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Pros and Cons of Buying Back Military Time

Written by Everett Bledsoe / Fact checked by Brain Bartell

pros and cons of buying back military time

When you have unspent military time, you have the option to buy it back. So, the dilemma is “to buy or not to buy?”

Know the pros and cons of buying back military time and make an informed decision. This article will list them for you!

Buying Back Military Time: PROS


Option to Retire with Full Benefits Early

To qualify for early retirement for FERs, you must:

  • Be at your lowest retirement age and have a minimum of 30 service years
  • 60 years old with a minimum of 20 service years
  • 62 years old with a minimum of 5 service years

If you choose to buy back military time, you may meet one among these following criteria and become eligible for early retirement.

For example, if you are 58 years old, have 15 years in civilian service, and have 15 years in military service, you can buy the 15 years back.

Once you do so, you will be able to obtain 30 years of creditable service time. Thus, you will be able to retire when you are 58 years old and not have to wait until you are 60.


 If you are a CSRS employee, the details differ, and a related matter is “catch 62 military buy back.” But this is a topic for another day.

Get More Upon Retirement

Your retirement pay depends on your service years. The FERS pension formula is:

  • Creditable Service Years * Salary (High-3) * Multiplier

So, for example, if your total creditable service years is 10, your salary is $200,000, and your multiplier is 1 percent, the gross annual FERS pension you are entitled to will be:

  • 10 x $200,000 x 1% = $10,000

To get a monthly pension value take $10,000 / 12 = $833,333333

Say you have (and bought back) 15 service years in the military, the creditable service will increase to 25 years. Your new gross annual FERS pension will be:

  • 25 x $100.000 x 1% = $25,000

And your monthly pension will be $2,083.33333

Increase Number of Leave Days Leave Accrual

The number of annual leave days a federal employee gets is affected by their years of service. On, it is said that most federal employees are entitled to:

  • 13 days each leaves year if they have 3 years of service but less than 15 years of service
  • 26 days each leaves year if they have 15 or more years of service

Therefore, if you are a federal employee who buys back military time, you have a higher number of service years under your belt and will qualify for more annual leave days.


The specific accrual of annual leave can depend on your duty type and other factors. Thus, refer to for details.

Faster Vesting of Thrift Savings Plan (TSP)

For service members, vesting of a Thrift Savings Plan requires a minimum of two years in service. If a service member contributes to a Thrift Savings Plan and leaves before they are vested, all the automatic and matching contributions they receive from the service will be forfeited.

In other words, it will take two years before the “service additions” officially belong to a member in service. If the service member decides to buy back military time, they can get faster vesting of their Thrift Savings Plan (TSP).


To learn more about the Thrift Savings Plan, check out

Improve Seniority Benefits in Current Job

When you buy back military time, you add to your creditable service time and are likely to retire earlier. This also means you become senior in your job and can therefore, enjoy better seniority benefits. For example, you might get:

  • The privilege of making the first cho
  • New assignments
  • Flexible working schedules
  • Relocation opportunities
  • Management openings
  • Day-offs
  • ice, like
  • The privilege of being the last to go (In other words: less likely to be laid off)
  • The privilege of being offered retention perks (i.e., nice cubicle, parking space, etc.)

Buying Back Military Time: CONs


Cost to buy back military time

Needless to say, you will have to shell out money to buy back military time and get service credits. The rate you need to pay is as follows (According to

  • 3 percent of your military basic pay if your date of service is through 12/31/98
  • 25 percent of your military pay (basic) if your date of service is 1/1/99 to 12/31/99
  • 4 percent of your military pay (basic) if your date of service is 1/1/00 12/31/00
  • 3 percent of your military pay (basic) if your date of service is 1/1/01 to the present

Interest Rates

There is a 24-month grace period to buy back military time without having to pay interest rates. If you decide to buy back your service time after this grace period, you will have to pay the rate above plus a Variable Interest Rate.

Here is a list of the Variable Interest Rates by year of service:

  • 375 percent in 2021
  • 250 percent in 2020
  • 75 percent in 2019
  • 125 percent in 2018
  • 875 percent in 2017
  • 0 percent in 2016
  • 0 percent in 2015

To get a clearer idea of the cost, use this online military service buy back estimator/ calculator.


The process of buying back military time is complicated. Even though there are general steps we can list for you to take, it is not as straightforward as it might sound. It is also time-consuming.

Here are the eight steps for the Buyback Program that the Defense Finance & Accounting Service provides:

  1. Fill out the Military Service Estimated Earnings Form (RI 20-97)
  2. Prepare proof of service
  3. Prepare records of pay and promotions
  4. Send your RI 20-97, proof of service, and records of pay and promotions to the National Personnel Records Center
  5. Complete the SF 3108 if you are enrolled in the Federal Employees Retirement System or
  6. Complete the SF 2803 if you are enrolled in the Civil Service Retirement System
  7. Submit your estimated earnings statement, DD 214, and SF 3108 or 2803 to your HR

If you work in the DCAA, DTIC, DFAS, DoDIG, NDU, DISA, or DAU, you should attach your information to send an email using USPS to the DFAS Shared Services Center. The DFAs is your HR office.

  1. The HR office will forward your submissions to the payroll office.
  2. Get an estimation of your deposit from your HR office
  3. Get the exact deposit amount and the instructions to pay it from the payroll office
  4. Make the payment
  5. Wait for the Paid-in-Full letter from your payroll officer

Frequently Asked Questions (FAQs)

Here are some common questions on the topic, so you do not have to scour Reddit.

What is the military buy back program?

This program allows Veterans who have had past or present active duty military service time to pay a certain amount of money to count the service time they had/have towards the total number of years in FERS service.

Can I buy back military time after retirement?

You cannot. You can only do this as a federal employee.

Is it possible to buy back reserve military time?

You can buy back the active-duty portion of your time in the Army reserves. Usually, you will still be eligible to receive reserve retirement.

Is it worth buying your military time back?

As we have outlined above, there are many benefits to buying back military time. However, there are cases where you should NOT buy back your time in service, such as when you have passed the grace period and the interest is too high.

What does buying back military time do for retirement?

When done right, the buying back pension can give you more every year compared to the fixed retirement!


Now that you know the pros and cons of buying back military time, you can make a call. Consider your own situation and tell us, will you buy back your service time? Drop your answer in the comments! Also, let us know why you chose what you did!

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