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10-16-2016, 06:01 PM
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#41
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Posts: 11,701
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When you fund your own pension, you understand just how much it takes.
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10-16-2016, 07:19 PM
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#42
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Thinks s/he gets paid by the post
Join Date: Aug 2011
Posts: 3,587
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@Running_Man
Thanks for filling in the legal details on how this can occur.
-gauss
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10-16-2016, 07:24 PM
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#43
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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CALPERS is huge and until now I didn't know they were in trouble.
My girlfriend has an interest and me thinks I will advise her to transfer to an IRA.
I do not trust pension plans.
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10-16-2016, 07:32 PM
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#44
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
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I think that is the risk the employees took. Just as she would have said before the issue arose that anyone could have gotten a government job and received a great pension too.
No pension is 100% safe. Public or private. It's not right, but unless there is some sort of claw-back provision, it is what it is.
The reality is, Governments receive plenty of money; they just prefer to spend it on other things than a pension program.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
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10-16-2016, 07:50 PM
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#45
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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I saw some paperwork they sent her, she asked for my advice.
She is divorced from her husband who is a CA Fireman.
CALPERS gave her some choices, take the dough (10% penalty, not 59.5), transfer to IRA or just leave it here for 6% forever. Six percent forever sounded good to me...
Now it doesn't sound good anymore.
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10-16-2016, 07:52 PM
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#46
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,405
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Quote:
Originally Posted by RobbieB
CALPERS is huge and until now I didn't know they were in trouble.
My girlfriend has an interest and me thinks I will advise her to transfer to an IRA.
I do not trust pension plans.
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As a local agency, miscellaneous member of CalPERS, I have been collecting a small pension from CalPERS for around 10 years. I worked for a large local government in the 80's and easly 90's that has always paid its contributions to CalPERS and is in no financial danger of not doing so.
The crediting rate for contributions is high, around 7 percent when I was accruing, before I retired. Over time, that crediting rate may not be sustainable, and agency and member contributions may increase. That does not mean the system will fail.
I would NOT advise someone to pull their money out of CalPERS based on a headline story. Dire predictions for CalPERS' future have been circulating for many years, even decades. If you are nearing retirement age and you do/did not work for a small, broke member entity, you are likely better off leaving your contributions in the system and collecting the pension.
Do the math, and then keep a close eye on the health of the system. And, of course, save and invest in other vehicles as part of your multiple streams of income approach to retirement security.
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10-16-2016, 07:59 PM
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#47
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,405
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Quote:
Originally Posted by RobbieB
I saw some paperwork they sent her, she asked for my advice.
She is divorced from her husband who is a CA Fireman.
CALPERS gave her some choices, take the dough (10% penalty, not 59.5), transfer to IRA or just leave it here for 6% forever. Six percent forever sounded good to me...
Now it doesn't sound good anymore.
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Sorry, I missed this. If she is close to retiring or at least to taking the CalPERS annuity, have her make an appointment with CalPERS to get them to do the annuity calculation. Then do the math. In general, most people are better off with the monthly retirement check.
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10-16-2016, 08:04 PM
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#48
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Thanks.
She is 51 and a half and has a split (divorce decree) of her husband's pension and I have no idea how this works. She is working as a sub in the CA public school system now.
I'm going to have to research this some me thinks.
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10-16-2016, 08:16 PM
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#49
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,405
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Did/does he work for a local agency or did/does he work for the state? Employees of local agencies are "miscellaneous members." Miscellaneous members are not eligible for CalPERS health insurance and some other benefits. Retirement ages and percentages also vary by agency.
I'm not sure what divorced spouses are entitled to, so my suggestion is to get as much information as you can about her account on-line. If she is entitled to an annuity at 50, go with her to a CalPERS retirement appointment and have them run the calculations.
ETA: Make sure CalPERS has a copy of the divorce decree. They need that to make the allocation.
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10-16-2016, 08:34 PM
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#50
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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I'm sure they have it, that's why they sent her the paperwork. As I remember an annuity was not an option. She could cash out, transfer to IRA or leave it in the system at 6%.
He is a city/county fireman, she was a stay at home Mom after the first child and has not worked in the 15 years from first child to divorce.
I'll look at it again to be sure.
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10-16-2016, 08:59 PM
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#51
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,405
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There may not have been an annuity option when this came up if she was too young. It's worth looking into to see what the options are now. However, at a guaranteed crediting rate of 6 percent, I would be inclined to leave the money in until I had strong evidence that the pension system was failing. CalPERS is NOT Illinois.
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