Military service buy back


Q. I retired as a master sergeant in the Army with 25 years of active-duty service. I currently collect my Army retirement check and disability from the Department of Veterans Affairs. I have been a FERS GG-12 for nine years. I believe I can buy back my military retirement time with interest and that would be added to my civilian FERS time. When do I have to relinquish my military retirement check: when I retire into FERS or when I have bought back my time?

A. Yes, you can make a deposit, plus accrued interest, to get credit for your active-duty service. You only need to waive your military retired pay when you get ready to retire. To see how that’s done, go to and scroll to Section 23A2.1-3, which applies to both CSRS and FERS employees.


About Author

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


  1. I retired in 2000 with 20 years. Started civil service in 2004 didn’t buy my retirement back until 2017. I retire end of this month that’s when my military retirement payments stop.

  2. REG,
    I see this question a lot here, just wondering why anyone with a military retirement check coming in would trade it for the purpose of buying back their time and ceasing what they have earned, wouldn’t a good suggestion be to keep their check and contribute as much as they can to the TSP.
    Just a thought.

    • If your retirement income would be greater, you should consider waiving your military retired pay when you retire from your civilian job. If it wouldn’t, you shouldn’t. Contributing the maximum amount to the TSP while working is always a good idea. However, if you were already doing that, it would have no bearing on your decision.

      • I just don’t see where its a smart move especially under the FERS guidelines approximately 1% per year to calculate annuity and military time can not be calculated in for the FERS supplement.
        Maybe if you retired military as an E-4 and then made it to a GS-13 or better maybe I could believe that.

        • As I just wrote to someone else, it’s a matter of dollars and cents. If combining your military and civilian service would produce a higher annual income, then you should waive your military retired pay. If it doesn’t, you shouldn’t.

  3. Chuck-
    I retired an E-7 with 20 years of active service (DFAS) and I am rated at 40% disability VA). I crunched the numbers and it was worth paying back the $9K to combine my years at retirement from CS FERS.

    I believe the issue is what year you retired. I retired in 2000. The troops are making much more money now. I had a conversation with an Army E6 who retired, and it wasnt worth it for her.

    Everyones situation is different. If you crunch the numbers and it isnt beneficial, than you know what you need to do. For me, I could should the numbers to a child and it was a significant difference and made the right choice.

    Hope this helps.

    • Thanks for your helpful response. It’s what I’ve been saying all along. If the numbers work for you do it. If they don’t, don’t do it.

  4. James Joshua on

    I have 20 years of military service and receive military retirement. I’ve been in fers system for 10 years. I’ve always been told that buying back a military retirement wasn’t a good idea. Was i wrong to take that advice on face value and never double check? What steps do i need to accomplish to obtain all the facts necessary to find out if it would benefit me.

    • While I can tell you what you’d get if you made a deposit to get credit for that time, I can’t tell you how much it would cost you. If you made the deposit, you’d automatically have your years of service increased by 10 years and your annuity by 10 percent. To find out what you’d owe, complete OPM form RI 20-97, Estimated Earnings During Military Service, and mail it, along with a copy of your DD 214, to the military finance center for your branch of service. When you receive that estimate, take it to your payroll office, along with copies of your DD 214 and a Standard Form 3108, Application to Make Deposit or Redeposit, and ask for an estimate of the amount you’d owe, plus accrued interest. Once you have that information, you can decide if the benefit is worth the cost. (The OPM and Standard forms are available for download at, cllick on Forms.)

    • I forgot to add that when you retire from your civilian job, you’d have to waive your military retired pay.

  5. Mickey Mitani on

    Reg, he would get 20 percent added to his annuity – I think you got his service and FERS times backwards.

    A quick ballpark way to help decide if your buy-back is reasonable.
    Take your yearly Military Retirement and divide by the years of Miltary service. The result is what a year of service earns – call it a Military Year. Then take your Federal Salary (Base plus Locality) and divide it by 100. This is what a year of FERS federal service (FERS Year) would earn if you retired now (unless you are over 62, then add a tenth to the value of the FERS Year). If the value of your Military Year is higher than the value of your FERS Year, then it is unlikely that you should buy back your time. This is provided that you are not expecting a grade increase or relocation to a higher locality pay area. The same if you plan on staying for enough years to get a few step increases before retiring – you need to recalculate the FERS year.
    Another consideration is if you are receiving VA Disability with a rating of 40% or less non-combat related so that your Military Retirement is reduced by the amount of the VA payment. If you waive your Military Retirement pay you are still entitled to the VA payment, so that needs to be considered. In my case, the FERS plus buy-back was $4K less per year than FERS and separate Military Retirement. But my VA disability was $7K per year (40% rating) so that it actually means that the FERS plus buy-back plus VA is $3K more a year than keep them separate. That would mean that after 5 years of retirement I would break even with my cost of the buy-back and then would be better off.

  6. Reg,

    I have a slight wrinkle to the above discussion that I cannot seem to get answered anywhere. I retired from the Army in 1993 as a First Sergeant. I started working civil service the same year and can retire now as a GS 14. i bought back all of my military service several years ago because the numbers made sense and can retire now with 46 years FERS service.

