Buying year of service KPERS

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Niplboss
Posts: 1
Joined: Wed Oct 20, 2021 3:12 pm

Buying year of service KPERS

Post by Niplboss »

Just wanted to get input. I am eligible to buy additional year of service. Aprox cost 10,078. Gain of aprox $130 a month or $1560 a year.

Am I correct in thinking this is a good deal and would be a annual15.4% return on the the price of the additional year, after a 10 year break even point.

Is my math flawed or am I looking at it from the wrong perspective?

Seems like a good deal?

I will be 53 years old when eligible to start pension. Next year.
bloom2708
Posts: 9859
Joined: Wed Apr 02, 2014 2:08 pm

Re: Buying year of service KPERS

Post by bloom2708 »

I agree, this seems like a good use of $10k if you have plenty of taxable/emergency funds.

You will come out ahead in 6.5 years.

Most of these scenarios are "yes, go for it".
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AAA
Posts: 1884
Joined: Sat Jan 12, 2008 7:56 am

Re: Buying year of service KPERS

Post by AAA »

Do you expect all forum members to know what KPERS stands for?
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Bruce
Posts: 401
Joined: Fri Mar 02, 2007 7:02 am
Location: Alaska

Re: Buying year of service KPERS

Post by Bruce »

It’s an incredible deal!
If you compare that amount against what you could buy in an annuity, you would spend well over $30,000 to get that amount paid back monthly.

https://www.immediateannuities.com/

Which should also cause you to make sure you are confident the pension plan you are in is funded well enough to live up to that promise for the rest of your life.
Bruce | | Winner of the 2017 Bogleheads Contest | | "Simplicity is the master key to financial success."
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