Due to a lot of misinformation from Regular Retirees and ARPC not being clear on Reserve Retirement rules and having run into more than a couple reservists telling me they stayed in the SELRES/ANG for 24 years in order to "max the pay chart" for retirement, and I think, obviously the ARC enjoying that people do not understand and therefore serve additional years unnecessarily, I am compelled to write this and wish it to become common knowledge for anyone seeking a reserve retirement.
The only stipulation to carry O-5 into retirement is serving on the Reserve Active Status List for 3 years Time in Grade. Now it is unclear that if those 3 years are only years on the RASL or if those 3 years need to be *good* years on the RASL. I would not want to press to test on this nuance, so let's say that those 3 years TIG need to be good years.
The biggest distinguishing feature of the Reserve Retirement is that once you transfer to the retired reserve (AKA grey area) your years of service for the purposes of determining your high 36 continue to accrue until you reach age 60 (or whatever your age is for reduced reserve retirement).
The reason that your finance office or ARPC will tell you that they have no idea what your reserve retirement pay will be and then refer you to any number of online calculators (which btw are designed for regular retirement and commonly misused by prospective reserve retirees) is because the calculation requires a look-back of 36 months and no one knows what the future pay charts will say. However, to get a pretty good idea we can use an example of a grey area retiree who reaches age 60 today (1 Apr 2019) and I will outline below what that looks like right now.
The formula for calculating a reserve retirement: points/360*"high36"*.025. This gives you your monthly pay. Now the confusion arises as to what high-36 is. High 36 for our guy who is now 60 years old as of 1 Apr 2019 and entered the grey area 18 years ago at 42 years of age, he now has 38 years on the pay chart, thus maxing out the pay chart for O-5.
He will have 36 months at $9521 (2019 pay chart is used for all 36 months), for a high 36 average of $9521. Assuming he has 5000 points, his retirement monthly pay will be 5000/360*$9521*.025=$3306. This math can be verified by the point valuation chart published by DFAS for 2019. Here is a link to the point valuation chart (Mypers): https://mypers.af.mil/ci/fattach/get/9805796/1553879360/redirect/1/filename/2019_POINT_VALUATION_FOR_RETIREMENT_BENEFITS_RESERVIST_AND_GUARD_MEMBERS.pdf
Again, this is assuming he had 3 years TIG as an O-5 at his 20 years TIS. There is no need to serve in the SELRES/ANG for more than the time it takes to get 3 years TIG. The only online calculator that I have found that will give a correct answer is on the VPC Dashboard (accessed via Mypers). Main takeaway is that your years in service are all years on the active status list (both regular and reserve) plus the years spent in the grey area.
If for some reason you do not get 3 years TIG as an O-5 on the active status list, you will enter the grey area as an O-4 (assuming you didn't get the 2 yr waiver) and then your retired pay will be based on maxing out the O-4 pay charts.
Here is a link from ARPC that explains all the above in fairly confusing (to me, anyway) language: https://militarypay.defense.gov/Pay/Retirement/Reserve.aspx
Info about transferring from active status to retired reserve (grey area): https://mypers.af.mil/app/answers/detail/a_id/14270
Also see the attachment which dispels additional rumors I've heard such as a regular retiree with IDT points gets a retirement re-calculation at age 60. I don't know how that rumor got started, but it's false. This is the 1405 service mentioned in the power point.