Pension buyback help
My wife is a teacher and was on mat leave last year. We now have the option of buying back her pension and I would like to make sure it's the correct choice.
The details of her buyback are as followed:
Retirement date without buy back: Nov 30, 2043
Retirement date with buy back: April 30, 2043
Increase in future pension with buyback: $688.78/year
My wife was born in 1988 so that would make her 55 in 2043.
What happens if she wants to work after 2043? Would she just stop contributing to her pension at the point it's maxed out?
If we buyback, would we get a tax refund on it?
If we invest the money now and assume 3% annual return, we would have $16406 (we have room in TFSA) so it would be untaxed. 4% of that is about $656, which is just a tad less then what they are offering but obviously this amounts to more as the money can be passed on and last longer.
I also make more money, am older, don't have a pension and have room in my RRSPs.
To me it just seems to make sense not to buy back but it seems odd... could anyone give me some insight?