Among many of your options as a federal employee and former active-duty soldier, buying back your active-duty military time is usually the one voluntary benefit that quietly delivers the biggest return — but also comes with the most confusion.
Why So Many Federal Employees Get Confused
Let’s start with this: many get confused about military buy back — not just Reservists.
Here’s why: when you look at your LES (Leave and Earnings Statement) or pay stub, your SCD (Service Computation Date) for leave purposes often reflects more time than you’ve actually worked as a civilian. That’s because the government automatically includes your active-duty years for leave accrual purposes.
But that DOES NOT mean those years are counting toward your FERS pension.
Your pension calculation will not include those military years unless you’ve formally bought them back and completed the process before your retirement date.
And that’s the trap. Many folks assume the time is already in the system, only to find out — sometimes too late — that they left tens of thousands of dollars on the table.
“They Told Me It Wasn’t Worth It”: Well-Meaning Advice Gone Wrong
Here’s a story that might sound familiar.
Mark, a GS-13 in his early 60s, had 20 years of federal service and 4 years of active-duty military from his early 20s. He was told — more than once, by well-meaning co-workers — “It’s not worth buying that time back, it’s too expensive now.” So he never did.
It turns out the deposit would’ve cost him around $6,500. His monthly pension would’ve gone up by $450. That’s over $5,000 a year for life, not counting COLAs.
Mark lived another 17 years. That’s $85,000+ in missed income — not including the survivor benefit his wife could’ve had.
The folks who advised him? Well-meaning. But wrong.
Don’t let friendly break-room advice replace actual planning.
A Tale of Two Retirements
Larry didn’t buy back his 4 years of military time. He figured his 22 years of civilian service was “enough” and didn’t want to deal with the forms. His pension is $29,700 a year.
Kendra, same salary, same 22 years — but she had 4 years of military time, bought it back, and her pension is $35,100. Over the next 25 years, she’ll collect $134,000 more than Larry, just by filing a form and paying a few grand upfront.
From the Desk of CD Financial
We recently helped a family we work with on this very subject. The wife has long been retired some 5 years ago from the Department of Treasury. The husband is planning to retire at the end of the year. As he says, “All the fun is gone from the job.”
After some years of encouraging him to buy back his active duty time, he finally has. He hemmed and hawed and wondered why he should do it. He even said “I heard some co-workers say it wasn’t worth it”.
Now for the real story, told in numbers, not from the water cooler, but from the calculator directly to his bank account. For his 4 years of active duty that he served over 4 decades ago, it cost him a whopping $4,900.
Considering his FERS pension increased to $5,849, and his former pension would have only been $5,282 per month, this is a drastic increase per month. That’s $567 per month more in his pension for life.
The numbers aren’t usually quite so compelling, but he had 37 years of federal service, and is a G/S 13/10. The fact of the matter is that his buy back cost $4,900 and if we divide that by the $567 increase monthly in his pension, we will see how long it takes to break even.
$4,900/$567 = 8.6 or 8 ½ Months to Break Even!
WOW!!!
In his case, it pays to play, and in all other cases also.
Reservists: Clearing Up the Big Myth
Many Reservists have heard a stubborn myth: If you buy back your active-duty military time, you’ll lose your reserve pension.
Not true. Not even close.
Buying back your active-duty time adds those years to your civilian FERS pension calculation. It does not erase or interfere with your reserve military pension, which is based on a different set of criteria and a separate service track.
You can collect both — and many do.
This misunderstanding is one of the most financially damaging myths out there for federal employees with reserve or dual service. Don’t fall for it. Stop telling yourself this myth!
What If You Do Buy Back vs. What If You Don’t
Let’s look at one more real-world pension scenario, with a chart:
- High-3 salary: $135,000
- Federal civilian service: 20 years
- Active-duty time available to buy back: 5 years
| Scenario | Years Credited | Pension % | Annual Pension | Monthly Pension |
| No Buy Back | 20 | 20% | $27,000 | $2,250 |
| Buy Back | 25 | 25% | $33,750 | $2,812.50 |
That’s $562.50/month more — every month, for life!
Now let’s add 2% COLAs over time during retirement:
| Year | No Buy Back (2% COLA) | Buy Back (2% COLA) | Annual Difference |
| 1 | $27,000 | $33,750 | $6,750 |
| 10 | $32,947 | $41,128 | $8,181 |
| 20 | $40,224 | $50,280 | $10,056 |
Over 20 years, you’re looking at $100,000+ more income, not counting survivor benefits.
How to Buy Back Your Military Time
The Process
- Request your military earnings using Form RI 20-97 and your DD-214.
- Submit SF 3108 to your military branch, then your HR office.
- Calculate your deposit — usually 3% of military base pay plus interest.
- Pay it off:
- Lump sum
- Payroll deductions
- TSP loan (common if you’re short on time)
Some agencies now allow starting this process via the GRB Platform, a centralized online HR portal.
Deadline
You must complete your buy back before your retirement date. If the money isn’t paid in full, your military years won’t count toward your pension.
Dave’s Clever Solution
An actual friend of mine, Dave, who attended a retirement brief I conducted years ago at his agency, was given the option for a VSIP & VERA election at the beginning of August with a deadline of September 30, the end of the fiscal year.
While sitting there in the retirement session, it occurred to Dave that he had 16 months of active duty Air Force time. He approached me afterward and said, “Charles, I have these 16 months of active duty and I’ve never paid for it”. I said, “We’re going to pay for it now”, but he said, “I only have six weeks before the retirement date of Sep 30”.
His agency did him one solid and held back his retirement paperwork until he could get the 16 months paid back to the Air Force. Once he had that paid back, he notified his agency and they turned his retirement paperwork in. It was a workaround so that he could get his time and credit for his pension calculation. It was a clever solution.
Final Takeaway: Understand It Before You Walk Away
Every federal employee’s retirement decision is personal. But here’s a summary worth remembering:
- Military Time Buy Back can add thousands to your monthly pension — forever.
It’s often misunderstood, underused, and life-changing when done right. And don’t forget, Reservists, that you can and should buy back your active-duty years. You’ll receive payment on both sides, without any reduction or penalties.
