A FERS military buyback is a deposit, generally 3 percent of the military basic pay you earned on active duty after 1956, that lets those years count toward your federal pension. It must be paid in full before you separate from federal service, and interest is added after an initial grace period.
If you served in uniform before your civilian federal career, those years can count toward your FERS pension. But not automatically. Under FERS, active-duty time after 1956 only counts if you pay what everyone calls the "military buyback" and OPM calls a military deposit. Skip it, and the time sits outside your pension for good.
Think of it as buying back seats you already earned. You did the service. The deposit simply pays the retirement contribution that would have come out of a civilian paycheck for that time. For many people, the price is small next to what the seats are worth. This guide covers the cost, the deadline, the interest, the retired-pay rules, and a worked example, plus the civilian deposits and redeposits that work in a similar way.
01What is a FERS military buyback?
A FERS military buyback is a deposit to your employing agency that credits honorable active-duty military service performed on or after January 1, 1957 toward your FERS annuity (OPM, retrieved 2026-10-11). Without the deposit, that service does not count under FERS for either eligibility or the computation.
- Military depositThe payment that credits post-1956 active-duty military service toward your FERS annuity. Commonly called the military buyback.
- Military basic payThe base pay you earned on active duty, not allowances such as housing or subsistence.
- Interest-free periodThe initial window after you are first hired in which no interest is added to the deposit.
- Civilian depositA payment for civilian federal service during which no retirement contributions were withheld.
- RedepositRepaying retirement contributions you took as a refund when you left an earlier federal job.
Service before 1957 is creditable without a deposit (OPM, retrieved 2026-10-11). For nearly everyone working today, that line does not apply, so the deposit is the path.
02How much does the military deposit cost?
The FERS military deposit is generally 3 percent of the military basic pay you earned during the active-duty periods you want to credit, with higher rates for two years: 3.25 percent for 1999 and 3.4 percent for 2000 (OPM, retrieved 2026-10-11). Interest may be added on top.
| Period of active duty | FERS deposit rate |
|---|---|
| Through December 31, 1998 | 3% of military basic pay |
| January 1 to December 31, 1999 | 3.25% |
| January 1 to December 31, 2000 | 3.4% |
| January 1, 2001 to present | 3% |
| Any portion figured under CSRS | 7% |
Source: U.S. Office of Personnel Management, FERS service credit, retrieved 2026-10-11.
The base is military basic pay only. Housing, subsistence, combat and other allowances are not included, which keeps the deposit smaller than many people expect. Your branch's finance center provides the earnings figures; your agency computes the deposit from them.
03When does interest start on the military deposit?
Interest on a FERS military deposit does not begin right away. It starts only after an initial interest-free period that begins when you are first hired into a FERS-covered civilian position, and after that, unpaid balances grow each year at a variable rate set by the Treasury.
The practical rule is simple: the earlier you pay, the less you pay. If you are early in your civilian career, requesting your military earnings and paying the deposit within the interest-free window means you pay the 3 percent and nothing more. Your agency's deposit estimate shows the date interest begins in your case, so ask for it in writing.
04What is the deadline to pay the military deposit?
You must pay the military deposit in full before you separate from federal service; it is paid to your employing agency, not to OPM (OPM, retrieved 2026-10-11). Federal regulations at 5 CFR 842.307 set the same rule.
The buyback window closes on your last day of work. After that, no amount of paperwork reopens it.
That deadline is the single most important fact on this page. People sometimes assume they can settle up with OPM after they retire, the way some civilian deposits work. For military service under FERS, that is not how it works. If the deposit is not complete when you separate, the military time will not count in your annuity.
- 01
Request your military earnings
Ask your branch's finance center for an estimated earnings statement, using the form your agency HR office provides.
- 02
Send it to your agency
Your HR or payroll office computes the deposit, including any interest.
- 03
Choose how to pay
Most agencies accept a lump sum or payroll deductions.
- 04
Finish before you separate
If paying by deduction, make sure the last installment posts before your retirement date.
- 05
Keep the paid-in-full record
Put the proof of payment in your retirement folder with your DD-214.
If you are within a year or two of retirement and have not started, start now. Earnings requests and agency computations can take months.
05How much does the military buyback add to your pension?
Each year of military service you buy back adds one year to the FERS formula, raising your annuity by 1 percent of your high-3 per year, or 1.1 percent if you retire at 62 or later with at least 20 years (OPM, retrieved 2026-10-11). Paid military time also counts toward eligibility, which can let you retire sooner without a reduction.
The eligibility effect can be even larger. Suppose you reach your Minimum Retirement Age with 26 years of civilian service. Without the deposit, you could retire under MRA+10, with a 5 percent reduction for each year under 62. With four bought-back years, you reach 30 years and retire at your MRA unreduced, and with the FERS supplement. The eligibility guide explains each combination, and the FERS annuity guide shows how service flows through the formula.
Your record, not our example
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06What if you receive military retired pay?
If you receive military retired pay, you generally must waive it to receive credit for that military service in your FERS annuity. Exceptions exist for retired pay based on certain service-connected disabilities and for reserve retirement, where the rules let you keep both.
- Regular military retirees. A 20-year military retiree usually must choose: keep the military retired pay, or waive it and credit the time in the FERS annuity.
- Disability-based retired pay. Certain disability-based retired pay does not have to be waived. Confirm your category.
