Top 10 Mistakes Made by Federal Employees — Part 6: Skipping the Military Buyback – The Retirement Mistake You’re Making Right Now

2.20.26: Audio automatically transcribed by Sonix

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

Speaker1:
Welcome back to the Federal retirement Show. I'm your host, Val Majewski with American Benefits Exchange. And as always, I really appreciate you taking the time out of your busy schedule to view our content, to join our show, to see what we have to offer you, the federal employee that is looking for accurate information when it comes to your benefits and retirement situation. Now that's what we're here for. If it's your first time at the federal retirement show, then just understand we have a lot of episodes geared towards you, and it's all for you to find out the answers to your questions. Hopefully you have additional questions that we can answer. You can reach out to us. I'll give you our website in just a second, but we've got over 160 episodes talking about unique situations as well as the basics when it comes to benefits and retirement. So I highly encourage you if this is your first time, even if you've been coming for a while and you just haven't checked out our previous content, Go do so you can find it. Wherever you listen or watch podcasts, whether that's on YouTube, SoundCloud, Spotify, Apple Podcasts, you can also go to our website, Federal Retirement Show.com. Um, and view all of our content there. And if you have any additional questions, if you like today's content, you have you want to schedule a time to review your full situation. You could do so also at Federal Retirement Show.

Speaker1:
Com and we're in the middle of a series where we're going over the top ten mistakes made by federal employees. This is a pamphlet that I created a number of years ago. And just revisiting those top ten mistakes from the past. Now, these are not all of the mistakes that federal employees make, but it's some of the top ten that I think will be beneficial for you. If you can avoid these things, put yourself in a better situation for your retirement. Now we're right in the middle. Today is mistake number six. So let's dive in and talk about today's mistake in the top ten mistakes that Better Employees make. Now, this is the pamphlet that I created years ago, and as I mentioned, it is the top ten. There are a couple extras that will probably go over when the series is over, but today we're talking about mistake number six. And mistake number six is not taking the time to purchase back prior military service. If you're not familiar with this, for those that have served in our military and appreciate your service, number one, I didn't serve. So I'm very grateful for those that have sacrificed for our country and have served. So thank you again for your service. Doesn't matter which branch you served on or served under or served at, you have the ability unless you retired. It's not something we normally recommend if you retire, but generally speaking, if you did not retire from the military and you got a civilian federal job, and let's say now you're a first employee, you have the ability to purchase back that time and have it count towards your first service.

Speaker1:
Now why is this beneficial? Because you do not collect a military pension if you do not retire from the military and you could utilize that time. It's not necessarily time wasted from a financial standpoint. For retirement standpoint, you can purchase back that time and have it count towards your civilian service. Now, there's a number of reasons why we want to do this. Number one, I just mentioned that it adds time to your CSRS or Fers service record. So let's say you had five years of military service and you had 20 years of civilian service, whether it's CSRs or first. Now when you purchase back that time, you're going to have 25 years of service for the sake of qualifying for retirement and for your pension calculation. These are going to be extremely beneficial for you. The reason why I say forgoing or not buying back military time is also a mistake. I should also put in there a little caveat if you don't do it on time, it can be a partial mistake. If you don't do it right away, it can be a partial mistake. I'll get into that here in just a second. I mentioned that it adds service, credit or time to your service.

Speaker1:
You can reach your requirement for retirement sooner, so just go over Fers employees. You have to satisfy one of three requirements in order to retire with full benefits as a first employee. Number one age 60 with 20 years of service. Number two. Age 62 with at least five years of service, or have 30 years of service and hit your minimum retirement age and having that extra time that you served in the military, purchasing that back would be beneficial to hitting that benchmark quicker. Now, not only is it going to help you hit that quicker, you're going to have more service time. That's going to factor into your calculation for retirement, which means your pension is going to be higher. Now why did I say earlier about the timing of this? Because generally speaking, you've got three years to purchase back the military service time before there's interest charged to the deposit. If you're not familiar with that portion of it, when you do go to purchase back your military time, you've got to go through the process. We can send that process to you if you don't have it. Um, and what it would be is you just you're going to get ultimately, how much would it cost you to purchase back that time? And normally that's paid via payroll deduction from your regular paycheck. And eventually you'd have all of that time purchased back.

Speaker1:
And the service credit would officially count towards your eligibility for retirement and for your pension calculation. If you go beyond that initial period and interest is charged, it can get significant. And I've talked to several federal employees along the way where their initial deposit wasn't very expensive, but they waited so long to purchase that time back that now the total price to do so was 3 or 4 times as much because they waited for the or waited to purchase that back and the interest just got so high. So just understand timing is important. Now it's important number one to purchase effect. Timing would be key. If you can do it right away there's no interest charge which is great. And also this is going to be more service credit more years of service used for your pension calculation. All good things. So if you have not yet done so I highly recommend to avoid this mistake. Look into purchasing back your military service time. Find out what that number is. Go through the process and if you don't know that process, reach out to us again. Go to our website, federal retirement Show.com. Fill out one of the forms. Myself or one of our experts across the country will be reaching out to you to discuss this and all of your other benefits, so you have a great understanding of where you currently are and how you're projecting as you're moving closer to retirement.

