FERS Military Buy Back: Deposit Cost and How Much It Adds to Your Pension

What it costs to buy back military service for a FERS pension, what it adds each year, how long it takes to pay for itself, and the rule for military retirees.

A FERS military buy back (the military service deposit) costs 3% of the military basic pay you earned for service from 2001 on (3.25% for 1999, 3.4% for 2000), plus interest if you pay after the interest-free period (OPM service credit). Each year bought adds 1% of your High-3 to your annuity every year, or 1.1% if you retire at 62 or later with 20 years (OPM computation). Example: $160,000 of basic pay costs $4,800; on a $100,000 High-3, four bought years add $4,400 a year at 62.

Official rules Deposit rates from OPM’s FERS service credit page and 5 CFR 842.307; the 2026 interest rate, 4.25%, from OPM BAL 26-101. Checked November 4, 2026.

Military deposit rates

FERS deposit for post-1956 military service — OPM
Dates of service	Deposit
Through December 31, 1998	3% of military basic pay
January 1 – December 31, 1999	3.25%
January 1 – December 31, 2000	3.4%
January 1, 2001 to the present	3%

Basic pay only: allowances, special pays and bonuses are not part of the base. Your service’s finance center (DFAS for most) provides the estimate of earnings you file with your agency. The deposit must be completed before you separate (5 CFR 842.307(a)(3)).

Interest: the grace period

Interest accrues on the unpaid balance starting on the second anniversary of your first FERS coverage, compounded annually, and none is charged if the deposit is completed before the end of the year after interest begins (5 CFR 842.307(b)(4)). The rate is set each year; for 2026 it is 4.25% (OPM BAL 26-101).

FERS military buy back calculator: cost, added annuity, break-even

Military basic pay earned (total, $)

A year of that service

Years of interest owed (0 inside the grace period)

Military years bought

Civilian FERS years at retirement

High-3 average salary

Age at retirement

Birth year

Interest is estimated at the 2026 rate, 4.25%, for every year; the actual rate changes yearly. Your agency’s figure is the one you pay. Bought years also count toward eligibility (for example reaching 20 or 30 years); the calculator figures both annuities at the age you enter.

The two annuities come from the FERS engine of our FERS pension calculator; break-even is the deposit divided by the added annuity, before COLAs and taxes.

Paid tool Buying back service changes your annuity for life; Personal PRO shows what it does to the whole plan: FERS annuity, TSP withdrawals and Social Security together, year by year on 10,000 market paths, with federal and state tax and the odds the money lasts. A planning tool, not advice. Run my own retirement numbers — Personal PRO ($49) → See what is included, and every price →

Military retirees: the waiver rule

If you receive military retired pay, you generally cannot also count the same military service in your FERS annuity: you must waive the retired pay to get credit, unless it was awarded for a service-connected disability incurred in combat or caused by an instrumentality of war, or under the reserve retirement rules of 10 U.S.C. chapter 1223 (5 U.S.C. 8411(c)). Compare your retired pay with what the bought years add before you waive: military retirement pay calculator →

Your basic pay by grade and year: 2026 military pay chart →

Common questions

How much does it cost to buy back military time for FERS?

3% of the military basic pay earned for service from 2001 on (3.25% for 1999, 3.4% for 2000), plus interest if not paid within the interest-free period (OPM).

Is the FERS military buy back worth it?

Each year bought adds 1% of High-3 to the annuity every year (1.1% at 62 with 20 years) (OPM). On a $100,000 High-3, a year bought adds about $1,000 to $1,100 a year for life; if that year’s basic pay was $40,000 the deposit is $1,200, repaid in about a year of retirement.

When does interest start on a military deposit?

On the second anniversary of your first FERS coverage, with no interest if the deposit is completed before the end of the year after interest begins (5 CFR 842.307). The 2026 rate is 4.25% (OPM BAL 26-101).

Can a military retiree buy back military time for FERS?

Generally only by waiving military retired pay, unless the retired pay is for a combat-related disability or under the reserve retirement rules (5 U.S.C. 8411(c)).

Sources

Rates and rules as published by OPM on the pages above. QuantCalc is calculation software, not legal, tax or benefits advice. Last updated November 4, 2026.

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