(This article by Lt. Col. Amy King, USA (Ret), CFP, originally appeared in the March 2026 issue of Military Officer, a magazine available to all MOAA Premium and Life members who can log in to access our digital version and archive. Basic members can save on a membership upgrade and access the magazine.)

Participants in military transition assistance programs often get briefed on the federal government’s veterans’ preference policy, under which former servicemembers may receive preference over nonveteran applicants during the hiring process. But those programs don’t always go over how veterans’ benefits interact with federal benefits.

If you are a federal employee with veteran status, there are five key factors to understand.

[RELATED: MOAA’s Federal Job Resources]

Annual Leave

Federal employees earn annual leave based on creditable service. Most new hires receive four hours of annual leave per pay period, whereas veterans with three or more years of creditable service may qualify for six or eight hours. There is no requirement to buy back leave credit; it is automatic once required documentation is submitted to calculate the service computation date.

Veterans not receiving military retired pay may get credit for all qualifying active duty service. Drilling reservists and Reserve retirees not yet receiving retired pay may also qualify.

Once retired pay begins, eligibility is limited, except for combat-related disability retirement or other statutory exceptions.

Military Service Buy Back

Veterans may make a military service deposit to increase creditable time under the Federal Employee Retirement System (FERS). The deposit equals 3% of basic military pay during creditable military service. No interest is due if completed within the first three years of federal service. Creditable military service includes active duty time documented on DD Form 214 and military academy time.

[RELATED: Understanding the Buy Back Program]

For non-retired veterans and reserve component servicemembers, the decision is usually straightforward. Active duty retirees face a more complex choice. Buying back military academy time does not affect a military pension, but buying back active duty service requires waiving the military pension when the FERS pension begins.

Thrift Savings Plan (TSP)

Veterans may have a military and civilian TSP account. Rolling the military TSP into the civilian account is optional.

Combining accounts can simplify management and increase loan limits. Keeping them separate may preserve flexibility in investment strategy and distribution options before age 59½.

Health, Dental, and Vision

Retirees eligible for TRICARE may enroll in the Federal Employees Dental and Vision Insurance Program (FEDVIP) and the Federal Employee Health Benefits (FEHB) Program.

FEDVIP premiums are pretax when deducted from a federal salary, but they’re post-tax when deducted from a pension, making enrollment as a federal employee advantageous.

Military retirees can enroll in the FEHB Program during open season before retirement, then suspend coverage upon retiring. It may be reinstated during a future open season.

[MOAA’S TRICARE TOOLKIT: Breaking Down FEDVIP]

Survivor Benefits

You can elect both the FERS and the military survivor benefits without one affecting the other.

For veterans ineligible for TRICARE, coverage under the FEHB Program for a surviving spouse depends on having a survivor benefit in place.

Lt. Col. Amy King, USA (Ret), CFP, is a Premium member of MOAA.