Q: I recently began federal employment after serving 10 years of active duty in the Air Force. I am buying back my time in one lump sum at the end of this month. However, I have been toying with the idea of returning to active duty in two or three years. If I return to active duty and retire from the Air Force, what happens to my deposit? Also, if after retiring from active duty, I return to federal employment, what effect would the original buyback deposit have on my potential civil service retirement?
A: If you left your contributions and deposit in the retirement fund, you could apply for a deferred retirement when you reach age 60 (if you had 20 years of combined service) or 62 (if you had fewer than 20). If you returned to work for the federal government, those years would be considered creditable service and your new period of employment be added on to it. You could then retire on an unreduced annuity at your minimum retirement age with 30 years of service, at age 60 with 20, or at age 62 with as few as five. You could also retire with a reduced annuity when you reach your MRA with at least 10 years of service but fewer than 20. The reduction would be 5 percent for every year you were younger than 62. You could reduce or eliminate that penalty by deferring the receipt of your annuity to a later age. Note: MRAs range between 55 and 57, depending on your year of birth.