What if I looked at my Pension like it was my 401k?

I was sitting at my computer this morning and I thought, what if I looked at my Pension like a 401k... because it essentially is a 401k until I decide to pull a pension from it. If I leave my work, the money is mine, and I can leave it in there until I want to and it will earn 6% interest every year with no market risk.

Right now, each month I put $152.42 into my pension (manditory + elected contributions), which is matched by my employer sticking in $150.50 a month. Which turns out to be 9.38% of my GROSS MONTHLY income (ie 2 pay periods). Then, I put an additional $250.00 a month in my ROTH IRA... which turns out to be7.74% of my GROSS MONTHLY income (ie 2 pay periods).

Together, that's $552.92 a month or 17.12% of my GROSS MONTHLY INCOME (again, 2 pay periods.

but in reality, I put in more than that in each month because 2 months a year I put in an extra $1000.00 to my ROTH and I also contribute to my pension with those checks as well. If i average out my paychecks for the year (including my extra checks) my monthly base is $3,468.50. My monthly average to my pension becomes $165.12, & my employers becomes $162.96... which makes my Average Roth contributions become $416.00 a month

For a total of $744.08 a month to retirement out of $3,468.50... which equals 21.45%

holy cow!!!!!!!!!!!!!!

Change in Direction this year (Retirement wise)

I've decided that for the rest of 2010 i'll be just droping money into my CD and savings account Roth IRA. Then in 2011 i'll begin by saving up the $3,000.00 i'll initially need to open the account at Vanguard and all of the 2011 contributions will be for mutual fund transactions.

Its been a spendy month...

While I haven't been posting my monthly spending, I've still been keeping track!!! I just haven't had time to transpose my spreadsheet into blog form. Despite, working the holiday and everything, the majority of the extra cash I got from that is paying for my plane ticket to Utah for thanksgiving.

Plane Ticket break down: Ticket Cost: $376.40

Monthly Unbudgetted Money $12.09
Extra Utilities Monet $29.75
Leftover Fun Money $2.94
Labor Day OT Money $247.06
Budgetted Savings $84.56

I won't be able to drop much into savings this month considering i dropped $125 on my sister for her birthday/christmas & $322 on Homeowners insurance!

Plus I spent $40 at wallmart buying some vestive holiday decorations to help cheer me up and make my place feel more homey.

But I will get to save some $$$$

Remaining Monthly savings $76.18
Gasoline Rebate from work $30.68
Home INS Rebate $12.93

$119.79

I still have some grocery and gasoline money left in the budget for the month so who knows if i'll use it all or not. I also redeemed a $25.00 giftcard from MYPOINTS for Target so when I get that i'm going to use it to buy some things for the condo like cleaning supplies, etc so that will save me $25.00 from the budget for next month. I normally cash out my points for gift cards to kohls to go shopping but I don't feel like clothing shopping till i start training for the marathon fully (which is next month) =)

I bought my sister her birthday/xmas gift

I helped her adopt a puppy from the humane society shelter. =) $125.00

So my xmas list:
My sisters boyfriend
my sisters boyfriend's brother (if he comes from christmas dinner)
My mom
?"aunt"?

My boyfriend (who's coming for christmas!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!)!


After I get those finished, i'll be able to do some things for charity, and some small things for friends! Like my bestie, my "bro", etc.

Another position is open at work

...

The question is... do i apply?

While emotionally I'm not sure if I can take another rejection so soon if I don't get the job... but then on the flip side, I think I'd be upset if I didn't try for it.

I'd get a 5% raise if I got the job & i'd get slightly better hours, but i'd have to work the same days of the week I do now... (which isn't m-f)...

hmmmmmmmmm

Kiva Updates: Mid month report

The monthly repayments have been posted to my account, 2 more loans were paid in full!!! I have 6 active loans, and 13 fully repaid loans!!!!!

