Thread: Buying back military time?

Without knowing all specifics surrounding your circumstances I would say that generally it's a good idea. I began a federal career last March. I had about 7.5 years of active duty in the Navy and am currently buying back my time. I owed close to $8k.

If your husband retires at the minimum retirement age than his four years will equate to an increase in pension payments of 4% of his high-3. If he retires at 62 than it would equal 4.4% of his high-3.

You all will have to look at your particular circumstances before deciding though. It may not be worth it if he is not going to retire as a federal employee and will not recieve a pension. Here are some things to consider:

-Military Service can be bought back over 3 years without incurring interest. Any remaining amount will incur interest after that time. (I set up an allottment from my pay so that my service will be bought back a few months before that deadline) This is a good thing, so don't take too long to decide which way to go. I bought a CD from my savings to offset my allotments as opposed paying it back in one lump sum.

-Payments made to buy back service ARE NOT tax deductible. Trust me, I checked.

Now, I just want to caveat that this is based on my experiences. Check with HR as far as specifics on interest incurred and the time at which it will start accumulating.