If you’re in the Army, you need to know what’s happening with Continuation Pay in calendar year 2025! Even if you’re not in the Blended Retirement System (BRS), I’d almost guarantee you know someone who will be affected by the upcoming changes. Be a good leader or battle buddy and share this with anyone who might be in the BRS and/or eligible for Continuation Pay.
BLUF: Continuation Pay Policy Will Change
The upcoming changes could affect service members who are in the Blended Retirement System (BRS) and have 8 or more years of service as of 01 January 2024 the most. In theory, the policy will change on 01 January 2025 (more on this in a moment), so if you have 9 or more years of service on 01 January 2025 (calculated by Pay Entry Base Date (PEBD), you might no longer be eligible for CP. There may be some wiggle room if the new implementation memo isn’t signed by 01 January 2024, but eligible service members should not wait if they plan to request Continuation Pay.
The bottom line is that if you’re currently eligible for Continuation Pay, you must consider your options and decide, or you could miss out completely.
If you want a better primer on what Continuation Pay is, check out my other article here or the Army’s Financial Frontline website. You also need to do yourself and your command a favor and complete your required “milestone” training on Continuation Pay (this is required by law, by the way).
You can be even more of a hero and help schedule your local Personal Financial Counselor to come teach a class to your unit. The training is also available on the Army Family Web Portal, but it’s extremely basic and the handouts are outdated (it had the 2020 memo as of today when I checked). However, it’ll spit out a certificate for you to show completion.
Big Changes Coming in CY 2025 for Army Continuation Pay
The Army is planning to make a major revision to its eligibility requirements and calculation of the bonus for CY25. Luckily, they’ve already published this as a heads-up in the Implementation Plan memo signed on 22 March 2023.
Eligibility Window
Currently, Soldiers in the BRS are eligible for Continuation Pay between 8 to 12 years of service (not eligible to request once you hit 12 years of service). The Army has said it is changing eligibility to be between 8 to 9 years of service (not eligible to request once you hit 9 years of service). Actually, the final guidance might be between 7-9 years since there was an update in the NDAA for 2024.
Changes to Continuation Pay Multiples
The other major potential change is that instead of being a set multiple of your monthly base pay (currently 2.5 active, 4 for Guard/Reserves), it will be based on strength for your particular Military Occupational Specialty (MOS) or Career Management Field (CMF).
There’s the potential for some Soldiers to get up to 11 times their monthly active-duty base pay! That’s almost a whole year’s salary! Make sure to read my other continuation pay article where I discuss the tax implications and payment options.
However, we simply don’t know what this looks like yet. Your multiplier may be higher, but right now it looks like it can only go up unless you’re Guard/Reserves. Here’s the chart from the CY25 Plan memo:
I haven’t seen exactly how they’re planning to get the current strength numbers published so people can plan. The way it’s written makes it seem like they’ll change from month to month or quarterly – meaning we can’t plan ahead. However, that’s just guessing on my part.
The “So What?” About These Continuation Pay Changes
Changing eligibility to 8-9 years of service means if you’re already at 8 years of service in 2024, you would need to make a decision and/or request CP either now or very soon. Last year the Army didn’t release their Continuation Pay guidance until about 3 months into the year. Go figure. However, for CY24, they’ve actually planned for this and released the Implementation Guidance memo covering CY24/25.
In short, the Army can’t release its CP guidance until a budget is approved. So, you can use the CY 24/25 memo until the CY 25 (maybe it’ll be a CY 25/26 memo?) is signed. The current CY 24/25 Implementation Guidance memo can be found here (CAC required) or here (open source). This is not to be confused with the CY 25 Implementation Plan memo here (CAC Required).
Plan = We’re Planning to do change Continuation Pay
Implementation Guidance = Current Policy for Continuation Pay
What If I Become Eligible After 01 January 2024?
These changes aren’t proposed until CY25, so if you’ll hit 9 years of service (calculated from PEBD) after March or April of 2024, you may be able to wait to see if your multiplier goes up. If they implement the plans they have published, as long as you’re in an MOS with less than 95% fill rate (probably every job in the Army right now), your CP multiple could increase.
However, keep in mind that we don’t know exactly what the CY25 policy will be until it’s published. If you wait, there could be a risk of them changing the policy to something completely different. For instance, technically, they could change the policy to be within 7-8 years of service. However, I don’t feel like they’ll do this. They may expand the policy to include 7 up to 9 years of service.
Bottom line, once you’re eligible, you need to be prepared to decide. Just like bonus messages, Continuation Pay policy can change any time and there’s no grace period that I’m aware of. Continuation Pay is a retention tool each individual service can adjust as they see fit within the broader DoD policy.
Still Confused About Continuation Pay? I Made a Flow Chart!
If you’re still confused, I’ve got a little more to help simplify and visualize your Continuation Pay options. I created this flow chart based on one that was shared on LinkedIn recently. Huge thanks to Erin Williams for the idea!
