buying back military time

dishdawg901 Rookie Va Beach

someone kinda posted this in some other area but i figured i'll ask it here where i might be more likely to get an answer.

i've heard about "buying back" military time in the FAA, can anyone explain how this works?

Thanks

polo708 Epic Member tower

You basically have to pay the taxes on your military time if you want to use them towards your retirement. My 8 years will run me about $3,000 and I think you have like 2 years to pay it.

I'll make that money back easily like the first few months of retirement. Its well worth the investment.

Im not too keen with the details, but those are the basics and how they were explained to me.

atcguruaf Rico Suave AZ

you actually have your whole career to pay it... the first 2 years of your career is interest free. I don't know the formula, nor know anyone that does, but as long as you didn't retire from the military, you can buy it back. The sooner the better.

JP13 Senior Member momoville

I cant find the reg that says this, but this is what i heard...You have to pay 2 percent of your Base pay for your entire military career. Not BAS/BAH, but just base pay.

dishdawg901 Rookie Va Beach

thanks guys sounds like a solid plan. so you buy it back and that time goes towards retirement? so if one could retire after 25 years in the FAA, if i were to buy back my time (which would be 9 years) i would only need 16 more in the FAA to retire? or would i have to still do the 25 but get retirement for 34?

polo708 Epic Member tower

no, no... you still need to do the 25 years. They will just tack on the extra 9 to your benefits.

So you will be paid as if you put in 34 years in the FAA

atcguruaf Rico Suave AZ

I haven't been able to find the exact document, however, the one you fax is the RI 20-97. A brief tidbit of info is at Estimated Earnings


i've been trying to search at DFAS -- HOME if any of you care to join in the search.

Roddy_Piper Resident Knucklehead Vegas baby

u still need to qualify for retirement based on good time. your military buy back time is NOT good time. it's just added on as a bigger retirement.

mills3ff Junior Member Port Orange

JohnnyB Newcomer

Here's the most recent OPM document explaining how it works: http://www.opm.gov/retire/pubs/handbook/C023.pdf

It's a lot of government mumbo-jumbo; you'll fall under FERS, which starts around pg 43 of the document. Basically, the first two years in the agency are interest free, but since interest is accrued annually, if you pay the full sum within 3 years, you'll still be able to buy it back interest-free. Per the document, any unpaid sum after the second year point will have annual interest of 8.75% tacked on to it, so the sooner you buy it back, the less you'll have to pay. People at work are telling me that as soon as you START buying it back, it freezes any interest and you can keep making small, regular deposits for many years, interest free. They say they're doing that, but I can't find supporting info in this document. But if that's the case, all you have to do is start paying before two years in the agency and you'll never pay any interest.

As a bonus, I think if you do over 30 years, when you calculate your retirement, you factor in 3% for ALL 30 years of service, as opposed to 1.3% or something. That's hearsay - I'm in the midst of researching it, but buying back military time and then putting in the necessary time to hit 30 sounds like a great deal!