Can I Get FERS and Military Retirement? Buyback, Waiver and VA Rules for 2026

Yes, you can get FERS and military retirement together, but the same active-duty years count in both only in narrow cases.

Yes, you can get FERS and military retirement at the same time. Military years count toward FERS only after a deposit of 3% of military basic pay is paid before separating, and active-duty retirees generally must waive retired pay to credit those years unless it is reserve or combat-disability retired pay.

By Craig Wear, CFP® | Last reviewed: October 15, 2026

Can I get FERS and military retirement?

Yes, you can get FERS and military retirement at the same time; the rule that matters is whether one stretch of active duty can count in both. Neither benefit is reduced because the retiree also receives the other.

The limit is on double-counting service. Under 5 U.S.C. 8411(c)(2), active duty that forms the basis of military retired pay cannot also be credited in FERS unless the retired pay fits an exception. Veterans fall into one of three paths:

1. Veteran with no military retired pay: collects FERS, and can add active-duty years to it by paying the military deposit.
2. Active-duty military retiree: collects both checks with no buyback, or waives retired pay and buys back the years so they count only in FERS.
3. Reserve or combat-disability retiree: can keep the military retired pay and also buy back the active duty for FERS credit.

The rest of the FERS benefit, including the formula and minimum retirement age, works the same as for any employee and is covered in FERS retirement explained.

Does military time count toward FERS without a buyback?

No, post-1956 military time does not count toward FERS for any purpose unless the deposit is paid. OPM’s training material for benefits officers puts it plainly: deposit paid means full credit for title and computation; no deposit means no credit for either.

That cuts both ways. The deposit raises the annuity, and it can also create eligibility. The CSRS and FERS Handbook gives the example of a 58-year-old with 8 years of civilian service and 3 years of post-1956 military service: with the deposit he can retire under the MRA+10 provision, and without it he must wait until 62 (OPM CSRS and FERS Handbook, chapter 23).

A common misconception is that CSRS-style rules apply. The age-62 recalculation that strips unpaid military time from a CSRS annuity does not exist under FERS, because unpaid time is never credited in the first place. Another misconception concerns the supplement: 5 U.S.C. 8421(b)(4)(C) says that for the FERS annuity supplement, service does not include military service. Bought-back years can help someone reach MRA+30, but the bridge payment until 62 is figured on civilian years only, which matters most for early retirees such as those in federal law enforcement retirement.

How much does it cost to buy back military time under FERS?

The FERS military deposit costs 3% of the military basic pay earned during the period being bought back, plus interest if it is paid late. The rate is 3.25% for service performed in 1999 and 3.4% for service in 2000, then returns to 3% (5 U.S.C. 8422(e)(1)).

Basic pay means base pay only: OPM’s handbook excludes allowances, flight pay and combat pay. The figure comes from the finance center’s estimate on Form RI 20-97 or from actual pay records.

Interest is where timing matters. Under 5 U.S.C. 8422(e)(2), interest begins two years after the employee first becomes subject to FERS following the military service, then compounds annually. Because interest posts once a year on the employee’s interest accrual date, OPM notes that a deposit paid in full before the first accrual date is in effect interest free for about three years. For 2026, the Treasury rate is 4.25%, with composite rates of roughly 4.26% to 4.38% depending on the accrual date.

Two smaller rules surprise people. A deposit must pay for a full distinct period of service, and a partial payment that completes no period is refunded (5 CFR 842.307(d)). Under FERS, a refunded military deposit can never be repaid.

Do you have to waive military retired pay to buy back military time?

Yes, an active-duty military retiree generally must waive military retired pay to have those same years credited under FERS, unless an exception applies. OPM lists the exceptions on its military retired pay page: retired pay awarded for a service-connected disability incurred in combat with an enemy of the United States, retired pay for a disability caused by an instrumentality of war and incurred in the line of duty during a period of war, and reserve retired pay under chapter 1223 of title 10.

OPM accepts the military finance center’s determination of whether retired pay falls under an exception and which service it is based on (5 CFR 842.306(c)). The bar applies only to the period that forms the basis of the retired pay, so the handbook treats military service that was not used to compute retired pay as creditable with a deposit (OPM Handbook, chapter 22).

Reserve retirement pay normally starts at age 60, and 10 U.S.C. 12731(f) lowers that age by three months for each aggregate 90 days of qualifying active duty after January 28, 2008, but not below 50. Because the chapter 1223 exception does not depend on age, a reservist can buy back mobilization periods for FERS and still draw reserve retired pay when eligible. Service members weighing a military TSP alongside a civilian TSP should also know the uniformed services and civilian TSP accounts are maintained separately and can be combined only after leaving one of the two services.

OPM says the waiver should reach DFAS U.S. Military Retirement Pay in Indianapolis at least 60 days before the planned retirement.

How does VA disability interact with FERS and military retirement?

VA disability compensation is separate from military retired pay, so it does not block a military buyback and is not waived to get FERS credit. OPM’s handbook states directly that benefits from the Department of Veterans Affairs are not military retired pay (chapter 22).

