When I started as an instructor at Minnesota State University, Mankato, I was told to choose between two retirement plans: a pension or an independent retirement account plan (IRAP). I chose the IRAP because I would only work there for 4 years. But, I wondered which I should choose and how would the two plans compare over time? How many years should I work for the pension to be a better choice? How many years would I have to live after retiring? (or does that matter?)

At the time, I remember (I think) that employee contribution for the IRAP was 4.5% on gross income and the university contributed 6.5%, which is amazing.

(**Final Average Salary**) x (**1.9%**) x (**Years of Service**) = monthly pension amount

So, after four years at about $40,000, I would have earned (40000)x(.019)x(4) = $3040 per month. Okay, wait. They give an example:

30*54000*(1.9%) = 2565.

But actually that is 25650. So, I’m guessing the formula really is:

(**Final Average Salary**) x (**0.19%**) x (**Years of Service**) = monthly pension amount

So, after four years at about $40,000, I would have earned (40000)x(.0019)x(4) = $304 per month. Huh. Maybe I chose wrong after all (if this is even close to our formula)

**What do you think? Should portability figure in or only the monetary amount? Should I have done the math?**

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