Free Tool · The 20% vs. 30% Decision, Quantified
Severance vs. Medical Retirement: What's the Rating Really Worth?
The line between a 20% and a 30% DoD rating is the line between a one-time check and a lifetime of retired pay, TRICARE, and CRSC eligibility. This tool projects both paths month by month — including the VA offset and severance recoupment — and finds the breakeven point. Runs entirely in your browser.
Side-by-side projection / 2026 rates
Path A — Severance (≤20%)
- Lump sum (net)
- $0
- VA comp / month
- $0
- Recoupment period
- None (combat-exempt)
- Cash/mo after recoupment
- $0
Path B — Retirement (≥30%)
- Gross retired pay
- $0
- Residual after VA offset
- $0
- VA comp + CRSC / month
- $0
- Total cash/mo
- $0
Retirement overtakes severance at month 1 (0.1 years).
Cumulative advantage at year 20: $0 in favor of retirement.
Assumptions:
Why this comparison is harder than it looks
The naive comparison misses two mechanisms: (1) VA offset: a Ch. 61 retiree waives retired pay dollar-for-dollar against VA comp, so a member whose VA comp exceeds retired pay may see little cash advantage unless CRSC restores the combat-related portion. (2) Severance recoupment: VA withholds compensation until severance is repaid, so the lump sum is, for most members, a loan against their own future benefits. Once both mechanisms are modeled, the retirement path usually wins on cash alone within a few years — before assigning any value to TRICARE.
This is why the fight over a 20% versus 30% rating — or over whether a second condition should have been found unfitting — is worth having, and worth having early, while rebuttal and formal hearing rights are still on the table.
Frequently asked questions
What is the difference between disability severance pay and medical retirement?
Disability severance pay is a one-time lump sum for service members separated with a disability rating below 30%. Medical retirement (Chapter 61) is a lifetime monthly benefit for those rated 30% or higher, or with 20+ years of service. Medical retirees also receive TRICARE, commissary and exchange access, and other benefits.
What disability rating do I need for medical retirement?
You need a combined disability rating of 30% or higher from the Physical Evaluation Board, or 20 or more years of qualifying service. A rating of 20% or below results in severance pay only. A rating of exactly 20% with fewer than 20 years of service is the most common outcome that veterans successfully appeal.
How does the VA offset affect medical retirement pay?
Military retirees who also receive VA disability compensation must waive an equal amount of retired pay (the "VA offset") unless they qualify for CRDP or CRSC. CRDP is automatic for retirees with 20+ years and a 50%+ VA rating. CRSC requires an application and is limited to combat-related conditions but is tax-free.
What is the breakeven point between severance and retirement?
The breakeven point is the number of months it takes for cumulative retirement pay to exceed the lump-sum severance. Because severance must be recouped from VA compensation, most veterans with a 30%+ rating reach breakeven within 3–7 years. After breakeven, medical retirement pays significantly more over a lifetime.
Can I appeal a PEB finding that gave me severance instead of retirement?
Yes. If the PEB rated you below 30%, you can request a formal PEB hearing, submit a rebuttal, or petition the BCMR/BCNR after separation. The difference between severance and retirement can exceed $500,000 over a lifetime — making experienced legal representation one of the highest-return investments a service member can make.
Your PEB findings are negotiable. Your deadline isn't.
Attorney Gately represents service members nationwide in IDES and LDES proceedings — rebuttals, formal PEB hearings, and the records corrections that fix ratings after the fact.
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