From Military to Civilian Life: How Federal Employees Are Cashing In on Little-Known Benefits That Make a Big Difference

Key Takeaways:

Federal employees with military service can enhance their civilian retirement benefits through lesser-known programs, such as military buyback.
By tapping into these unique federal benefits, employees can significantly increase their pensions and Social Security payouts, securing a more robust financial future.

From Military to Civilian Life: How Federal Employees Are Cashing In on Little-Known Benefits That Make a Big Difference

Transitioning from military service to a federal civilian career comes with some amazing perks—ones that are often overlooked but can have a huge impact on your financial future. If you’re a federal employee with a history of military service, you’re in a position to take advantage of certain benefits that can supercharge your retirement, maximize your pension, and improve your overall financial outlook. These are the benefits you don’t want to miss out on, especially if you’re eyeing retirement in the near future.

The Power of Military Buyback

One of the best-kept secrets among federal employees with military service is the ability to “buy back” their military time. The military buyback program allows federal employees to count their military service toward their civilian retirement, boosting the total years of service used to calculate their pension. In other words, if you served in the military, you can add those years to your federal retirement plan—and that can mean a bigger monthly pension when you retire.

But this doesn’t happen automatically. You need to take action to buy back your military service, which involves paying a small percentage of your military earnings as a deposit. The earlier you start the process, the less you’ll have to pay in interest. It’s a smart move if you’re serious about securing the highest pension possible under the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS).

Boosting Social Security Benefits

Military service doesn’t just enhance your pension—it can also increase your Social Security benefits. Many federal employees are unaware that their military earnings can count toward their Social Security credits, helping them qualify for higher Social Security payments later in life. If you served on active duty between 1957 and 2001, you’re eligible for additional earnings credits toward Social Security. These credits are automatically added when you apply for Social Security, and they can increase the total amount you receive.

For federal employees, this is a golden opportunity. You’re already contributing to Social Security through your civilian job, but adding your military credits can give your benefits an extra push, leading to a more comfortable retirement.

Special Retirement Supplement for Law Enforcement and Firefighters

If you served in the military and transitioned into a federal civilian job as a law enforcement officer (LEO) or firefighter, you could be eligible for even more benefits. These roles come with unique retirement options, including a special retirement supplement. This supplement kicks in once you retire, filling the gap between your early retirement and when you’re eligible for Social Security at age 62.

For those in law enforcement or firefighting, it’s crucial to understand how your military service can add value to these specialized retirement plans. Combining your military service credits with the enhanced retirement perks available to LEOs and firefighters could significantly boost your overall retirement income.

Survivor Benefits for Your Loved Ones

Federal employees with military service also have an edge when it comes to protecting their loved ones. If you pass away, your military service years could help your spouse or other beneficiaries receive larger survivor benefits. Survivor benefits are designed to provide ongoing income for your loved ones after you’re gone, and the more years of service you have, the higher the survivor benefit payout.

By including your military service in your civilian retirement plan, you’re not only increasing your pension but also ensuring that your family will have greater financial security if anything happens to you. And since survivor benefits can be an important lifeline for families, maximizing this payout should be high on the list for any federal employee with military service.

VA Disability Benefits and Their Impact

It’s also worth noting that if you’re receiving disability benefits from the Department of Veterans Affairs (VA), this won’t reduce your federal retirement benefits. Many people assume that VA disability payments will be offset against their federal retirement pension, but this isn’t the case. You can receive both your full VA disability payments and your federal retirement pension without one impacting the other.

However, if you’re currently receiving military retirement pay, you may need to waive a portion of it to buy back your military time for credit under FERS or CSRS. It’s a trade-off that’s often worth making, but it’s important to weigh the pros and cons before deciding.

Don’t Forget About TRICARE and FEHB

For military veterans who qualify for TRICARE, the federal employee health benefits (FEHB) program offers another layer of protection. Federal employees can choose between keeping their TRICARE coverage or enrolling in an FEHB plan, but in many cases, combining the two can give you the best of both worlds. TRICARE offers low-cost medical coverage, while FEHB plans provide access to a broad network of providers and comprehensive coverage.

When you retire, you can continue your FEHB coverage for life, which is a major perk for federal employees. And if you’re eligible for TRICARE, you can use it as secondary insurance, filling in the gaps and reducing your out-of-pocket healthcare costs. This combination can provide peace of mind, especially as healthcare costs continue to rise.

Don’t Leave Money on the Table

The bottom line? Federal employees with military service have access to a treasure trove of benefits that can dramatically enhance their retirement. From military buyback programs that boost your pension to additional Social Security credits and survivor benefits, these little-known perks can make a world of difference.

But the key is to act. Too many federal employees leave money on the table because they don’t fully understand the benefits available to them or wait too long to take advantage of them. If you’re a federal employee with military service, now’s the time to start exploring your options and ensuring you’re getting every dollar you deserve.

Secure Your Financial Future by Leveraging Military Service

For those federal employees who have served in the military, the combination of civilian and military benefits can set the stage for a financially secure retirement. With a little planning and the right moves—like buying back military time, coordinating TRICARE and FEHB, and understanding how VA disability benefits factor in—you can enjoy a comfortable retirement and make sure your loved ones are well-protected. Now’s the time to take charge of your benefits and make sure you’re cashing in on every opportunity available.