Current KIVA Loans:

Location: Kant, Kyrgyzstan
Repayment Term: 6 months
Activity: Cattle
Repayment Schedule: Monthly
Loan Use: To purchase more cattle for breeding

Location: Monrovia South, Liberia
Repayment Term: 6 months
Activity: Food Market
Repayment Schedule: Monthly
Loan Use: To buy more bags of rice, onions, peppers, palm oil, and beans
Repaid: $2.08

Gbawulu Group
Location: Monrovia South, Liberia
Repayment Term: 6 months
Activity: Construction
Repayment Schedule: Monthly
Loan Use: To buy bags of cement to make blocks
Repaid: $12.68

Iyunge Group
Location: Cibitoke, Burundi
Repayment Term: 8 months
Activity: Fruits & Vegetables
Repayment Schedule: Monthly
Loan Use: purchasing bigger quantities of beans but also new products to sell her customers
Repaid: $18.75

Fight For Progress Group
Location: Makeni, Sierra Leone
Repayment Term: 12 months
Activity: Food Market
Repayment Schedule: Monthly
Loan Use: Buy palm-oil, rice, and oranges in wholesale quantities
Repaid: $13.96

Altantuya Lhasuren
Location: Tsetserleg, Arhangai, Mongolia
Repayment Term: 20 months
Activity: Butcher Shop
Repayment Schedule: Monthly
Loan Use: to purchase meat
Repaid: $9.73

LOANS PAID IN FULL:

Zenaida Daing- Farming, Sta. Josefa, Agusan Del Sur, Philippines
Elizabeth Aidoo- Food Market, Wiawso, Ghana
Mobateli Plus Group -Manufacturing, The Democratic Republic of the Congo
Paz y Amor Group -Fruits & Vegetables, Dominican Republic
Dustmatov Eralboy - Livestock, Tajikistan
Seccelambras Group -Food Production/Sales, Peru
Rashidat Mumuni -Fish Selling, Nigeria
Karla Vanessa Montiel Barahona -Housing, Nicaragua
Eal Nub -Fish Selling, Cambodia
Atim Irene's Group -Medical Clinic, Uganda
Obama Group- Grocery Store produce- Dar Es Salaam, Tanzania
La Esperanza Group- Materials such as sugar cane, flour, sugar and coal- Ita, Paraguay
Siguikadi Group- Purchase of selling items -Kadiolo Sikasso, Mali


As of today i've loaned and re-loaned out a total of $475.00 through KIVA to 19 different groups in 18 different places all around the world. Its amazing what $25.00can do!

Like Kiva? Think its neat? then Lend Kiva

Looking at my pension... and how it works

With pensions and local governments in the news, I thought i'd take sometime to explain how my City's pension formula works.

Right now I make $17.98 an hour, 80 hours a paycheck, 26 paychecks a year. That makes my base salary $37,398.40 a year.

My Retirement formula is 2.7% of my highest 12 month base salary if I work until i'm 55 years of age. I can retire as early as 50, but then the % is a lot smaller, I think its 2%.

As long as I retire after May 8th, 2041 I'll receive the full 2.7% of my salary because that's when I turn 55. My Pension formula can never be changed, but what can be changed is the amount I have to pay for these benefits. At max, it can be 8% of my salary. Right now, 3% of my salary is put towards my pension, while the City pays the other 5%. Over the past few years the trend has been to make employees may more money towards their retirement gradually. I wouldn't be shocked if next year the pension requirements were 4% employee 4% employer or higher.

In today's dollars, if I were to take 2.7% of my salary that comes out to be $1,009.75. I then am supposed to take that amount and times it by how many years i've worked for my city (currently, I have slightly over 5 years without purchasing anything). When i'm 55, that will be 36.005 ( again not including any time i'm buying right now or may in the future). = $36,356.29 which is 97.21% of my current salary.

Now, I am purchasing around 0.8 of a year of service credit from my 2 years working part time when I was a teenager. Most people my age change jobs, and don't stay with a company long term. I'm different. I still work for my very first employer and while i picked up jobs in addditon to the one I have now, I stayed. The 0.8 of a year was calculated by adding up every hour I worked before I was enrolled in CalPERS.

If I tack that on to my service credit, I'd have 36.805 years of service & I then get a check for $37,163.84 a year, or 99.37% of my current salary.

If I were to work an additional year and 2 months from my hire date, i'd end up with 38 years of service and it would be pointless for me to continue working because all pensions are capped with 38 years of service.

So If I were to retire on July 20th, 2042 my unmodified pension would be $38,370.50, or 102.5% of my current base salary -- more $$$ then i'm currently making right now. I'd get a raise to retire.

