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Started By
Message
Can anybody explain the State's retirement...
Posted on 1/29/13 at 11:53 am
Posted on 1/29/13 at 11:53 am
I work for the state(LA) and don't know exactly what they are doing with my contributions. I plan on additionally getting a Roth IRA.
Posted on 1/29/13 at 12:33 pm to Hu_Flung_Pu
what state plan are you in trsl, lasers,..?
Posted on 1/29/13 at 1:07 pm to Hu_Flung_Pu
They're taking your contributions and the state's contributions on your behalf and investing them. Their ROI has historically been very good.
It's still a defined benefit plan if you're already in it which means that you will be entitled to a guaranteed pension based on your salary and years of service. The pension benefit is computed by taking the average of your five highest earning years with the state multiplied by .025 (2.5%) multiplied by the number of years of service. For example, if your highest earning average is $50,000 and you retire after 20 years, your pension would be .025 x 20 x 50,000 = $25,000.
There are some minimum age requirements to retire but those can be flexible in return for a reduced benefit. You can also name a beneficiary to receive your pension after you die for the rest of the beneficiary's life. Read the handbook for details. A defined-benefit plan like this is the Cadillac of pensions. You can also invest in a deferred comp 457 plan (similar to a 401K) while working for the state.
It's still a defined benefit plan if you're already in it which means that you will be entitled to a guaranteed pension based on your salary and years of service. The pension benefit is computed by taking the average of your five highest earning years with the state multiplied by .025 (2.5%) multiplied by the number of years of service. For example, if your highest earning average is $50,000 and you retire after 20 years, your pension would be .025 x 20 x 50,000 = $25,000.
There are some minimum age requirements to retire but those can be flexible in return for a reduced benefit. You can also name a beneficiary to receive your pension after you die for the rest of the beneficiary's life. Read the handbook for details. A defined-benefit plan like this is the Cadillac of pensions. You can also invest in a deferred comp 457 plan (similar to a 401K) while working for the state.
This post was edited on 1/29/13 at 1:09 pm
Posted on 1/29/13 at 1:31 pm to Layabout
thanks for the info. is this the new one? I heard it changed
Posted on 1/29/13 at 1:32 pm to Layabout
Don't forget the Drop program. You can work for 3 years while putting your paycheck into an interest bearing account while drawing your pension as payment while working after achieving retirement age (20-25 years).
At the end of three years, that 36 months of compounded salary is paid out in a lump sum.
I've been considering buying a few years of service credit. I think it would cost me around $12K right now and allow me to retire in my mid 50's.
At the end of three years, that 36 months of compounded salary is paid out in a lump sum.
I've been considering buying a few years of service credit. I think it would cost me around $12K right now and allow me to retire in my mid 50's.
Posted on 1/29/13 at 1:47 pm to Hu_Flung_Pu
quote:
I plan on additionally getting a Roth IRA.
Good idea
You can't trust the state
Posted on 1/29/13 at 1:55 pm to Powerman
quote:
Powerman
quote:
Good idea
You can't trust the state
We've averaged 10% returns through the recession on an annual basis. If any of the last 5 governor's of our state would pay the state's share of our retirement contribution, we'd actually be completely solvent.
The problem is not that more are taking out than are putting in. The problem is not that we're losing money in the markets. The problem is our leadership kicking the can down the road while kicking us while we're down.
Zero raises in the past five years, no cost of living adjustments in decades. Retirement and healthcare under attack at every session...even though his plans are literally ruled Unconstitutional by a conservative panel of La judges...
Posted on 1/29/13 at 2:15 pm to Hu_Flung_Pu
State makes large promises to employees for decades, doesn't allocate enough money to pay for said promises, kicks can down the road every legislative session, creating nightmare scenario of large tax increases in future, or defaulting on pensions.
In other words, typical politics.
In other words, typical politics.
Posted on 1/29/13 at 2:35 pm to Hu_Flung_Pu
quote:
thanks for the info. is this the new one? I heard it changed
No, this is the original retirement plan. I believe the new plan went into effect on January 1, 2013 for new hires. Not sure about the details but if you were in the old plan I think you can elect to remain in it. Maybe others could clarify.
Posted on 1/29/13 at 4:05 pm to Layabout
quote:
I believe the new plan went into effect on January 1, 2013 for new hires. Not sure about the details but if you were in the old plan I think you can elect to remain in it. Maybe others could clarify.
Was ruled unconstitutional.
Posted on 1/29/13 at 4:54 pm to TigerintheNO
Surprised no one has mentioned the other benefit from State retirement - health insurance coverage for life.
Posted on 1/29/13 at 5:05 pm to PvilleP
quote:
Surprised no one has mentioned the other benefit from State retirement - health insurance coverage for life.
Good point. However if you've worked other places besides the state and are eligible for Medicare, you have to enroll in Medicare when you reach 65 and the state provides Medicare supplement coverage. The state pays 75% of the cost of that for the employee, less for any dependents.
This post was edited on 1/29/13 at 5:06 pm
Posted on 1/29/13 at 5:15 pm to GFunk
quote:
I've been considering buying a few years of service credit. I think it would cost me around $12K right now and allow me to retire in my mid 50's.
How do you buy time? How much is it?
Posted on 1/29/13 at 7:45 pm to Lil Man
You will need to fill out an application that can be found on lasers website. You can purchase up to 5 years of airtime. The cost is calculated by an actuary and varies depending on numerous factors. A $150 fee will have to be paid for the actuary to calculate the cost.
Posted on 1/29/13 at 8:12 pm to Hu_Flung_Pu
Be sure you know what plan you are in, as there are about 22 different ones. This will determine your retirement eligibility and accrual rate.
Posted on 1/29/13 at 9:08 pm to Ders
quote:
You can purchase up to 5 years of airtime.
Can that 5 years bought get you vested? Say you worked 5 years for the state but it takes 10 years to be vested.
Posted on 1/30/13 at 9:49 am to Jake88
quote:
Can that 5 years bought get you vested?
No. You have to have at least ten years of actual employment to be vested.
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