Calculator
Military Buyback Calculator
Estimate your FERS military service deposit cost, the annual pension increase it buys, and how many years until you break even.
Reviewed by Jonathan D., 20-year federal employee · Formulas verified against OPM.gov ·
Your military service details
Base pay only — excludes BAH, BAS, combat pay, and allowances. Estimate across all years served.
Active-duty years to buy back (Title 10). Decimals allowed for partial years (e.g. 3.5).
Your highest 36-month average federal basic pay. Use the High-3 Calculator if unsure.
FERS pension multiplier
Use 1.1% if you retire at age 62+ with 20+ total years of creditable service; otherwise 1.0%.
Are you within the interest-free period?
You have roughly 3 years from your first FERS-covered civilian hire date to pay the deposit interest-free. After that, interest compounds annually at the OPM Treasury rate.
Your buyback estimateInterest-free — within grace period
$3,600
Deposit cost
3% of military basic pay
$4,000
Annual pension increase
Every year, for life
< 1 yr
Break-even
To recoup the deposit
$100,000
Gain over 25 yrs
Nominal, pre-COLA
$3,600 base deposit (3%)
4 yrs creditable years added
Deposit = Military Basic Pay × 3% · Annual gain = Years × Multiplier × High-3. Estimates only — your actual deposit is computed by your payroll office from official DFAS earnings (Form RI 20-97). Find your High-3.
How the FERS military buyback works
By paying a deposit of 3% of your military basic pay, OPM adds your active-duty years to your FERS creditable service — raising your pension and helping you reach retirement-eligibility thresholds sooner.
Deposit = Total Military Basic Pay × 3%
Annual Increase = Military Years × Multiplier × High-3
Break-Even = Deposit Cost ÷ Annual Pension Increase
Those military years also count toward the MRA+30, age 60+20, and age 62+5 eligibility thresholds — so buyback can let you retire earlier, not just richer. The 3% rate has applied to all service from January 1, 2001 forward (1999: 3.25%, 2000: 3.4%).
Example buyback scenarios
These examples use a $100,000 High-3 and the 1.0% multiplier. Run your own numbers in the calculator above.
| Profile | Total basic pay | 3% deposit | Annual gain | Break-even |
|---|---|---|---|---|
| E-4, 4 years (2018–2022) | $120,000 | $3,600 | $4,000/yr | < 1 yr |
| E-5, 6 years (2016–2022) | $155,000 | $4,650 | $6,000/yr | < 1 yr |
| O-3, 4 years (2019–2023) | $220,000 | $6,600 | $4,000/yr | 1.7 yrs |
| E-6, 8 years (1996–2004) | $160,000 | $4,800 | $8,000/yr | < 1 yr |
High-3 assumed at $100,000, 1.0% multiplier throughout. Actual results depend on your specific military basic pay records, certified by DFAS.
The interest-free grace period
You have roughly 3 years from your first day of FERS-covered civilian employment to pay the deposit without any interest. Here is how that works.
Year 0–2
Statutory 2-year grace period. No interest accrues at all.
Year 2–3
Interest technically starts accruing but, because it compounds annually, no actual charge hits until the end of year 3.
Year 3+
First interest charge applies. Each January 1 thereafter, interest compounds at the OPM Treasury rate (4.25% for 2026 per OPM BAL 26-301).
OPM example (5 CFR 842.307): an employee first covered by FERS on March 1, 1988 owed no interest if the deposit was paid by February 28, 1991 — exactly 3 years.
CSRS employees: different rules apply
This calculator covers FERS only. CSRS employees pay 7% of military basic pay, and face the “Catch-62” penalty: if you have post-1956 military service and do not pay the deposit, your CSRS annuity is recomputed at age 62 to remove the military credit — roughly a 2% annuity reduction per year of unbought military service. The Social Security Fairness Act (signed January 2025) repealed WEP and GPO but did not change the Catch-62 rule.
