MIL buyback

TrashcanDan

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Has anyone gone through this with the state of Ma?
What was the start to finish time?

Submitted all my stuff in Jan, sent an e-mail for a status update middle of March.
Assuming its dragging out due to the panic-demic, was curious what the wait time was before all this was.
 

n1oty

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You actually found someone to buy back your MOTHER IN LAW???????
No. He is looking into "buying back" his military active duty time so it can apply to a state pension. And to OP, I do not have any answers for you. It did not make sense for me, in my particular situation, to spend the money to buy back my time. Good luck and I hope someone has some answers for you.
 

smokey-seven

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I did it.

The pay in is for the amount of time you are buying and also at the rate of pay at the percentage required at the time of ENTRY into your civil service.

I t cost me 7K for 4 years of buy back.

You have to do the math for your total and then do the math for the total years of service actual and then gained by the buy back. If you hit the magic numbers earlier for 80% then it MIGHT be a good deal.

In my case, I got double whammied. MA came up with an, "early out" retirement and I left the job at 80% at 58 years of age. The military buy back put me way over the top and I actually could have gotten the 80% without the buy back due to the early out computations. Once you hit the magic numbers, the amount of time on the job (MILBB non inclusive) makes no difference. If there is no closed window of when you can do a MILBB, I offer the advice as to wait as long as possible before doing it. That way you keep your money till it's required to pay into it and it also opens a window for the changes in retirement options (in my case an early out and I could have saved 7K).

It's a math problem only you can fill in the blanks for the computation. Your local retirement board will run the numbers for you, both ways.

The interesting part of the computation is that you have to consider the amount of pay that WILL be deducted from your pay in order to pay INTO the pension system during the time you would be retired as opposed to being employed. That pay in stops on retirement. If you really want to get fancy, you can also include the NON payment of state income tax from the time of retirement, comparing it to continued employment. 3-5 years of that will net you more than 15-25% income.

The very best advice I could offer is to plow as much money into the whatever public employee outside retirement fund they are running now. The dollars saved in taxes, frequently outweigh a large portion of the money paid into the plan. I think I stuck almost 25% of my annual income into what was then PEBSCO and due to what the decrease in taxes was, it was absurd NOT do do that. 4-5 years of that gets you an annual salary total in the retirement plan.

Consult a fiduciary financial planner after you have the numbers from your retirement office.


.
 
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TrashcanDan

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You actually found someone to buy back your MOTHER IN LAW???????
You can sell anything online these days.

No. He is looking into "buying back" his military active duty time so it can apply to a state pension.
Bingo

I did it.

The pay in is for the amount of time you are buying and also at the rate of pay at the percentage required at the time of ENTRY into your civil service.

I t cost me 7K for 4 years of buy back.

You have to do the math for your total and then do the math for the total years of service actual and then gained by the buy back. If you hit the magic numbers earlier for 80% then it MIGHT be a good deal.

In my case, I got double whammied. MA came up with an, "early out" retirement and I left the job at 80% at 58 years of age. The military buy back put me way over the top and I actually could have gotten the 80% without the buy back due to the early out computations. Once you hit the magic numbers, the amount of time on the job (MILBB non inclusive) makes no difference. If there is no closed window of when you can do a MILBB, I offer the advice as to wait as long as possible before doing it. That way you keep your money till it's required to pay into it and it also opens a window for the changes in retirement options (in my case an early out and I could have saved 7K).

It's a math problem only you can fill in the blanks for the computation. Your local retirement board will run the numbers for you, both ways.

The interesting part of the computation is that you have to consider the amount of pay that WILL be deducted from your pay in order to pay INTO the pension system during the time you would be retired as opposed to being employed. That pay in stops on retirement. If you really want to get fancy, you can also include the NON payment of state income tax from the time of retirement, comparing it to continued employment. 3-5 years of that will net you more than 15-25% income.

The very best advice I could offer is to plow as much money into the whatever public employee outside retirement fund they are running now. The dollars saved in taxes, frequently outweigh a large portion of the money paid into the plan. I think I stuck almost 25% of my annual income into what was then PEBSCO and due to what the decrease in taxes was, it was absurd NOT do do that. 4-5 years of that gets you an annual salary total in the retirement plan.

Consult a fiduciary financial planner after you have the numbers from your retirement office.


