nun
Thinks s/he gets paid by the post
- Joined
- Feb 17, 2006
- Messages
- 4,872
Well it looks like my buy in to my state pension might not be the amazing deal that I thought I had once engineered. Because of some poorly conceived legislation and accounting issues I found a loophole in the buy in and after a large volume of emails with the pension administrators I was assured that I'd be able to purchase the following state pension
Cost: $183k
Start date: 2016 at age 55
Amount: $20k / year
COLA: 2%
Doing the maths and assuming an 83 year life span that works out to a 12% interest rate and an initial 11% payout rate.
Obviously this is stupidly generous and while it's good for me it's bad for the state and tax payer so I contacted my state senator to look into the loophole and ask what the retirement board was going to do about it. I frankly didn't believe it and wanted some cover in case the retirement board came back at a later date and said they'd made a mistake and if a large number of people qualified for the loophole it really had to be closed.
After 9 months it's still under discussion and it might be that for the very small number of people that can take advantage of the loophole the administrative and legislative burden of closing it won't be worth it....if it does get closed the pension will cost me $282k......that's a 7% interest rate and a 7% starting payout rate. That's still pretty good, my wallet will be lighter, but at least my pointing out the loophole might help the politicians to craft better pension legislation in the future.
Cost: $183k
Start date: 2016 at age 55
Amount: $20k / year
COLA: 2%
Doing the maths and assuming an 83 year life span that works out to a 12% interest rate and an initial 11% payout rate.
Obviously this is stupidly generous and while it's good for me it's bad for the state and tax payer so I contacted my state senator to look into the loophole and ask what the retirement board was going to do about it. I frankly didn't believe it and wanted some cover in case the retirement board came back at a later date and said they'd made a mistake and if a large number of people qualified for the loophole it really had to be closed.
After 9 months it's still under discussion and it might be that for the very small number of people that can take advantage of the loophole the administrative and legislative burden of closing it won't be worth it....if it does get closed the pension will cost me $282k......that's a 7% interest rate and a 7% starting payout rate. That's still pretty good, my wallet will be lighter, but at least my pointing out the loophole might help the politicians to craft better pension legislation in the future.
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