Q. I retired from the Air Force with 25 years of service and am collecting an active duty (Title 10) military pension. I also have a service-connected Veterans Affairs disability for time served in Iraq. Currently, I am working for the U.S. Postal Service and contributing toward a FERS retirement. Can I buy back my active duty time for my FERS retirement? If so, can collect two pensions: FERS and Title 10?
A. No, you can’t. To get credit for your active duty service in your civilian annuity computation, you’ll have to make a deposit for that time and – at retirement – waive your military retired pay.
9 Comments
It not advisable for Military retirees to buy back their military Service time for FERS Civil Service retirement computation credit. You will get far more money in retirement by keeping your Military pension plus whatever your FERS retirement will be for just the number of years you worked in the civil service. Not only would you have to forfeit your military pension at time of your civil service retirement (for a big loss of retirement income), but you would have to buy back 3% of the amount of your 20+ years of active duty pay. That’s a lot of money to pay back for something that you will lose money for.
Actually as a retired E7 I’ve run the numbers for several situations. The major determining factors are military retired rank, when the retirement happened, the pay grade held as a federal employee, and the area where the high three occurred. I retired before the Gulf War and before all of the large military COLAs. My retirement pay is about 40% of what an E7 would make now. But if a person retired from the military 10 years before me his/her retirement pay would be another 25% lower. Had I been working in a high cost area like SF or DC it would make total sense to buy back my time due to the locality pay. However here in the mid-west I would go backwards 4K a year if I did do the buy back. On the other hand, I have a VA disability rating of 40%, which currently means that the VA gives me money every month but DOD takes the same amount out of my retired pay so the only benefit I see is the tax break. If I were to buy back my military time and waive my retired pay I would still get the VA payment. So with that I would break even about 6 years from now and then be about 3K a year better off than with separate pensions
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Thanks for your well-reasoned input.
Thanks. I’ve always been told it wasn’t advisable for Military retirees to buy back their military time under FERS as they would lose money. But like you said it depends on your particular circumstances whether or not buying back your Service time is advisable or not.
I am a retired E-7, VA disability at 40%. It was a no brainer for me to buyback my 20 years, it cost me $9K. I am also a GS-14 in Washington DC so to add that 20 years makes alot of sense.
Good for you to research as there is ALOT of bum scoop out there.
Best of luck to you!
Thanks for sharing yur experience with us.
I have served 16 years on active duty in the Air Force, and then switched over to a full time position in the Air Force Reserve. I have been an AGR for 12 years now, and will retire soon. The entire time I have been an AGR, I have been on orders, I get new orders every four years.
I will begin drawing my retirement as soon as I retire next year. Because of the time I served, I won’t have to wait until I’m 62.
If I take a civil service job, can I buy back my 16 years of active duty and draw both FERS retirement and my reserve retirement?
It seems as though I should be able to, since my military retirement is based only on my reserve service. (With only 16 years of active duty, I don’t qualify for an active duty retirement.)
It all depends on whether you are receiving military retired pay or reserve retired pay. If you are receiving military retired pay, you’d not only have to make a deposit to get credit for that service but waive your military retired pay when you retire from your civilian job. If you are receiving reserve retired pay, you’d only have to make a deposit for that time.
Thank you. I appreciate your time. I thought it would be reserve retired pay, since I only have 16 years serving as an Active Duty member, but your answer implies that it might be military retired pay.
How can I determine which I will receive? Please just point me in the right direction, and I will research through the regulations and contact whomever at my unit you recommend for information.
Thank you again.