Buyback Pensionable Time - Worth it?

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u/retire-free · Joined Oct 2024

This tool helps you calculate whether you should take the buyback offer - a one-time transfer in exchange of a higher, guaranteed pension after retirement.

Last update Oct 2024
  • Scenario 1: Buy it back
  • Scenario 2: Don't buy back, keep in RRSP
  • Which One Is Higher (%)

The chart shows the simple accumulated value of total pension income. Find where the purple line crosses the pink line. If you're confident of living past that age, then buyback is totally worth it.

Age

Try your numbers:

A =

B =

C =

Enter the before-tax yearly amount of your current Defined Benefits Plan.

D =

Enter the before-tax yearly amount of the proposed Defined Benefits Plan, if you buy back the pensionable time.

E =
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

Calculate the accumulated value of yearly pension, after buyback.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

F̃ =
∞
Follow Inflation

Calculations

(Expressions are evaluated at every year.)

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