I also have the option of purchasing that same year with my own money and not having to work it, thus retiring at 56 with the same pension on July 20th, 2042. They are changing how much it costs to be able to buy additional service credit as of 2 days ago, so i'm not sure if this would be a good trade off for another year of working. I'll run the numbers for it in November when the new calculators go online that reflect the price changes. I have my old estimate saved so i'll be able to compare the difference in price to see if its worth it.

Essentially, if I stay and continue working and retire with a pension, i'll have worked for the City for 41 years, since i started right after my 16th birthday. Hypothedically thinking, the average college grad graduated at 24-25.. if you tack on the 41 year i'll have worked for the company, that would put it at a more understanding 66 years of age for retirement.

Guess sometimes it pays to be old fashioned. Mind you all these dollar amounts are based on me never getting another raise in my life and never receiving a promotion.

From the CalPERS website:

Press Release
September 15, 2010


External Affairs Branch
(916) 795-3991
Patricia K. Macht, Director
Brad Pacheco, Chief, Office of Public Affairs
Contact: Edward Fong, Information Officer
pressroom@calpers.ca.gov


New CalPERS Actuarial Assumptions Increase Cost of Service Credit Purchases
Slight Benefit Increase for Optional Benefit Payment Choices

SACRAMENTO, CA – The California Public Employees' Retirement System (CalPERS) today announced that newly adopted actuarial assumptions will increase the cost of service credit purchases effective immediately.

The new assumptions will also result in slightly higher benefit amounts for members who choose an alternative payment option at retirement that reduces their unmodified benefit amount in order to provide a benefit for a spouse or beneficiary upon the retiree's death.

"Under state law, we are required to charge the member the full cost of the additional liability due to the purchase of additional service credit," said CalPERS Vice President George Diehr. "The new assumptions will increase the member's liability to the employer so the cost of service credit purchases will have to go up."

In April of this year, the CalPERS Board adopted a new "experience" study that updated various actuarial assumptions based on the actual experience of CalPERS members from 1997 to 2007. The study found that CalPERS members were living longer than previously assumed, members were retiring slightly earlier, and members with higher years of service were receiving bigger salary increases than previously assumed. The new actuarial assumptions will result in an increase in the average cost of service credit purchases under the "present value" costing method, ranging from 12 percent to 38 percent, depending on the member's retirement plan classification.


Plan Average Increase
Public Agency Miscellaneous 17%
Public Agency Safety 24%
State Miscellaneous 18%
State Industrial 12%
State Safety 23%
Police Officers, Firefighters 23%
California Highway Patrol 16%
Schools 38%


The most common types of service credit purchases that use the present value costing method include Additional Retirement Service Credit (ARSC); military service; and leave of absences for maternity or paternity, educational purposes, sabbatical, serious illness, and service leave.

"We regret the fact that the new assumptions will result in higher costs for service credit purchases," said CalPERS Chief Actuary Alan Milligan. "Our fiduciary responsibility requires us to make sure that benefits are fully paid for."

While the new actuarial assumptions will increase the cost of purchasing service credit, CalPERS members who select an optional benefit payment method at retirement instead of the unmodified allowance in order to provide a benefit to a spouse or beneficiary upon the member's death will benefit from a smaller reduction in the benefit amount, about $5 to $10 for every thousand dollars of benefit, resulting in a slightly higher benefit amount. More information about how the new actuarial assumptions will affect the cost of purchasing service credit and optional benefit payment methods are available on the CalPERS website at www.calpers.ca.gov.

The new assumptions go into effect on September 16, 2010. They will be used for service credit purchase cost requests postmarked or received by CalPERS September 16, 2010, or later, and for calculations of optional benefit payments for members who chose a retirement date of September 16, 2010, or later. Any service credit cost requests postmarked or received by CalPERS September 15, 2010, or earlier will be calculated with the old assumptions. Likewise, benefit calculations for retirement dates of September 15, 2010, or earlier will use the old assumptions.

CalPERS is the largest public pension fund in the U.S. with assets of approximately $210 billion. The retirement system administers retirement benefits for more than 1.6 million active and retired California public employees and their families on behalf of 3,000 public employers, and health benefits for more than 1.3 million enrollees.

I'm glad I elected to buy my back time when I did. Too bad for future buying. If its too expensive, I can just work 1 year, 2 months longer and get the same benefits without paying another dime.

