Pension or LIRA?
Q – I currently am a member of a municipal employees pension system and have contributed to it for 10 years. However, I no longer am employed with the municipality having left for the private sector which does not have a reciprocal agreement. One of the options available to me is to keep it where it is and at normal retirement age (19 years away) I can expect a modest pension indexed for inflation. Another option available is to move the “commuted” value of the pension benefit to a locked-in retirement account (LIRA), where I may direct and manage its investment, and will turn into a income fund at retirement age. Which option do you recommend and why? Thank you for your advice. – A.M.
A – We get this kind of question a lot and there is no simple answer. It depends on the exact terms of the pension offer and what kind of return you might expect managing a LIRA on your own.