Interest on time


Q. I have eight years active. I’m going to buy my time back; however, it will not be paid off within the three years. How much interest will accrue on the balance after that third year is over? Also, I am at 90 percent with the Department of Veterans Affairs. When I retire, will I have to give up my VA disability or does that only apply to retirement pay?

A. No interest will be charged if your deposit is made within two years after the date you first were employed. If it isn’t deposited withing that two-year period, interest will be charged one year after the two-year period, In other words, the total effective interest-free period is three years minus one day. Interest rates are determined by the Treasury Department and are only known at the end of the year. The interest rate for 2018 is 2.125 percent. No one can predict what they will be in upcoming years.

As for your other question, you won’t have to give up your VA disability. Receiving it will have no affect on your civilian retirement pay.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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