Buying Back Miliatary Time.

Civil Service Discussion.

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MakeMe$$$$
Posts: 772
Joined: Tue Aug 23, 2011 10:12 pm

Buying Back Miliatary Time.

Post by MakeMe$$$$ »

Some interesting items I didn't know about regarding dual Military and Fed retirement.

http://www.ftleavenworthlamp.com/news/around_the_force/x1112930233/Federal-civilians-can-buy-back-military-time
Don
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jdeacon
Posts: 136
Joined: Fri Mar 05, 2010 4:38 pm

Re: Buying Back Miliatary Time.

Post by jdeacon »

Yes, I was able to buy back 4 years of military service. I was paid so little in those days, it only cost me $401 for all 4 years! That will add ~4% to my eventual retirement paycheck and will allow me to retire 4 years earlier if i so desire.

TECH1
Posts: 25
Joined: Tue Oct 18, 2011 8:01 pm

Re: Buying Back Miliatary Time.

Post by TECH1 »

Yes what a great opportunity, but make sure you you pay it as soon as you are hired by Fed. They give you a window to pay it back without interest at the beginning. I gained six years(Navy Nuke) will leave at 62 with 42years!

nomny2020
Posts: 83
Joined: Mon Sep 13, 2010 10:35 am

Re: Buying Back Miliatary Time.

Post by nomny2020 »

jdeacon wrote:Yes, I was able to buy back 4 years of military service. I was paid so little in those days, it only cost me $401 for all 4 years! That will add ~4% to my eventual retirement paycheck and will allow me to retire 4 years earlier if i so desire.


jdeacon;
I may have read your post wrong or you are under something I don't know about, but, my understanding of how the buy-back works is that it does not count towards retirement time. Meaning - If you need 20 years to retire, you can not do 16 + your 4 buyback years to equal the needed 20 years. If you need 20, you do 20 but retire with a 24 year pension. Unless you meant 4 years earlier to reach your desired pension. Again, sorry if I read into the post wrong.
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jdeacon
Posts: 136
Joined: Fri Mar 05, 2010 4:38 pm

Re: Buying Back Miliatary Time.

Post by jdeacon »

It is my understanding that under FERS, one must only have 5 years of actual civil service to be eligible for a retirement check at some point in the future. The issue is when you will get your first retirement check. The amount of the check would be increased by ~1% for each year of military service "bought back". So, if I am correct, someone could start working in civil service at any age. Perform 5 years or more of service and then leave civil service for a commercial job. Once they reached full retirement age they could start collecting their civil service pension without penalty. If they also bought back military time, the pension amount would be increased accordingly. By the same token, if someone did more actual civil service years, for example 10 years and met the MRA retirement requirements, they could elect to either take a "discounted" immediate pension or wait until their full retirement age to start collecting an "undiscounted" deferred pension. I have a friend who at age 58 just retired with 6 years of actual civil service and four years of military "buy back" making 10 years total. He is pursuing another career because his spouse got a job in another city, and it was not practical for him to stay away from her in the civil service job.

GrowTSP
Posts: 8
Joined: Wed Jun 22, 2011 4:21 am

Re: Buying Back Miliatary Time.

Post by GrowTSP »

Good evening all, I recently retired in FERS with 30 years of service at my MRA of 56. That is 26 years FERS plus 4 years military that I bought back years ago. When you buy the time back, you are actually making a FERS deposit as if you worked for civil service at the same time you were in the military. Talk about double dip. The years in the military count both toward your FERS retirement and a possible military one if the member is say, also in the National Guard.

BigMike
Posts: 220
Joined: Wed Sep 29, 2010 12:45 pm

Re: Buying Back Miliatary Time.

Post by BigMike »

I retired from the Military with 20 years service. I have another 23 years now as an Army Civilian. I am in the process of buying back my military time. I was an enlisted soldier so my salary was really low but as a civilian I have done very well. When I did my math by buying the military time back I will get $1250 more per month. No brainer!!!

It doesn't seem to work for retired Officers (they make way too much) or even recently retired enlisted soldiers since their salaries are not as pitiful as they were back when I was in.

marange263
Posts: 2
Joined: Sun Dec 02, 2012 12:34 am

Re: Buying Back Miliatary Time.

Post by marange263 »

BigMike wrote:I retired from the Military with 20 years service. I have another 23 years now as an Army Civilian. I am in the process of buying back my military time. I was an enlisted soldier so my salary was really low but as a civilian I have done very well. When I did my math by buying the military time back I will get $1250 more per month. No brainer!!!

It doesn't seem to work for retired Officers (they make way too much) or even recently retired enlisted soldiers since their salaries are not as pitiful as they were back when I was in.

