Why Reservists can't draw retirement until they are 60 yrs of age even if they retire at, say, 40 yrs old?

If I may quote 1SG Miles Bizzell: "The retirement rule is National Guard or reservist can retire after 20 years of service. This doesn't mean that you have served 7,300 days in uniform. The rule states at 60 you can get that check, they can and will take off a maximum of 5 years that you were deployed, so if you were deployed active for 5 years you can get that check at 55." Here's the catch regarding the "take off a maximum of 5 years that you were deployed" rule: The only deployed time that counts is that time occurring AFTER 2008 - deployment time prior to 2008 doesn't count.

To further address RC/NG retirement, once you receive your 20 year letter, you can retire. You become a "grey area" retiree meaning you are retired but only receiving limited benefits such as the commissary, PX, space A flights and so on. You don't get full retirement benefits (like an active duty retiree with at least 20 years) until age 60, unless you have qualifying deployment time that could reduce the age (up to 55). An exception to this would be if you served 20 years in AGR status, then you could retire with full benefits after 20 years.

Good question, I never understood this either!

Retirement age is determined by federal law. For the Reserve Components, the law says (I’m paraphrasing here) you must have 20 “good” years for a length of service retirement (15 years for medical retirement) and then you qualify for retirement at age 60. If you have qualifying service, you can retire as young as age 50 (not 55) but qualifying service must have been accumulated after the date set in law (in 2008).