You can generally receive both a FERS annuity and military retirement pay, but the rules depend on how you retired from the military. If you retired from the Reserves or National Guard, you keep both checks in full and can still have your military years counted toward your FERS annuity. If you retired from a regular active-duty career, you have to choose: keep the military pension as is, or waive it so those years count in your FERS computation. A separate, more generous path exists for veterans whose military retirement was based on a combat-related disability.
Reserve and Guard Retirees Keep Both
Federal law treats reserve retirement as “non-regular” retirement under Chapter 1223 of Title 10. If you fall in that category, you can draw full military retired pay and a full FERS annuity at the same time, with no offset. You can also pay the military service deposit and get those reserve years credited in your FERS computation without touching your military pension.1Office of the Law Revision Counsel. 5 USC 8411 – Creditable Service The rule reflects that reserve service is typically part-time and doesn’t duplicate a full civilian career.
Combat-related disability retirees get the same concurrent treatment. If your military retirement was based on a disability incurred in combat with an enemy of the United States, or caused by an instrumentality of war during a period of war, you keep the military disability pay and can still have the service credited in FERS.3U.S. Office of Personnel Management. Military Retired Pay
Regular Retirees Have to Choose
If you completed a full active-duty career and draw a regular military pension, you cannot have those same years count in your FERS annuity while still collecting military retired pay for them.2Office of the Law Revision Counsel. 5 USC 8411 – Creditable Service To get FERS credit, you must formally waive your military retired pay.
The waiver is a written request to the Retired Pay Operations Center, submitted at least 90 days before your civilian retirement date. OPM’s suggested language reads: “I [full name and military serial number] hereby waive my military retired pay for FERS purposes effective [the day before your annuity begins].” The waiver takes effect the day before your FERS annuity starts, and once your FERS annuity is finalized, the waiver is permanent. You cannot reverse it later.4U.S. Office of Personnel Management. When and How Do I Waive My Military Retired Pay
Waiving the pension by itself doesn’t buy you FERS credit. You also have to pay the military service deposit before you separate from federal service.5U.S. Office of Personnel Management. Military Retired Pay Miss that, and you lose the military pay and get no FERS credit for those years.
What the Buyback Costs
The deposit is 3% of the total military basic pay you earned during your service after December 1956.6Office of the Law Revision Counsel. 5 USC 8422 – Deductions From Pay, Contributions for Other Service Six years of active duty at $150,000 in total base pay works out to a $4,500 base deposit before any interest.
The process runs through two forms. You send RI 20-97, “Estimated Earnings During Military Service,” to your branch’s finance center (DFAS for Army veterans, for example), and it comes back with a year-by-year record of your base pay.7U.S. Office of Personnel Management. Retirement and Insurance Forms You then submit SF 3108, “Application to Make Service Credit Payment for FERS,” to your agency’s HR office along with the earnings record.8U.S. Office of Personnel Management. Service Credit Payroll calculates the balance and bills you, and you can pay in a lump sum or through payroll deductions.
You’ll also want a copy of your DD Form 214. If you don’t have one, you can request it through the National Archives’ eVetRecs tool with an ID.me account, or through the milConnect website depending on your discharge date.9National Archives. DD Form 214 Discharge Papers and Separation Documents10Veterans Affairs. Request Your Military Service Records Including DD214
The deposit has to be paid in full before you separate. If you’re inside six months of retirement, OPM recommends filing SF 3108 with your retirement application.8U.S. Office of Personnel Management. Service Credit
Interest Makes Delay Expensive
Newly hired federal employees get a two-year interest-free window. Pay the full deposit within roughly three years of your entry-on-duty date, and you owe only the base 3%.6Office of the Law Revision Counsel. 5 USC 8422 – Deductions From Pay, Contributions for Other Service After that, interest compounds annually on the unpaid balance. The 2026 rate for military service credit accounts is 4.25%.11United States Office of Personnel Management. Calendar Year 2026 Interest Rate
A $5,000 base deposit left alone for 15 years at roughly 4% compounding grows to more than $9,000. Veterans who wait a decade before starting often find interest has nearly doubled the bill. If the buyback is on your list, starting early saves real money.
What the Extra Years Buy You
The FERS basic annuity is your high-3 average salary multiplied by a percentage for each year of creditable service. The multiplier is 1% per year, or 1.1% if you retire at 62 or later with at least 20 years of total service.12U.S. Office of Personnel Management. Computation
Add five bought-back years at a $95,000 high-3, and you’re adding $4,750 to your annual annuity at 1%, or $5,225 at 1.1%. Bought-back years also count toward the 20-year threshold that unlocks the higher multiplier, which can bump every credited year up.
One boundary worth naming: military years generally do not count toward the FERS Special Retirement Supplement, the bridge payment some retirees get between retirement and age 62. The supplement calculation uses only civilian FERS-covered service.
Is the Waiver Worth It
For reserve and Guard retirees the answer is almost always yes. You keep the military pension, and the FERS annuity grows for the price of the 3% deposit plus any interest.
For regular active-duty retirees, the tradeoff is real. You’re giving up guaranteed monthly military pay in exchange for a larger FERS annuity. Take a veteran with a $2,000/month military pension and a $90,000 high-3 buying back six years: the FERS increase at the 1% multiplier is roughly $450 a month. Trading $24,000 a year in military pay for $5,400 a year in FERS pay never breaks even.
Change the facts, and the math changes. A veteran with four years of service and a $900/month military pension is giving up much less to gain FERS credit, and COLAs and survivor effects tilt the comparison further. Veterans with shorter military careers and smaller pensions tend to benefit most from the waiver; those with 20-plus-year careers and substantial retired pay usually do better keeping the pension. Ask your agency’s benefits counselor for a personalized estimate before you commit, because the choice is permanent.
Effect on Your Survivor’s Annuity
If you paid the deposit and had your military service included in your FERS annuity, your surviving spouse’s FERS survivor annuity reflects those years too. If your survivor is also entitled to a military survivor benefit based on the same period of service, the FERS survivor annuity is reduced by the amount of the military survivor payment. Children’s survivor benefits are not offset.13U.S. Office of Personnel Management. Will My Deceased Spouse’s Military Service Be Used to Determine the Amount of My Survivor Annuity
Skip the deposit, and the military service does not enter the survivor annuity computation at all. That’s a reason to settle the deposit question well before retirement.
Social Security and Military Pay
FERS retirees also collect Social Security. If you served after 1956, Social Security taxes were withheld from your military pay and those earnings already count toward your benefit. For service between 1957 and 2001, SSA credits extra earnings on top of your actual pay: $300 per quarter from 1957 through 1977, and $100 extra for every $300 of active-duty basic pay from 1978 through 2001, capped at $1,200 per year. Service after 2001 gets no extra credit.14Social Security Administration. Military Service and Social Security
FERS employees are not exposed to the “Catch-62” reduction that affects some CSRS retirees. Under FERS, if you don’t pay the deposit, the military years simply never count in your annuity. There’s no delayed reduction at age 62, but there’s also no credit without the deposit.