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Would it be crazy to get a loan to buy back service years of your retirement?
I have an opportunity to retire in 4yrs with full benefits if I buy six years of service time back. I wanted to know if it would be a good idea to get a loan if possible to fund this. I look at it as an investment. It will cost me approxmately 24000.00. I'm will be graduating with my BA in December 2011. I can work here two more years and retire with full benefits and then still have an opportunity to make more money using my degree with another company. I am 46 now.
Asked by
MavisMiller
1 year ago
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Like you, I was thinking I would have to get a loan to buy five years of service. For me, the cost is $100,000.
I found out that I can pay now....and pay as I go.
So, I'm going to pay a lump sum (out of my savings), and they will finance the remaining amount by withdrawing payments from my salary (now)....and, then (later), continue to withdraw payments from my monthly pension (15 year term).
Hope that helps.
kkwms 1 year ago
It really depends on your overall situation. What do you get with full retirement at your current employer? And, how much more do you think you can make elsewhere? (Keep in mind that for many positions, from a pay perspective, you may not be able to command the same salary at another company, as the economy has made it a buyers [employers] market, and a degree will only help to not have your resume thrown in the circular file and potentially be considered.)
You have some time to consider, and I would watch what the economy does, etc. But, if you get a bonus at your current company, I would put that on the side to save up to be able to buy the additional years of service than take out a loan.
phnxangell 1 year ago
Thank you for the advice. I'll think more about it before I make a move. I am saving for this time.
MavisMiller 1 year ago
Thank you for the advice. I'll check into it.
MavisMiller 1 year ago