That produces three practical outcomes:

• Veteran with VA compensation and no retired pay: can buy back active duty with no waiver at all, and the VA payments continue.
• Military retiree with VA compensation: must still waive retired pay for civil service purposes even if part of it is already waived to receive VA compensation. The handbook adds that a nondisability civil service retiree does not have to renounce the VA benefits to get military credit.
• FERS disability retiree: different rules apply. VA payments made in lieu of military retired pay can block military credit in a disability annuity, which is covered in FERS disability retirement.

Concurrent Retirement and Disability Pay restores retired pay that would otherwise be offset for retirees rated at least 50% (10 U.S.C. 1414), which can make keeping the military retired pay more valuable. VA disability compensation itself is not taxable income under IRS Publication 525, while both military retired pay and the FERS annuity generally are.

How do you buy back military time for FERS?

You buy back military time by getting a basic pay estimate from the military finance center, applying through your agency, and paying the full deposit before you separate. The sequence below follows OPM’s procedures and the current RI 20-97 form.

1. Gather proof of service. Locate the DD 214 (or request it on SF 180) for every period of honorable active duty after 1956, since each distinct period is bought back as a unit.
2. Request estimated earnings. Send OPM Form RI 20-97 with the DD 214 to the finance center for the branch (DFAS Indianapolis for the Army, Navy, Air Force and Marine Corps); the February 2026 form notes that the Ask DFAS online upload tool speeds processing.
3. Apply through the agency. Complete the employee section of SF 3108 and give it, the RI 20-97 estimate and the DD 214 to the agency HR or benefits office, which computes the 3% deposit and any interest.
4. Pay by lump sum or payroll deduction. The agency sets up the account; installments must be at least $50 under 5 CFR 842.307, and interest keeps accruing on any unpaid balance after the grace period.
5. Waive retired pay if it applies. A military retiree who is not covered by an exception writes to DFAS at least 60 days before retiring to waive military retired pay for civil service retirement purposes.
6. Finish before separation and keep the receipt. The full deposit for each period must be paid before leaving federal service; the paid-in-full record goes into the retirement file that the agency sends to OPM.

Deadlines that cost veterans credit

The firm deadline is separation. Under 5 CFR 842.307(a)(3), the deposit must be completed before separation from service, and OPM’s training material says a deposit made at the time of retirement must be paid in a lump sum.

Timing is most critical for employees who leave before retirement eligibility. A separated employee cannot make the deposit later, so the military years would be missing from a FERS deferred retirement annuity. The handbook also says an employee who will postpone an MRA+10 annuity must pay the deposit before separating.

Is buying back military time worth it? A 2026 worked example

For a veteran who is not a military retiree, the buyback usually adds far more annual income than it costs; for a 20-year active-duty retiree, waiving retired pay to do it usually lowers total income. The two hypothetical cases below show why, using the FERS formula of 1% of high-3 salary per year, or 1.1% at 62 or older with at least 20 years of service, and the military multiplier of 2.5% per year under the legacy High-3 plan (10 U.S.C. 1409).

Case A shows the hidden lever: the four bought-back years lift total service from 16 to 20, which switches the multiplier on every year from 1.0% to 1.1%. If the same $3,300 balance were left unpaid past the grace period, one year of interest at the 2026 rate of 4.25% would add about $140.

Case B shows why waivers are uncommon among active-duty retirees: the military multiplier is 2.5% per year (2.0% under the Blended Retirement System) versus 1.0% or 1.1% under FERS. Military retired pay also generally gets the full CPI increase (10 U.S.C. 1401a), while 5 U.S.C. 8462 caps most FERS COLAs and pays none to regular retirees before 62. A waiver can still fit narrow cases, such as small retired pay or needing the years for eligibility, which a planner who works with military officers or the agency benefits office can model.

How does a military buyback affect taxes and Roth conversions?

A military buyback is paid with after-tax dollars and recovered tax free over the life of the annuity, while the larger pension it creates is taxable each year. IRS Publication 721 says that when you pay into the plan to receive credit for service not subject to retirement deductions, the entire repayment, including interest, is part of your cost, and you cannot deduct the interest. That cost is then excluded from income gradually under the rules described in how a pension is taxed.

A larger annuity also changes the tax picture for the TSP. Extra pension income fills bracket space that might otherwise hold Roth conversions or TSP withdrawals, and it stacks with Social Security, which becomes taxable above $32,000 of provisional income for joint filers. The years between retirement and the start of the annuity or Social Security can be the lower-income window discussed in Roth conversions before your pension starts and TSP Roth conversion rules for federal employees.

Active duty after 1956 was also covered by Social Security, and FERS has no age-62 reduction for military service like the one CSRS applies when a deposit is unpaid; how that third leg fits is covered in do federal employees get Social Security.

Frequently asked questions

This article is for educational purposes only and is not individualized investment, tax, or legal advice. Consult a qualified professional about your specific situation.