Should I buy additional retirement credit?

[FLIGHT762]

I was able to buy one year of Military service a number of years ago, but it only cost me $15,500.00. It was worth it for me since I retired @ 90% at 55 years of age, but you have to crunch the numbers to see if it's worth your while. It may or may not be with the current rate.

[Haz]

San Berdoo Co. has various formulas for calculating buy backs.

Do it as soon as possible...cost increases exponentially as salary increases, and as you get closer to projected retirement date.

My 4 years military buy back was about 30k. 5 years of air time is running almost 205k (63k in interest. ) Unfortunately, since I was hired in my 30's, had to make up time somehow.

There is something to be said for pre-tax deduction, and "those 5 years" of my life.

Good Luck

[retired]

I looked at buying just two years back (2% per year x2 years = 4%). LACERA wants just under $60K. I don't think it's worth it to me. It would give me an extra $385.00 per month after retirement. I'd rather use my own $60K when and IF I need it to supplement my retirement pay.

...that's just me. Everyone's different.

At one time, IIRC, it was $4K for each year, but of course that was when I first got on and we drove cars with one red light on the roof.

[BT JUSTICE]

I thought about it but I'm glad I didn't. Got hurt and now I'm about to retire medical. That money woulda been blown if I had done it. The odds of getting hurt working a beat seem pretty good, and if you're close to 50 and driving a desk, it seems like it would cost more.

[Jack L]

Bought 5 years for the wife so she could retire at 50 years old with 30 years in. Best thing we did. Money well spent for us.......... freedom with a few good years left is a blessing.

[CaptMike]

I spent 43 grand to purchase 5 yrs last year. The way it worked out for me was that after working 25 years the ARC I purchased will increase my retirement by 9% every year. Based on my salary at the time, it would have taken me 8 years of retirement to recoup the 43K and see benefit after that. What made it better for me was that I rolled over 36K from my deferred comp which really only costed me 18K of my own money. The rest was matched by the county. The additional 7K that was lefrt over I set up as payroll deductions of 54 bucks a check for the next 10 years. So the 5 yrs of ARC actually costged me about 26K. I have since been promoted and will retire at a higher salary. As it stands now, I will recoup my 26K in a little less that 6 years. If I am lucky enough to make Lt. Before I retire, I will make my money back in just under 4 years. If the numbers work for you, you can't beet it. Its too bad that the ability to purchase additional retirement credit goes away at the end of the year for all of us.

[tahoetarga]

I used my deferred comp to buy two years of air time. Retired at 30 years total, with 27 of those years in a CalPERS agency, and the other three in a college PD. For me it was a no-brainer, especially after I did it the market took a big hit and the fund I was in reduced to about 55% of its original value.

The extra 6% I receive each month is well worth not having to worry about watching the stock markets really close.

[TrailerparkTrash]

Well I just changed my mind after doing some research. I just faxed my contract in to buy two years worth. I'll have 90% upon retirement now at age 55. My dept never had a 3%@50 plan to begin with anyway and I've always planned on retirement at 55. 55 is a "magic" number for agencies that do not have 3%@50, so for me it was a good deal afterall

In my case, I also have enough social security "credits" to collect SS at whatever age that will be (65, 67 or 70???) However what sucks is that because I have a government retirement plan that does NOT currently pay into SS, I will be penalized and only receive about 1/3 of what the average "joe" will get. I was told that even though I've payed my full "dues" of SS taxes, I or anyone else in a similar position does NOT receive the full benefits!

How screwed up is that????? I pay taxes into SS with another side business, yet I can't collect my full benefits because i already have another government retirement! I HATE THE FEDERAL GOVERNEMENT!

Hopefully that 1/3 SS payments I'll eventually get will at least be enough to buy me some beer every month!