- Reserve retirees. Reserve retired pay generally begins later and has its own rules for combining with FERS credit.
- VA disability compensation. VA compensation is a different benefit from military retired pay. Ask your agency how yours is treated.
Because these rules depend on exactly what kind of payment you receive, confirm them with your agency and the military finance center before paying a deposit. Paying for service you cannot use is an expensive mistake.
07What about civilian deposits and redeposits?
Civilian deposits and redeposits work much like the military buyback: they pay for civilian service that would otherwise count less, or not at all, in your FERS annuity (OPM, retrieved 2026-10-11).
| Type | What it covers | Cost | If you do not pay |
|---|---|---|---|
| Civilian deposit (pre-1989 FERS service) | Civilian service with no retirement deductions | Generally 1.3% of basic pay plus interest from the midpoint of the service | Not credited in the computation |
| FERS redeposit | Retirement contributions you took as a refund | The refund plus interest from the refund date | Counts for eligibility but not the computation |
| CSRS redeposit, service ending before March 1, 1991 | Refunded CSRS service | The refund plus interest | Credited, with a permanent actuarial reduction |
| CSRS redeposit, service ending on or after March 1, 1991 | Refunded CSRS service | The refund plus interest | No computation credit unless paid in full |
Source: U.S. Office of Personnel Management, FERS service credit and creditable service pages, retrieved 2026-10-11.
Civilian deposits and redeposits use Standard Form 3108, and OPM says no additional interest applies if you pay by December 31 of the year the bill is issued (OPM, retrieved 2026-10-11). If your history includes CSRS service, the CSRS guide explains how that portion is figured.
08How do you decide whether to buy back military time?
Most people decide by comparing the deposit with the added pension and the eligibility it brings, then checking any military retired pay. When the deposit is paid early, before interest builds, the math often favors paying, but your own numbers decide.
- Find your periods. List each period of honorable active duty after 1956 from your DD-214.
- Get the cost. Request earnings and an agency deposit estimate, including the interest start date.
- Price the benefit. Multiply your expected high-3 by the years you would add and by 1 percent.
- Check eligibility. See whether the added years move you to an unreduced combination or the 1.1 percent multiplier.
- Check retired pay. Confirm whether you would have to waive military retired pay.
- Check special provisions. Military time does not count as covered law enforcement, firefighter or controller service for the 1.7 percent rate. The special provisions guide explains covered service.
- Pay before you separate. Build in time for payroll deductions to finish.
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The FERS pension estimator lets you compare your annuity with and without the extra years, and the FERS hub shows how service credit connects to the rest of your FERS plan. Your SF-50s and the retirement application guide help you check that the paid service shows up on your record.
09Moving forward with your service credit
The military buyback is one of the few FERS decisions with a hard deadline and, often, a clear payoff. It rewards people who handle it early: before interest builds and well before the last day of work. If you served, put it on this month's list.
FFEBA is an education organization. If you want someone to look at your own numbers, we can match you with a Federal Retirement Consultant (FRC), a professional trained on federal benefits. The FRC designation is listed with FINRA. The first review is free, nothing is booked until you choose a time, and you are never obligated to work with anyone we introduce. Get matched with an FRC.
10Questions federal employees ask
How much does a FERS military buyback cost?
The deposit is generally 3 percent of the military basic pay you earned on active duty after 1956. The rate was 3.25 percent for 1999 and 3.4 percent for 2000 (OPM, retrieved 2026-10-11). Interest is added once the initial interest-free period ends.
When do I have to pay the military deposit?
You must pay the deposit in full before you separate from federal service for retirement (OPM, retrieved 2026-10-11). Once you leave, you cannot pay it, and the military time will not count in your FERS annuity.
Is the military buyback worth it?
It depends on your service, your high-3, your plans and any military retired pay. Each added year raises the annuity by 1 percent of high-3 (1.1 percent at 62 with 20 years). The calculator compares that with the deposit on your own numbers.
Can I buy back military time if I get military retired pay?
In most cases you must waive military retired pay to receive credit for that service in your federal annuity, though exceptions exist for certain disability-based and reserve retirements. Ask your agency and the military finance center how the rule applies to you before you pay.
Does military buyback time count toward retirement eligibility?
Yes. Once the deposit is paid, post-1956 military service counts toward both eligibility and the annuity computation under FERS. It can help you reach 20 or 30 years sooner.
What is the difference between a deposit and a redeposit?
A deposit pays for service where no retirement contributions were taken, such as military time or certain civilian service. A redeposit repays retirement contributions you took as a refund when you left an earlier federal job.
Reviewed by the FFEBA education team. Last reviewed October 2026.
Sources
- U.S. Office of Personnel Management, FERS service credit (military deposit rates and deadline), retrieved 2026-10-11
- U.S. Office of Personnel Management, FERS creditable service (military service, civilian deposits and redeposits), retrieved 2026-10-11
- 5 CFR 842.307, deposits for military service (Legal Information Institute), retrieved 2026-10-11
- U.S. Office of Personnel Management, FERS computation, retrieved 2026-10-11
- U.S. Office of Personnel Management, FERS eligibility, retrieved 2026-10-11
Every government figure on this page carries its source and retrieval date. Worked examples are educational estimates on the assumptions shown, not a projection of any person's benefit. FFEBA is an education organization, not a financial advisor.
