Why Buy Back Your Military Time?

For current federal employees with prior military service, there are a number of benefits available if you decide to buy back your time. Beyond just an increased pension at retirement, it can add benefits to your career almost immediately. Read on and you'll understand why making a deposit is a smart move for those who served in the Armed Forces and now serve as civilian federal employees.

Before you start to explore the benefits of buying back your time, you should do two things:

  1. Estimate how much your service deposit will be (use the calculator below to find "true cost"; deposit plus interest).
  2. Find out how much it will add to your pension (obtain by requesting a Buyback Blueprint™).

With these two pieces of information, it'll be clear whether buying back your time makes sense. If it does make sense, then you'll have everything you need to complete the process, including: detailed report of military pay calculations, access to a specialist, all required forms, and final instructions for making your deposit. Avoid the costs of waiting, and get the ball rolling today.

Does it make sense to buy back time?

You Be The Judge

Example: 30 years creditable service, a high-three average $65,000 and a retirement age of 62.

Standard FERS Pension


FERS Pension with Military Buyback


Additional LIFETIME Pension Earnings


Assumes 28 year retirement. Amount continues to grow for your entire life.

Military Buy Back Calculator - Estimate the Cost to Buy Back Your Time

Use our buy back calculator to estimate the cost of buying back your time. There are two methods available to choose from, both are described below. Start by determining which entry method to use, either "Basic" or "Advanced", and enter the information required to get a fast and detailed estimate at no cost.

Military Time Buy Back Calculator

Select entry method: Basic Advanced

Basic: This entry method is ideal if you moved through the ranks at a standard rate of progression and did not have any breaks in service. Simply enter the date you began your military service and the date you separated.

Advanced: This entry method allows you to enter multiple, non-consecutive military service periods, and a specific grade/rank for each. This is ideal if your military career includes breaks in service, accelerated promotions, demotions, or a change of status (enlisted to officer, etc.).

*Both entry methods calculate an unofficial estimate of your military service earnings and the deposit required to apply your military service time towards your federal civilian retirement.

Please note that Warrant Officers and Officers with pay grade designations O-1E, O-2E, and O-3E may be required to use the Advanced entry method.

Military Time Buy Back Calculator


Military Time Buy Back Calculator

The Benefits When You Buy Back Military Time

For those who like it short and sweet, the main benefit to buying back your time is that it can significantly increase your monthly annuity payment at retirement (in the example below, you'll see an increase of 20%). Some additional benefits you probably won't hear about is that it can also; increase your leave accrual per pay period, offer faster vesting of your thrift savings plan, give you the option to retire early with full benefits, and enhance your seniority benefits in your current job.

So, let's talk a little bit about what to expect regarding an increase in your retirement pension. Take a look at a real-life example:

A federal employee has worked for 30 years, they have a high-three average earning of $65,000 per year (high-three is the average of the highest three consecutive years of creditable service), they're covered under the FERS Pension Plan, and they decide to retire at age 62. In this example, our federal employee would have an estimated standard FERS Pension of $1,788 per month for the rest of their life. If we assume that they live to the age of 90, their total lifetime pension earnings would be $600,768. But, if they make the decision to buy back their military time of 5 years of honorable service, they're estimated pension will be $2,085 per month (an increase of $297 per month). If we factor in the assumption of living to the age of 90, that adds an additional $99,972 to their total lifetime pension earnings. Ask yourself this question: What could I do with an extra $99,972 in retirement?

As you can see from the example, buying back time through a service deposit can definitely make sense. But will it make sense for you? That's what you need to find out. The best way to do this is to estimate the cost of your required deposit, and then request a Buyback Blueprint™. With this information you'll have a complete overview of what it looks like from the day you make your deposit through your last day of retirement, as well as a step-by-step breakdown of how to complete it.

Cost of Waiting to Complete Your Buy Back

Military Buy Back Calculator First, let's get the facts straight about buying back your military time. You have a 24-months interest-free grace period that begins on the day you're hired as a civilian federal employee under the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). If you have recently entered the federal workforce, this is absolutely when you should get it done. If you've exceeded the grace period, then the cost of buying back your time increases every year that you serve in the federal workforce. Interest accrues once per year, compounded annually, and the rate of interest you pay is different for each year. Also, you cannot buy back your time after you retire, it must be done prior to separation as a retiree. Simply put; the longer you wait, the more it costs, and the less time you have to complete the deposit!

In order to have your military time credited, you must complete several steps to account for the time you served. And if you want your military time to count toward a FERS or CSRS pension, it's important to take action now. The first thing you'll want to do is make sure that buying back your time makes sense. There are certain situations where it doesn't. In general, the best way to find out if a buy back makes sense, is to estimate the cost of your service deposit, and then find out how much will be added to your pension at retirement. You can easily get both pieces of information using the calculator above.