Related tools & guides
FERS Retirement Calculator
Model your total pension with the bought-back military years included — see the exact dollar impact.
High-3 Salary Calculator
Calculate the High-3 average that drives your pension increase in this calculator.
TSP Growth Calculator
Project your TSP alongside your pension for a complete retirement income picture.
Military Buyback 2026: Is It Worth It?
The complete guide — deadlines, paperwork, waivers, and when buyback does not pay off.
Frequently asked questions
For FERS employees, the deposit is 3% of your total military basic pay. Basic pay only — BAH, BAS, combat pay, and special allowances are excluded. For example, four years of service with $120,000 in total base pay = $3,600 deposit. If you are past the roughly 3-year interest-free window, interest at 4.25% (2026 OPM rate) compounds annually on the unpaid balance.
Approximately 3 years from your first day of FERS-covered civilian employment. The law provides a 2-year statutory grace period (5 CFR 842.307), and because interest compounds annually, no actual charge hits until the end of the year following the 2-year mark. OPM's own example: hired March 1, 1988 — no interest if paid by February 28, 1991.
Each year of bought-back military service adds one year of creditable service to your FERS pension formula: Years of Service × Multiplier × High-3 Salary. Using the 1.0% multiplier, one additional year on a $100,000 high-3 = $1,000/year more pension for life. Four years = $4,000/year. The multiplier rises to 1.1% if you retire at age 62+ with 20+ total years of creditable service.
Break-even = deposit amount ÷ annual pension increase. Most veterans recoup their deposit in 1–3 years of retirement. Example: $3,600 deposit ÷ $4,000/year gain = less than 1 year. Even with interest, the math typically favors buying back unless you are very close to retirement and owe many years of interest.
Only military basic pay — the base salary printed on your LES. Not included: Basic Allowance for Housing (BAH), Basic Allowance for Subsistence (BAS), combat-zone tax exclusion pay, hostile fire pay, family separation allowance, or any other allowances. DFAS certifies your exact earnings when you submit form RI 20-97.
Yes, but you must waive your military retirement pay to receive FERS credit for the same years. You cannot collect both a military longevity pension and FERS annuity credit for the same period of service. Exceptions: Reserve/Guard retirees under Chapter 1223, Title 10 can buy back active-duty time without waiving their reserve retirement. Combat-related disability retirees are also exempt. VA disability compensation is separate and unaffected.
Only active-duty service under Title 10 federal orders qualifies. Title 32 (state-controlled) National Guard service generally does not qualify. If you were federally mobilized or deployed under Title 10 orders, those periods count. Review your DD-214 or NGB-22 to confirm the order type.
No. The deposit must be paid in full before you submit your retirement application. Once you separate for retirement, it is too late — there are no exceptions. The process takes 3–9 months minimum (DFAS earnings estimate alone takes 2–6 months), so start well before your planned retirement date.
The 2026 interest rate is 4.25%, set annually by OPM based on U.S. Treasury rates (OPM Benefits Administration Letter 26-301). Recent rates: 2024 = 3.75%, 2025 = 4.375%, 2026 = 4.25%. Interest compounds annually on any unpaid balance after the grace period.
Yes. CSRS employees pay 7% of military basic pay (not 3%). Additionally, CSRS employees with post-1956 military service face the "Catch 62" provision: if they do not pay the deposit and become eligible for Social Security at age 62, their CSRS annuity is reduced to remove the military service credit. FERS employees are not subject to Catch 62. This calculator covers FERS only.
Sources
- OPM FERS Service Credit (deposit rate: 3% of military basic pay, 2001–present)
- 5 CFR 842.307 (interest-free grace period, annual compounding rule, OPM example)
- OPM Benefits Administration Letter 26-301 (2026 interest rate: 4.25%)
- 5 USC 8415 (FERS annuity formula: years × 1.0% or 1.1% × high-3)