11.30.22: Audio automatically transcribed by Sonix

11.30.22: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Val Majewski:
Well, welcome back to the Federal Retirement Show. I'm your host, Val Majewski, with American Benefits Exchange. And today, we're going to talk about a topic that we get asked a lot, especially when we work with DOD civilians that work on military bases. A lot of them have had previous military time. We're going to talk about military buy back. So let's dive into the information and I'm going to go over that process with you. So military buyback, we're going to get into the steps and there's really not a whole lot of steps, but it's not as easy as you may think and certainly not as complicated as it may sound. But the idea here is you served in our military. First of all, thank you for your service. I appreciate your service. I commend you for your service. I didn't volunteer. I didn't sign up. I didn't dedicate my time and effort to defending our country. So I really appreciate your service on behalf of our entire staff, our team, our folks across the country. Thank you for your service. We just had service time in one of the military branches, and now you work as an employee of the federal government and you want to get credit for that service time. Well, let's assume that you did not have enough service time to retire as a federal as sorry, as a military member and get a military pension. But you want to get credit now in your civilian service. Now, how do you go about that, whether you just have a couple of years or a number of years? In my opinion, and this is my opinion, you could think different.

Val Majewski:
In my opinion, it's always worth buying back your military time. And this is you may go back to previous episodes. One of the mistakes that is in the top ten mistakes made by federal employees brochure or pamphlet that we have is not buying back the military time if you have it, because you get credit for it, not only as a regular service for qualification of your pension service time that's used in the calculation for your eligibility for retirement, but it's also used in the calculation of your pension. So again, in my opinion, not every situation is the same. So this is not a 100% everybody needs to do this blanket statement, but in most cases that I run across, it is well worth the time and effort and money that it costs to buy back your military time so you can get more out of your pension as a now civilian CSRs or FERS employee. So what's the process look like? Well, it's not as easy. It's just walking in to your HR department and saying, Hey, I want to buy back my military time. What do I do to do that? I can't just walk in with your checkbook. Say, how much does it cost to write the check and now everything is good to go. There is a process involved and we're going to go over that step by step.

Val Majewski:
Now, if you have any questions about this, I'm going to keep this pretty general. You may have specific questions. You may run into some hiccups and things along the way, because this is by no means perfect if you've done things with the government before, there are things that get missed or messed up or forms lost or didn't get sent in properly, what have you. We can walk through those unique scenarios to reach out to us. Please fill out the form on our website. We'd be in contact with you to go over your particular situation. But let's just say in a perfect world, everything happens the way it should. What are the steps so that you can buy back your military time and have that count towards your civilian service? Well, the first thing is you need to fill out an I 20 9d7. Now, this is a form that gets your estimated earnings during your military service. So this is the first form that you need. It estimates your earnings that you had during your military service. Right? 2937 Sounds pretty easy. If you need a copy of that form, we can send that in for it. Now, once once you fill out that form, you're going to attach your D 214 to it, which is your discharge. And usually that's going to say this is proof of an honorable discharge from your military branch. You're going to take your deed to 14 and you're 2937 and send that into the appropriate military finance center for the branch that you served.

Val Majewski:
So fill out those two forms. Send in those two forms to the appropriate military finance center. Now, if you do not have a deed to 14, if you do not have that, do not have a copy of it, you lost it. Well, you fill out C.F. standard form 180 to request a copy of your deed to 14. Most folks that I talked to know they have it or know where it is or have a copy of it. This should not be something that is difficult to obtain even if you do not have it. So you're going to have those two forms. All right. 29 seven. Again, if you do not have a copy of that, we can send that to you. Your deed to 14. If you do not have a copy of that, we can send you the 180 form so you can request a copy of your deed to 14. Now, once you submit those to your appropriate military finance center, you will receive back the estimated military earnings computation. This can take a little bit of time. It varies depending on log or backlog that they do have, but you'll receive that estimated military earnings computation. Once you receive that. You are going to complete the standard form SF 30 108, which is the application for buyback. And submit that along with your 2097 and your deed to 14 to your new HR department.