Vietnam vet - bought back 6 yrs active duty time for CSRS and stayed in NG retiring as LTC
Buy back was a good move- earned enough qtrs from NG to draw Soc Sec. now I'm a triple dipper. :lol:

donkmoney
Posts: 2
Joined: Wed Mar 06, 2013 4:49 pm

Re: Buying Back Miliatary Time.

Post by donkmoney »

I am new to this site and looking for some guidance about buying back military time. I retired in 2003 from the Air Force with 20 years and started with FERS soon thereafter. I currently have 10 years with FERS and after some discussions with co-workers am contemplating buying back militray service time. Has anyone already calculated the pros or cons of this, and is it beneficial to do so. Apologies up front if this is in wrong area for discussion.

michimichi
Posts: 18
Joined: Thu Dec 15, 2011 11:54 am

Re: Buying Back Miliatary Time.

Post by michimichi »

I don't know the numbers, but I have never met anyone who retired from Active Duty who bought their time back for FERS. All of them have said that they would lose money if they did it.

ETA: I bought my five years back, but I didn't RETIRE from active duty. I separated and started my next career. My buyback is totally worth it.

jdeacon
Posts: 136
Joined: Fri Mar 05, 2010 4:38 pm

Re: Buying Back Miliatary Time.

Post by jdeacon »

Michimichi,

Well there are exceptions. For example, military academy graduates are on active duty while they attend the academy for 4 years but that time does not count towards retirement (unless they had prior enlisted service). As a result, the vast majority of academy graduates who retire from active duty after serving an additonal 20 years of military service can buy back their four years of "academy" time if they become civil servants. I know of several retired officers who have done that. My example in the January post above was such a case.

crondanet5
Posts: 4330
Joined: Tue Aug 19, 2008 8:51 pm

Re: Buying Back Miliatary Time.

Post by crondanet5 »

donk, please refresh my memory. Does the buyback mean you lose your military pension? Tricare? BX priviliges?

BigMike
Posts: 220
Joined: Wed Sep 29, 2010 12:45 pm

Re: Buying Back Miliatary Time.

Post by BigMike »

crondanet5 wrote:donk, please refresh my memory. Does the buyback mean you lose your military pension? Tricare? BX priviliges?


You only give up your retired pay in my experience. However, you do get to keep your retired card, tricare, PX/BX and commisary priviliges.

michimichi
Posts: 18
Joined: Thu Dec 15, 2011 11:54 am

Re: Buying Back Miliatary Time.

Post by michimichi »

jdeacon wrote:Michimichi,

Well there are exceptions. For example, military academy graduates are on active duty while they attend the academy for 4 years but that time does not count towards retirement (unless they had prior enlisted service). As a result, the vast majority of academy graduates who retire from active duty after serving an additonal 20 years of military service can buy back their four years of "academy" time if they become civil servants. I know of several retired officers who have done that. My example in the January post above was such a case.

Gotcha - so they buy back their time that didn't count toward the military retirement, thus keeping their pension AND getting a few years toward FERS. Nice!

BigMike
Posts: 220
Joined: Wed Sep 29, 2010 12:45 pm

Re: Buying Back Miliatary Time.

Post by BigMike »

michimichi wrote:I don't know the numbers, but I have never met anyone who retired from Active Duty who bought their time back for FERS. All of them have said that they would lose money if they did it.

ETA: I bought my five years back, but I didn't RETIRE from active duty. I separated and started my next career. My buyback is totally worth it.


I did buy back 20 years and it made a positive difference of approximately plus $1250 a month. It cost me $21K to do the buy back (because I waited so long to do the buyback) but the extra $1250 a month means that I will get to the break even point within about a year and a half. After that it will be all gravy.

I agree with the others here that normally it doesn't work out positively for most military retirees (especially those retiring recently since military pay is so much better nowadays). I have certainly never seen the numbers come out positive for retired officers.

In my case it was a function of being a retired enlisted person from years ago when we didn't make very much. Combine that with retiring as an Army Civilian at a very high grade. The shifting of those low paying 20 military years to my high paying civilian record so to speak is what made the math work so well.

I would highly recommend however that anyone that didn't retire seriously consider doing a buyback. I have never seen that not work out to be a positive move. The advice to do it as soon as practical is also solid advice. The longer you wait to do the buyback the more it will cost because of the interest. After approximately 2 years from the date of your civilian employment starts interest starts to accrue. If I had paid mine back in those first two years the cost would have been only around $7K as opposed to the $21K I had to pay 23 years later!

Why did I wait so long? Ignorance! I listened to everyone who told me the numbers never work instead of actually running the numbers for myself for my own unique situation. When I finally got around to taking a hard look at it just before retiring as a civilian it was like a big wake up call and a kick in my ass for not doing better planning earlier. Shame on me!

Run the numbers yourself for your own situation instead of making decisions based on generalities and rumors that come your way. I found that almost no one really knew what they were talking about unless they had actually been there and done that themselves. Even then they only really knew how it affected their own personal record and situation.

Mike

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