Military retirement buyback


Q. I have 20 years of military service and receive military retirement. I’ve been in FERS for 10 years. I’ve always been told that buying back military retirement wasn’t a good idea. What steps do I need to obtain all the facts necessary to find out if it would benefit me?

A. If you made the deposit, you’d automatically have your years of service increased by 10 years and used in the computation of your annuity. 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, click on Forms.) Note: When you retire from your civilian job, you’d have to waive your military retired pay. Doing so will have no affect on your other military benefits. 


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 did this, but please.understand its a personal financial decision. Major factors at play are how much is your military retired pay, what GS grade will you retire at, and what yoyr High Three pay will be.

    For me I was E7 with 20 and $1,800 military retirement. I made it to GS14 and had DC local High three. It cost me $17K to pay military time, but retired GS14 with 38 years versus 18. My FERS retirement now is $700 more a month versus Gs14 18 years + $1800 military retirement. I will recoup that $17K in less than three years so it was a no brainer.

    I now its a bit complicated, but you have to run your own numbers to decide

    • Yes, it is a personal matter. And you seem to have done a good job of reviewing the pluses and minuses and coming up with the right answer. Congratulations.

    • Sherry Christeson on

      Hello, I am reaching this point in my career. I retired from the Military as an E-8 and am reaching that tipping point where my high 3 will benefit me to combine.

      What I am wondering is when you made your deposit for buy back, did it automatically change your SCD and increase your leave accrual?

      • If you are retired – active duty – ask your personnel office about an SF-813.
        Any campaign time/deployments completed and approved on the SF-813 can give an retired military – credit towards their SCD for leave.

        Buying back 20 plus years of retired military time may/may not affect your SCD for leave.

    • Greg Huebner on

      I have a question for the persons who did the buyback. I bought back my 20 year military retirement already, my question is how smooth was the process when you retired on the civilians side. I’m 1 week away from retiring and I have been unable to get an acknowledgment letter from DFAS which looks like it might be a requirement of my FERS application. I’ve been around and around in circles on the phone with DFAS and can’t get anything from them, I did submit the letter to waive military retired pay that I sent to DFAS in my application, I’m worried that I may end up being one of those horror stories as a result of an incomplete retirement application. I have a friend who’s been waiting 9 months because of a divorce decree.

      • Greg H, are you saying you still do not have a “PAID IN FULL” letter from DFAS?

        I think this needs to be needs to be uploaded to your eOPF file before you retire.
        I got mine by submitting a ‘help ticket’ from the DFAS website:

        Also, does your LES indicate “PAID and OWED” in Box 20?
        OWED should be blank.

        If (hopefully), you do have a PIF letter, drop it off to your HRO to post in your eOPF.

        Best of luck with your desired outcome.

      • If the ticket to DFAS solution doesn’t work, you need to talk to your office’s DFAS CSR. That would usually be in the Comptroller’s Office. Look for whoever is responsible for submitting pay adjustments. It took one of the guys in my office a month to get his DFAS Paid in Full letter. I hope you aren’t as unlucky.

  2. As a general rule of thumb, buying back time for active duty retirees is not beneficial unless the following general circumstances exist. If you had a 20 year retirement and retired as an E6 in your respective service and then somehow landed a job that gave you an upward progression path to a GS-15 or SES position, then it might be a beneficial move. The reason for this is the relative cost of buying back military time that was spent being paid as an E1-E6 is relatively small compared to how those years get multiplied through a FERS retirement using a much higher pay grade/pay. The bottom line is as Reg says, you have to run the numbers to know for your exact circumstance. There is only one exception to this rule. For those that retired from active duty as service academy graduates (USMA, USNA, USAFA, etc) it always pays to buy back that time since it costs you hardly anything and those four years were never used to computer military retired pay.

  3. Buying back military time – it’s a little complicated.

    Regarding FERS:

    For a reserve military retirement, with less than 20 years active duty, it certainly would make sense to buy back your active duty time to apply towards your FERS retirement. The two retirement systems are completely separate and you can collect on both. This is a no-brainer.

    For a regular military retirement, 20 years active duty or more, the situation is different. If you buy back your active duty time and apply it to your FERS retirement, you must waive your military retirement. In this case, you must run the actual numbers. It would make increasing sense – the lower your military pay and the higher your civil service pay.

    Keep in mind, if you buy back your active duty military time and apply it toward your FERS retirement, your annuity will then be subjected to a diet COLA. Your annuity could decrease by up to 1% per year, depending upon inflation. The military retirement has a full COLA.

    Because of the COLA issue as above, the calculations should be projected over time. This will take some work but it is well worth the effort.

    Hope this helps.

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