FERS retirees with Post 1/1/57 military service will not receive credit or annuity computation for their military time without making a deposit. If a deposit is made, the employee will receive credit towards his/her annuity computation. Under CSRS rules, if you served on active duty and will be eligible at age 62 to collect Social Security, your CSRS annuity will be reduced by the number of years that you served unless you buy back that time.
Federal employees have the option of making military service credit payments  for creditable military service  before they retire. I bought back my 3 plus years of active duty military time when I discovered that my CSRS retirement  annuity would decease at age 62 if I didn’t. All FERS employees and CSRS employees that anticipate having at least 40 quarters, 10 years of work under social security at age 62, should consider paying back their military time. Otherwise your annuity will decrease. In my case the cost was minimal, $650 total, and I was able to pay $25 a pay until the debt was settled. The earlier you initiate the payback the less interest penalties you will pay. I suggest buying it back early in your career even if you are CSRS and aren’t sure you will be able to collect Social Security. You can always have the payment refunded before you retire if you know for sure you won’t have the 40 quarters necessary to collect Social Security. My military pay was meager, $97 a month, in 1969 when I was in the Air Force.
There is a lot of confusion around whether or not it is worth your while to recoup your military time. If you make a military deposit, there is no effect on your other military benefits such as medical benefits, base access, commissary, or VA benefits, including any disability payments  from the VA. It only affects (active duty) retired military pay; you cannot receive 2 separate retirements (military and civilian) for the exact same period of service. If you are retired from active duty and elect to buy back your 20 years or more of military service, your military retirement will stop once you start collecting your federal civil service annuity. Reserve or National Guard members under Title 32 can collect both a federal civil service retirement and a Reserve or National Guard retirement.
Another issue that comes up frequently is how your military time can be used for retirement eligibility requirements. You need a minimum of 5 years of civilian service time to be eligible for a civilian retirement annuity. However, after the 5 years is met, military service is creditable towards years of service for all the other voluntary retirement eligibility requirements: MRA +10; MRA +30 ; 60 years old with 20 years of service; and even the VERA requirements  – age 50 with 20 years of service or any age with 25 years of service. Review all eligibility requirements  for FERS and CSRS retirement.
If you are a veteran check that your service is creditable  and then determine if buying back your military time is worth your while . If you decide to pay it back, review your FERS  or CSRS buy back options . Complete instructions and forms  are available for your use on our site. You will also find helpful articles and site visitor comments with answers to often confusing military credit issues.
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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.
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