Why Federal Employees with Military Backgrounds Are Seeing Huge Gains from Buyback Programs in 2025

Missy E
November 14, 2025

Key Takeaways:

Military buyback programs allow federal employees with prior military service to boost their retirement benefits significantly by crediting military service toward civilian retirement.
In 2025, streamlined processes and growing awareness make it an excellent time to consider leveraging these programs for a stronger financial future.

Understanding Military Buyback Programs

If you’re a federal employee with military service in your background, you may have access to one of the most impactful tools to enhance your retirement—the military buyback program

. This program lets you convert your years of military service into creditable service for your civilian federal retirement system. Whether you’re under the Federal Employees Retirement System (FERS) or the older Civil Service Retirement System (CSRS), the benefits are significant.

The program isn’t automatic, though. To take advantage, you need to “buy back” your military time by paying a deposit. The deposit amount varies but is usually based on your military earnings and the time you served. Once paid, your military time counts toward calculating your retirement eligibility and annuity. With 2025’s updates to the program, now is a great time to act.

Why 2025 Is a Game-Changer for Buyback Programs

This year, military buyback programs are gaining even more traction. Updates to federal systems have streamlined the application and payment processes, making it easier than ever for eligible employees to participate. Additionally, increased educational efforts within federal agencies have helped more employees become aware of this opportunity.

These changes mean fewer delays and more straightforward paperwork. If you’ve been hesitant to start the process because of bureaucratic hurdles, 2025 is your year to dive in. Agencies are now prioritizing better support for employees exploring retirement enhancements like the military buyback.

Who Qualifies for Military Buyback Programs?

Before you begin, ensure you meet the eligibility requirements. Generally, military buyback programs are available to:

Federal employees under FERS or CSRS.
Veterans who served in active-duty military roles.
Employees who do not already receive a military pension (with some exceptions, such as pensions for disability or reserve service).

If you’re unsure about your eligibility, your agency’s human resources (HR) office can help clarify the requirements and guide you on the next steps.

How Does the Program Work?

The military buyback process involves several steps:

Requesting Earnings Statements: You’ll need to obtain your military service records and earnings statements, typically from the Defense Finance and Accounting Service (DFAS).
Calculating the Deposit: Your agency or the Office of Personnel Management (OPM) will calculate the amount you need to pay. The deposit is generally 3% of your basic military pay, plus interest if applicable.
Making the Payment: Once you’ve confirmed the deposit amount, you’ll arrange payment. Many agencies now offer installment plans to make the process more manageable.
Updating Your Records: After the payment is processed, your military time will be added to your federal service record, increasing your years of creditable service.

Benefits of Buying Back Military Service

Why should you consider the military buyback program? The advantages can reshape your retirement outlook:

Increased Retirement Annuity: Adding military service years boosts the calculation of your annuity, leading to higher monthly payments.
Faster Retirement Eligibility: By increasing your years of service, you might qualify for retirement earlier.
Cost-Effective Investment: The deposit amount is often much less than the long-term financial gains from a larger pension.

For example, if your military service adds five years to your federal record, it could mean thousands of dollars in additional retirement income annually.

What About Interest?

Interest can be a concern for those who wait too long to buy back their time. Typically, interest starts accruing two years after you begin federal employment. The longer you delay, the more you may have to pay in interest. This is why acting promptly in 2025 can save you money and maximize your benefits.

Comparing FERS and CSRS Benefits

The impact of military buyback programs differs between FERS and CSRS. Here’s a breakdown:

FERS: Since FERS combines a basic pension with Social Security and the Thrift Savings Plan (TSP), buying back military time enhances your pension calculation significantly. It’s a critical step for those planning to retire with a strong financial foundation.
CSRS: While CSRS offers more generous pension calculations than FERS, military buyback still provides a substantial boost to your retirement income.

Regardless of your retirement system, the benefits are worth exploring.

Steps to Get Started Today

Ready to take the plunge? Here’s how to begin:

Contact HR: Reach out to your agency’s HR office to express your interest in the buyback program. They can provide guidance tailored to your situation.
Gather Records: Obtain your DD Form 214 and military earnings statements.
Request a Deposit Estimate: Submit your documents to your HR office or OPM for a deposit calculation.
Plan Your Payment: Decide whether to pay in full or set up an installment plan.
Monitor Progress: Ensure your agency updates your records once the payment is complete.

Acting now ensures you lock in the benefits and avoid unnecessary interest.

FAQs About Military Buyback Programs

1. Can I buy back time if I receive a military pension? In most cases, no. However, exceptions exist for disability pensions or reserve service pensions. Check with HR for specific guidance.

2. What happens if I don’t buy back my time? Without buying back your time, your military service won’t count toward your federal retirement calculation, potentially reducing your benefits.

3. How long does the process take? Processing times vary, but 2025’s streamlined systems mean faster turnaround. Expect a few months from start to finish.

4. Is the buyback mandatory? No, it’s voluntary, but the financial advantages make it a compelling choice for many federal employees.

Common Pitfalls to Avoid

When navigating the military buyback program, steer clear of these mistakes:

Delaying the Process: Procrastination leads to higher interest payments.
Inaccurate Records: Ensure all military documents are accurate and complete before submission.
Assuming Ineligibility: Even if you think you don’t qualify, double-check with HR.
Ignoring Payment Options: Don’t overlook installment plans if the lump sum feels daunting.

Building a Stronger Retirement

Military buyback programs offer federal employees a unique opportunity to amplify their retirement benefits. By acting in 2025, you can take full advantage of streamlined processes, avoid unnecessary interest, and secure a stronger financial future.

Retirement planning isn’t just about numbers; it’s about understanding your options and making informed decisions. Military buyback programs are one of those options you don’t want to miss.

Enhance Your Federal Retirement Today

Taking charge of your retirement means exploring every available advantage. If you have a military background, the buyback program could be the key to unlocking a more secure and rewarding retirement. Start the process today and make the most of this valuable benefit.