to the lump sum" — and lump-sum electors default to full coverage. Your survivor annuity is protected, but you pay the full 6.5% premium out of a 25%/50%-reduced check, so the premium roughly doubles as a share of your monthly payment. (Electing a base amount below full — minimum $300, with spousal concurrence if required — is a separate voluntary election unrelated to the lump sum; FMR Vol 7B Ch 3 ¶ 6.9.2.)
You will live a long time: The standard pension has no end date; the lump-sum reduction does end at 67 but you give up purchasing power to get there.

Continuation Pay — the 12-year decision

At the mid-career point — statutorily between 7 and 12 years of service (37 U.S.C. § 356(a)(1), as amended by NDAA FY2024, Pub. L. 118-31 § 611(a); DoD FMR Vol 7A, Ch. 66, ¶ 2.2 still reflects the pre-2024 8-to-12 window) — BRS members are eligible for a one-time Continuation Pay (CP) bonus. Each service sets its own payment point within that window — the services have used the 12-year mark, which is what this calculator models; confirm the timing in your service's current CP guidance. The bonus is a multiple of monthly basic pay (2.5× to 13× for active component, 0.5× to 6× for reserve component per DoD FMR Vol 7A, Ch. 66, ¶ 2.3) and is set annually by each service based on retention needs.

In return for accepting CP, the member enters an agreement to serve not less than 3 additional years of obligated service (37 U.S.C. § 356(a)(2); DoD FMR Vol 7A, Ch. 66, ¶ 2.4.1) — several services set their CP agreements at 4 years, so confirm the obligation in your service's CP memo before signing. CP can be taken as a lump sum or in up to 4 annual installments. CP is fully taxable in the year received.

Know your service's current multiplier: CP rates vary by service and can vary by AFSC/MOS/rate, and are published annually on a calendar-year basis via OSD memo — verify your service's current rate via your career counselor or your service's personnel center (AFPC, HRC, MyNavy HR, etc.). This calculator uses the CP multiplier you enter (default 2.5×, the DoD-policy minimum).

BRS TSP matching — the bigger picture

BRS members receive automatic and matching contributions to their Thrift Savings Plan (TSP) from day 60 of service:

1% automatic agency contribution — credited regardless of whether the member contributes. Subject to 2-year vesting.
Matching contributions on member contributions: dollar-for-dollar on the first 3% of basic pay contributed, plus 50 cents on the dollar for the next 2% — a 4% total match at a 5% member contribution.

Over a 20-year career, the government's 5% (1% automatic + 4% match) totals roughly $52,000–$55,000 in contributions and grows to roughly $100,000–$150,000 by the 20-year mark. That figure is illustrative, not an entitlement: it uses the 2026 basic-pay table for an E-1 to E-7 progression (about $4,580/month career average) at 7–10% nominal returns (roughly 4.5–7.5% real), assumes no future pay raises, and assumes matching begins at the 25th month of service. Your result will differ. That value is what the legacy High-3 system did not provide. That's the "blended" piece — BRS members give up some defined-benefit pension value in exchange for portable defined-contribution wealth that they keep regardless of whether they reach 20 years.

For separators who leave before 20 years, BRS is a clear win over High-3 (whose pension is forfeited entirely below 20 YOS). For long-career retirees who stay 30+ years, High-3's higher multiplier may produce a larger lifetime pension — though never including the TSP portability.

Lump-sum decision checklist

Before electing a lump sum at retirement, work through these:

Project your standard pension with COLA over your expected lifetime — use the comparison above as a starting point and add 2.5% annual COLA.
Compute the after-tax lump sum (lump is taxable; consult tax pro for bracket placement).
Project the after-tax growth of the invested lump sum at your realistic return assumption.
Factor in SBP cash flow — coverage is not reduced (the base amount stays at your unreduced retired pay per DoD FMR Vol 7B Ch 3 ¶ 6.9.1), but the full premium is withheld from your reduced monthly pay until age 67.
Factor in VA disability offset — if your VA rating is under 50% (no CRDP), the VA withholds your disability compensation until it has recouped the entire gross lump sum (DoD FMR Vol 7B Ch 3 ¶ 6.8.2), a major hidden cost of the election. Retirees eligible for concurrent receipt at 50%+ are exempt (¶ 6.8.3).
Confirm state tax treatment — some states exempt military retirement entirely, others tax the lump differently than the monthly.

