Military Buyback: A Smart Move for FERS Retirees?

Should FERS retirees buy back their military service time? These are some condsiderations.

Retirement planning is a pivotal phase in an individual’s life, marked by decisions that can shape their financial security and quality of life in the years to come. For military retirees navigating the transition to civilian life, understanding the complexities of the Federal Employees Retirement System (FERS) can be critical to securing their future. A key consideration in this process is whether to buy back military service time on FERS, a choice that can significantly impact their retirement amount and retirement eligibility under FERS.

The Federal Employees Retirement System (FERS) military buyback program is a benefit that allows military retirees to purchase credit for their military service time towards their FERS retirement annuity.

In this article, we will delve into the factors that military retirees should consider when making this decision, providing insights into the pros and cons of buying back service credit on FERS. We aim to equip military retirees with the knowledge and tools they need to make informed choices that align with their retirement goals and long-term financial security.

Understanding Military Service Credit in FERS Retirement

Military Service Credit refers to the credit given for the time served in the uniformed services (such as the Army, Navy, Air Force, Marines, Coast Guard, and the National Oceanic and Atmospheric Administration Commissioned Corps) when calculating federal benefits. It recognizes the dedication and sacrifice made by military personnel and uses their military service with their federal civilian employment for retirement purposes.

Separated Service Members – Buyback Military Time Makes Sense

Separated military service members should seriously consider buying back their military time because of the potential for significantly enhanced retirement benefits. You can add your military service into civilian federal employment by making a military deposit. This increases the total length of service when calculating their FERS annuity, leading to a higher annuity payment during retirement.

Moreover, including military service time can accelerate your eligibility under FERS, allowing individuals to retire earlier since it will increase your service time under FERS. 

Retired Reservists – The “Double Dip” Buyback

Retired reservists have the potential to benefit from what is commonly referred to as “double-dipping” based on their military service time.  Because the Reservist military pension is based on the point system, they can simultaneously receive their military retirement and civilian employment. Retired reservists can deposit based on active time served and have that time count towards FERS while keeping their military service points and pension intact.

Retired Service Members – Considerations Before Buying Back Your Military Time 

Members retired from active duty military service have the most to consider. While they are able to buy back their military time, it also means that they will lose their military pension if they do. This decision cannot be taken lightly and requires various factors to be considered.

I. Survivor Benefit

Both the military and FERS pensions can select survivor benefits for your spouse. However, you cannot change the selection after it’s been made. 

If you did not elect survivorship with your military pension and would like a do-over, buying back your military time may be an option. You will continue to receive your military pension while working as a civilian.

After you process your civilian retirement, the military pension will stop, and military time will be added to your FERS (Federal Employee’s Retirement System) or CSRS (Civil Service Retirement System) pension calculation.

II. Rank vs Grade

While everyone’s service record and pay are different, you may find that combining the two retirement pensions may net you a higher retirement income. This is especially clear if you retire from the military at a lower rank but have a high grade level in civilian service. This is because the military pension is based on your military basic pay at a lower rank. If you are a grade 13, 14, or 15 employee, your base+locality pay may be much higher.  

III. Other Military Benefits – VA, Tricare, etc.

It is a common misnomer that you will lose all military benefits if you buy back your military time. This is not true. The decision to buy back will have significant effects on your military pension. However, it does not affect your other benefits, such as VA Disability, Tricare, base access, and commissary. You will continue to receive VA Disability and all other benefits. 

Process of Buying Back Military Time 

Before you buy back your military time, you must know how much it will cost. While the formula is based on your years of military service, base pay during service, deposit multiplier, and possible interest, it is not you who calculates it. Instead, you need to request the calculation made on your behalf. Once the amount has been calculated, you can decide if you will make the deposit in a lump sum, payment plans, or change your mind and not make a deposit. 

Important Note: You must complete the buyback process and fully pay before you leave federal civilian service. If you retire from civilian service before completion, any deposit made will be refunded, and service will not count.

Here’s how to start the process:

  1. Complete the RI 20-97 (Estimated Earning During Military Service Request Form)
    • If you have served in multiple branches, you will need to complete one for each branch
  2. Attach your DD 214 (Certificate of Release or Discharge from Active Duty)
    • You can request a copy of your DD 214 by sending in the SF 180 (Military Records Request Form) 
    • Or use their online system: NARA | e-Vetrecs (
  3. After receiving the estimated earnings during military service, you will submit it to your agency to calculate the buyback amount
    • for FERS, use SF 3108 (Application to Make Service Credit Payment)
    • for CSRS, use SF 2803 (Application to Make Deposit or Redeposit)
  4. You will be contacted by mail on the deposit amount and payment options. 

There are various aspects to your federal retirement, and military buyback has been a subject most military retirees avoid. They are told that buying back your time does not make sense, you will lose all your military benefits or other misnomers.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Securities and advisory services offered through Osaic Wealth, Inc., member FINRASIPCOsaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Representatives may not be registered to provide securities and advisory services in all states. Branch address: 10701 Parkridge Blvd, Ste 130, Reston, VA 20191. Branch phone: 571-543-2783.

About the Author

David Fei is the co-founder of PlanWell Financial Planning. He specializes in guiding federal employees toward a confident retirement nationwide. PlanWell’s mission is to empower Feds when making retirement decisions, ensuring their benefit choices align with their retirement aspirations. Sign up for our no-cost Federal Retirement Webinar or contact him for a confidential review.