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- Thread starter SoapyCy
- Start date
If I’m understanding it right that 33,000 payout would be worth over 100,000 if you take the monthly payment for 20 years.
I’d be tempted to leave it alone.
I’d be tempted to leave it alone.
probably doesn't make a lot of difference what you do with that little amount in IPERS. Generally, if they want to buy you out, it is to their advantage, not yours. I don't know a ton about IPERS, but it seems like it has some kind of inflationary adjustments built into it.
Also, is there a possibility that you might get a public job in the future? Maybe you should hold on to it, in case you can contribute to it in the future. I know they are trying to get people out of it and into something else because it is way too generous with payouts. There is a lot going on with IPERS in the future, but I don't they will eliminate it, since it is for public employees.
Also, is there a possibility that you might get a public job in the future? Maybe you should hold on to it, in case you can contribute to it in the future. I know they are trying to get people out of it and into something else because it is way too generous with payouts. There is a lot going on with IPERS in the future, but I don't they will eliminate it, since it is for public employees.
Personally, I would take it out (given it is not earning a whole heck of a lot) and roll it into something that pays a better rate of return that you have more control over.
Listening to local radio last week and the whole IPERS debate came up. I think that IPERS is WAY overvalued as a benefit, with the exception being that you can potentially retire earlier than most of us private sector schmucks.
Grossly underfunded (according to my sources, by $7B) and is only generating a return of about 7%. While that seems "safe", it also doesn't have the upside other investment vehicles have.
I am surprised that they have not moved their new hires to a 401(k) and begun phasing out IPERS.
Listening to local radio last week and the whole IPERS debate came up. I think that IPERS is WAY overvalued as a benefit, with the exception being that you can potentially retire earlier than most of us private sector schmucks.
Grossly underfunded (according to my sources, by $7B) and is only generating a return of about 7%. While that seems "safe", it also doesn't have the upside other investment vehicles have.
I am surprised that they have not moved their new hires to a 401(k) and begun phasing out IPERS.
I went through this when I retired last year. By my crude calculations, you would only have to return about 5% after fees on the $33,000 to spin off more than $460 a month at age 55. The other concern you may or may not have is what becomes of the money if you should happen to not live to a ripe old age. I assume the annuity stops at death, and if you take the lump sum-obviously this is not a concern. Good luck
I would let it ride for now. By the looks of it IPERS will not be touched this legislative session so you should be safe from any funding issues there until at least January. Get through the mid term craziness in the markets and re-evaluate.
I don't think either option is a bad choice. If it were me, since the balance is fairly low, I'd probably roll it into a 401k or IRA just because having all my retirement income in the same place seems like it makes things easier down the road.
I agree that their investments are a little too conservative. I disagree that it is way overvalued. Starting Jan 1, teachers will contribute 6.29% while their employers will contribute 9.44%. I could be wrong, but most employers in the private sector don't contribute more than their employees I'd imagine.
There is a significant benefit to having a forced, and defined pension plan that allows you to be a little more aggressive in your other investments. No one will live forever, but it is nice knowing you will have retirement income the rest of your life without having to sell out to an annuity.
And yes you can potentially retire much earlier and take home 60-65% of your salary. Then you can go teach in another state or enter the private sector
I hope it stays in place.
Don't be greedy. 33 grand is not that much on the grand scale. However, when you get to be my age and see retirement coming, you'll wish you had a supplemental income beyond Social Security and whatever you've managed to save. An extra $680 a month would look pretty fantastic to me right about now.
Don’t anticipate any person needing money after they are dead. IPERS does not have COLA.
Good point. Most people let their cash windfall get away from them. Happens all the time. Take a trip. Buy a vehicle.
If you think that you may work in government again before you retire, leave the money in IPERS.
It is possible that you could earn a higher rate of return by rolling it over into an IRA/401k, but the reality is that most people do not invest wisely (they buy high and sell low, so to speak), so with that in mind, you may want to consider leaving the money where it is.
Politics drives retirement discussions anymore, and there is--as mentioned earlier--around 16 percent of an employee's salary being invested in IPERS. Most people NEVER come close to putting that much away in an IRA/401k. They certainly may be able to, but most simply do not, and most employers do not match at the level that the state is matching.
There probably is more real safety with IPERS, unless you believe that the government will renege on its promises to its employees. This may be something that you have to consider politically.
So, of course you can potentially have greater returns if you roll over the money, but my message board opinion is that IPERS is safer than most private investments.
It is possible that you could earn a higher rate of return by rolling it over into an IRA/401k, but the reality is that most people do not invest wisely (they buy high and sell low, so to speak), so with that in mind, you may want to consider leaving the money where it is.
Politics drives retirement discussions anymore, and there is--as mentioned earlier--around 16 percent of an employee's salary being invested in IPERS. Most people NEVER come close to putting that much away in an IRA/401k. They certainly may be able to, but most simply do not, and most employers do not match at the level that the state is matching.
There probably is more real safety with IPERS, unless you believe that the government will renege on its promises to its employees. This may be something that you have to consider politically.
So, of course you can potentially have greater returns if you roll over the money, but my message board opinion is that IPERS is safer than most private investments.
I moved from a public job in Iowa to one in Missouri. In my job in Missouri, we are offered 457 deferred comp plans, so I rolled all of my IPERS into that. The only hesitation I had was how it would effect "the rule of 88" if I ever come back to a public job in Iowa. Ran the numbers a few times, and it made the most sense for me to move it and try to gain more out of the lump sum.
There are death beneficiaries:
https://www.ipers.org/sites/default/files/media/17.pdf
I'd keep the monthly payouts.
Lots of things factor into this, but here are some simple #s to look at.
Assuming Life Expectancy will probably be about 85 for our generation.....
Total at 85:
($460 @55) $460 x 12 month x 30 years = $165,600
($680 @62) $680 x 12 month x 23 years = $187,680
($33K @3% Int) $33,000 x 1.03 x 50 year = $144,668.77 (hopefully conservative Bank)
($33K @4% Int) $33,000 x 1.04 x 50 years = $234,520.31 (a little better rate)
($33K @7%) $33,000 x 1.07 x 50 years = $972,081.06 (Probably invest in the Markets, in some risky/volitable stuff)
If you were to take it out and simply put into a conservative bank acct, you would probably be better off to leave it in IPERS(if IPERS is still around).
But if you were a risk taker, compounding intrest/returnd can do great things with money.....or help you lose all of it too....
Not an answer, but some numbers to ponder.....
Assuming Life Expectancy will probably be about 85 for our generation.....
Total at 85:
($460 @55) $460 x 12 month x 30 years = $165,600
($680 @62) $680 x 12 month x 23 years = $187,680
($33K @3% Int) $33,000 x 1.03 x 50 year = $144,668.77 (hopefully conservative Bank)
($33K @4% Int) $33,000 x 1.04 x 50 years = $234,520.31 (a little better rate)
($33K @7%) $33,000 x 1.07 x 50 years = $972,081.06 (Probably invest in the Markets, in some risky/volitable stuff)
If you were to take it out and simply put into a conservative bank acct, you would probably be better off to leave it in IPERS(if IPERS is still around).
But if you were a risk taker, compounding intrest/returnd can do great things with money.....or help you lose all of it too....
Not an answer, but some numbers to ponder.....
I tend to not trust state run anything. My mother in law retired last year from teaching in Texas for the last 20 years. She's now back at work because her health benefits tripled in one year. I'm sure IPERS is a lot different but it would still worry me.
