Continuation Pay – Planning For 2025 and beyond
UPDATED 07 JAN 25 TO REFLECT NEW 2025 CONTINUATION PAY MEMORANDUM
UPDATES – There has been a lot of confusion regarding continuation pay recently in late 2024.
in 2023 and 2024, several conflicting and confusing memorandums and plans were published by various official and unofficial sources (including the CJO). Specifically a Continuation Pay Implementation Plan was published with drastic changes but was never intended for wide distribution.
In early 2025 the Army published a new memorandum discussing the changes to Continuation Pay. CJO leadership spoke directly with the Continuation Pay Program Analyst at HQDA G1 to confirm the changes and to alleviate confusion regarding previously published plans and policies. The below linked Memorandum is the Official Continuation Pay Policy going forward.
Updated CY25 Continuation Pay Memo – Dated 31DEC24
The below article has been updated to summarize what continuation pay is for those just learning about it and what changes will be occurring in 2025 and beyond.
ARTICLE
Did you know that if you are in the Blended Retirement System (BRS), you’re eligible for a mid-career bonus that is currently worth 2.5x your monthly base pay?! This is called continuation pay, and it’s one of the key factors that distinguishes Blended Retirement from the Legacy system. The Blended Retirement System has been functional for the better part of 7 years, but there is still limited awareness about continuation pay, eligibility, and how to request it.
The Army is changing it’s continuation pay program in calendar year (CY) 25 and will continually change it over the next 3 years. . If you are enrolled in BRS, and currently have less than 12 years of service, it is important to understand these changes and know your options.
What is Continuation Pay?
Continuation pay, or CP, is a one-time bonus paid to a mid-career service member enrolled in the Blended Retirement System. Continuation pay has two primary purposes. First, it serves to bolster the Blended Retirement package by providing a bonus that the service member can invest, pay down debt, or otherwise improve his or her financial outlook. Second, it’s a retention tool for the DoD. Taking continuation pay requires an additional service obligation (ADSO), which typically takes the service member “over the hump” where he or she will remain in the force through the 20-year mark.
Since 2018, the Army’s active component continuation pay program operated with the following features:
- 2.5x multiplier (meaning the CP amount was 2.5x one month’s base pay)
- Eligibility window of no less than 8 years and no more than 12 years to request CP
- ADSO of 4 years
However, in 2025 and beyond, this will change – and it is important that you are tracking these changes, as part of the pool potentially eligible for CP and also as leaders of those eligible for CP.
What’s Changing?
The most important thing changing is the window of eligibility is widening, then shrinking and moving earlier over the next 3 years. Historically, it has been a 4-year window between year 8 and year 12.
In 2025, this remains the same
However in 2026, it will include those with no less than 7 years to no more than 12 years.
Finally, in 2027 the upper threshold will fall to 10 years, with the lower threshold remaining at 7 years.
This is important to note as the years advance where you will fall in terms of rank and pay respectively in that calender year. Historically it would have been wisest to take continuation pay later to maximize time in service and rank based pay but this may not be possible given the changes over the calendar years. Using this timeline, you should be mapping out where you fall in terms of time in service related to these changes.
The multiplier as of now remains 2.5x. As discussed – several documents illuding to a raise in the CP multiplier were published but the new memorandum is clear that 2.5x will be the base rate for all.
What Should I Do?
Taking continuation pay is a personal decision. However, it is important for service members to understand what options are available. For those approaching or in CP eligibility, it is important to understand how your eligibility, the pay you could potentially receive based on your rank and time in service, and your willingness to serve an ADSO is going to change over the course of the next 3 years as the eligibility window shifts and shrinks.
It is highly recommended to discuss continuation pay and the ADSO it incurs with your spouse, partner, or other potentially impacted family members, and to leverage financial planning resources like your installation’s Financial Readiness Program to discuss how to best leverage this bonus.
If you want to request continuation pay, fill out the Request for Continuation Pay form. You will need to sign the form, and get the first 0-5 in your chain of command to approve. The your unit HR representatives can then send this form and substantiating documents to the military pay office. You can opt to receive the continuation pay in a lump sum or spread it out via monthly payments over 2, 3, or 4 years. Soldiers may also request CP be allocated to their TSP. Anecdotally, most service members get this payment within 2 weeks of requesting it. This pay is taxed as income so plan accordingly.
Unfortunately, Continuation pay is still not widely understood by more senior leaders. Only a small pool of mid-to-late careerists who opted into Blended Retirement have navigated it. Most battalion- and brigade-level command teams likely do not have personal experience navigating the Blended Retirement System and continuation pay program.
The Army is doing a better job spreading the word, but it’s the personal interactions and grassroots-level education effort that are helping to ensure eligible Soldiers don’t miss out. If you’re a junior leader, make sure you are talking to your teammates and subordinates about continuation pay, and that your unit retention team has the right information. After all – knowing is half the battle!
Maj. Erin Williams is an ORSA serving with the 101st Airbrone, a dual-military officer, and the mother of three young children. She spent a decade as an engineer officer, serving in the 20th Engineer Brigade, 82nd Airborne Division, the 101st Airborne Division, and the USMA Department of Systems Engineering before transitioning to the operations research/systems analysis (FA49/ORSA) functional area. She holds a master’s degree in data science from Harvard University, as well as degrees from Missouri University of Science and Technology and the United States Military Academy.
