Federal Employee Advisor Match

FERS Military Buyback Deposit Calculator (2026)

If you served in the U.S. military before entering federal civilian employment, you can buy back that service to add years to your FERS pension. The deposit is 3% of your military basic pay, plus compound interest that has been accruing since your FERS hire date. The 2026 rate is 4.25%. This calculator shows your estimated deposit, how much your pension increases, your break-even timeline, and the lifetime value — so you can decide whether the buyback makes financial sense for your situation.

Core rule: The deposit is 3% of military basic pay only — not BAH, BAS, or other allowances. Interest compounds at 4.25% in 2026 (OPM BAL 26-301) after a 2-year interest-free grace period from your FERS hire date. The deposit must be paid in full before you submit your retirement application — once you separate, the window closes permanently.1
Use your net active service from DD-214 Block 12c. Enter only the years you are buying back — typically all active-duty time prior to your federal civilian appointment.
Basic pay only — no BAH, BAS, or special pays. Request exact figures via myPay (DFAS) or ask your HR for a FERS deposit estimate, which uses the same underlying number. E-5 in the late 2010s earned ~$28–35K/yr base; O-3 in the same era ~$60–70K/yr base.
Found on your first SF-50 — look for your initial appointment effective date. The 2-year interest-free grace period starts here. If you have multiple SF-50s, use the earliest FERS-covered appointment.
Enter only civilian service — the calculator adds military buyback years automatically. Do not count any military time you plan to buy back here.
The 1.1% annuity multiplier requires age 62 or older with 20+ total creditable service years. Military buyback years count toward that 20-year threshold — unlike sick leave credit, which is explicitly excluded.
The average of your 3 highest consecutive years of basic pay (base salary + locality). Use your current salary as a conservative estimate, or use the High-3 Calculator for a more precise projection.
Active-duty retirees must waive military retired pay to receive FERS credit for the same service — a permanent, consequential decision. Reserve/Guard retirees generally can keep reserve retired pay and still buy back their active-duty periods.

How the deposit amount is calculated

The FERS military service credit deposit equals 3% of your total military basic pay for the service period you are buying back.1 Basic pay is your taxable base salary — it excludes housing allowance (BAH), food allowance (BAS), special pays (hazardous duty, sea pay, flight pay), and any combat-zone tax exclusion amounts. Your full basic pay history is available through the Defense Finance and Accounting Service (DFAS) myPay portal, or your HR office can pull an estimated deposit statement directly from OPM.

Interest on the unpaid balance compounds annually at the rate the U.S. Treasury certifies each year, published by OPM in a Benefits Administration Letter. The 2026 rate is 4.25%.2 A 2-year grace period applies from your first day in FERS-covered employment — no interest accrues during that window. After the grace period, interest applies to the unpaid balance dating back to your FERS hire date. This calculator uses 4.25% as a flat approximation; the exact OPM figure will reflect each calendar year's actual rate (which has ranged from 2% to 5.75% in recent years).

Worked example: GS-14 with 6 years of military service

Break-evens under 12 months are typical for veterans who entered federal service in the 2000s–2010s and are now approaching retirement, because the deposit was small and the FERS pension multiplier compounds across a lifetime annuity.

Does the buyback affect the 1.1% annuity multiplier?

Yes — and this matters. Military buyback service years count toward the 20-year threshold required for the 1.1% annuity multiplier at age 62. This differs from sick leave credit, which is explicitly barred from counting toward the 20-year threshold under 5 U.S.C. § 8415(f).3

The implication: if you have 17 years of civilian service plus 4 years of military buyback = 21 total years, you qualify for the 1.1% multiplier at age 62. Without the buyback, 17 civilian years falls short of the 20-year requirement. The higher multiplier then applies to all 21 years of service, not just the 4 military years — amplifying the pension gain significantly.