Kiva update:

I got this from KIVA today... some silver lining to my not so great day... I didn't get the job I applied for. =(


This is an update on your loan to Obama Group in Tanzania.

Greetings from Tanzania! Thank you for supporting Saraya Salum and theObama Group with a loan. With the loan Saraya received, she startedselling water, juice, sodas at wholesale price. She is doing very well.With the new stock in her business, her monthly profit rose from around$652 to around $661. She used the profit to pay school fees andhousehold expenses. Saraya's family is happy. Saraya and the Obama groupare very grateful for the loan and are thankful to everyone who hassupported them.

Thanksgiving plans

I think I may be getting on a plane and flying out to Utah for thanksgiving!!!!! if all goes to plan, I'll be flying out Wednesday night after work, and i'll be there thursday friday saturday, sunday and hopefully fly home one Monday if I don't get the promotion I applied for. That means i'd only have to take one vacation day because that's one of the holidays I don't have to work. I found a ticket for $300 online

If I get the promotion, I think it would be wed night - Sunday night, but the ticket would cost me $470! so i'm hoping i'd still be able to take off the monday to fly back. Its more time with BF and it makes the trip a lot cheaper.

Retirement Update

End of 2009 Balance: $26,529.33 | Current 2010 Balance: $31,119.68
Additional Contributions since 2009: $4,438.55
Growth: $401.80 (2.53%)

Discontinued 401a Account: Makes up 2.92 % of my Retirement
$908.70/$898.62 invested. (New contributions suspended.) Bond Fund

Discontinued 457 Account: Makes up 3.32% of my Retirement
$1,034.25 (Earns pennies a week and I can’t move the $$$$ until I quit.)

ING DIRECT CD Roth IRA: Makes up 54.78% of my portfolio
$17,046.49/$16,750.00
Up 1.77% from inception +$296.49

Pension: Approximately 38.18% of my portfolio
If I quit tomorrow, I’d just have the cash in the account (earning an automatic 6% until withdrawn).

Total: $11,880.24

$2,800.23 (What I’ve put in out of my paychecks) 424.25% Return from inception.

I’m currently buying additional time in my retirement accounts from when I was 16-18 years of age (Cal PERS service prior to membership). It’s less than a year’s worth of service credit, but I’ll be having $33.06 deducted from each paycheck for a while….

Mortgage update+ Total Condo Costs

Mortgage Update:
I made my 12th mortgage payment today... Yup, I've had my place for a full year!!!! It's crazy to think this place has been mine for a whole year... time sure seems to be flying by. Anywho, its mortgage update time.

I paid my mortgage and tacked on an extra $103.35 this month so my new balance is $115,442.32 (my goal is to get it under $115,000.00 by the end of 2010.)

If I pay the minimum balance from here on out, I'll pay off my mortgage in April of 2039. To date, i've saved $8,696.74 in interest and $3,210.93 in principle by paying a total of $709.28 in additional principle payments over the life of my loan.

Total Condo Costs:
Money paid to aquire the property and get keys: $7,057.08
Money Spent to Remodel and Repair Property: $17,672.29

Total: $24,729.37

First Time Home buyers Credit: $8,000.00
Current equity: $4,557.68(not including any change in value the upgrades gave me)
Electrician costs -$95.00
TILE Refund $1,265.00

Current amount in the hole: $11,001.69

Open Enrollment Time...

It's official, the new health packets are here and everything is going up again.

Last year I paid $454.99 a month for Kaiser | $17.99 a month for Dental | and i got to cash out the remaining benefits $352.02 a month or $176.01 a paycheck because I get $825.00 a month for benefits.

Kaiser health insurance will be $477.95, a $22.96 increase or 5.04%.
Dental will be $18.53, a $0.54 increase or 3.00%.

So this year i'll only get to cash out $328.52 or $164.26 a paycheck. =(

I'm just thankful i'm not hitched, Medical benefits for 2 people $955.90, dental 33.25, and vision 36.00. All of that totals $1,025.15 which would be an out of pocket expense of $200.15 (after i'd loose the cafe cash)!!!

Work Changes

With more employees retiring, It looks like I won't be helping out with a lot of commitees anymore so most of my overtime i've been applying to the condo won't happen for a while.

I took the last bit of OT from last month, added it to the extra I normally pay, and besides my normal payment, I added an extra $103.35 to the mortgage.

