Hello, I just started federal employment this July. I served Active Duty in the Army for 9 years from 2009 to 2018. In 2018 I joined the reserves. I will be going part time in my Federal job this Sept. Does it make since to by back my military time. Would it only be the 9 years on Active duty. When I retire from the reserves then would I still be able to collect my reserve pension and FERS? Does it affect disability that I receive from the military? – Katie
Micah Shilanski 00:05
You had great service, military service that we really appreciate, but then you transition from uniform service to civilian service, the question is, what do you do with that military time? Should you buy it back or not? And when do you buy that time back? If you’ve ever won their answers to those questions, and stay tuned for this FERS Federal Fact Check. Hi, I’m Micah Shilanski with Plan Your Federal Retirement, we have a great question that came in from Katie about military service, reserve service and civilian service, that’s kind of fun to put all of those things together, so let’s see what Katie asks. Katie says, Hi, I just started federal employment July one, i served active duty the army for nine years, 2009 to 2018, in 2018 I joined the reserves, and I’ll be going part time my federal job this September. Does it make sense to buy back my military time? It would only be nine years on active duty when I retire from the reserves, when I still be able to collect my reserve pension and FERS, does it affect my disability that I receive from the military? Katie, excellent question, you got a lot of moving pieces here. All right, a couple of things I’m gonna throw out some some cautionary facts for you, when you get to military buyback, it does get a little bit confusing when we have a guard component, you have this reserve component, which is great, it’s a huge benefit for you, if you talk to people that in traditional military service and they’re getting a pension there and say, hey, Katie, don’t buy it back, right? So you can’t double dip with this retirement. That is a correct statement, unless you’re in the guard of reserves you get to double dip. So my short answer is, of course, Katie, I don’t know your personal situation, but I will say I’ve never seen it where it does not make sense to buy back. It could theoretically not make sense to buy back, but I have never run across that ever, so I’m gonna guess that it really makes sense for you to buy this this back. The way that it would work is you can buy back your nine years of active duty time, and you need to buy that back right away. Why do I say buy it back right away? If you buy it back within first two years, which is kind of the first three within the first two years of federal service, there’s no interest assessed on that time you buy back, you just have to buy back roughly 3% of your base pay, now Katie, the great part about this, and by the way, we did a whole guide on how to buy back your military time, so shameless plug for that, maybe we’ll get a link inside of here, go check that out on kind of the steps and how this works, would be a great resource for you, but go and buy it back, so all you got to do is pay back 3% of your base pay, that’s not BH, that’s not deployment, that’s not all the extras you get, just 3% of your base pay, and all of those nine years count towards your federal service. Absolutely do that, otherwise, those nine years cannot help your federal service. Now it will count your reserve retirement, is great, but this is where you get to double dip. When your reserve you get to buy back that time, you also get to buy back your active duty reserve time, right? One week in a month, two weeks a year, etc. You need to point the time that you have, those are future things you’re probably going to want to buy back as well, and that’s going to help increase your federal service, which is always an excellent thing to do, you will still be able to get a reserve retirement, you can talk for your reserve retirement people on how that one is going to work and does this affect your VA disability that you have in military, nope it absolutely does not, you still get that. So the reserve retirement is really that best of the both world being able to double dip a little bit into that military pension and civilian pension, so I hope this made sense, go check out that military buyback guide, it’s going to give you break down a lot more details than I just did in a couple of minutes and be a great resource for you. If you have questions like this from Katie that come in says, hey, I got this complex question about my federal benefits, then go ahead and give us a call, let us know about that. We can just sit down one and work through this with you or just leave us a wish on your question, just like this and we’re going to be able to go ahead and get back to you on this FERS Federal Fact Check, until next time, Happy Planning!