Ask The Experts: Retirement

By Reg Jones

Combining military, civilian service

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Q. I have 20 years of active-duty service (Army E-6) and have just retired (actual retired date will be Dec. 1). I have been hired by the federal government as a GS-11. Would it be financially beneficial for me to buy back my military time and contribute it to my federal civilian retirement down the road? If I buy back my military time, will that 20 years allow me to retire from my civilian position early, maybe in 10 years with a total of 30 years of service? What is the impact or consequence of this on my military retirement?

A. Combining your active-duty and civilian service would allow you to retire with 30 years total service but only if you have reached your minimum retirement age. MRAs range between 55 and 57, depending on your year of birth. If you make a deposit to get credit for your active-duty service, do it as soon as possible. You’ll have an interest-free window that’s at least two years long. After that, interest begins to accumulate. One cautionary word: If you decide to make that deposit, when you retire, you’ll have to waive your military retired pay.

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  1. Eric Says:
    November 22nd, 2012 at 1:55 pm

    Suggest you keep your military retirement and do 10 years as a federal employee. After ten years and reaching your MRA, you’ll be eligible for a FERS pension of 10% of your high-3 salary.

  2. Tena Rench Says:
    November 23rd, 2012 at 10:07 pm

    I will have 18.6 years at 591/2, will my annuity be reduced? Or if I work until 60 will I receive a full annuity?

  3. Tena Rench Says:
    November 23rd, 2012 at 10:09 pm

    18.6 years @60- full annuity? with no penalty or 18.1 @ 591/2 will give me a reduction of how much? Thanks!

  4. Kate Says:
    November 25th, 2012 at 6:13 pm

    In a nutshell, if you retire at your MRA with at least 10 years of service, the reduction will be 5% for every year you are not 62. In order to not get a reduction, you would have to retire at MRA with at least 30 years, 60 with at least 20 years, or 65 with at least 5 years. Any combination that is less will give you a reduction unless you do a postponed. Therefore, retiring at 59.5 years with 18.6 years will give you a little over a 10% reduction. If you wait until you are 60 you will still have a reduction because you will have less than 20 years. See your local HR Specialist for more details.

  5. Kate Says:
    November 25th, 2012 at 6:14 pm

    Correction, 62 wih at least 5 years will give ou no reduction (not 65 years old).