Military Buyback Calculator (FERS Deposit)

2026

Calculate the FERS military service deposit — 3% of military basic pay plus 4.25% CY2026 interest — against the pension increase it buys.

By Konstantin Iakovlev · Updated August 2026 · Source: OPM — Service Credit

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Retiring at 62+ with 20+ years?

Deposit Due

$4,800.00

Annuity Increase / Year

$3,800.00

Payback Period

15 months

Deposit vs. Payoff

Base deposit (3% of military pay)$4,800.00
Interest (4.25%, CY2026 rate)$0.00
Total deposit due$4,800.00
FERS annuity increase per year$3,800.00
Net gain over first 10 retired years$33,200.00

Use the Military Buyback Calculator (FERS Deposit) above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Federal employees with prior military service can add those years to their FERS pension by paying a military service credit deposit — the “buyback.” The price is 3% of the military basic pay you actually earned (allowances never count), plus interest if you wait: the deposit is interest-free for roughly your first three years as a civilian employee, after which the balance compounds annually at a Treasury-set rate — 4.25% for calendar year 2026, down from 4.375% in 2025.

The payoff side is what makes this one of the most reliably positive deals in federal benefits: every bought-back year raises your FERS annuity by 1% of your high-3 salary (1.1% if you retire at 62 or later with 20+ years of service), every year, for life, with COLAs on top. Because the deposit is a one-time payment and the increase is perpetual, payback periods of one to three years are typical.

Get the exact earnings figure from DFAS with form RI 20-97 rather than estimating — the deposit is computed from your documented pay record. One caveat: buying back time to satisfy eligibility is separate from receiving military retired pay; in most cases you must waive military retired pay for the same years to have them count (reserve retirement is the main exception).

Example: Buying Back 4 Years Inside the Grace Window

  1. 1 A federal employee served 4 years with $160,000 in total military basic pay, and pays the deposit within the interest-free window. Deposit: 3% × $160,000 = $4,800.
  2. 2 Their expected high-3 is $95,000, retiring before 62, so each year is worth 1%: the buyback adds 4 × 1% × $95,000 = $3,800 to the annuity every year.
  3. 3 Payback period: $4,800 ÷ $3,800 ≈ 15 months of retirement.
  4. 4 Over the first 10 retired years the net gain is $3,800 × 10 − $4,800 = $33,200, before COLAs — and the four years also count toward retirement eligibility.

Source: OPM — Service Credit · Last updated: August 2026

Frequently Asked Questions

How much does a military buyback cost?
For FERS: 3% of the military basic pay you actually earned (never allowances), plus interest if you pay late. The deposit is interest-free for roughly your first three years as a federal employee; after that it compounds annually at a Treasury-set rate — 4.25% for 2026.
Is buying back military time worth it?
Almost always, if you expect a FERS pension. Each bought-back year adds 1% of your high-3 (1.1% retiring at 62+ with 20+ years) to the annuity for life. Typical payback periods run one to three years of retirement; everything after is pure gain, plus the years count toward eligibility.
How do I find my military basic pay total?
Request your estimated earnings from DFAS with form RI 20-97 (submitted through your HR office with your DD-214). The deposit is computed from that documented record, not from memory or LES samples.
Do I lose military retired pay if I buy back my time?
If you receive regular military retired pay, you generally must waive it for the years to count toward FERS. The big exception is reserve/Guard retired pay (non-regular retirement), which you can keep alongside a full FERS annuity that includes bought-back active time.

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