Speaker1:
But a big key part of that would be ensuring that all of your service time counts for your retirement eligibility and your retirement calculation be huge to include that military time. So just to wrap up and ensure that you're not making this mistake if you have served in our military. Again, thank you so much for your service. Thank you for what you've done. But take advantage of that time and use it towards your Fers pension requirements and your first pension calculation. If you have any other questions, as I mentioned, I'll say it one more time. Go to our website, Federal Retirement Show.com look forward to chatting with you and getting you all the information regarding your benefits every time your situation. I thank you for watching the Federal Retirement Show. If you did like our content, be sure to tell a colleague. Tell somebody that you work with. We're trying to help as many federal employees as we possibly can. The word gets spread via social media and people liking subscribing, all that stuff, but also just share it. Just talk to somebody, tell somebody about the show. There's a lot of great information on here. Um, hopefully it'd be great for your colleagues. So point them in this direction. We thank you in advance. My name again is Val Majewski. You've been watching the federal retirement show and look forward to seeing you on a future episode.

Speaker2:
Well, the job market these days can be tough for anybody, but especially older workers really concerned about either losing their job and then having to find a new one in a tough job market or, you know, other concerns within the workplace. And AI is increasingly becoming a part of that workplace, including finding a new job. Well, joining me to talk more about that is Carly Roskowski with AARP. She is the VP of financial resilience programming there. Hi, Carly. How are you?

Speaker3:
I'm good. Matt, thanks so much for having me today.

Speaker2:
No problem. Thanks so much for being a part of the discussion here. And it's a very important one. I mean, first of all, as we kind of set the the sort of baseline, I guess, for our conversation, what are people saying about their concerns about either, you know, losing a job, finding a new job at a certain age? I know that you all have some new research that kind of delves into that.

Speaker3:
Yes we do. And the labor market is is quite challenging right now. Many people who have jobs are staying put. We're calling that sort of job hugging. You might have heard that term. So older workers who have been laid off, or those who retired and want to go back to work, may have more difficulty finding a job than they have in the past during this, this current climate. Our recent research shows that about a quarter of the older workers we surveyed are concerned about losing their job within the next year. And more than two thirds, about 67% of older workers, believe it would be difficult to find a new job right now.

Speaker2:
Yeah, well, it's, uh, it really is a concern, obviously, for a lot of folks then. And so, you know, I mentioned AI there. You know, it's it's sort of taking over our lives a bit. Um, and, and I think it's gone from maybe this sort of like, scary unknown thing to just this sort of tool that we're all using, um, in one way or another. How are workplaces, especially in the job search, or that maybe the the candidate search. If you're talking about the the company's position, they're like the candidate search part of things. How are they using that. And I guess as a as a follow up to that, how can candidates for jobs actually use that to their advantage?

Speaker3:
Yeah. So the job market has changed dramatically in recent years, with AI playing a much bigger role, both on the employer side and the job seeker side. So we encourage older workers to embrace this technology, including AI, and use it to help with their job search. You can use it to help write your resume and cover letters. It can also provide information or research on the companies that you're interested in or you're applying to, and it can even predict the types of questions that may be asked during an interview.

Speaker2:
Wow. And so, you know, what are some tips that you may have for older job seekers who are either, you know, updating their resume, maybe looking at using different AI tools to to either help with that or other aspects of the job search process.

Speaker3:
Job seekers should focus on making sure that their resume highlights their skills and experience, and not their age. So we recommend your resume be no more than two pages long. Focus on your recent experience. Include your credentials, but you don't have to include your graduation dates. Take off your street address and maybe ditch that old AOL or Hotmail email address for a more modern service like Gmail. But we also talk a lot about making sure that your resume includes industry specific terms or keywords straight from the job descriptions that you're applying to. Because some employers are using AI based tools to do an initial review or scan of candidates. And if you have these keywords or specific terms, it can improve your chances of making it past those sort of first digital gatekeeper rounds.

Speaker2:
Yeah, we talk about the changes in the workplace and in the job seeking area. It really is, um, crazy how things do evolve over time. And, you know, I mean, as we talk about older workers and, and folks going either going back to the workplace or, or just being in the workplace for a long time and bringing that experience to the table. Aarp, I know, often really highlights the benefits that come with that, you know, people of different generations working together. What does that look like right now in 2026?

Speaker3:
Yeah, there are five generations in the workplace today, which is fantastic. And we see and research shows that multi-generational teams bring together different perspectives, different skill sets and different ways of solving problems. We hear from younger workers that collaborating with older colleagues provides them opportunities to learn new skills, and contributes to maybe a more productive work environment. Our recent research shows that 90% of all workers enjoy working with people of different ages.

Speaker2:
Yeah, I often have enjoyed that as well. Like just getting that when I was younger, like, you know, getting that experience and, and all of that just from people who have been there and done that in the workplace. I always thought was just so helpful. And really, they really do just bring a lot to the work that they do. And along those lines, what resources are out there for, uh, you know, from AARP, I should say, for older Americans who may be looking for work right now.

Speaker3:
Job seekers can go to AARP. To find expert advice, tools, resources including AARP and Indeed's job search platform, which offers thousands of curated job listings. Help with your resume and interview prep.

Speaker2:
Very good. Well, we will direct our listeners in that well, direction. Um. Carly Roszkowski is VP of Financial Resilience Programming at AARP. Carly, thank you so much for spending a few minutes with me. I really do appreciate it.

Speaker3:
Thank you Matt, have a wonderful day.

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