Is the FERS military buyback worth it?
To count active-duty military service toward your FERS annuity, you pay a deposit of 3% of your military basic pay (3.25% for 1999 and 3.4% for 2000). Interest starts 2 years after you begin FERS-covered work, and you must pay in full before you leave federal service. Because each year adds 1% of your high-3 for life, the deposit often pays for itself in a few years.
Your numbers
Your branch of service sends an estimate of your military basic pay when you request one through your agency (OPM's form RI 20-97).
How we worked this out
About interest
If you were first hired on or after January 1, 1987, the deposit is interest free for 2 years from the date you first started work under FERS. After that, interest is charged at a variable yearly rate set by the Treasury and compounded once a year (CSRS/FERS Handbook, chapter 23). This calculator shows the deposit without interest. Your payroll office will tell you the exact balance, including any interest, and you can pay in installments through payroll deduction.
Why it matters
- It counts toward eligibility too. Paid-for military time counts toward the years you need to retire, which can move your retirement date earlier and can remove the MRA+10 reduction.
- Pay before you leave. OPM says the deposit must be paid before you separate from federal service. Unpaid military time doesn't count for FERS (OPM: Service credit).
- Military retirees: if you get military retired pay, you usually must waive it to count the same service toward FERS, with exceptions for some disability and Reserve retirements (OPM: Military retired pay).
Our full guide walks through the forms and steps: FERS military buyback explained. To see your whole annuity, use the FERS and TSP Planner.
An estimate, not advice. We aren't part of OPM or the military. Your agency's payroll office sets the exact deposit and interest.