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Federal Employees with Military Backgrounds: Don’t Miss Out on These Hidden Benefits

David Richards
December 19, 2024

Key Takeaways

Federal employees with military backgrounds may qualify for benefits they’re often unaware of—don’t miss out on what’s owed to you.
Combining your federal and military service can boost your retirement benefits and ensure a more secure financial future.

Make the Most of Your Military and Federal Service

Also Read: What Changes to Federal Benefits Could Mean for Your Retirement Plans This Year
Also Read: Divorcing as a Federal Employee? Here’s What Happens to Your Pension, TSP, and Benefits
Also Read: How Civilian Jobs Can Supercharge Your Military Service—And Secure a Comfortable Retirement

As a federal employee with a military background, you may be sitting on a treasure trove of benefits without even knowing it. Many people don’t realize that the service they’ve dedicated to both the military and federal government can translate into enhanced financial and retirement benefits. Whether you’re already in federal service or transitioning from the military, it’s essential to explore every avenue available to you. In this article, we’ll walk through the hidden perks that come with a federal career combined with military service.

What Benefits Are Available for Federal Employees with Military Service?

If you’ve served in both the military and a federal civilian capacity, you’re in a unique position to leverage a mix of benefits. Some of the most valuable perks include retirement credit for military service, health insurance options, and education benefits.

Here’s a quick breakdown of what’s available to you:

Military Service Credit for Retirement: If you’re a federal employee, you may be able to apply your years of military service towards your civilian retirement under the Federal Employees Retirement System (FERS) or the older Civil Service Retirement System (CSRS). The key is knowing how to buy back your military time—more on this later.
Health Insurance through FEHB: Under the Federal Employees Health Benefits (FEHB) program, military retirees often have access to some of the best health coverage options available in the U.S. If you served in the military, there’s a good chance you already know about TRICARE, but understanding how FEHB and TRICARE work together can open doors to better health care during your federal career.
Education Benefits: Federal employees who served in the military are often eligible for education perks, like the GI Bill, that can be used to further your career. Whether you want to pursue a new degree or brush up on some specific skills, these benefits can make continuing education more affordable.

How Can You Buy Back Military Time for Federal Retirement?

One of the most significant financial boosts you can get as a federal employee with a military background is through “buying back” your military service time. This process allows you to count your military years toward your federal retirement plan under FERS or CSRS, potentially speeding up your eligibility for retirement and increasing the overall pension you’ll receive.

Here’s how it works:

Determine Eligibility: You must have served on active duty in the military and be employed in a federal civilian position to buy back time. It’s important to note that National Guard service doesn’t typically count unless you were activated under Title 10 of the U.S. Code.
Calculate the Buy-Back Cost: The cost to buy back your military time varies depending on when you served and how much you earned during that time. Typically, it’s a percentage of your military pay, plus interest if you delay the buy-back process.
Submit the Application: To get started, you’ll need to complete and submit the necessary forms, such as the SF 2803 for CSRS or the SF 3108 for FERS. It’s best to start this process early in your federal career since interest on the buy-back accrues the longer you wait.

Once you’ve completed this process, you’ll effectively add years of military service to your federal career, giving you access to a more robust retirement plan down the road.

How Does Military Service Impact Your Federal Health Benefits?

The Federal Employees Health Benefits (FEHB) program and TRICARE, the health care program for military service members, veterans, and their families, can work together in a way that maximizes your coverage options.

FEHB vs. TRICARE: If you’re still on active duty, TRICARE will be your primary health insurance. However, once you leave military service, you may have the option to keep TRICARE or switch to FEHB, or even use both. This is especially important when you retire, as keeping both plans can ensure that you have comprehensive coverage well into retirement.
Switching Between Plans: You’re not locked into a single option for life. Federal employees can switch between FEHB and TRICARE during open seasons, or if a qualifying life event occurs. This flexibility allows you to tailor your coverage to your evolving needs as a federal employee with a military background.

When Should You Start Planning for Retirement?

The best time to start planning for retirement as a federal employee with a military background is now. Federal employees are eligible for retirement based on their years of service and their age. Military retirees who also serve in a civilian capacity can often retire earlier if they’ve bought back their military service time.

Here’s a rough timeline for retirement under FERS:

Minimum Retirement Age (MRA): This ranges from 55 to 57 depending on when you were born. You can retire at your MRA if you have at least 30 years of service.
Age 62 with 5 years of service: Even if you didn’t spend decades in the federal government, you can retire with a pension at age 62 as long as you have at least five years of federal service. If you bought back your military time, those years count toward this requirement.

By planning now, you can make sure you’re not leaving any benefits on the table.

Are You Missing Out on Veterans’ Preference?

Federal employment offers Veterans’ Preference, which gives qualified veterans a hiring advantage over other applicants. This can be a game-changer when applying for federal jobs, especially when transitioning from military to civilian work.

What Is Veterans’ Preference? Veterans’ Preference provides extra points during the hiring process for veterans who meet specific criteria. These points can move your application to the top of the list, increasing your chances of landing a federal job.
How Do You Qualify? To qualify, you must have served on active duty in the Armed Forces during specific periods of conflict or meet other criteria, such as receiving a qualifying disability rating from the Department of Veterans Affairs.

By taking advantage of Veterans’ Preference, you can enhance your federal career prospects, making the transition from military service to a civilian role much smoother.

Unlocking Your Full Potential
As a federal employee with a military background, there are plenty of benefits available to you—many of which might go unnoticed without some investigation. From buying back your military time to making the most of your health care options, it’s important to take action sooner rather than later. Maximizing these benefits can lead to a more financially secure future, allowing you to retire with confidence.