Buying Back Military Time Isn’t Just a Financial Move—It Could Reshape Your Retirement Timeline

Key Takeaways

• Buying back military time can increase your federal retirement annuity and help you reach eligibility for retirement years sooner.

• The process has strict deadlines and cost implications that grow over time, so early action is key to maximizing the benefit.

Understanding What Military Time Buyback Means

If you served in the uniformed services and later transitioned into a civilian role with the government, your military time doesn’t automatically count toward your retirement. However, under FERS and CSRS, you have the option to “buy back” that time. This means paying a deposit for your active-duty service so that it can be credited toward your civilian retirement.

This buyback is not just symbolic. It has tangible effects on your eligibility to retire and on your pension calculations. The more service time you accumulate, the earlier you can retire and the larger your monthly benefit becomes.

Why Buying Back Military Time Can Be a Game Changer

The Federal Employees Retirement System (FERS) and the older Civil Service Retirement System (CSRS) reward longevity. Every additional year of service increases your pension calculation. Military buyback allows you to:

• Reach retirement eligibility sooner, especially if you’re close to Minimum Retirement Age (MRA) or the 20/25-year thresholds.

• Increase the size of your annuity by adding credited years to your service history.

• Avoid penalties associated with early retirement due to insufficient years of service.

For example, if you served 4 years of active-duty military service, buying it back could make you eligible for retirement 4 years earlier than if you hadn’t. That time also compounds the percentage used to calculate your annuity.

How the Buyback Cost Is Calculated

The cost to buy back military time is not arbitrary. Under FERS, it is based on 3% of your military base pay for each year of service. Under CSRS, the rate is 7%. But that’s only part of the equation.

If you don’t complete the buyback within 3 years of starting your civilian government job, interest begins to accrue annually. This interest compounds, and over time it can significantly increase your deposit. That’s why early action is essential.

• Timeline to act: You have a grace period of 3 years from your civilian service start date to complete the buyback without interest.

• After 3 years: Interest is charged annually and can make the deposit cost significantly higher.

The Process Step-by-Step

1. Request your military earnings: You’ll need to fill out a Military Earnings Request (RI 20-97) and submit it to the appropriate military finance center.

2. Submit to your HR or benefits office: They’ll help determine your estimated deposit.

3. Receive an official estimate: This includes the amount you owe and any interest if applicable.

4. Make the payment: You can pay in lump sum or installments. Once paid in full, you’ll receive confirmation that your military time is credited.

How It Impacts Retirement Eligibility

Eligibility to retire under FERS often depends on a combination of age and years of creditable service:

• Age 62 with 5 years

• Age 60 with 20 years

• Minimum Retirement Age (MRA) with 30 years

• MRA with 10 years (reduced annuity unless postponed)

Buying back military time gives you more creditable service, which can shift you into an earlier retirement category or help you meet a service requirement you would otherwise miss.

In 2025, this becomes especially critical as proposals to adjust FERS contribution rules and annuity supplements loom. The more creditable time you have locked in now, the better protected you are from potential future policy shifts.

How It Affects Your Pension Calculation

Your annuity under FERS is calculated as:

• 1% of your high-3 average salary multiplied by your years of creditable service

• 1.1% if you retire at age 62 or later with 20+ years of service

Each year of military time you buy back increases the multiplier effect of this formula. For instance, 3 years of additional credit could mean thousands more per year in annuity income.

Let’s say your high-3 is $85,000 and you retire at 60 with 17 years of civilian service. If you also bought back 3 years of military time, your annuity would be based on 20 years, giving you a much higher annual payout.

Impact on TSP and Social Security

Buying back military time doesn’t impact your Thrift Savings Plan (TSP) account directly, as TSP contributions are based on actual civilian earnings. However, it can affect your strategy:

• Early retirement: If you buy back time and retire sooner, you might begin TSP withdrawals earlier.

• Longer pension payments: A higher pension may reduce your need to withdraw aggressively from TSP, preserving your balance longer.

Social Security is also unaffected in most cases. However, if you were subject to the Windfall Elimination Provision (WEP) in the past, that has now been repealed as of 2025. This means that buying back military time won’t trigger a reduction in your Social Security benefit anymore.

Special Considerations for Law Enforcement and Other Special Provisions Employees

If you’re in a special provisions category such as law enforcement, firefighter, or air traffic control, buying back military time could carry even greater value. These roles allow for retirement after:

• 20 years of service at age 50

• Any age after 25 years of service

Military time that is bought back counts toward that 20 or 25-year threshold, which could move up your eligibility date dramatically.

Also, your annuity is calculated at a higher percentage for special provision employees—1.7% for the first 20 years. That makes each additional year of service even more valuable.

Things You Should Watch Out For

• Timing: Interest makes waiting costly. Even a one-year delay beyond the 3-year grace period could result in hundreds or thousands more in required payments.

• Incomplete records: Ensure you get your DD-214 or other military service documents early in the process.

• Changing laws: While 2025 protects your creditable time from WEP reductions, future legislative changes could affect buyback policies or costs.

• Confusion with reserve time: Only active-duty service counts. Time spent in the reserves typically does not count unless you were called to active duty.

What If You Already Retired Without Buying Back?

If you’ve already retired and didn’t buy back your military time, the opportunity is generally lost. You had to complete the deposit before retirement. However, if you are still in federal service or retired under deferred retirement rules, you might still be able to act.

There are no retroactive buyback rights after retirement is finalized. That’s why acting while you’re still employed is essential.

Making the Final Decision: Is It Worth It?

The answer in most cases is yes. Buying back military time is one of the few legal ways to:

• Add multiple years to your retirement service record

• Increase your annuity significantly

• Move up your retirement date by years

But it comes with upfront costs. You must weigh the deposit amount against the long-term annuity increase. For many, the payback period is only 2 to 3 years, meaning your investment pays for itself within a short time after retirement.

Also, the psychological impact of retiring earlier and with more security is worth considering. This is not just a financial transaction. It’s a strategic decision that affects your lifestyle, peace of mind, and legacy.

Your Military Time Could Be the Missing Piece in a Stronger Retirement

If you served in the military and now work in the public sector, don’t let your years in uniform go unrecognized. Buying back your military time may be the smartest move you can make for your retirement future.

Take time to run the numbers, evaluate your timeline, and gather your records. Then get in touch with a licensed professional listed on this website who can walk you through your options and ensure no detail is missed.