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.

    • I’m not familiar with federal retirement and wonder if you are able to receive both military retirement and federal retirement after buying your active duty time? Are there any military benefits affected?

      • Both federal employees and members of the military who are eligible to retire can receive individual retirement benefits based on their service. Anyone who has served on active duty in the military can get also credit for that service in their civilian annuity by making a deposit to the civilian retirement system. Making such a deposit would have no affect on any other benefits to which a former member of the military would be entitled to receive. As a rule, anyone who is receiving military retired pay would also have to waive that pay in order for the time to be credited in their civilian annuity computation. Note: Anyone receiving reserve retired pay would only have to make a deposit for their active duty service; doing so would have no affect on their entitlement to their reserve retired pay.

        • REG.

          I am an Army Reserve Soldier that has about 10 years of credible active duty that I can buy back to increase my Federal annuity. I keep reading from dubious sources (facebook etc.) that you can’t receive both your military retirement and your Federal retirement. You have to waive one of them. Dave’s post (below) very clearly articulated what I believe is true.

          I am about to retire at 40 years military service and have been trying desperately to nail down the regulation that covers this. Were can I find in the regulations that I can collect my USAR and FERS Retirement.

          Thanks to all for their very illuminating posts.


    • TIMOTHY, Did you start as a FERS employee after 2013? If so, were you subject to continue paying the higher FERS-RAE (Revised Annuity Employee) coverage percentage that was enacted in 2013? or, did the years bought back place you in a position with lower FERS contribution percentage that everyone has who were employed prior to 2013?
      (FERS employees prior to 2013 had a lower FERS retirement contribution percentage)

  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.

    • I hope you will see this and reply, you’re the only one I can find that mentions how academy time works…
      I was AD enlisted, went straight to West Point, and left before graduation straight back to AD. Whenever I submit my RI20-97 to DFAS they always leave out my time at the Academy. So even though I have 7yrs 8mo of time (including the academy), I only get 4.5 years worth of time to buyback from DFAS.
      Will this cause problems buying back my whole 7yrs 8mo?

      • Time spent at one of the military academies is creditable for retirement, even if you didn’t graduate.

      • There is a process involved. The first step is you have to send a letter to the Registrar’s office at West Point and ask for a letter they produce on Academy letter head that indicates the time you spent there from-to dates by month and year. Once you get this letter, you then have to forward it to DFAS and request all cadet paty statements for the time you were a cadet. Then you send the RI20-97 to DFAS with just the time you spent at the Academy. Do no include your prior active service before or after the Academy. Submit those periods of service on a separate RI20-97. Once you do that, they should be able to produce a letter indicating the total amount of creditable service for each period of active duty, which will also include Academy time. With that, you will get a computation of your active duty pay for each of those months and they will then compute the amount you owe to get credit for the entire service. If DFAS says they do not have the cadet pay statements, then the Treasurer USMA should be able to produce tem. They keep historical records as well. One thing you do not want to do is delay. If you delay and wait any longer than two years from your initial civil service appointment date, they will start charging interest- and it could be substantial.

        • Thanks for your invaluable description of the steps required to get credit for that time, and the importance of doing it sooner than later.

          • Sorry for all of the horrendous spelling errors. Unfortunately this site does not allow you to go back and do edits once posting; it was late and I was in a rush 😉

  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.

    • DAVE or anyone: Does the waiver of the military retirement only apply to 20 yr AC retirements? if I buy back my Reserve active duty time (5 years) and apply to FRS, will there be any adjustment to my military retirement annuity? I was told that my reserve retirement calculation will be reduced by the years that I buy back and applied to FRS. Just looking for confirmation before I make a decision on the buyback.

      • Whoever told you that your reserve active duty calculation would be reduced by the years you buy back to get credit for that time in your civilian annuity was dead wrong. Making a deposit to get credit for that time would have no affect on your reserve retired pay.

  4. If I have 15 years of Reserve time and 15 years of FRS, will it make sense to buy back my Reserve active duty time and apply it to FRS. Will it count towards my retirement?

    • If you make a deposit to get credit for any periods of active duty service -excluding any weekend drills – you will get credit for that time in determining your years of civilian service and have it used in the computation of your annuity.

  5. Michael M Hawkins on

    I Did 4 years Navy Reserve time and out of those years I deployed to Iraq for 1 year. What would be my back so I can add it to FERS? Also what is the calculation for personnel in the reserves for buy backs?

    • You would need to make a deposit to the civilian retirement system, plus interest if that service was performed more than three years minus one day ago. Your agency personnel office can proved you with the paperwork needed to do that and let you know how the amount of your deposit would be determined.

  6. Mr. Jones,
    Thank you for your advice. Indeed navigating this decision is full of what if’s, here is mine: E6 with 18.7 years of active duty service was medically retired at 60%, now I am 100% VA and not collecting from DEFAS due to the offset. I am not currently a federal employee, but I am considering becoming one and buying back all my military time. I understand that I will have to work for the federal government for at least five years before I could retire.

    Can I buy back my active duty time?
    Will this have any effect on my VA Disability retirement?


    • Yes, you can make a deposit to get credit for your active duty service. Doing so would have no affect on your VA disability compensation.

      • Mr. Johes, It similar situation for me. I medically retired after 11 yrs of Active duty. I got 70% from the military and it is more than 80% of VA disability compensation. I have received retirement that is about $400 more than VA for about a year and a half. Now, I am working at DOD for 7 months and it counted only my deployment time. I am considering a buy-back option for my 11 years. Do i have to pay bcak if i decide to waive my retirement pension? i am confused and i don’t know whether it is worth or not.

        • Yes, you would have to make a deposit to get credit for that time in determining your civilian length of service and have it used in your annuity computation.

  7. Mr. Johes, It similar situation for me. I medically retired after 11 yrs of Active duty. I got 70% from the military and it is more than 80% of VA disability compensation. I have received retirement that is about $400 more than VA for about a year and a half. Now, I am working at DOD for 7 months and it counted only my deployment time. I am considering a buy-back option for my 11 years. Do i have to pay bcak if i decide to waive my retirement pension? i am confused and i don’t know whether it is worth or not.

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