Buying back military time?

[SGN]

Not sure exactly where to post this, but this seems to be the most reasonably place. When my husband was in the military, he didn't pay into the federal retirement system. Would it be worth it for him to make up that retirement investment in order to have those four years added to his total federal service? I think the amount we would have to come up with is around $2-3K. I don't think it will make any difference when he would retire, because he won't be at minimum retirement age when he hits 30, with or without the extra four years.

[Wrngway]

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.