BRS continuation pay, the lump-sum election, and the irreversibility of the BRS opt-in

The Blended Retirement System applies to every service member who entered active service on or after 1 January 2018, plus the cohort of members who entered before 1 January 2018 and elected to opt in during the opt-in window that closed 31 December 2018. That window was not open to everyone still serving: only active duty members with fewer than 12 years of service on 31 December 2017, and Reserve Component members in a paid status with fewer than 4,320 retirement points as of that date, were eligible to elect BRS (DoD FMR Volume 7B, Chapter 2, paragraph 1.1). The opt-in election was a one-time, irrevocable decision under the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114-92), and members who opted in cannot return to the legacy High-3 system regardless of subsequent career decisions. Members who entered after 1 January 2018 are automatically enrolled in BRS and have no opt-out path. The calculator above models the BRS pension multiplier and the continuation pay and lump-sum components defined in 37 U.S.C. § 356 and 10 U.S.C. §§ 1409 and 1415. It does not model the TSP automatic and matching contributions authorized by 5 U.S.C. § 8440e — use our TSP Calculator (linked below) to project that growth.

The 2.0% pension multiplier vs the 2.5% High-3 multiplier. BRS pension is 2.0% × YOS × High-3 average basic pay. The legacy High-3 system uses 2.5% × YOS × High-3 average. A 20-year retiree under BRS receives 40% of High-3 as monthly pension; the legacy 20-year retiree receives 50% of High-3. The 10- percentage-point reduction at 20 years is partially offset over a career by the BRS-only government TSP contributions of up to 5% of basic pay (1% automatic plus up to 4% matching) every pay period — how close that gets to break-even with the legacy system depends on TSP investment performance and contribution discipline.

Continuation pay at 12 YOS. Under 37 U.S.C. § 356, BRS members are eligible for a one-time Continuation Pay bonus if they enter an agreement to serve not less than 3 additional years of obligated service (37 U.S.C. § 356(a)(2); DoD FMR Volume 7A, Chapter 66, paragraph 2.4.1). Several services set their CP agreements at 4 years — confirm the obligation in your service's CP memo before signing. The multiplier is set by the secretary of the service branch and varies between 2.5 and 13 times monthly basic pay for active component members (and a separate, lower 0.5 to 6 times multiplier for reserve component members under § 356(b)(2)(B)). The continuation pay amount and conditions are published in service-specific instructions and rotate periodically based on retention needs. A member at the 12-YOS mark who is undecided about staying past 20 should understand that continuation pay is taxable in the year of receipt and is subject to recoupment if the obligated service is not completed (37 U.S.C. § 373; DoD FMR Volume 7A, Chapter 66, paragraph 2.8).

The lump-sum retirement election under 10 U.S.C. § 1415. At retirement under BRS, the member may elect to receive 25% or 50% of the present value of pension payments through age 67 as a lump sum at retirement, with the monthly pension reduced proportionally during the lump-sum period and full pension restored at age 67. The lump-sum present-value calculation uses the discount rate calculated by the DoD Office of the Actuary and promulgated annually by the Deputy Assistant Secretary of Defense for Military Personnel Policy no later than June 1, effective January 1 of the following year (DoD FMR Volume 7B, Chapter 3, paragraph 6.4.2). The CY2026 rate is 6.46% per the DASD(MPP) Lump-Sum Discount Rate memo signed 22 May 2025. The 25% lump-sum election produces a smaller lump but a smaller monthly reduction; the 50% election produces a larger lump but a larger monthly reduction. The election is irrevocable once made. Members evaluating the lump-sum should treat it as a tax-event decision — the lump sum is taxable in the year of receipt, and a large lump can push much of it into higher marginal brackets. Unless one of the exception scenarios applies (a reliable above-LSDR return, a major near-term capital need, shortened life expectancy, or a specific tax-arbitrage opportunity), declining the lump sum preserves the full COLA-protected pension.

