How Do You Buy Back Your Military Service Time?

I’m really surprised that more veterans don’t take advantage of this process, since it’s a cheap and easy way to pad your retirement.  It’s possible that not a lot of people understand how to buy back their service time, which is why I wanted to walk through the process today.

I’ve written before about how the federal government’s retirement system calculates a pension based largely on your years of service, so go back and read that post if you haven’t done so already.  For veterans, you need to know that you can add on your active duty service time in order to have a greater number of total years in civil service.  For example, serving 4 years on active duty in the Navy and then 20 years as a civil servant could add up to 24 years in the Federal Employees Retirement System (FERS), as opposed to just 20 years if you didn’t buy your time.  For a person who retires making $100,000 per year, these 4 additional years could mean another several thousand dollars added onto your yearly pension at retirement.

One other thing I like about buying your military time is the fact that reservists can qualify for this benefit as well.  Any active duty time, whether it’s for deployments to a war zone or simply for training, is eligible to be bought back.  Even someone who’s only gone through basic training and a military occupational specialty will have served close to 6 months on active duty, all of which could be added to your years of civil service.

Yes, there is a cost to buying back your time, but it’s only a fraction of your current salary.  This reimbursement can be paid back over several years by withdrawing money through your paycheck, and you probably won’t notice it’s missing once you get started.  Since the FERS calculates a pension based on an employee’s highest three years of earnings and buying back your military time is based on your current salary, I recommend that new employees start this process as soon as possible.  The only group of new hires who might want to think twice about this would be retired veterans who are already receiving a DoD pension after 20-plus years of service.  For you guys and gals, converting all of your service time into the FERS might actually affect your pension, so crunch the numbers before you make any decision.

Your local HR technician should be able to refer you to a retirement specialist who supports your agency, and they’ll be able to help you get the ball rolling with payroll deductions.  Remember that as a federal employee, your pay and benefits belong to YOU!  Take charge and get all the information you need to make an informed decision!