Has anyone done Military Buyback? Is it worth it? Is it a crazy amount to buy back?

2016-06-16T14:12:54-04:00

Response by SGT David T. made Jun 16 at 2016 2:36 PM

2016-06-16T14:36:07-04:00

Mine was about $2.5k for 9 years. $25 a check isn't bad.

Response by Sgt Christopher Wenzel made Jun 16 at 2016 2:37 PM

2016-06-16T14:37:29-04:00

It would cost me about $122K to buy back my military time to civilian service. Which is insane, even for a GS-13.

Here's the link for the estimate:

http://www.dfas.mil/civilianemployees/militaryservice/militaryservicedeposits/estimator.html

Military Buy Back Estimator

Response by CAPT Kevin B. made Jun 16 at 2016 3:16 PM

2016-06-16T15:16:53-04:00

You have to finish your number crunching Sgt Christopher Wenzel . Take the number of years the $122K buys and apply either the 1% or 1.1% factor depending on the number of years total CS that will turn out to be. Apply that to the estimated future high three you'll be at. Then normalize both to present value and you have a choice. Do nothing (maybe because you can't) with $122K, start making payroll deductions on the $122K at the Treasury interest rate (very low), or increase your TSP and see what that result forecasts. Mine turned out to be a no brainer. In the '86-88 timeframe I bought 10 years of credit for $10K. That is netting me over $14K/year on my annuity starting in 2013. That turned out to be a no brainer but at the time, looking out 25 years later was tough. I was an early FERs type having got off AD after the CSRS cut off date. That meant I had to pony up 3% of my total base vs. 7% if I went CSRS. Check out: http://www.federalretirement.net/militarybuyback.htm for some more details. Also consider if buying time equates to having an earlier annuity in the bank and the time to do another career along with its retirement stream. Lots of options to look at.

Military Service Credit, Buyback Options for CSRS and FERS Retirement

Federal CSRS and FERS retirement annuities decrease when you reach age 62 if you are eligible to collect Social Security and had active military service and didn't buy back your military time.

Response by TSgt William Meyer made Jun 16 at 2016 4:31 PM

2016-06-16T16:31:15-04:00

When I did it they took it right out of my check and I never even noticed it.