# DB Pension Buyback versus Annuity



## Freddie (Sep 11, 2009)

Hi,

My wife has just joined the Federal Government after not working there for almost 30 years. She has the option to buyback pension from 1982 to 1987 at her much higher salary than back then. She is about 12 years away from retirement....not sure if she'll work all 12 of those years though. I have a couple of questions I hope you can help me with:

1. Does anyone know how the Government DB pension compares with a regular annuity in terms of cost? Trying to decide if the buyback is worth it or whether just using funds to by an annuity would be a better option. My gut feeling is that the Gov. DB pension is a cheaper option given, I assume, due to the portion that is contributed by the government.

2. My understanding is that buybacks from earlier than 1990 that are made with Cash are limited to $3,500 per year in terms of deductibililty of contributions. Can anyone confirm this?

Thanks,


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