... build wealth with it, lol.
I decided that it will be the start of my attempt to one day buy a year of service with CALPERS so I can retire at 55 instead of 56.
If I bought a year of service on Jan, 1, 2012 it would cost me a lump sum of $4,875.00. Ideally I'd like to save up this amount so I can do paycheck deductions over 3-4 months so I'll actually save money because I wouldn't have to pay federal taxes on the amount deducted from my paychecks.
If i save the whole balance up ahead of time, i'd then be able to pull out the money from the savings account to "replenish" what my paycheck was short.
Every year I wait the price goes up since you have to add in all the interest the money would have naturally earned if it had been in the account (which is 6%).
Once i'm married, and Keith gets a job in California and we figure everything out, i'd like to be able to make this a goal of ours to save up the funds and "get it out of the way." I'll only be able to buy 1 year (38 years of service is the MAX you can have towards your pension) and after 55 my percentage doesn't increase, but if i retire before 55 it decreases... So i'm working till i'm 55 to get the full 2.7%... I just don't want to wait until August 11, 2042 to retire. (when i'd have exactally 38 years of service credit.) If I purchase a year, I can retire August 11, 2041, maxing out my pension.
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