Q. I moved to another base due to a base realignment and closure in 1994. I was told by my personnel office several years ago that it would be to my advantage to pay back my military time. So, trusting their advice, I paid it back. And because the interest accrued since 1986, the dollar amount tripled. I served in the Navy from 1974 to 1978.
However, I attended a retirement class for CSRS employees and was told by the instructor I didn’t need to pay it back. I do not have 40 quarters and I will not be eligible for Social Security at age 62. Is there any way I could be refunded the money I paid in? I was told no by the personnel office, but they are the same people who gave me the wrong information. Is there any advantage to my paying back my military service if I fall into the “Catch-62” scenario? I had not planned on getting another job to make up the quarters. Should I reconsider?
A. Many CSRS employees who were (or still are) subject to the post-1956 deposit option (or Catch-62) made the same payments you did because they wanted to be protected if they retired and were eligible for a Social Security benefit at age 62, or when they retired if it was after age 62. That’s because the effect was something to be avoided — having those years of active-duty service for which they got credit in their CSRS annuity computation eliminated and their annuity reduced. For some, like me, it was a gamble. I lost. As it turns out, I didn’t need to make the deposit. However, neither I nor you are eligible for a refund.
Whether you decide to go back to work in a job that will earn you enough Social Security credits to get a Social Security benefit is up to you. Because you will be retiring from CSRS, a system where you didn’t pay Social Security taxes, you’ll be subject to the windfall elimination provision. The WEP will reduce, but not eliminate, any Social Security benefit to which you are entitled.
