Many federal employees with prior military service are curious about the possibility of buying back their military time to count toward their federal civilian retirement while still receiving their military retirement pay. The general answer is no, but there is a rare exception for certain combat-related retirements.
General Rule: Buyback Usually Requires Waiving Military Retirement
Under the Federal Employees Retirement System (FERS), federal employees can generally buy back their active-duty military service so it counts toward their federal civilian retirement. However, to take advantage of this buyback, you must typically waive your military retirement pay. Most people do not want to give up their military pension, which is why they usually do not buy back their military time unless there is a special circumstance.
The Exception: Combat-Related Special Compensation (CRSC)
An exception exists for those who receive Combat-Related Special Compensation (CRSC). CRSC is a special benefit provided to military retirees who have disabilities directly caused by combat. If your military retirement pay is classified under CRSC, you may be able to buy back your military time for FERS while still retaining your full military retirement pay.
In these rare cases, it is possible to benefit from both systems, sometimes referred to as “double-dipping,” due to your combat-related service and disability.
What Steps Should You Take?
If you think you might qualify for this exception, here are the steps you should follow:
- Check your military retirement classification to ensure it is under CRSC.
- Review your military pay documentation to confirm that your retirement pay is classified as CRSC.
- Request a military service earnings report to determine the cost of buying back your military time.
- Submit the correct buyback forms before you retire to avoid delays or complications.
Planning is essential to ensure your benefits are correctly set up and to prevent unexpected issues.
Final Thoughts
If you served in combat and were medically retired due to a combat-related injury, you may qualify for this unique exception. While not everyone will meet the criteria, those who do stand to gain a significant advantage. It’s wise to consult with a federal retirement specialist to verify your eligibility and ensure that all necessary paperwork is properly submitted.
ABOUT THE AUTHOR
Micah Shilanski, CFP®, is a distinguished financial planner known for his deep commitment to providing exceptional advisory services to his clients. As the founder of Plan Your Federal Retirement, Micah has dedicated his career to helping federal employees understand and optimize their benefits to ensure a secure and prosperous retirement. His expertise is widely recognized in the industry, making him a sought-after speaker and educator on financial planning and retirement strategies.
Micah’s approach is client-centered, focusing on creating personalized strategies that address each individual’s unique needs. His work emphasizes the importance of comprehensive planning, incorporating aspects of tax strategy, investment management, and risk assessment to guide clients toward achieving their financial goals.Micah Shilanski 00:05
What’s the exception to buying back your military time and still getting a military pension? If you’ve ever wanted to answer that question, then stay tuned for this FERS federal fact check. Hi, I’m Micah Shilanski, and welcome to plan your federal retirement in this special episode of the FERS Federal Fact Check. We have a great question from Walt. Let’s listen to what Walt has to say.
Walt 1 00:27
Hey, this is Walt. I’m retired Air Force, 22 years combat injury related, 100% disabled Veteran. I’m working civil service now. I’m going to retire after 15 years of civil service just found out about the military buyback, but I understand about by my military time back to get the years I lose my already Air Force retirement pay that I’m getting now. But I did see unless you are a combat injured veteran, at which I am so does that mean I can buy back my military time and also keep my Air Force retirement pay? Thanks a lot. Bye, bye.
Micah Shilanski 01:12
Well, that’s a great question, and kudos to you for doing your research. Right? There’s exceptions to almost every rule that’s out there, right? Even though the rules kind of apply to the majority of us. You are correct. There is an exception out there for your 22 years of active duty service in the Air Force. And what this is talking about is, if you have a disability that is directly related to a combat and that is called a combat related special compensation, if you get that, there might be an exception for you, and for a lot of contingencies in here, the documentation has to line up and say all this. But if that’s the case, if you got retired from the military due to a combat related special compensation package, then more than likely, you can buy back that military time and continue to get as a full military retirement and all of your other benefits. So it really is a great way to double dip in the benefits, because you served our country and you were injured in combat. That’s why the military and the government has these options for you. So documentation on this one rule is going to be absolutely key. Make sure you verify your pay, your retirement pay Classification. Make sure that’s correct, get the cost of the buying that back, and then complete, of course, all of the forms in order to do that. And doing it before you retire is always that better option for you. If you have questions like Walt, then jump on our website Plan-your-federal-retirement.com and you could be featured the next FERS Federal Fact Check. Till then, Happy planning.