Page 78 - The Informed Fed--Hearn (edited 10.29.20)

$900. Bob would get this check from age 56 to age 62. Once Bob
becomes eligible for Social Security, the supplement is stopped, and
Social Security starts sending his normal check. CAUTION: It is very
important that the employee understands that you have to reach your
minimum retirement age and either 30 years of service, or age 60 with 20
years of service to qualify for the Special Supplement. Some agencies are
offering Early Outs. If you have not met the minimum retirement age
and years of service, you will not get the supplement. This can make a
significant difference in your evaluation of taking an Early Out or not.

Should I Buy Back My Military Time?

In most cases, the answer is yes. Unless you are receiving a military
retirement pension or insurance benefits, you should consider buying the
time. The cost of doing so will usually be covered in less than 2 years by
the increased pension amount. FERS employees with military service
BEFORE January 1, 1957 will receive credit for their military time for
annuity computations and no buy-back deposit is required. The FERS
deposit is 3% of basic pay, plus a variable market rate interest may be
charged. Military deposits must be completed before you retire. For
example, let’s say Bob served 4 years in the Army. At $10,000 per year,
his base pay totaled $40,000. Buying this time back will require a deposit
of 3%, or $1,200 plus any applicable interest. This can be done in a lump
sum or arranged to be taken through payroll deductions as long as it is
completed prior to retirement. Adding 4 years of service will add 4% to
his FERS retirement pension. Since Bob’s high-three salary is $50,000,
4% will add $2,000 per year to his retirement pension, or $167 each
month. That will repay Bob's buy-back deposit in only 8 months. As a
general rule, all honorable active duty military service is potentially
creditable under FERS.
What is the number in the lower right-hand corner of my postal
paystub? This is the amount you have contributed to your retirement.

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