Hi everyone, I am excited to have military specific threads available! I wanted to share some info that I dug into this week because I realized one of my Sailors was about to loose out on some money. Luckily, I caught it a few weeks before the deadline and the member will now get $12k that he could have missed out on.
A few years back we were offered the opportunity to switch to the Blended Retirement System (BRS). Many people who decided to make the switch, myself included, are now within the 8 to 12 years window to apply for Continuation Pay (CP). I can only write intelligently about the Navy’s policy, but I wanted to post this as a reminder for those who may be in this window to become familiar with their branch’s policy. One misconception a lot of my Sailors have is believing they will be loosing money from their retirement. This is not how it works. CP is a retention tool that is more in line with a reenlistment bonus. You agree to serve 4 more years and in return you get a predetermined amount of money from your branch to do so. If you don't serve the 4 years, you will owe the unserved portion of that money back to Uncle Sam. Basically, if you are faced with the decision and you know you are going to stay in for 4 more years, there is not a downside. If you would like to have this money go to your TSP, you can log into My Pay and elect a percentage of special pay to be sent directly to your TSP (again, this is how it works in the Navy). Just make sure it wont put you over your annual limit so you can still get your government match for the rest of the year. Below I will post Navy specific policy. Please feel free to comment with your branches policy or correct me if I have made an error.
Navy Specific:
Navy policy states the member must elect for continuation pay between 11.5 and before their 12 year anniversary. The Navy just released the FY 26 Continuation Pay rates (NAVADMIN 133/25) which announced a payout of 2.5 times your base pay. Each member must go into NSIPS and elect to receive the pay. During this process Sailors can choose the number of installments they would like to receive the CP in. You may want to choose multiple years to minimize tax burden. The pay will be given to you on or around your 12th anniversary, and will be calculated using your 12 YOS pay rate.