Military Retirees Fairness Act of 1998

Military Retirees Fairness Act of 1998 - States that the prohibition on the concurrent receipt of military retired pay and veterans' disability compensation shall not apply in the case of a person who has a service-connected disability if: (1) the person has completed at least 20 years of retirement-creditable military service; (2) the disability was incurred or aggravated in the line of duty; and (3) the person has attained the age of 65. Allows such a person, in addition to receiving the full amount of military retired pay, to receive: (1) 50 percent of the authorized veterans' disability compensation due, if such person is at least 65 but not yet 70; and (2) 100 percent, if such person is 70 or older.

Requires military retired pay paid concurrently with disability compensation to be paid out of funds appropriated to the Department of Defense for that fiscal year.

Makes the concurrent payment provisions effective for months beginning on and after October 1998, with a prohibition against the payment of retroactive benefits.