In our previous guides, we may have missed a critical aspect of buying back military time, especially concerning the distinction between reserve military retirement and active duty military retirement. This article aims to clarify whether you can keep both reserve military retirement and FERS military retirement.
Understanding the Basics
The question of buying back military time often arises for federal employees with military service. This is a complex issue that requires a clear understanding of the rules and implications. Buying back military time allows you to count your military service towards your Federal Employees Retirement System (FERS) pension. However, there’s often confusion about how this affects your military retirement benefits, particularly for reservists and active-duty retirees. This complexity underscores the need for expert advice.
Active Duty vs. Reserve Retirement
- Active Duty Retirement: If you are retired from active duty, you generally must choose between receiving your military retirement pay and credit for your military service in your FERS pension. You cannot “double dip” by receiving military retirement pay and counting that service toward your FERS pension.
- Reserve Retirement: For reservists, the rules are different. If you are receiving reserve military retirement, you can keep your reserve retirement pay and your FERS retirement benefits. This means you can “double dip,” receiving both types of retirement benefits.
Steps for Reservists to Maximize Benefits
- Documentation: Ensure you have the necessary documentation, such as your DD 214 form, which verifies your active duty service. Proper documentation is not just important, it’s crucial. It’s the key to validating your service and applying it correctly, ensuring you receive your full benefits. Complete an SF 3108 Application to the agency’s HR office. HR will then Submit this to OPM. OPM typically takes 6-7 months to process.
- Work with HR: Work with HR to determine the deposit amount and payment method. The deposit can be paid in a lump sum or through payroll deductions over time. Many HR personnel may not be fully aware of the nuances between active duty and reserve retirement. Be prepared to educate them and ensure they understand the rules to correctly process your benefits.
- Records: Document and keep records of everything that was sent to HR and OPM.
- Confirmation: Once the deposit is paid in full, request a paid-in-full letter from HR. You can also request a new Certified Summary of Federal service showing “Deposit Paid” for that time.
- Consult an Expert: If you’re unsure about the process or how to maximize your benefits, it’s advisable to consult with a retirement specialist who understands federal benefits. They can provide personalized advice tailored to your specific situation.
Key Takeaways
- Active Duty Retirees: Must choose between military retirement pay and FERS pension credit for their military service.
- Reservists: Can receive both reserve military retirement pay and FERS pension benefits by buying back active duty time.
- Documentation and Education: Proper documentation and educating your HR department are essential steps to ensure you receive your full benefits.
Conclusion
Understanding the distinction between active duty and reserve military retirement is crucial for federal employees with military service. By following the correct steps, reservists can indeed receive both their reserve retirement pay and FERS benefits, maximizing their retirement income.
If you have further questions or need personalized advice on how to apply these benefits to your situation, contact us at Plan Your Federal Retirement. Our advisors are here to guide you every step of the way.
Micah Shilanski 00:03
Did we miss a huge and important part of buying back military time in our guide How To Buy Back Your Military Time? Rich thinks so. So if you’re wondering the answer to this question, then stay tuned for this FERS Federal Fact Check. Man, one of the things I just enjoyed so much about helping Federal Employees with their retirement is the complexity of your benefits. All right, I don’t enjoy it’s complex. I enjoy when we able to streamline it down to a simple matter, as simply as we can so you can help improve your retirement. We get a lot of joy in that helping transform people’s lives, and Rich brings up a really good question about a guide we recently put about the ultimate guide to buying back your military time. So let’s do a service go and read his comment, his question. He says, I just saw your guide to buying back military service. I purchased 11 years back, and it was the best decision I ever made. I didn’t see something in your guide that I thought was very important. There’s a huge difference between reserve retirement and active duty retirement, AKA regular retirement. As you state in your guide, active duty retirees must choose between their federal benefits and active duty retirement. However, those that are reservists keep both of their reserve retirement and FERS Military Retirement, as he did, and they do need to submit proof of their active duty time, usually on a DD-214, now he finds that many reservists that he talked to have the full suppression they can’t receive both retirements, but they actually can. I’d ask that you clarify this for reserve retirees so they can get their full benefit. Thanks for listening, thanks for all that we do. Rich. Rich, thank you so much I really appreciate you sending that out. You’re right, we did not mention that our guide was really intended, and we’re gonna go back and take a peek at this really intended for active duty retirement, not the reserve side of it. And you are correct. There is a great benefit you have as a reserves and we talked about this channel a lot, I think we even have a page on our website about this as well. You reserve retirement, you get a double dip, and it’s an amazing benefit we’ve helped a lot of clients with this. And Richard, again, you’re writing your comment you talk to a lot of reservists that don’t know this. Now, let’s be really clear, though, we can only double dip for a reservist, we cannot do it on an active duty retirement. So this a lot of confusion can come out there. So what can reservists do? Well, reservists, you can buy back your active duty military time. If you’re not a reservist, or you’re not in the wasn’t in the military, might be losing you right here, and that’s okay, forward this to a friend that was so they can better understand it. As a reservist, you shouldn’t have active duty reserve time and just reserve time, right? Your active duty reserve time you can absolutely buy back, and it follows the same rules that we outlined inside of the guide. The biggest difference is you still are eligible for that reserve retirement and you bought back your active duty time, so it’s going to count on the FERS side as well. So Rich, you absolutely can, documentation here is key, and you mentioned that again in your post. Rich, do you need a job by the way, maybe you should contact us. I would love that. So you mentioned this in your post. You got to be able to show records of that, and that’s going to be the DD-214. This also is fairly confusing I find to HR personnel, so this would probably something you want to spend a little bit more playing even more time in this process, because we might need an education period with our HR team to get them up to speed on what these rules are, again your benefits are complex, and not everybody is going to have all those answers, so sometimes you run into people that don’t know this, no problem, we’re going to spend some time educating them to make sure you get the best benefit. So if you have questions like this or comments that you think we did wrong, send them our way, we’re always looking to improve. I love this additional feedback that Rich has given us. It’s fantastic, and if you have questions about how to apply these benefits to your personal situation, then, give us a call, sit down with one of our advisors, and let’s see how we can help you out. Till next time, Happy Planning!