    There’s is the possibility for me to go on Phased Retirement in my current position. However no one can tell me what happens with my military retirement. Do I have to terminated as I would to normally retire? Or do I continue to with a military pension and half of my calculated FERS for 26 years. Or do I give up the military and receive only half of my combined FERS pension for 46 years? And how does this all get sorted with the additional servive at the time of my complete retirement? Or should I just forget the whole thing?

    • I haven’t found an an answer to your question. While OPM guidance makes it clear that anyone applying for phased retirement must have made a deposit to get credit for any period of active duty service, it is silent about the waiver of military retired pay. Since an employee who is approved for phased retirement can decide to return to full time service, it’s possible that a waiver isn’t required. If any of our readers have the official answer to the question, I hope they’ll share it with us.

  7. I have paid the deposit to buy back my 20 year retirement. I retired as a SFC with 20 years and made GS13. When I retire I will have 36 years and 9 months. I want to retire early, so financially it works for me. My question is what happens with Tricare. I have heard it continues without any issues, but I hear also that it won’t. Do you know the answer?

    • First things first. When you retire, you will have to waive your military retired pay to get credit for that time in your civilian annuity computation. If you don’t, your annuity will be based solely on your civilian service. Now to your question. Every retired member of the military I’ve talked to has assured me that retiring from the civil service had no affect on their entitlement to continue their coverage under Tricare.

      • I retired from federal service after 13 years, and I completed my military (retirement) years buyback. I gave up my retired E7 military paycheck for a FERS retirement check that is slightly more than double what my military annual retirement benefits were. This action did not in any way impact my retired medical coverage (DEERS/TRICARE). PLEASE NOTE: If you signed up for any survivor benefits when you retired from the military you are on the hook for these monthly payments – for life – UNLESS you select the same (or higher) survivor benefits when you retire from federal service.

      • I retired from USN as a Chief with 21yrs, and I did the buy-back. I achieved GS-15 and was offered early retirement. My 21 years Navy and my 13 years federal resulted in doubling my monthly retirement check (doubled my Navy retirement check). Without the buyback I would not have been eligible for the early FERS retirement. Hope this helps.

  8. This is a great question. It all comes down to the numbers related to your specific situation. Generally speaking, deciding to but back your full retired military service (time) for converting it for computation of a federal civil service retirement. Several main factors play into this computation: 1) what rank did you retire as from the US Military, 2) what grade and step did you attain (or you reasonably believe you can attain) in federal service, 3) the number of years you served in the US Military, and 4) the number of years you have (or planned to be) a federal civil servant. Run the numbers.

  9. Please help…I retired from the military as an E-7 after 22 yrs of service. I started paying into the military buyback program because I thought it would benefit me when I retired from federal service (which won’t be till 09/2031) however now, I’m not so sure. At the time, I didn’t realize that I would have to waive my military retirement pay 90 days before retiring from the fed gov’t…Based on my FERS estimate report (calculated when I was a GS-12), if I didn’t pay the deposit, my annuity would be $1,234.19 but if I paid the deposit, my annuity would be $3,085.47. I am currently a GS-14, will probably retire as a GS-14 Step 7/8 by 09/2031. I still owe about $16,000 to the buyback program. My military retirement check is currently $2200 per month. Every time I run numbers, I get different results and now I’m just frustrated. No one answers the phone at my HR department so I’m turning to you. If I find out that the buyback program doesn’t financially benefit me when I retire from the fed gov’t, is it possible to cancel my allotment and get my money back?

    • Yes, it is possible. If you want a refund of your deposit, send your request to the following address:
      U.S. OPM
      Retirement Operations Center
      Boyers, PA 16017-0045
      On the envelope write: Attention: Military Deposit Refund

      • Thank you for your quick reply! Based on the numbers I listed in my previous post, can you tell me if I would collect more keeping my military and federal retirements separate or should I stay the course with the buyback program as I would collect more money when I retire?

        • That’s a question only you can answer. Periodically run the numbers to see which would give you the best retirement benefit. If you decide that keeping the two benefits separate would be better, you can ask for a refund of your deposit, which will be paid back to you with accumulated interest.

          • Would it be beneficial then to buyback time as soon as your start to avoid paying interest and have the choice to request refund when you’re ready to retire if numbers don’t make sense?

          • Yes, it would be beneficial to do that. Not only will it cost less to do it now than if you waited until you were near retirement age when interest charges will have mounted up but, as a FERS employee, the deposit you make will actually be earning interest based on rates determined by the Department of the Treasury.

  10. Hi. Getting real close to retiring under the FERS system. Bought back 1.5 years of the two years served in the Peace Corps. Service computation date reflects the time but the document did not carry over from the FSC (when I bought back the time many years ago) to the DFAS. Remote human resources don’t seem to have a clue. Where can I go to get proof of buying back the time. Thanks.

  11. Jess Harbison on

    I retired from the Army as a First Sergeant with 20 years. I am in the process of buying back my military time for the option to retire at 57. I have reviewed the numbers and it still makes sense, however, I have been unable to find anything out about what happens in States that do not tax military retirement. Basically, if I waive my military retirement pay for a single civil service retirement, am I also giving up any military retirement state tax break?

    • While I’m not qualified to answer questions about the taxation of military benefits, I think it unlikely that you could receive a tax break on a benefit you are no longer receiving.

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