I recently accepted a new position and have the opportunity to buy back up to 10 pensionable service years from other workplaces. When I left each of the other plans, I transferred the funds into Registered Retirement Savings Plans and Locked-in Retirement Accounts. This means I have a hodgepodge of accounts with different rules attached to them. The security of a pension is attractive and I have the resources to do this, but it’s a big number and I wonder if it’s worth it. I am 53 and single, so am solely responsible for my financial future.

We asked Jillian Bryan, senior portfolio manager and senior investment adviser at TD Wealth Private Investment Advice, to answer this one.

Ms. Bryan said she has guided dozens of clients facing the same crossroads. She suggested identifying the possible consequences before making a decision.

The offer to buy back up to 10 years of pensionable service is attractive, she said, because it trades flexibility for a predictable, lifetime income. It also forces a real conversation about what you value most: certainty or control.

“You can convert liquid savings, currently in RRSPs and LIRAs, into a pension promise that you cannot reverse and that you cannot access as a lump sum,” she said.

The question is whether that promise, which often includes inflation protection and longevity insurance, is worth the upfront cost when compared with keeping the assets invested in accounts you control.

The ‘singles tax’ of going it alone on saving for retirement

When you are single, guaranteed lifetime income has outsized value. “There is no partner to smooth cash flow, and longevity risk becomes, as you said yourself, purely your responsibility,” Ms. Bryan said. But pensions that offer indexing reduce the risk of outliving your savings, she added.

“On the other hand, locking funds into a plan reduces flexibility to respond to emergencies or opportunities and may limit what you can leave to heirs. That is why these types of decisions are rarely purely financial,” she said.

Ms. Bryan suggested these three steps:

Get the facts from your pension administrator. Request a written buyback cost estimate and a projection of your pension at retirement both with and without the buyback.Calculate the implied return. A useful benchmark is whether the buyback generates an effective, inflation-adjusted yield in the 4- to 6-per-cent range on an actuarial basis. If the implied yield is within or above that range, the pension will likely outperform a conservative investment outcome for someone in their 50s who values income certainty. If it is well below that range, the pension may be less attractive purely on return grounds.Confirm tax treatment and funding mechanics. Ask whether you can transfer RRSP or LIRA funds directly to the plan to avoid immediate tax.

She recommended analyzing different scenarios with a qualified financial adviser.

“Model a range of market returns, inflation rates and lifespans. Include worst case, base case and optimistic case scenarios,” she said. Ms. Bryan also advised paying particular attention to the longevity and liquidity outcomes: How long must you live for the buyback to have outperformed keeping the funds invested?

“The security provided by a pension often reduces the mental burden of financial planning and makes practical choices in retirement simpler,” Ms. Bryan said. “That is not a small benefit.”

No workplace pension? Here’s how to DIY your retirement income

Still, she had a caveat: Do not let the desire for security blind you to important trade-offs. If you expect to need accessible capital for health issues, family obligations or business opportunities, you may prefer to keep more assets liquid. If you have heirs you want to leave a significant legacy to, examine how pension rules affect estate transfers.

“If the math and your priorities both point toward buying back some or all the years, the pension will likely be a wise choice,” she said. “If the numbers do not support that outcome, keep the flexibility and manage a portfolio with a plan for safe retirement drawdowns. Either way, you will make the decision confidently if you proceed with clear information and a deliberate process.”

Do you want advice on a financial planning or retirement issue that’s affecting you? Send us an e-mail.