Here are the basic questions you need to ask to determine if you need to consider making a decision on CP right now:
Are you in the Blended Retirement System?
- If yes, continue on.
- If no, you’re not eligible for CP. Forward this article to someone who is in the BRS.
Do you have eight (8) or more years of service (calculated by your PEBD)?
- If yes, you need to consider your CP options now!
- If no, you need to start researching and thinking about CP.
Did you hit eight (8) or more years TIS between 01 January 2024 and ~April 2024?
- If yes, you’re in what I’m calling the Continuation Pay “Gray Area.” The new policy will likely not take effect until after you’re no longer eligible. Read more for some additional planning considerations.
- If no, you may be able to wait to see if your multiplier increases (wait at your own risk).
Did you/will you reach eight (8) years TIS ~01 April 2024 or later?
- If yes, you might be able to wait for a higher multiplier when the CY25 policy is released. However, I’d be careful waiting if you don’t have at least a month’s buffer just in case processing gets delayed for some reason.
- If no, see previous questions.
Continuation Pay Changes Flow Chart
Hopefully, this helps to clarify when you need to make a decision and how these changes may affect you. There’s one special category of Soldier who has a unique yet important decision to make. I’m calling these the Continuation Pay “Gray Area” Soldiers.
Continuation Pay “Gray Area” Soldiers
If you did hit or will hit eight (8) or more years of time in service (TIS) after 01 January 2024 and before about April 2024, you’re in a “gray zone” for these CP changes. You’ll still technically be eligible for CY25 (as planned). The policy for Continuation Pay historically releases sometime in late March. The risk is that if you wait, they could either release the new criteria early or they won’t release the new memo in time for you to request CP under the new guidance for Calendar Year 2025.
I’ll say wait at your own risk. Unless you’re close to a promotion or going to have another significant jump in pay, I would carefully consider taking Continuation Pay now rather than waiting. If you will enter eligibility (hit 8 years TIS) as of about April 2025 or later, you’re probably safe to wait until the new CP memo is released. There’s still a risk they could change it further, but I hope the new policy will match their Plan memo pretty closely.
Waiting for the Annual Pay Raise
Other than getting promoted, if you’ve already hit 8 years TIS, there’s little reason to wait to request CP just to get the annual pay raise. As of now, we have no idea what that will be, but we can assume it’ll be 5% or less. To me, it’s probably not worth waiting to try to get another 5% (before taxes).
We’re talking about $500 (probably more like ~$400 after taxes) on a $10,000 bonus. It’s probably not worth putting $10,000 or more at risk in order to try to snag an extra $500. For context, if you apply six months earlier and put that money into a high-yield savings account, you might make up for the lack of the annual pay raise in interest earnings. However, our pay raise could be anything. I’m not expecting another hefty 5+% pay raise this year – and that’s assuming they even pass the defense spending bill before the end of the year…
How Will I Know When Continuation Pay Changes?
The only way anyone knows when anything changes in the Army is through S1NET on MilSuite. I highly suggest you sign up for it. Out of all the things I check on a daily/weekly basis, their updates are the absolute most helpful thing in my inbox. Full stop. If you’re in the Army, you should sign up here (CAC required).
I’d tell you to keep checking with your S-1 or Retention office, but many are unaware of what Continuation Pay is, let alone that changes may be coming. As with anything, I highly suggest paying attention to your own career and making sure you have all the information to make your own decisions.
What About Guard and Reserves?
Great question! Unfortunately, we don’t know yet. The plan memo for CY25 only says Regular Army (RA). It only says that the Chief of the Army Reserve (USAR) and the Director of the Army National Guard (ARNG) have until 31 December 2024 to give their continuation pay timing and amount recommendations with “justified and supporting analysis” included.
One thing to note is that if they decide to follow suit and match the active component, you might end up with a lower multiple than you have now (2.5 for 95%+ vs 4% for Guard/Reserve right now). This might be an instance where it’s best to deal with the devil you know versus a wait-and-see strategy.
Big apologies to my brothers and sisters in the Guard and Reserves! If I find something out, I’ll update you as best I can and send a note in my newsletter.
Final Impressions and Takeaways on Army Continuation Pay Changes
If you are currently eligible for Continuation Pay, you need to take a really hard, honest look at it and consider making your decision. Make sure you’ve taken the mandatory training on the Continuation Pay program, contact your local Personal Financial Counselor and get the training or take it online. If you know anyone who’s in the BRS, make sure they know what Continuation Pay is.
Get started with these sources from the DoD and the Army:
Army Financial Frontline Continuation Pay Information Page
If you like podcasts, you can also listen to the episode I did on The Military Money Manual Podcast.
Please don’t let another day go by without looking into and understanding Continuation Pay! It absolutely breaks my heart to hear stories of people missing out on this “build-your-own-bonus” program we call Continuation Pay. Please share and let me know what questions you still have!