MoneyWatch with Jill Schlesinger Pension Buy Back Strategy
5 snips
Mar 15, 2026 They tackle whether buying five years of pension service credits is worth the cost and how timing affects retirement. They explore consolidating old state accounts into a current 403(b) to fund the buyback. They discuss prioritizing Roth contributions, mortgage refinancing timing, and cleaning up estate documents and portfolio concentration. Practical action steps and tradeoffs are highlighted in short, clear guidance.
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Consolidate Old Retirement Accounts Into Current 403B
- Do roll old retirement balances into your current 403(b) so they count toward buying pension service credits.
- Vanessa had ~$40,000 in past-state accounts and Jill recommended consolidating to boost the 403(b) from $100k to ~$140k for buybacks.
Prioritize Pension Buybacks For Guaranteed Retirement Income
- Do prioritize buying pension service years because it's a guaranteed return compared with market exposure.
- Vanessa can buy five years at once (~$12,500–$15,000 per year) and then annually up to 10 years total for a larger guaranteed pension.
Pension Buybacks Turn Savings Into Guaranteed Income
- Buying pension years uses today's dollars to purchase a future guaranteed income stream, which can outperform uncertain market returns.
- Jill called this tradeoff a strong rationale for educators to buy back service credits.