Question for teachers.....Purchasing prior service credit towards your pension

[Anonymous]

The cost prohibitive was comes from the fact that buying yours of service means you are covering your contribution (7-7.5% of salary), school system contribution (7-7.5% matching) plus whatever the state also adds in each year or expects to lose to you in retirement payments.

[Anonymous]

Does anyone have any experience with this in 2025? I know this thread is from 2022.

[Anonymous]

If you are quoted tens of thousands of dollars you may be better off investing that money yourself. Also consider that your pension is based on your top three salary years when you retire (or it could be five years by now . . . I don't know). So if you retire earlier your pension will have to last longer and be lower due to your salary being lower because you don't benefit from further COLA or step increases. In Virginia the COLA amounts are low. I know people who are in their 80's on a teaching pension and really having some problems.

[Anonymous]

If you’ve taught past 20 years in md you are not eligible for step increases, just COLA but pensions in md give you cola anyways. I can’t imagine a former teacher having issues in their 80s with a full pension, social security, and possible 403b unless they have really been bad with money. Maryland is a terrible place to retire.

[Anonymous]

If you’ve taught past 20 years in md you are not eligible for step increases, just COLA but pensions in md give you cola anyways. I can’t imagine a former teacher having issues in their 80s with a full pension, social security, and possible 403b unless they have really been bad with money. Maryland is a terrible place to retire.

COLA in Virginia is capped at 3%. When inflation is running at 8% (like it was during COVID), your pension is being devalued quickly. Social Security is not a huge sum for someone who was on a teaching salary. And a 403b is not usually large for people who were on teaching salaries.

[Anonymous]

In DC, you can “buy” additional years after you fully vest in the pension, which takes 5 years.

I’m not sure if it’s worth it, though. You’d have to run the numbers to weigh the cost of buying years, the potential added value to your pension, and just keeping the cash and investing it.