Military buyback


Q. I have been in the Federal Employees Retirement System as an Army civilian since October 1989 and contribute to TSP. I have active-duty Army time from 1979 to 1989 that I can buy back. I know I should have done this a lot sooner to avoid interest. But I didn’t. Would it still be a worthwhile financial option? I’ve done all the paperwork except to start making payments on the amount determined, which includes about $6,000 in interest and $3,000 for the original amount of the buyback. Would using a TSP loan to pay it all off make sense? I’m 52 and would like to retire around age 60.

A. This question is too complex to answer in a Q&A forum. You’ll need to consult a financial planner or analyst.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at


  1. The best thing to do is to check with your HR office, but specially with the person that handles retirement. They will need to gather certain information about you and give you an estimate of how much you will get for retirment if you pay the deposit or not.

    Based on what you have, you stated that you have been under FERS since 1989 and want to retire when your 60 (2020-2021). The current data shows that you will put in about 30-31 years of service.

    If you pay the deposit you will then have about 40-41 years of service.

    Remember that the formula for FERS annuity is:

    1% x high 3 average x years of service (for those under age 62)

    1.1% x high 3 average x years of service (62 and over)

  2. I would determine what my estimated retirement would be without a military buyback and then with the miltary buyback to see exactly what the difference is in my monthly amount before anything else.

  3. Mr. Miles is absolutely correct, by stating that this person needs to work with a professional in order to work out the answers being sought-after. If this person, were s/he to proceed with a more “routine” form of BuyBack, also already-been provided details regarding how much her/his retirement benefit package would be enhanced (i.e., in terms of the addition to her/his potential future monthly retirement income – re., that of the defined benefit portion, recalculated to consist of X-amount more dollars, as recalculated based upon X-additional Career Service Time), then it just becomes a series of math and probability problems to work out. If they haven’t already, his/her Human Resources area should be able to provide at least those initial recalculation figures, and get the ball rolling.

  4. Start paying back as much as you can pay. Right before its time for you to retire then start firguring out ways to finish paying off the buyback. You can take out a loan if need be but not a TSP loan because when you submit the paper work to retire it will become due in full.

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