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Fantastic, that info helps quite a bit. Appreciate the info.
Hitting 80% was a goal once, but thats since changed. Now the goal is to get 20 yrs in without murdering someone.
Based on what I've read on the mass.gov site, they buy back total time in rounded down to months, which effectively rolls back my start date, which is even better. Cost would be based off of whatever it is for mid 90's pay?
If I can hit the physical 20 plus whatever it rolls back to (state counts only years, starting from date of hire) I'll be doing pretty good. I'm only making 75 grand now so the 2% increments wouldn't add up to much.

Plan is to leave here when the 20's in (I'll be 48 or 49 depending) , maybe do an extra six or seven months depending on what the rollback date is,and then start drawing at either 50 or 55 as an additional income stream, as I still plan on working. It won't give me a huge amount ( 50% I think) but we'll be mortgage free in another 5 or so years.
We'll be moving outside of Chattanooga Tenn.

I had a 403B (still do, just sits) but had to stop adding money to it back in 06 after divorce. Just recently fulfilled child support obligations.

We had an appointment with a financial adviser on the 5th of may, but that got pushed off until people stop panicking.

Figured I's start on it now while I have the cash set aside instead of waiting till I was 6 months out.

So from time of filing to getting that dollar amount you had to pay back in to, what was that, 6 months? 8 months? year?
 

smokey-seven

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Now the goal is to get 20 yrs in without murdering someone.
heh heh... I hear that.

I had a 403B (still do, just sits)
As I stated before, you MUST max out payments to that 403B! You will not believe what the tax break works out to be. If you are puling down 75K, call your financial guy, give them your numbers and let them do the calcs. I tossed n something like 250+ a week and the tax benefit worked out so that it only cost me 40 or so a week. Please!!! have the planner push the numbers. Work some OT and put it ALL in.

So from time of filing to getting that dollar amount you had to pay back in to, what was that, 6 months? 8 months? year?
I don't understand the question. I paid the MILBB and waited probably 10 years before retiring. I probably filed the papers and inside of a week or three gave them a check. Thus the time lapse of getting an early out in effect negating my MILBB payment, because I hit the magic 80% with the early out alone. Yea, MILBB gave me 4 more years time served but 80% is 80% and it's not going higher.

You have to run YOUR numbers.

Cost would be based off of whatever it is for mid 90's pay?
It is based on your annual base pay (no OT) and the percentage of retirement pay in at THAT TIME. I paid in 4 years at my rookie year income rate and at 7%. Which worked out to the approx 7K number.

and then start drawing at either 50 or 55 as an additional income stream
You have me confused. You are going to retire and WAIT some years before collecting?

.
 

TrashcanDan

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I don't understand the question.





It is based on your annual base pay (no OT) and the percentage of retirement pay in at THAT TIME. I paid in 4 years at my rookie year income rate and at 7%. Which worked out to the approx 7K number.



You have me confused. You are going to retire and WAIT some years before collecting?

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Lets see-

1- From the time you filed, or applied for buyback, how long from applying to get that buyback #, to actually getting that buyback #, was it in months. So say you applied for buyback in January, did you hear back by June? July? Next January?
Not to actually start drawing, but getting something in writing saying " In order to gain X amount of time to your retirement pension, you have to pay X amount to get that"

2- No overtime. Ever. Has to be a state of emergency like snow storm or a road call, and even then its less than 20 hours a year like this year was. Anything I had in savings went to the purchase of 7.8 acres in Signal Mountain Tenn. Although between paying off the siding loan, fulfilling child support (still pay out of pocket for community college, but at least I know where that money's going) , we have been able to cram away a ton of cash each month, even with the wife maxing out her 401k and then some.
It would be a more viable option if my health ins wasn't $720 a month.

3.- Yes. Not retire really, but more do my 20 and leave for a much freer state.
So according to the mass.gov site ( Massachusetts State Retirement Board ) which is about as joyful to navigate as the old CommPass system, I'm a "prior 2012" hire, which states "you can retire at any age after 20 yrs in".
Now just to be clear, the % amount is a pittance for a municipality/ school system. Like 25% at my age of leaving. At the 20 year mark, I'll be 48.
The % goes up as you hold out to actually file for retirement.
So if I do 20 and then leave, I can wait till I'm 50, 55, 58, 60, whenever to actually file and start drawing on it. The % jumps up quite a bit at 55 yrs of age.
 

