Military Service Buyback Calculator: Estimate the Cost and Annuity Increase
Use this guide to understand the assumptions, inputs, results, and next steps behind the calculator.
Created by Luis Gonzalez · Last updated October 21, 2026
A military service buyback, also called a military service deposit, is a payment that may allow qualifying federal employees to receive retirement credit for prior military service. This calculator estimates the deposit, added FERS-style annuity, projected lifetime payments, and a simplified break-even point. Eligibility and the actual deposit calculation depend on your employment and service record, so confirm the estimate with your agency or the Office of Personnel Management (OPM).
With the default inputs—$120,000 total military pay, four military years, a $105,000 High-3 salary, and 20 civilian service years—the calculator estimates a $4,560 deposit including modeled interest. It projects an additional $4,620 per year, or $385 per month, in annuity. The calculator estimates a one-year break-even and $155,560 in lifetime annuity increases through age 88.
Enter the service and salary details
Enter total military pay, military years, High-3 salary, and civilian years of service. High-3 is the highest average basic pay over a qualifying three-year period, not necessarily your current salary. The calculator uses the total military-pay amount and deposit rate to estimate a base deposit.
The years since separation and interest rate affect modeled interest. Retirement age, current age, life expectancy, and COLA affect the projected annuity timeline. The tool does not verify that the military service qualifies, whether you already receive a military pension for it, or whether you have completed required paperwork.
For related federal-benefit estimates, compare with the FERS Annuity Calculator and Military Retirement Calculator. A Military High-3 Calculator can help examine the salary assumption.
Default example: deposit and added annuity
The default deposit rate is 3%, and the modeled interest rate is also 3%. The calculator subtracts two years from the 10 years since separation when calculating interest:
- Base deposit: $120,000 × 3% = $3,600.
- Interest period: 10 years since separation − 2 years = 8 years.
- Modeled interest: $3,600 × ((1.03)^8 − 1) = approximately $960.
- Deposit including interest: $3,600 + $960 = $4,560.
- Total service after buyback: 20 civilian years + 4 military years = 24 years.
- Because retirement age is 62 and total service is at least 20 years, the calculator uses a 1.1% annuity factor.
- Annual increase: $105,000 × 1.1% × 4 = $4,620.
- Monthly increase: $4,620 ÷ 12 = $385.
The calculator projects benefits for 26 years, from retirement at 62 through the assumed life expectancy of 88, and applies a 2% COLA to future annual increases. Its projected lifetime increase is $155,560. It reports a 3311% ROI, calculated from the modeled lifetime increase compared with the $4,560 deposit; that is a nominal projection, not an investment return rate.
What the estimate assumes about FERS service credit
The calculator applies a 1.0% annuity factor in most cases and a 1.1% factor when retirement age is at least 62 and combined service is at least 20 years. This is a simplified rule in the calculator, not a complete determination of your FERS benefit. Actual annuity calculations can depend on retirement type, age, service credit, part-time service, special provisions, and other details. OPM’s military service credit information explains deposit requirements and how military service may count.
| Scenario | Military years | High-3 salary | Factor used | Estimated annual increase |
|---|---|---|---|---|
| Default assumptions | 4 | $105,000 | 1.1% | $4,620 |
| Fewer military years | 3 | $105,000 | 1.1% | $3,465 |
| Lower High-3 salary | 4 | $90,000 | 1.1% | $3,960 |
| 1.0% factor assumption | 4 | $105,000 | 1.0% | $4,200 |
The scenarios change one input at a time for comparison. The final row illustrates the formula at 1.0%; it does not establish that this factor applies to your case. Use agency estimates to confirm the factor, service credit, and deposit.
Deposit interest and timing can change the price
The calculator uses a deposit rate input and compounds interest on the base deposit after a two-year period. In the default example, eight years of interest at 3% adds about $960. A real service deposit can be governed by specific rules, deadlines, and interest schedules that are not fully represented by one rate and a simplified two-year delay.
