Military deposits

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Q. I am 37 and have been in the Navy 20 years. I have begun the hiring process with the U.S. Border Patrol. I am an E-8. Should I try and buy back my years in military, which should cost about $8,000? Can I defer receipt of military retirement until I retire from the Border Patrol?
I am also curious about the amount of buyback. Is it based on my rate of E-8 or on the total amount I made? Due to my billet and frequent deployments, I made twice what the base pay might be. I spent a lot of time at sea or in combat. I understand the “85 Rule.” Will that apply to my retirement age? Will I have to work at least 20 years with USBP, retire at 57 or even older? The only reason I have thought about deferring my military retirement is because of the benefits of being a military retiree.

A. If you are currently entitled to military retired pay, you can continue to receive it even while employed by the federal government. You would only need to waive that pay if you want to combine that service with your civilian service, and then only when you retire from your civilian job. Waiving your military retired pay would have no affect on your other earned benefits while in the military. Note: If you are (or will be) receiving reserve retired pay, you would only need to make a deposit to get credit for that time.
In either case, the amount you would have to deposit to get credit for that time is based on the entire amount of base pay you received while on active duty. If you make that deposit within three years minus one day, no interest would be charged.
There is no “85 Rule” in the federal government. You simply have to meet the age and service requirements to retire: 62 with 5 years of service, 60 with 20, or at your minimum retirement age with 30. You could also retire at your minimum retirement age with l0; however, you annuity would be reduced by 5 percent for every year you are under age 62. Note : Your MRA is 57.

Reg Jones is away until May 2. Daily posts of previously submitted questions will continue, while newer queries will be answered following his return.

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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 fedexperts@federaltimes.com.

2 Comments

  1. Timothy Bozoki on

    I did this and retired as 14.with 38 years, 20 of that was from AD.

    I’m afraid there’s no hard.rule to do it.or not. Start with how much your retired.pay then you have to guess/estimate your Civil Service when you want.to retire. Then you have to request personnel.compute that estimated Civil Service retirement with military deposit and subtract from your retired.pay to decide.

    Its a but complicated,but heres how mine broke out.

    E7 retired pay was $1,800 plus $2,000 GS14 at 20 and 57 MRA. That meant if I didn’t pay and kept military retirement I would gross $3,800. I did pay n cost me $17K, but now my Civil Service retired check is about $4,700 which is $900 more and Ill recover.the 17K in less.than 3 years and 4700 is for rest of.my life.

    Hope that helps…oh you should read up on SRS its another factor to.consider

  2. Tim Bozoki is correct. There are no hard and fast rules about whether you should or should not buy back time. The best thing to do is **first** get armed with the proper information, not just reasonable guessing. This process starts by filling out this DFAS form and sending it in (expect 30 days minimum for an answer) :

    https://www.opm.gov/forms/pdf_fill/RI20-97.pdf

    Instead of having a guess as to what you will have to pay for a service deposit, you can get an actual number. Once you have that number, then you will have to make some logical assumptions on career progression and longevity and pay grade at retirement. As an example, if you typically retired as an enlisted member from active duty and then joined the federal service and stayed with them until retirement, ideally as a GS14 or above, it generally pays to do the service deposit. On the other hand, retiring as a GS9 in a non-locality pay area might not work out better for you. You will need to crunch realistic numbers on expected pay grades and salary at retirement and then inject those numbers with and without the service credit for a military deposit.

    Another way to analyze this would be to set up gates. For example, let’s say you only wanted to serve a maximum of five years of civil service and the rest would include credit for a military deposit. What grade/time in service/locality pay would make that worthwhile? Same analysis for serving 10/15/30 years. This would give you a realistic guideline for career goals in civil service.

    HTH.

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