Military Buy Back
It is almost always a good idea to do “Military Buy Back” because it can
increase your monthly retirement check.

Military Buy Back

Payments to capture military service credit
The armed services began deducting Social Security from military pay on January 1, 1957. Congress enacted a law in 1982 giving employees the opportunity to make a deposit into their civilian retirement system for active duty military time served after that date (no deposit is required for service before that date). Individuals who make the deposit are entitled to credit for the military service under both the Social Security systems and the applicable civilian retirement system.

Military service for this purpose is honorable active duty service in the following uniformed services: Army, Navy, Air Force, Marine Corps, and Coast Guard. You also may receive credit for Army National Guard or Air National Guard service that is followed by federal civilian re-employment that occurs after August 1, 1990, when all of the following conditions are met:

  • The service must interrupt civilian service creditable under CSRS or FERS and be followed by re-employment in accordance with the appropriate chapter of the laws concerning veteran benefits
  • It must be full-time, not inactive duty; and
  • It must be under a specified law and you must be entitled to pay from the U.S. for the service

FERS – If you are covered under FERS, you will receive retirement credit for military service only if a deposit for military service is made. The deposit equals 3 percent of basic military pay (not allowance or differentials) you received for the post – 1956 military service, except for periods of service performed during 1999 (3.25 percent) and during 2000 (3.4 percent).

CSRS – If you were first employed under CSRS on or after October 1, 1982, you will receive retirement credit for post-1956 military service only if a deposit for the military service is made. The deposit equals 7 percent of basic military pay (not allowance or differentials) you received for the post-1956 military service except for periods of service performed during 1999 (7.25 percent) and during 2000 (7.4 percent).

Payments to CSRS and FERS to capture military service entail additional amounts of interest. No interest will be computed if a deposit for military service is made within two years after the date you first became employed. If the deposit is not completed in the two year period, interest will be posted to your account one year after the two year period; thus the total effective interest-free period is three years minus one day. Any required deposit for post-1956 military service normally must be made before retirement in order to be creditable for eligibility in computation for retirement purposes.

We provide assistance with the necessary forms and computations required to make the deposits. Each military branch has a different address to mail to. Contact us for steps to take.