Key Takeaways
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If you retired from the military and are now working in the civilian public sector, you may be eligible to increase your future retirement income through a military service credit deposit.
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Making a military buyback could significantly boost your federal civilian annuity under the Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS).
Still Serving—But in a New Way
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This process is formally known as a military service credit deposit, often referred to simply as a military buyback.
Understanding the Military Buyback Program
The military buyback program allows you to make a one-time payment to have your active-duty military service time count toward your civilian retirement annuity calculation. This is available to employees under both FERS and CSRS, but the rules vary depending on your status and retirement system.
What Can Be Bought Back?
You can typically buy back any period of active-duty military service that was:
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Performed under honorable conditions
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Not already used to qualify for a military retirement based on 20+ years of active-duty service
However, if you’re receiving military retired pay, you’re usually required to waive it to receive credit under the civilian system—unless your military retirement was from a reserve component or a combat-related disability.
Timeframe to Act
You generally have up to three years from the date you first become covered under a federal civilian retirement system to complete the deposit interest-free. After this window, interest begins to accrue annually, increasing the total cost.
The Cost vs. Benefit
The service deposit is equal to a percentage of your military base pay:
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FERS: 3% of base military pay earned during service
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CSRS: 7% of base military pay earned
While this may seem like a considerable out-of-pocket expense, it can pay off significantly in the long run. The added years can increase your annuity, reduce the number of years needed for eligibility, or both.
For example, adding 5 years of creditable military time to your civilian career could lead to thousands more per year in retirement income for the rest of your life.
Eligibility and Exceptions
Reserve and National Guard Service
Generally, inactive-duty training, weekend drills, and annual training don’t count. Only periods of active-duty service under Title 10 or full-time National Guard duty under Title 32 that are not already credited toward a military pension can be bought back.
Disability Retirements and Special Provisions
If you’re receiving retired pay due to a disability incurred in combat or under combat-related conditions, you may be eligible to buy back time without waiving your military retired pay. Similarly, if your retirement pay is based solely on reserve service, you may still qualify.
How It Works in the FERS System
If you are covered under the Federal Employees Retirement System, your annuity is calculated based on your years of creditable service and your high-3 average salary. Buying back military time adds directly to your total years of service.
FERS Annuity Formula:
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1% x High-3 Salary x Years of Service
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1.1% if you retire at age 62 with 20+ years
So, adding 4 years of military service could increase your annuity by over 4%, which becomes a permanent increase in your annual pension.
CSRS and Military Time
For those under the legacy Civil Service Retirement System, the calculation differs slightly. Since CSRS offers a more generous accrual rate, the value of buying back military time can be even more impactful.
However, if you’re receiving military retired pay, you must waive that pay to receive credit under CSRS. Timing your waiver is critical and must align with your civilian retirement date to avoid a gap or denial.
What Happens if You Don’t Buy It Back?
If you don’t make a deposit, your military time won’t count toward your retirement annuity. You’ll still receive your military pension if eligible, but it will remain entirely separate from your civilian retirement.
Moreover, not buying back time could delay your retirement eligibility if you’re counting on those years to meet the minimum service requirement.
Process to Make a Deposit
To initiate the military service credit deposit process, you need to:
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Request your military earnings via the Estimated Earnings During Military Service form (RI 20-97).
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Obtain your DD-214 or other official proof of service.
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Submit the paperwork to your civilian HR or benefits office.
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Receive an official calculation of your required deposit.
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Make the payment—either in a lump sum or installments if permitted.
It’s important to complete this process early in your civilian career to avoid interest accumulation. Each passing year adds more cost.
Retirement Timing Considerations
In 2025, many public sector employees are approaching key retirement milestones. If you are turning 60 with 20 years of creditable service (including bought-back military time), you may be eligible for an immediate, unreduced annuity under FERS.
Similarly, under CSRS, the age and service combination of 55 with 30 years, 60 with 20 years, or 62 with 5 years applies. Buying back military time might help you reach these thresholds faster.
TSP and Military Time: Separate Accounts
Remember, the Thrift Savings Plan (TSP) is a defined contribution component of your retirement. Your military service does not increase your TSP balance unless you contributed during your military career.
However, buying back military time increases your defined benefit annuity, which provides lifetime income. The two work together to provide retirement security but remain financially separate.
Survivor Benefits and Military Service Credit
Military service credit also affects survivor annuities. If you pass away after retirement, your surviving spouse or family member will receive a portion of your increased annuity if you bought back your military time.
This can be particularly important for those planning survivor elections during retirement processing.
Common Misunderstandings
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You do not lose your military pension automatically by buying back time. You only need to waive it if you’re receiving active-duty military retired pay and want the service credited toward your civilian annuity.
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Not all military time is creditable. Make sure your service qualifies before initiating the process.
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It’s not automatic. You must apply and pay to receive credit.
Why Many Miss This Opportunity
This benefit is often overlooked because:
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Many assume it only applies to non-retired veterans.
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The process is complex and not well-advertised.
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Agencies may not always inform new employees of this option during onboarding.
Yet for those who understand and use it, the military buyback can result in thousands of additional dollars annually during retirement—every year, for life.
Take Full Advantage of What You’ve Earned
Whether you served 4 years or 24 years, your military service is a valuable asset. Don’t let bureaucratic processes or outdated assumptions prevent you from receiving the full value of that service in your retirement.
Even if you are within 5 years of retirement, it may still be worth exploring. While earlier is better, late is not the same as too late.
Learn More and Get Support
If you’re retired from the military and now working in a civilian public sector role, this is one of the most important financial decisions you can make. Don’t go it alone—get the facts, ask the right questions, and understand your full eligibility.
For personalized help reviewing your military time, retirement estimates, or calculating your buyback costs, speak with a licensed agent listed on this website. They can help you take the next step confidently.
