How does the FERS military buyback work?
To count active-duty military service after 1956 toward FERS, you pay a military deposit of 3% of your military basic pay, plus interest that starts 2 years after you were first hired under FERS. You must pay it in full before you separate for retirement. Once paid, those years count toward both your retirement eligibility and your annuity, but if you get military retired pay you usually have to waive it.
What the buyback is
Many federal employees served in the military before their civilian career. Under the Federal Employees Retirement System (FERS), honorable active-duty service performed after 1956 does not count automatically. OPM says plainly: "To receive FERS credit for military service performed after 1956, you must pay a deposit" (OPM: Service credit).
People often call this payment a "military buyback." It is a one-time payment, made through your employing agency, that turns your military years into FERS service credit. OPM's handbook says all post-1956 military service must be covered by a deposit to get FERS credit "for any purpose," which means it counts for nothing until the deposit is paid (OPM: CSRS and FERS Handbook, Chapter 22).
The deposit only applies to military service performed before the separation your annuity is based on. Check with your personnel office about which periods on your records qualify, especially reserve or National Guard time.
What it costs
The deposit is a percentage of your military basic pay. Basic pay does not include allowances such as housing, flight pay or combat pay (OPM: Military deposits presentation).
| When you served | FERS deposit rate |
|---|---|
| Through December 31, 1998 | 3% |
| Calendar year 1999 | 3.25% |
| Calendar year 2000 | 3.4% |
| January 1, 2001 and later | 3% |
Source: OPM: Benefits Administration Letter 26-101.
If you left a civilian job to serve and came back under the reemployment law known as USERRA, OPM says the deposit may be the lower of the military-pay amount or the retirement deductions you would have paid on your civilian salary for the same period. Your agency figures out which applies.
When interest starts
You get an interest-free window. For FERS employees first hired on or after January 1, 1987, interest begins two years from the date you were first employed under FERS. If you transferred into FERS without any CSRS service, the two years run from the transfer date (OPM: Military deposits presentation).
After that window, interest is charged at a variable rate set each year and compounded annually. For 2026, OPM set the variable interest rate for service credit payments at 4.25% (OPM: BAL 26-101). Because the rate changes every year, the interest on an old balance mixes many years of rates. Your agency calculates the exact figure.
The practical point: the deposit only gets more expensive the longer you wait. Someone who pays within the first two years pays just the 3%.
How it changes your eligibility and annuity
Once paid, military years are added to your civilian service. That matters in two places.
Eligibility. Your Minimum Retirement Age (MRA, 55 to 57 depending on birth year) does not change, because it is set by age alone. What changes is the number of years you bring to it. Extra years can move you from an MRA+10 retirement, which is cut 5% for each year you are under 62, to an unreduced MRA+30 or age 60 with 20 years retirement. See When can I retire under FERS? for all four routes.
The annuity. The basic FERS formula pays 1% of your high-3 salary for each year of service, or 1.1% if you retire at 62 or older with at least 20 years (OPM: FERS computation). Each military year you buy adds one more year to that multiplication, for life, and it raises any survivor annuity based on your annuity too.
Military years can also qualify you for the FERS supplement by getting you to an MRA+30 or 60+20 retirement. The supplement amount is figured from your federal civilian earnings and FERS service, so ask OPM or your benefits office whether your military years change the amount or only help you qualify.
If you get military retired pay
Most people who retired from the military cannot count the same service twice. OPM says that if you receive military retired pay, you cannot receive credit for that military service in your FERS computation unless you waive the retired pay (OPM: Military retired pay).
There are two main exceptions where no waiver is needed:
- Retired pay for a service-connected disability incurred in combat with an enemy of the United States, or caused by an instrumentality of war during a period of war.
- Reserve retired pay under Chapter 1223 of Title 10 (the program that typically starts paying reservists at 60).
If you do waive, you send a written waiver to the Defense Finance and Accounting Service. OPM's page says to send it at least 60 days before your planned retirement, and you still must pay the deposit before you separate. A waiver trades a military pension you already have for credit in a civilian annuity, so compare the two amounts carefully. Your agency's HR office can tell you whether a waiver is needed in your case.
Steps and forms
Agencies handle the details a little differently, but OPM's guidance describes this order:
- Find your proof of service. You need your DD 214 or equivalent. If you don't have it, request your records from the military records center using Standard Form 180.
