Federal employees with military backgrounds often wrestle with a complex question that could impact their lifetime retirement income by tens of thousands of dollars. If you’re wondering Can I get FERS and military retirement, the answer involves understanding a specific deposit system that many employees overlook. This decision affects not just your monthly benefits, but your long-term financial security.
Clarify when a federal employee can receive both FERS and military retirement, how deposits/redeposits work, and how different choices affect long-term income.
Can I Get FERS and Military Retirement?
Yes, you can receive both FERS and military retirement benefits, but only if you make a military deposit to purchase credit for your military service time under the federal retirement system. Without this deposit, you face a choice: receive your military retirement pension or include your military service years in your FERS benefit calculation. The military deposit process allows you to keep your military retirement while gaining additional federal pension credit for those same service years. If you need help navigating the deposit process, consult a FERS retirement lawyer.
How Military Service Credit Works Under FERS
The Federal Employees Retirement System treats military service as creditable time, but this credit doesn’t happen automatically. You must take specific action to secure this benefit.
When you start federal employment, your military service years initially count toward your FERS calculation. However, if you’re receiving military retirement pay and haven’t made a deposit, those years get removed from your federal pension calculation when you retire. This removal prevents what the system considers “double credit” for the same service time.
Your military years can substantially boost your federal pension if you handle them correctly. Each year of military service you purchase adds to your FERS pension calculation. If you have 20 years of federal service and purchase 4 years of military credit, your pension calculates as if you had 24 years of federal service.
This claim requires verification from official FERS benefit calculation documentation not provided in the search results.
Understanding the Military Deposit System
Making a military deposit means paying into the FERS fund to purchase credit for your military service. Military service deposits are required to receive credit for military service under FERS, and interest accrues on the deposit amount from the federal employment start date until payment completion, but the specific calculation methodology should be verified through official OPM guidance.
You can pay this amount as a lump sum or through payroll deductions over time. Interest continues growing until you complete the full payment, making earlier deposits generally more cost-effective.
Once you complete the deposit, your military years become permanently credited under FERS. They count toward both your years of service calculation and your high-three average salary determination, potentially increasing your federal pension by 1% to 1.1% for each year of military service.
Interest accrues on military deposits from your federal employment start date until payment completion, making earlier deposits generally more cost-effective, though specific interest rates and cost projections depend on current federal rates. However, you can make payments over time through payroll deduction, spreading the cost and managing cash flow.
Your Three Strategic Options
Federal employees with military service face three distinct paths, each creating different outcomes for total retirement income:
- Option 1: Receive Military Retirement Only
You can collect your military retirement without making any deposit to FERS. Your federal pension calculates based only on your civilian service years, and your military time won’t count toward FERS at all.
This option makes sense for employees with relatively short federal careers or those whose military retirement substantially exceeds the potential FERS increase. Some find the deposit cost prohibitive relative to their expected federal service time.
If your military retirement provides $2,000 monthly and purchasing military credit would only increase your FERS pension by $300 monthly, you might reasonably choose to skip the deposit and keep things simple. - Option 2: Make the Deposit and Receive Both Benefits
By completing the military deposit, you receive your full military retirement plus the enhanced FERS benefit that includes your military years. This approach often provides the highest total retirement income.
You’re not choosing between systems; you’re adding federal retirement credit on top of your existing military retirement. Your military pension continues unchanged, while your FERS pension calculates as if all your military and civilian years were federal service.
This strategy works particularly well for employees with long federal careers ahead. The additional FERS credit compounds over many years of federal salary increases, often producing substantial returns on the deposit investment. - Option 3: Don’t Make the Deposit, Keep Military Years in FERS
If you don’t make a deposit and don’t receive military retirement pay, your military years remain credited under FERS automatically. This situation typically applies to service members who left the military before becoming eligible for retirement benefits.
Your FERS pension calculates using both military and civilian service years without requiring additional payment. However, if you later become eligible for military retirement benefits, you’ll need to choose between receiving those benefits or keeping the FERS credit.
