Thank you all for your input.
In the end I have decided to only purchase 2 years and not 5 years of service for my Arizona pension for the following reasons:
I could fund the purchase with a pretax payroll deduction, but AZ requires I will have to pay 8% interest each month until the amount is paid off. Since this is too high, my next best choice would be to do a HELOC at 4%. If I did the HELOC I would also have to pay more interest on my primary mortgage because I will not be able to pay it off as fast.
Then there is the issue of the pension system itself. A few years ago, AZ had the 7 best pension in the nation. However, now it has fallen to 24th in just a few years. While many states are worse off than AZ, the future of state pensions may face additional headwinds and uncertainty, as political forces continue to work against public and educational employees.
Including opportunity costs, to buy 5 years, the ROI will be almost 15 years after I retire, achieved at age 70, if I retire at 55.
By not purchasing the extra years, I will be able to pay off my house much faster.
Once my house is paid off, I will have significantly more money to add to Vanguard retirements accounts.
Although, I do expect to live past 70, I feel that a 15 year payback is too long. I also prefer to have the peace on mind from eliminating my mortgage faster and growing separate retirement accounts in Vanguard and use the magic of compounding interest.
Thanks again for helping me look at different angles.