The fed retirement calculation is based on years served (percent x average of high 3 yrs of salary x years served), so if you buy-back your military time (i.e., I served on Active Duty, but not long enough to retire from) it increases the amount of my years served as a civilian, and increases the amount of the annuity I will receive at 62. You pay a fee for those years and months you served, and they increase your civilian years. I was National Guard, but I was deployed for a lengthy tour back in '03, so this adds about 2 years time to my calculation. I should make the deposit I paid back in short order of annuity payments, and then it is just extra money in the annuity from then on.