A Word of Caution

Before you decide to buy back credit for other employment, make sure you weigh the costs and benefits. Since the cost is based on the expected improvement in your pension, the cost can vary significantly over time and from one person to another. Generally, the longer you take to complete the payment, the more it'll cost. Why? Because the value of your pension grows with increases in your age, salary and other factors.

Buying back credit for other employment is not always your best financial choice. For example, if you leave teaching before you qualify for an unreduced pension, the cost of the buyback may be greater than the actual increase in your pension value.