Government Information about the Buy Back Process

There is no doubt about it: This is a complicated process

Information about the buy back process, as provided by the Office of Personnel Management (OPM) and the Defense Finance and Accounting Service (DFAS) of the U.S. Department of Defense, provide a somewhat generalized explanation of how to go about buying back your time. DFAS offers a type of estimator similar to the official MFB calculator above, but it's difficult to use and doesn't include some of the more important factors in calculating the actual cost of your deposit, such as; annually compounded interest (different for each year of service) which can add a significant portion to your total cost, the estimate of payroll deductions based on when you plan to retire (an important factor in making decisions about buying back your time and the date you decide to retire), or the actual positive impact to your lifetime retirement pension amount.

As you get deeper into the process, the information becomes a little overwhelming. Simply put, the process, which should be relatively straightforward and simple, can send you in a bit of a loop (as many find to be the case), requiring you to contact multiple offices, request multiple official documents/personnel records - sometimes requiring you to backtrack depending on the notifications you receive, and then finally you are given the task of filling out a stack of forms. If you make a mistake during the process, if you fail to file the correct form, or if you misinterpret important information, you'll end up waiting approximately 60 "business days" only to receive a notification requesting additional information which almost always results in a significant delay.

Honestly, this process shouldn't be as difficult as it is. Federal civilian employees who have previously served in our Armed Forces, deserve the best that we can provide for them in their retirement, and having military time applied to their pension should be automatic. That's what we believe. But as with many things in life, it's not always so simple. Luckily there's help available for those who need it.

Help From MyFEDBenefits to Buy Back Your Military Service Time

For those who need assistance buying back their time, our buyback service makes the process painless and hassle-free. We simplify a very confusing topic and provide a layout that's easy to follow and simple to complete. In addition, we'll stand beside you during the entire process - ready to answer questions or assist whenever you need us. MyFEDBenefits is on a mission to provide Federal Employees with the HR they've never had. That's the experience you can expect any time you speak with us.

If you're ready to start the process of buying back your time, or simply have questions about estimating your deposit or how much higher your pension will be, click the button below to request a Buyback Blueprint™. You'll get the opportunity to talk with a Buyback Specialist that is an expert in this field. They'll answer all your questions and explain things in way that's easy to understand. Remember, we're here to help, this is what we do. Take the time to get started today.

Military Buy Back Program Q&A

Q: What is the basic estimated cost to buy back my time?
A: While the simplest and most accurate way to estimate the cost of your service deposit is to use the buyback calculator near the top of this page you can calculate it manually as well. The formula varies depending on which federal retirement system you're a part of. Let's look at both retirement systems; FERS and CSRS.

  • FERS - Use this formula to calculate cost of your military buy-back: Your Total Military Basic Pay x either 3.00-3.40% (based on chart below) = Cost to Buy Back Your Time (before interest, variable rate)
    Dates of Military Service Amount of Deposit Due for FERS
    01/01/1957 through 12/31/1998 3.00% of military basic pay
    01/01/1999 through 12/31/1999 3.25% of military basic pay
    01/01/2000 through 12/31/2000 3.40% of military basic pay
    01/01/2001 to the present 3.00% of military basic pay
  • CSRS - Use this formula to calculate cost of your military buy-back: Your Total Military Basic Pay x either 7.00-7.40% (based on chart below) = Cost to Buy Back Your Time (before interest, variable rate)
    Dates of Military Service Amount of Deposit Due for CSRS
    01/01/1957 through 12/31/1998 7.00% of military basic pay
    01/01/1999 through 12/31/1999 7.25% of military basic pay
    01/01/2000 through 12/31/2000 7.40% of military basic pay
    01/01/2001 to the present 7.00% of military basic pay
    CSRS NOTE: The rules and percentages are a bit different if you were originally under CSRS and then transferred to FERS. If that is your case, please reach out for assistance.

Q: What is meant by "Military Basic Pay"?
A: "Basic pay" simply refers to the base salary or wage that was received during your service. Basic pay is based on the individual's rank and length of service. Important: Basic pay does not include any additional forms of compensation, such as allowances, flight pay, combat pay, or special pay, which may be received by military personnel while on active duty. Allowances are additional payments that are provided to military personnel to help cover the cost of living, while flight pay and combat pay are additional forms of compensation that are provided to military personnel for the special duties or hazards that they may encounter in their work. Special pay is additional compensation that is provided to military personnel for performing specific duties or serving in certain locations. These forms of compensation are typically in addition to basic pay and are intended to help military personnel meet the unique financial challenges that may be associated with military service.

Q: Who Can Make a Military Service Deposit?
A: Either of the following:

  • Federal employees currently covered by CSRS, CSRS Offset, or FERS.
  • The spouse or former spouse of a deceased federal employee (that died while working for the federal government) who was designated to receive the survivor benefit from the deceased federal employee's retirement annuity.

Q: When Can a Military Service Depost Be Made or Buy Back Be Completed?
A: During the following times:

  • Before the employee's separation from civilian federal employment - separation from their agency.
  • The spouse or former spouse of a deceased federal employee who was entitled to receive a retirement annuity.

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