Do not assume that delaying payment is cost-free. The modeled deposit grows with interest, while the annuity increase generally starts when the annuity is payable. Ask your agency benefits office for an official deposit estimate and instructions. OPM guidance explains when interest may apply and how the deposit is handled. If you also have military retired pay, verify how crediting that service affects your circumstances before proceeding.
A buyback can be attractive in the calculator because the estimated deposit is small relative to projected lifetime annuity payments. But the calculation does not discount future annuity payments to present value, account for taxes, model survivor benefits, or include every benefit interaction. It is a comparison of nominal modeled dollars over the entered lifespan—not proof that buying back service is always advantageous.
Formula: deposit, annuity, and break-even
Base deposit = total military pay × deposit rate
Default: $120,000 × 3% = $3,600.
Deposit including interest = base deposit × (1 + interest rate)^interest years
The calculator expresses accrued interest as base deposit × ((1 + interest rate)^interest years − 1). Default interest years are 10 − 2 = 8; the result rounds to $4,560 total.
Annual annuity increase = High-3 salary × annuity factor × military years
Default: $105,000 × 1.1% × 4 = $4,620 per year.
Break-even year = first projected year when cumulative annuity increase reaches the deposit
The first year’s modeled increase is $4,620, which exceeds the $4,560 deposit. Therefore, the calculator reports 1 year. This excludes taxes, discounting, survivor benefits, and the possibility that your real annuity differs from the estimate.
Weigh the annuity against the upfront payment
The main tradeoff is cash paid now versus an increase in a future federal annuity. A buyback may increase lifetime income, but it also uses cash that could otherwise pay debt, fund emergencies, or remain invested. The model does not assign a value to those alternatives or estimate investment performance.
Compare the increase with your expected retirement budget. A retirement needs calculator can help estimate spending, and a retirement income calculator can combine pension income with other resources. If a deposit would require drawing from savings, compare that withdrawal with a retirement withdrawal calculator or a retirement withdrawal strategy calculator.
Check whether your civilian service estimate is correct before using the result. If you have other government service, the Foreign Service pension calculator addresses a different system, while the Military Pension Calculator estimates a military pension rather than the federal civilian annuity. These benefits should not be combined without checking eligibility and coordination rules.
Frequently asked questions
Does buying back service automatically increase my annuity by the displayed amount?
No. The estimate assumes the service qualifies, the deposit is accepted, and the entered salary and service figures are accurate. Your agency and OPM determine the official credit and annuity.
Is the calculator’s 3% deposit rate a guaranteed rate?
No. It is an input assumption. Actual deposit rates and interest treatment depend on applicable rules and timing. Request an official calculation from your agency before paying.
Why does the calculator subtract two years before charging interest?
That is a simplifying assumption in the calculator’s formula. It does not replace the statutory interest schedule or determine when interest applies to your service deposit.
What does “break-even in one year” mean?
It means the calculator’s first year of projected annuity increase ($4,620) exceeds the modeled deposit ($4,560). It does not mean the entire decision is risk-free or that the deposit is recovered in one calendar year under every payment schedule.
Should I pay the deposit as soon as possible or wait?
Paying sooner may limit modeled interest, while waiting can preserve cash for other needs. The right choice depends on the official payment deadline, interest rules, liquidity, and what else the money could do. Get your deposit estimate and due dates before deciding.
Does this model include taxes and survivor benefits?
No. It projects an annuity increase and nominal lifetime payments, but it does not calculate income taxes or survivor-benefit value. Those factors can change the practical comparison.
Can I use this for CSRS as well as FERS?
Do not assume so. This calculator uses a simplified annuity-factor approach and is not a complete CSRS or FERS eligibility tool. Ask your agency which system and formula apply to you.
Next steps for a reliable estimate
Request a service-deposit estimate from your agency, confirm the military service dates and pay records, and ask how interest is calculated and when payment is due. Compare the official annuity increase with the cash required, your retirement timeline, and other uses for the money. Then test the broader plan with the Military Service Buyback Calculator and a federal annuity estimate from OPM.