Originally Posted by
LDAHL
A few years prior to retirement, my state passed a law allowing me to purchase credit for my military service in our state pension system. The payment was based on an actuarial estimate of the future payments to my spouse and me. At the time, I looked at what an equivalent commercial pension would cost, and perhaps unsurprisingly the public pension was a significantly better deal. The law allowed me to pay up to 90% of the cost out of my Section 457 plan while stretching the tax impact over our actuarial life spans.
You mileage may vary, but it was basically a no-brainer for me. It was more cost-effective than a commercial annuity, and less likely to default due to a provider bankruptcy.
We also went with the 100% survivor benefit, as well as an option that guaranteed fifteen years of payments even if we were both to die. It was surprisingly inexpensive.