BRS vs High-3 break-even. The most defensible heuristic for the BRS-vs-High-3 decision (for members who had the opt-in choice in 2018) is to model both systems forward with a realistic TSP return assumption and the member's actual contribution history. Members who would consistently capture the full government contribution throughout a 20-year career narrow — and depending on TSP returns can close — the pension gap. Members who would skip TSP contributions or contribute below 5% are meaningfully worse off under BRS because they would lose 20% of the legacy pension without capturing the offsetting employer match. This calculator models the BRS side only (pension, continuation pay, lump-sum election); for the legacy side, use the High-3 Calculator, and for the match-growth side, use the TSP Calculator — both linked below.

Authorities: National Defense Authorization Act for Fiscal Year 2016 (Public Law 114-92, sections 631-635); 37 U.S.C. § 356 (Continuation pay); 10 U.S.C. § 1409 (Pension computation); 10 U.S.C. § 1415 (Lump-sum election); 5 U.S.C. § 8440e (TSP matching); DoD Financial Management Regulation Volume 7B, Chapter 3 (Gross Pay Computation — paragraph 6.0 lump sum, Table 3-5 BRS multipliers); DASD(MPP) Lump-Sum Discount Rate memorandum (CY2026 = 6.46%, signed 22 May 2025); DoD Financial Management Regulation Volume 7A, Chapter 66 (Continuation Pay, February 2024); DepSecDef memorandum, 27 January 2017 (BRS implementation). The BRS opt-in window closed 31 December 2018; service members who entered after 1 January 2018 are automatically enrolled with no opt-out.

BRS — frequently asked questions

What is the BRS Lump-Sum Discount Rate for 2026?

The Lump-Sum Discount Rate (LSDR) for calendar year 2026 is 6.46%, published by the DoD Office of the Actuary via DASD(MPP) memo signed May 22, 2025. The rate is fixed for any BRS retirement eligible to begin receiving retired pay between January 1, 2026 and December 31, 2026. Authority: 10 U.S.C. § 1415. Rates are promulgated annually no later than June 1, effective January 1 of the following year (DoD FMR Vol 7B, Ch. 3, ¶ 6.4.2).

How is the BRS lump sum calculated?

You may elect to receive an immediate lump sum equal to the present value of 25% or 50% of your monthly retired pay forgone from retirement to age 67. The present value uses the current LSDR (6.46% for 2026). After the lump, your monthly retired pay is reduced by 25% or 50% to age 67, then restores to the full amount for life.

BRS vs High-3 — which is better?

BRS has a 2.0% per-YOS multiplier (vs 2.5% under legacy High-3) — a 20% smaller pension. In exchange, BRS adds TSP automatic 1% + matching up to 4% (after 2-year vesting on the auto 1%), Continuation Pay at 12 YOS, and the lump-sum election. For separators who leave before 20 YOS, BRS wins because TSP is portable. For long-career 30+ YOS retirees, High-3 produces a larger pension but BRS adds substantial TSP value.

What is Continuation Pay?

A one-time mid-career bonus — statutorily payable between 7 and 12 years of service (37 USC § 356(a)(1), as amended by NDAA FY2024, Pub. L. 118-31 § 611(a)), though services have paid it at the 12-year point (confirm timing in your service's current CP guidance) — in exchange for an agreement to serve not less than 3 additional years of obligated service (37 USC § 356(a)(2); several services set 4). Range per DoD policy: 2.5× to 13× monthly basic pay for active component, 0.5× to 6× for reserve component (DoD FMR Vol 7A, Ch. 66, ¶ 2.3). The multiplier varies by service and AFSC/MOS/rate and is published annually on a calendar-year basis via OSD memo. Verify your service's current CP rate with your career counselor.

Should I take the lump sum?

Generally not, unless you have a higher reliable investment return target than 6.46%, a major near-term capital need, shortened life expectancy, or specific tax-rate-arbitrage gain. Reasons to skip: COLA on the standard pension (CPI-W, 10 USC § 1401a) adds substantial lifetime value the lump escapes; SBP premiums stay at 6.5% of your unreduced retired pay (10 USC § 1447(6)(A); FMR Vol 7B Ch 3 ¶ 6.9.1) but come out of a reduced check; tax bracket pushed up by lump receipt. Run the math with COLA before deciding.

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