Val Majewski:
So we went before you were submitting the 2987 and the 214 to your military finance center in order to get your estimated earnings computation. You're taking all of that information with the 30 108 and the previously mentioned forms and submitting that to your new HR department with whichever government branch you're working for. Now, I said this happens a lot with us working with the DOD because there are a lot of folks that served previously in the military and then took a similar job as a civilian once they got out or they worked for a different agency, maybe like the VA. But if you if you've got previous military time, you're going to submit it to that new h.r. Department. For processing. Now once they process all of that. Right. And again, this could take some time. So it's not going to be instantaneous. I wish it was. But you will be informed of the deposit amount that you're required to pay in order to now buy back the military time. So that's what this is all about. That whole process of filling out the forms, getting the estimated earnings, submitting all the documents to h.r. It's so they can tell you what it's going to cost you in order to buy back that military time. Right. You are making a purchase. Now, here's the thing. That buyback amount may contain some interest in it. Why interest? Well, if you separate from service, you have three years up to three years from the time that you took your civilian job to buy back your military time before you start being charged interest on the deposit.

Val Majewski:
Let me explain that again. So if you want to minimize the amount of money it's going to cost you to buy back your military time, I would recommend doing it sooner than later, because if you wait too long, there could be interest charged on that amount. And over time, I've talked to some people who took way too long, maybe 20 years, to buy back military time, and the interest on the deposit was maybe two or three times the amount of the deposit at that time. So just understand, the sooner you can take care of this, the better. You only, no matter how much you spend, the time you buy back is going to be the same. You don't get any more time. Just may cost you more money if you wait longer. So once you are informed of what that deposit amount is and hopefully it doesn't contain any interest. You can choose how you want to pay that, and you can pay it in a lump sum with a check or money order. Most people that I talked to, you don't have to do it this way, but most people I talk to would say paid incrementally via payroll deductions and they will incrementally take that money out of your paycheck. Until the entire balance is paid off, the entire deposit is made to purchase back your military time.

Val Majewski:
Now, if you use a check or money order and just pay with a lump sum, you will get a letter that tells you that your deposit has been made in the time has been bought back. If you do it via payroll deductions, you may not automatically get that letter. You'll have to send in and request that letter to show that you've been completed or you have completed sorry that the full deposit and that time has been bought back. Now, I do recommend, even if you have bought back your military time, you've completed the process, you've got the letter, all of this stuff prior to retirement, as I talked about during the retirement process episode, prior to retirement, still check your personnel file and make sure that that military time that you bought back is in there, that it is accounted for. Because there are times where errors have been made, where people have paid deposits and it's not showing up. Now you have to just go back, show that letter that it shows you paid it. You could maybe track with previous earnings statements to show that you've been making deposits or payroll deductions to pay off that deposit. Keep all the documentation. That way you can prove that this was done, done properly, done completely, and the time should be there. The chance of them making a mistake is very slim. But as I said, it has happened. So why not just create a backup for yourself and keep all that documentation? So when it comes to the military buyback process, it seems fairly simple and straightforward.

Val Majewski:
We've only got five steps listed here, but you've got to go through those steps and wait the amount of time it takes to do that. It could take up to 60 days is kind of my general rule of thumb to get this completed, assuming you're doing everything back to back to back and there's really no gaps and delays on your end of submitting all of the proper documents. Now, 60 days to get to the end result of the deposit amount, not to pay everything off. If you're going to do it over time, that could take a little longer to completely pay it off. If you don't do it via a check or money order or just in a lump sum. So if you have questions about the military buyback process, please reach out to us. As I said, you can go onto our website FederalRetirementShow.com. Complete The form will be in contact with you. We can go over any specific questions that you might have. Walk you through this process. If you just need a refresher on anything, you can do it by requesting that information or providing us some contact information on our website. Well, thank you for taking the time to learn about the military buyback process and today's episode. Have a great rest of your day and look forward to seeing you on a next session.

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