Calculating the Financial Impact
The financial impact of making a military deposit varies greatly based on your specific circumstances and career trajectory.
The optimal choice depends on your specific circumstances: current age, federal salary trajectory, military retirement amount, and life expectancy projections. Generally, making the deposit proves financially beneficial for employees planning extended federal careers.
The financial benefit of making a military deposit varies based on individual circumstances, including current salary, years of service, and deposit amount, and employees should consult with their agency’s personnel office for personalized calculations.
The math becomes more compelling when you factor in survivor benefits. FERS provides automatic survivor protection, while military retirement requires separate elections and costs for survivor benefits.
Your current federal salary level substantially impacts the deposit’s value. Higher-paid employees see larger pension increases from military credit because FERS calculates benefits as a percentage of salary.
The timing of your federal retirement also matters. Employees retiring at age 62 or later with 20-plus years receive 1.1% per year instead of 1%, making military credit more valuable for those meeting these criteria.
Understanding Key Misconceptions About Military Service Credit
Several persistent myths confuse federal employees about their military service options, potentially costing thousands in retirement income:
“You Can’t Double Dip”
Many employees believe receiving both military retirement and FERS credit for the same service violates some “double dipping” rule. This misconception stems from confusion about other government employment situations.
FERS specifically allows this arrangement when you make the required deposit. You’re not double dipping because you’re paying into the federal system to purchase credit for your military time. The deposit represents your employee contribution that you never made during military service.
“The Military Deposit Never Pays Off”
Some employees avoid making deposits, believing they’re too expensive or won’t provide adequate returns. This misconception often results from focusing only on the deposit amount rather than the long-term benefit increase.
Military deposits provide increased pension benefits that can substantially improve long-term retirement income, though the financial return depends on individual circumstances, including deposit amount, salary trajectory, and retirement timeline.
“You Must Decide Immediately”
While making deposits earlier costs less due to interest accrual, you can make this decision at any point during your federal career, even shortly before retirement. However, waiting increases the total cost and reduces the time you’ll benefit from higher pension calculations.
Strategic Timing and Special Considerations
The timing of your deposit decision substantially impacts both costs and benefits, making strategic planning necessary for maximizing your retirement income.
Federal military deposit provisions are subject to legislative changes, and employees should stay informed about potential modifications to current law.
Staying informed about potential legislative changes helps you time your decision optimally. However, don’t delay indefinitely waiting for rule changes that may never materialize or might make deposits less favorable.
Your military deposit decision should integrate with your broader retirement strategy, including TSP contributions, Social Security planning, and other investments. The guaranteed nature of FERS benefits makes military deposits particularly valuable for employees seeking guaranteed retirement income.
Consider how additional FERS income affects your overall retirement tax situation. Higher FERS benefits mean higher taxable retirement income, which might influence your TSP withdrawal strategy or Roth conversion planning.
Your military deposit decision should be based on an analysis of your specific situation rather than assumptions. Federal employees with military backgrounds should evaluate whether making a military deposit aligns with their individual financial circumstances and retirement goals. Understanding both the rules and your personal financial situation helps you make decisions that protect your long-term financial security. If you want legal advice about your decision, consider contacting a FERS retirement attorney.
Talk With a Federal Employment Attorney About Your Options
At The Law Office of Justin Schnitzer, we focus exclusively on federal employment law and the real people behind every case. We understand how stressful it is to face discipline, discrimination, retaliation, or other career‑threatening issues, and we’re here to help you move into a more stable chapter of your life.
When your career or income is at risk, it helps to speak with someone who knows how this system actually works. Our federal employment attorneys will review your situation, explain your options in an easy-to-understand language, and help you decide on a next step that fits your goals. We offer virtual appointments so you can get clear guidance from the comfort of your home.
We’re proud of the trust our clients place in us. We encourage you to read our client reviews and see how we’ve helped other federal employees in situations like yours.
To talk through your situation and get a plan you can feel confident about, contact us today or call 202-964-4878 to schedule your initial consultation.
