rktect1,
What would the IMRF give you a month after 20 years?
So I work for a municipality in Illinois. I have a pension plan through the IMRF which is one of the last well funded, non raided, pension plans left in Illinois. At any rate, I want to retire at 60. At 60 I will have 20 years in and can start taking my pension. This is based on my years and final pay. But they offer prior military an option to buy their service years. I have 4 years of service. IMRF wants $47500 for this 4 years so I would then retire with 24 years on my pension. Doing some simple math if I invest my $47500 at 6% return for 12 years I would have about $95000 Well, $95000 while retired earning 5% will provide me with about $400 per month. The pension plan extra 4 years would give me about $750 per month.
My problem is that giving away $47500/$95000 seems counter intuitive.
Would anybody here take this deal? Would I be passing up a good deal?
Any other thoughts I should be having on this?
11.80% for 2012, 24.79% for 2013, -5.13% for 2014 , 4.94% for 2015 WTF?, -0.04% for 2016 , 13.09% for 2017======= 8.23% , Moved to Vanguard in 2018
rktect1,
What would the IMRF give you a month after 20 years?
May the force be with us.
THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
Tracker = Check my position
11.80% for 2012, 24.79% for 2013, -5.13% for 2014 , 4.94% for 2015 WTF?, -0.04% for 2016 , 13.09% for 2017======= 8.23% , Moved to Vanguard in 2018
You just never know. In one hand i have the possibility of $47k going up or down and in the other i have a "gaurantee" of a rest of my life base retirement income that always increases 3% per year.
My tsp average for the past 15 years or so is about 8%. So im ok there. Im looking to adjust upwards.
My vanguard account average is about 7%. So im ok there too. This is where the $47k would come out of.
11.80% for 2012, 24.79% for 2013, -5.13% for 2014 , 4.94% for 2015 WTF?, -0.04% for 2016 , 13.09% for 2017======= 8.23% , Moved to Vanguard in 2018
THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
Tracker = Check my position
11.80% for 2012, 24.79% for 2013, -5.13% for 2014 , 4.94% for 2015 WTF?, -0.04% for 2016 , 13.09% for 2017======= 8.23% , Moved to Vanguard in 2018
So if I'm reading it right, the $47K buy gives you an EXTRA $750.00/month? If that is the case, if you estimate that leaving the $47K might yield $95K where you have full control. I would estimate that @ 95,000 / 750 =126 months which is 10.5 years to get your money back out of the annuity. which means you have to live to 70.5 to get to the break even point. Plus you don't have any control of that in their annuity. How much control do you want/need?
THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
Tracker = Check my position
rktect1,
Not doubting your math but the difference in the above statement is only $630. So maybe over the next few years that would increase to the $750. I agree with Frixxxx on the break even part. The other thing is you stated; "I have a pension plan through the IMRF which is one of the last well funded, non raided, pension plans left in Illinois." What will the pension plan look like in 15-20 or less? I wouldn't put all my eggs in one basket. It sound like your TSP and Vanguard accounts are doing well. It's my opinion but I wouldn't move your money into the pension fund.
May the force be with us.
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