Magic number to retire in Texas is 80. Ones age Plus service years. Mine would have been 77 (age 55 + 22 teaching years) except I took out my balance one time after moving out of state years ago leaving me with only 12 service years … thus my number is only 67 now … not smart, but I had no guidance at the time…
Anyway I got a note from the state that if I would like to buy back the 9 service years to bring me up to 22 again, that I would have to pay $28,700. I can make a lump sum or payment anywhere from a 1 year plan o $2200 a month to a five year plan of $590 a month.
But in Reality I want to get out of Texas asap with the retirement in my pocket. I have a young 11 yr old daughter that is in show business and I would like to accompany her on another tour and would like to wrap things up here within two years.
I have a $130,000 house with a loan balance of $75000. What is your opinion of doing a loan, possibly a home equity loan, to payoff my retirement plan immediately. The payments would be the same as the $590 given a 5 year plan. But with a Home Equity I would get a tax write off. And with still earning a very decent salary now with no debt, I would like to pay down the principal even more.
If I move I could sell the house the balance of the equity loan would be paid leaving me with appx $20000 cash. I would however be able to immediately start collecting appx 70% of my $53000 pre-retirement salary.. plus we get $850 from SS from her retired dad.
Or I could rent the house and continue paying on the loan and still build more equity in the property while we are traveling around.
The only way to avoid paying that amount if I move out of state, is to take another job in another state an wait out 13 years to get full benefits from Texas … 13 years .. oh my..
What to do
Pay via the State .. but no full pension until paid
Or Home Equity loan??