What the buyback does and does not affect

BenefitAffected by military buyback?
FERS basic annuity (pension)Yes — adds years to the service credit multiplied against your high-3
1.1% multiplier eligibility (age 62, 20 yrs)Yes — counts toward the 20-year threshold
FERS supplement eligibility and amountYes — included in the SS × (FERS years ÷ 40) formula
Survivor annuity benefit amountYes — survivor benefit is based on your full annuity including buyback years
FEHB retirement continuationNo — based on 5-year enrollment rule, not service years
TSP vesting or agency matchNo — TSP is based on actual pay periods in FERS-covered employment
Social Security earnings recordNo — SSA uses actual wages; FERS service credit is separate
FERS disability retirement eligibilityYes — 18-month civilian requirement still applies; buyback adds to total service used in the benefit computation

The military retired pay trap

Active-duty retirees (20+ years of active service) face a binding constraint: you cannot receive both military retired pay and FERS pension credit for the same service period under 38 U.S.C. § 215 and 5 U.S.C. § 8332(c). To complete the buyback, you must permanently waive military retired pay for those years; the waiver takes effect when your FERS annuity begins.4

For most active-duty retirees, the math favors keeping military retired pay. Military retirement pays 50% of final base pay after 20 years (or equivalent under the blended retirement system), includes annual COLAs, and starts immediately at separation. The FERS pension increase from the buyback rarely exceeds this — especially since the waiver is permanent and military retired pay for active-duty service has no survivor benefit cost built in.

Reserve and National Guard retirees are different. If your military retirement is based on 20+ years of qualifying reserve service (with pay starting at age 60 or a reduced age), you generally can receive both reserve retired pay and FERS credit for any active-duty periods you buy back. This is a favorable situation worth calculating carefully.

Related tools and guides

  • FERS Military Buyback Guide — full explanation of the 3% deposit rule, how to request your DFAS pay history, SF-3108 process, installment payment options, and the military retired pay waiver decision.
  • FERS Retirement Calculator — model your complete retirement income; add your military buyback years to service years to see the full FERS annuity with the credit included.
  • FERS High-3 Salary Calculator — the other major lever in your pension formula; determine whether delaying retirement to capture a step increase or promotion changes your pension more than the buyback does.
  • FERS Civilian Service Deposit Guide — for pre-1989 non-deduction civilian service and withdrawn contributions; different rates (1.3%) and mechanics than the military buyback.
  • When to Retire from the Federal Government — all six retirement timing variables together, including how to sequence paying the military deposit before your retirement application deadline.

Model the full retirement picture with a specialist

The military buyback ROI looks compelling in isolation, but the real analysis combines it with your survivor annuity election, FERS supplement timing, TSP withdrawal sequence, Social Security filing strategy, and whether the 1.1% multiplier threshold becomes accessible with the buyback. A federal benefits specialist can run the integrated model — including the military retired pay waiver tradeoff if it applies — calibrated to your exact situation.

Fee-only · No commissions · Federal specialists · Free match

  1. OPM — FERS Service Credit (opm.gov). Military service credit deposit for FERS: 3% of military basic pay (5 U.S.C. § 8422(e); 5 C.F.R. § 842.304). Two-year interest-free grace period from first day of FERS-covered employment. Deposit must be paid before separation for retirement; SF-3108 is the application form. Verified June 2026.
  2. OPM BAL 26-301 — Calendar Year 2026 Interest Rate (opm.gov). Treasury-certified interest rate for service credit deposits and redeposits: 4.25% for CY2026. Interest compounds annually on the unpaid balance. This rate applies to both FERS military deposits and civilian service redeposits. Published annually by OPM as a Benefits Administration Letter.
  3. OPM — FERS Annuity Computation (opm.gov). The 1.1% multiplier requires retirement at age 62 with 20 or more years of creditable service (5 U.S.C. § 8415(a)). Military buyback service counts as creditable service for this purpose. Contrast with sick leave credit, which is explicitly excluded under § 8415(f): "Sick leave credited as service under this subsection shall not be used to determine the eligibility for an immediate annuity under section 8412."
  4. OPM — FERS Creditable Service (opm.gov). Active-duty military retirees must waive retired pay to receive FERS credit for the same service period (38 U.S.C. § 215; 5 U.S.C. § 8332(c)). Reserve/National Guard retirements (based on 20+ qualifying years of reserve service) are generally exempt from this waiver requirement — employees in this category can typically receive both reserve retired pay and FERS credit for bought-back active-duty periods.

Deposit rate (3% of military basic pay) and 2026 interest rate (4.25%, OPM BAL 26-301) verified against OPM FERS information pages and BAL 26-301. Annuity multiplier rules verified against 5 U.S.C. § 8415. This calculator applies the current 4.25% rate as a flat estimate for all prior years — actual OPM calculations use the rate in effect for each calendar year; your exact deposit amount may differ. Confirmed June 2026.