Military Reserve Retirees Approaching Age 60 Need to Take These Financial Steps

A retired military reservist approaching age 60 needs to take several steps before starting to receive military retirement pay; needs to review their Survivor Benefit Plan election; and may prepare to switch to “regular” retiree Tricare coverage.

Most reserve retirees are eligible to receive military retirement pay at age 60. However, service members with qualifying active-duty service may become eligible earlier. Under the reduced-age retirement rules, each block of 90 qualifying days of active duty in a fiscal year typically moves the pension start date three months earlier. The start of military retirement pay can not be earlier than age 50.

Retirement Pay

Whenever you are eligible, you will need to apply for military retirement pay to begin. You should submit your retirement pay application six to nine months ahead of your pay eligibility date. That application includes DD Form 108, Application for Retired Pay, and DD Form 2656, Data for Payment of Retired Personnel.

Before you send the application, pull your Chronological Statement of Retirement Points and verify that the points line up with your orders and Leave and Earnings Statements. If you find errors, gather documentation and work with your service’s personnel office to correct the record, because inaccurate points could permanently reduce your retired pay. You should also confirm that you received your Notice of Eligibility (“20‑year letter”) and keep a copy with your retirement paperwork, since it is the official proof that you completed at least 20 “good” years of service.

Survivor Benefit Plan

Reserve component members make initial Survivor Benefit Plan (SBP) elections when they receive the 20‑year letter, choosing among options A, B or C for coverage during the “gray area” before retired pay starts. Option A defers the SBP decision until retired pay begins, but provides no annuity if the member dies before age 60. Option B provides a delayed annuity that begins at what would have been the member’s 60th birthday, while Option C provides an immediate annuity to beneficiaries if the member dies during the gray‑area years. If you didn’t make an election within 60 days of receiving your NOE, then you were default enrolled in Option C. For those who elected Options B or C, no action is necessary when you start receiving military retirement pay.

However, if you elected option A when you received your NOE, you’ll need to make your SBP decision now. You’ll need to learn about the program, analyze your financial situation, and make the decision that is best for your family’s finances and your sleep-at-night factor. If you choose less than full SBP coverage or decide not to participate, your spouse must consent in writing, because declining SBP shifts significant financial risk to the survivor.

Tricare Eligibility

Regardless of when you start receiving military retirement pay, reaching age 60 is a major health‑care milestone for reservists. At this point, you and eligible family members gain access to standard Tricare retiree plans such as Tricare Prime and Tricare Select, just like retired active‑duty families. These plans have lower enrollment fees than Tricare Reserve Select and Tricare Retired Reserve premiums. Importantly, those enrollment fees now count toward the family catastrophic cap, which can help limit total out‑of‑pocket expenses for the year. Regardless of what health care coverage you use before age 60, you’ll want to evaluate your options now that you have access to Tricare.

If you choose to use Tricare retiree coverage, you’ll need to enroll. There is a 90‑day window to contact Tricare and sign up. If you miss that window and do not have another qualifying life event, you may have to wait until the next annual Tricare Open Season to enroll, potentially leaving you uninsured or paying much higher costs for other coverage.

Read More: Is Tricare Retired Reserve Worth the Cost of Coverage?

Review Your Overall Financial Plan

Finally, integrate your new pension, SBP decision and health‑care changes into your broader retirement cash‑flow plan, Social Security strategy and investment allocations. At 60, many reservists are still working in civilian careers, so it is important to understand how this additional income and benefit package fits with civilian retirement plans, employer health insurance and long‑term goals for your family’s financial security.

For example, a reservist who starts pay at 58 due to early retirement orders may use age 60 as the point to transition from employer coverage to Tricare Prime, adjust life insurance as SBP takes effect, and shift investment contributions toward tax‑efficient withdrawals in later years.

You’ve earned military retirement pay, the opportunity to participate in the Survivor Benefit Plan, and Tricare medical coverage, but none of these things happen automatically. Set aside some time to fill out the right paperwork and make the decisions necessary to get the most value from these benefits.