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Service Academy Time and Your GS Retirement Thumbnail

Service Academy Time and Your GS Retirement

Retirement Funding

Hi, I'm Curt Sheldon from C.L. Sheldon & Company, and welcome to "Curt's Chalk Talk". Today, I'd like to talk to you about your time at a service academy.

Now, most of us think our time at the service academy isn't going to count for much of anything after we graduate from the academy. It doesn't count towards your military retirement. It pretty much only gets you another oak leaf cluster on your longevity ribbon. But if you decide to go to work for the federal government after you leave the military, it can become quite valuable, you see, because you can sell back your time or buy back your time on active duty to increase your federal pension.

Now, if you're retired from the military, you don't want to buy back your active duty time because you'd actually give up some of your military pension or all of your military pension and you wouldn't get as much from your first pension. But remember your time at the academy doesn't count towards time served in military but it does count as federal service. So you can buy back your time at the academy to increase your federal pension. You're basically going to pay about 3% of what you earned at the academy. And when I was there, it was, which was shortly after the earth cooled, you didn't earn much as a cadet. So you're not going to pay back that much money and you're going to increase your time of federal service by four years.

Now, you can use those four years two different ways. If you decided you're going to work to 10 years so that you can get a federal pension, you could actually retire after working six years for the government can credit for your four years at the academy and retire with 10 years of service. Or if you're going to decide to work to a certain age and then retire, let say, you've decided you're going to work to age 65, and you've worked 20 years for the federal government at that point, when you retire you're going to get credit for 24 years worth of service, which is going to increase your pension by about 4%.

Now, if you've just separated from the service and gone to work for the federal government without retiring then you want to sell back your time on active duty to the government as well to get credit for that service and increase your longevity with the government and increase your first retirement.

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