- Get your military earnings. Send form RI 20-97 (Estimated Earnings During Military Service) with a copy of your DD 214 to the pay center for your branch of service. It sends back your basic pay year by year.
- Apply to your agency. OPM's FAQ says FERS employees apply to make a payment by completing SF 3108, the Application to Make Service Credit Payment (OPM: Military service and retirement FAQ). Many agencies use it, modified for military service, or their own electronic process.
- Get your bill. Your agency computes the deposit and interest on OPM Form 1514.
- Pay it. You can pay in a lump sum or in installments, usually at least $50 each. If you wait until retirement, OPM's presentation says it must be a lump sum.
- Confirm it's paid in full before you separate. Your personnel office verifies the deposit with payroll. Keep your receipts and include proof with Schedule A of your retirement application (OPM: SF 3107).
Unlike civilian deposits, the military deposit cannot be paid to OPM after you retire. OPM is clear that you "must make the deposit payment for your post-1956 military service before you stop working for the government." Starting a year or more before your planned date gives time for records requests, which can be slow.
Dana is a made-up FERS employee. She served four years of active duty in the Army from 2004 to 2008, then was hired under FERS in 2010. Her military basic pay for those years totaled $90,000. She was born in 1970, so her MRA is 57, and she plans to retire at 57 with 26 years of civilian service and a $100,000 high-3.
- Deposit: 3% of $90,000 is $2,700.
- Interest: her interest-free window ended in 2012. If she pays in 2026, her agency adds interest for about 14 years. As an illustration only, if rates averaged 3% a year, $2,700 would grow to about $4,080. Her real bill uses each year's published rate.
- Without the deposit: 26 years at 57 is an MRA+10 retirement. $100,000 × 1% × 26 = $26,000, cut 25% (5 years under 62 × 5%) to $19,500 a year, and no FERS supplement.
- With the deposit: 30 years at 57 is an MRA+30 retirement. $100,000 × 1% × 30 = $30,000 a year, with no age cut, plus the FERS supplement until 62.
- Result: about $10,500 more a year in annuity for life, for a one-time payment of roughly $4,000, before taxes and any survivor reduction.
Not every case is this dramatic. If Dana already had 30 civilian years, the deposit would add about $4,000 a year (4 years × $1,000), which still pays for itself quickly but changes nothing about her retirement date.
What to do next
- Check your records. Look at your Official Personnel Folder to see that your military service is listed. OPM suggests doing this well before you apply (OPM: Military service FAQ).
- Request your earnings. Send RI 20-97 and your DD 214 to your branch's pay center.
- Ask HR for a deposit estimate. Ask for the amount with interest, and an annuity estimate with and without the military years.
- If you get military retired pay, ask HR whether you need a waiver, and compare the two pensions before you send one.
- Pay before you separate. Put a reminder on your retirement checklist.
Add your military years to your service in our FERS planner to see how they change your date and annuity.
Try the FERS plannerCommon questions
Is the FERS military buyback worth it?
For most people the deposit is small next to the extra annuity it buys, because each year adds 1% of your high-3 every year for life. It can be less clear if you must waive a military pension to get the credit.
Can I pay the military deposit after I retire?
No. Under FERS the military deposit must be paid in full to your agency before you separate. Unpaid post-1956 military service gives no FERS credit.
When does interest start on a FERS military deposit?
For people first hired under FERS on or after January 1, 1987, interest starts two years after your first FERS employment date. After that, a variable rate is charged and compounded each year (4.25% for 2026).
Does buying back military time change my MRA?
No, your MRA depends only on your birth year. The extra years can let you retire unreduced at your MRA with 30 years, or at 60 with 20, instead of taking a reduced MRA+10 annuity.
Do I need to waive military retired pay?
Usually, if you want the same years counted for FERS. Exceptions include combat-related disability retired pay and reserve retired pay under Chapter 1223 of Title 10.
What forms do I need for the military deposit?
Your DD 214, form RI 20-97 to get your military earnings, and SF 3108 (or your agency's version) to apply. Your agency computes the bill on OPM Form 1514.
Does military service count for the FERS supplement?
Paid-up military years can help you reach an MRA+30 or 60+20 retirement, which qualifies you for the supplement. Ask your benefits office whether the military years also change the supplement amount, which is figured from your federal earnings.
General information, not advice. We aren't part of OPM, DFAS or any military branch. Your agency's HR or benefits office calculates your deposit and can give you an official annuity estimate with and without your military service.