Manomet

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I just got my # back after about a 8 week wait, Worcester County Retirement. They want 17K for 4 yrs, it only cost me $2300 for 2.5 years of municipal time. I don't understand the big difference. I don't think it will be worth it for me.
 

smokey-seven

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So say you applied for buyback in January, did you hear back by June? July? Next January?
It was weeks for me to learn how much to pay. There was a time limit that it had to be paid, I disremember what that was, but I paid it very shortly after getting the numbers.

Like 25% at my age of leaving. At the 20 year mark, I'll be 48.
The % goes up as you hold out to actually file for retirement.

The % jumps up quite a bit at 55 yrs of age.
I was not aware that one could, "leave" and not take retirement until a later date. How does that work, leave of absence? Can you return to the job? That is another alternative. If you could return to the job for a year, a number of years down the road, retirement is calcd on the highest 3 years. That could kick all these numbers to a different level. I know a guy that took disability retirement and was forced back on the job 10 years later. He worked a year and retired and a tremendously higher number than his disability.

The retirement % is a combination of age and years of service. Adding in the military time alters that retirement % in conjunction with age. You have to push the numbers and look at it both ways and then consider the difference in ACTUAL DOLLARS by paying for the MILBB and taking the straight time pension. You can push the straight time numbers at 55 now and push the added years of service as well. Hypothetically, if the difference is say X dollars a year with mil buy back at 55 years old, that number goes on forever. If the buy back is Y dollars, then if you live 10 years after 55, if Y is less than the difference over 10 years, then it's worth the investment provided you out live the 10 years.

I just got my # back after about a 8 week wait. They want 17K for 4 yrs, it only cost me $2300 for 2.5 years of municipal time. I don't understand the big difference.
It is probably the annual income under the muni time vs the annual income under the Worc. Co. time. Also it could be the % into retirement in both places. Insure they computed that number on the income at the time of entry and not the current income. How long before you have to make the decision?

IANAL and not a financial type. I did my time and lived the system. I offer this only as from my old fart perspective and seriously suggest you consult a fiduciary financial planner for your final answers. Numbers crunching is what will tell you what your options are.

Point 1: The dollars you pay into a milbb, have to be considered against alternatives. This is one thing I did wrong in selecting what type of retirement I took. Alternatives are, a: whole or term life insurance and b: investing what you would have paid into the mil bb in an alternative.

If you have a significant other that you will be protecting with option B in retirement. Pick an average life expectancy for you and add up the TOTAL you will spend to protect them over that life expectancy. I took B and it cost me over 750 a month for that. She passed before me, but if I had put those same dollars into a whole life policy for me, that would have been 126,000 in premiums I could have paid. So, balance off a whole life policy against option B or a term to cover immediate expenses inclusive of total mortgage etc. This one I screwed up. I did get a 750$ a month bump when she passed, plus a reduction in health insurance. You can remove your SO with a death cert.

Point 2: Take the total dollar number you would have paid into mil bb, and invest that in whatever. 401,3 IRA or any retirement planning and toss that dollar value into that. Now add the expected percentage a year over your lifetime, compounded and balance that against the (increase) in annual income added to your retirement by the mil bb. I know this is partial guesswork, but it leads you in a direction.

I hope this helps, feel free to pester me for fatherly advice anytime you young whipersnappers! :rolleyes:

.
 
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TrashcanDan

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It was weeks for me to learn how much to pay. There was a time limit that it had to be paid, I disremember what that was, but I paid it very shortly after getting the numbers.



I was not aware that one could, "leave" and not take retirement until a later date.





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They must be behind the curve then. Its been close to 3 months, so I'll shoot another e-mail off tuesday. All the other vets tell me "do it sooner than later". I think I have 180 days after getting that buyback # to either start paying it off or not, and go through the process all over again.
You can buy it at anytime long before filing for "retirement". I consider it more "drawing off of" as I still plan to work until I'm at least 60. Providing my body allows it. Doing leaf springs at 45 hurts a lot more the next day than it did at 30. I'm too stubborn and thick headed to send it out to have them done.
Although I should probably start, its not like I get anything out of it for saving money.
Same thing with tires.
Maybe if they started having to pay for mounting 11R/22.5's they change their mind about that tire machine I keep putting in for.

