Benefits of Buying Back Military Time

Your military service can be a detriment to your civilian employment retirement. It doesn’t have to be this way.

You can avoid penalties to your FERS and CSRS annuities because of your military service. But it will take navigating a convoluted process that includes filing lots of paperwork. The time invested, however, is not a fool’s errand — it will strengthen your retirement income.

To do this, you must “buy back” your military service time so that your time in the service can be applied to your civilian pension plans. If you do so, you will be increasing the value of these pensions and, therefore, securing more retirement income for you and your family.

Military Service Buy Back Estimator

The Defense Finance and Accounting Service (DFAS) of the U.S. Department of Defense offers a relatively straightforward, yet somewhat generalized, explanation as to how you go about the process on their website. They caution that you should consult your agency’s human resources department for the particulars.

The site does detail much of the process and provides several of the forms you need to get started. They also offer a calculator that can estimate your military service earnings and how much your military time “buy back” will cost.

You will be required to make a deposit. The fee is based partly on your military pay over the course of your career in the armed forces.

The Office of Personnel Management website also offers guidance about the process. They suggest that you write to the DFAS and tell the agency that you want to waive your military retired pay. If you do so, you can receive credit for your military service on your FERS or CSRS annuities calculation.

Buy Back Your Military Time

There is no doubt about it: This is a complicated subject.

But a failure to act could translate into a major decrease in your retirement income. If you can bring your military retirement pay into your annuity calculation, it could mean an increased pension payout of $200 to $500 a month. If you need assistance, please contact us or schedule a free consultation with one of our benefits experts.

Helpful Links:

● OPM: In-Depth Rules and Regulations

● OPM: In-Depth Rules and Regulations II

● Form RI20-97: Estimated Earnings: Military Service

● SF Form 3108: Application to Make Deposit or Redeposit

● OPM: Short Guide, Contact Information

● OPM: FAQ