Vesting.
It went from 10 yrs to 5 yrs? People move all the time, so its not unheard of, its just not that common. Thats why theres that graph, life happens and have to move out of state or leave that job for whatever reason.
Better job offer in the private sector, family leave, they get fired for whatever reason, hit the lottery for a million or so.
Even the ones that get shitcanned keep their time in if they're vested. If not vested, they get that money back minus a hefty tax penalty.
The "carrot on a stick" is the 80% #, which a lot of people get screwed by and led to believe they have to hit that number. And they feel they're stuck at that job until they hit that magic #.
Which is 100% understandable if they feel bound to this area. Not knockin it, wife and I are just tired of this state.

Perfect example of that is the guy I used to work with before he retired.
He was at 70 or 72 % at 61 or 62? He started when he was 18 or 19.
He had 39 years in and still wasn't at the 80% mark, and with the cutoff being 30 or 35 yrs "time in" max, he was paying into the system for X amount of years for nothing.
He was hired in the 70's, so his pay-in % was 7% I think. He was on the fence for a few years until one of the girls in payroll who handled all the retirement stuff sat him down and said "Look, unless you're making over 100 grand a year, which I know you're not (he was at 75-77 grand), that % you're trying to get is less than 3 grand a year. So you can spend another 3 years being miserable, or shit and get off the pot and not be miserable"
Once she ran all the numbers for him, he did his 6 month announcement the next day. He framed that letter.
He tap danced all the way off the property on his last day.

I'm at 9+2% for a pay-in..
I'm in the peon category, which I think is group 1.

1 of the stipulations are-
If I were to leave now (17 yrs in, already vested) and take another municipal job in this state (or govt job maybe too like the v.a.?) it would automatically roll into that pension plan.
If I were to leave now and take another municipal job out of state (not uncommon, new hampster is a good example) it wouldn't roll and I'd essentially be "starting over" at that job, but would still retain my time in for this armpit of a state.

What I'd lose is the 10+ yrs of paying into s.s., and if I got anything out of that, it would probably be only double digits a month at the age of 68 or 70 or whatever it is now, assuming I live that long.
 

smokey-seven

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They must be behind the curve then. Its been close to 3 months, so I'll shoot another e-mail off tuesday.
Stop dealing with email. Get it on paper, ret recpt requested. They can't prove you were not in communication, they cannot refuse your bennies.

Vesting.
It went from 10 yrs to 5 yrs?
But CAN you return to the state and take another job or the same one during that period? (the 3 year avg highest income may be a factor.)

He was at 70 or 72 % at 61 or 62? He started when he was 18 or 19.
To my mind, that makes absolutely no sense at all. 20 years old to 60 is 40 years on the job. 40 years OTJ and 60 years old does not compute to anything other than 80% in my book, unless teachers are computed differently. I had 80% at 30 years and less than 60 years of age.

What I'd lose is the 10+ yrs of paying into s.s
The SS pay is about nada. SS pays for my Medicare and the other 50% (160 a month) pays my muni health insurance. That's 320 a month TOTAL due to the pension reduction in SS. I carried a part time job and also was self employed for more than 20 years and due to the SS
"pension reduction", that's all I get. If you are hanging in there for the SS, rethink and here again, this is where a fin planner helps. I will never recover what I paid in at this rate even if I live well past my avg TOD.

I'm at 9+2% for a pay-in..
Plus Social Security? Teachers pay SS or for outside employment? See above.

Those numbers change fast. I missed 6% by a few months but grand fathered for no medicare! LOL. What still pisses me off is that pension pay in dollars were taxed at the time. After retirement it USED to be that pension pay in pay back (my payment in to the annuity) was non Fed taxable after retirement. Then in the 80's they changed that and I now pay Fed taxes on money I have already paid fed taxes on. If they start to think about having MA retirees pay MA taxes, GTFO before they pass that law.

In the 70's I know military retirees that were also MA civ service were told that they had to pay MA income taxes on the fed pension. Quite a few friends said FU and waited for the federal court to sort that out and the Fed Pensions was from then on, nontaxable. They cannot NOT have state retires not pay state taxes and force them to pay Fed Ret income in state taxes. That went round and round for a couple years.

It all sux.... best wishes and keep me informed as to how things are progessing.
 

TrashcanDan

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Yea, teachers have a different one.
Its an additional 5% or something like that. Different classification group.
Neither one of us were teachers so we get the peon option.

Found the graph, you'll see what I mean on how he got shafted. And you can see why I'm hot to buy back the MIL time.

Fun fact-
Cops can do a 20/50, or get 20 yrs in, leave with a 50%.
Staties probably get 100%
 
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