Also, I applied for another job at work. I should find out later this week or early next week.

*****crosses fingers*****

Comments

I answered back some comments from all of you on the respected post pages, hope that clarifies a few things!!!

A bit of this and that

I'm proud to say that most of my goals for the year should be accomplished via auto pilot for now with things that have already been ear marked into the budget.

****GRINS****
In other little news...,
I was able to use the cash in my wallet left over from the foodie fest to mail the boyfriend his little care package (the mail man also told me there was a cheaper and fast way to send it instead of flat rate because it wasn't very heavy) I love helpful people...

so other than that, here's the start of September:

Gasoline $46.42

Condo Insurance Renewal Policy $322.00 (with all the changes finally made)

Dinner out with a friend $29.00 (a bit on the pricey end but we did appetizers, meal, and dessert and it was nice to hang out with my chef buddy.)

I know that today I'll be picking up a present for my friends birthday, and I have her birthday dinner to go to tonight as well.... and another birthday later this month too.

Tomorrow I'll finally get a chance to go grocery shopping (I've been a busy little bee!!! and my un-kept condo is just the beginning besides my slacking on the blogging and the posts).

I'll be working Labor day (And then have to work my regular 5 days because I have to come in on my day off)... but the overtime and holiday pay will be nice since I have a few birthdays and things coming up this month... and by working labor day I get other holidays off instead (we sign up in advance for holidays... i'm just bummed that I got stuck with the night shift.)

Kiva Update:

Location: Kant, Kyrgyzstan
Repayment Term: 6 months
Activity: Cattle
Repayment Schedule: Monthly
Loan Use: To purchase more cattle for breeding

Mamile Orozalieva is the leader of this group. She is 37 and married with a daughter and a son, both of them at school. Her husband works in construction.

In order to make money, Mamile takes orders and sews national clothes and sells dressmaking supplies. She started this activity four years ago with an initial investment of 4,000 soms and now makes 8,000 soms per month. She is also engaged in cattle breeding.

With money received from the loan, Mamile wants to purchase more cattle for breeding. In the future she wants to increase the number of her cattle and save money to provide her children with a good education.

The other group members are:

Sapargul Konokbaeva is treasurer of the group. She is forty-three and married with three children: her elder daughter is sixteen, her elder son is thirteen and her youngest daughter is two years old. Her elder daughter and son go to school and her youngest daughter is at home. Her husband is a salesman. Sapargul helps her husband in selling lime. Before, her husband was assisting his friend in selling lime but, five years ago, he decided to start selling it himself. His initial investment was only 2,000 soms but now they receive 10,000 soms monthly. Sapargul is applying for a loan in order to increase their turnover, using the loan to purchase more lime. In the future, they are planning to reinvest all their money in the purchase of lime.

Indira Shekeeva is thirty-eight and married with three children: her daughter is sixteen, her second, a son, is twelve and her youngest son, is two years old. Her daughter and her elder son go to school and her youngest son is at home. Her husband is a meat supplier while Indira works at a sewing workshop and in a café called “Tofic”. Twelve years ago, her parents gave her a calf on the birthday of her son and she decided to start cattle breeding with that calf. Since that time, they have significantly increased the quantity of their cattle and have sold some. Now, they have a milk cow and two calves. Cattle breeding brings them 14,500 soms monthly. Indira is applying for a loan in order to purchase additional cattle to continue their cattle breeding business.

Beishebiubiu Ozhoshova is fifty-seven and married with a son twenty-two years old. Her son works abroad. Her husband is a guard at a local school while Beishebiubiu is a housewife who breeds cattle while she is at home. She started cattle breeding three years ago with an initial investment of 1,000 soms and now makes 10,000 soms. She plans to increase the number of her cattle and therefore she is applying for a loan in order to purchase additional cattle for breeding purposes. With the profits from cattle breeding, she is planning to buy a car.


Current KIVA Loans:
Location: Monrovia South, Liberia
Repayment Term: 6 months
Activity: Food Market
Repayment Schedule: Monthly
Loan Use: To buy more bags of rice, onions, peppers, palm oil, and beans
Repaid: $0.00

Gbawulu Group
Location: Monrovia South, Liberia
Repayment Term: 6 months
Activity: Construction
Repayment Schedule: Monthly
Loan Use: To buy bags of cement to make blocks
Repaid: $4.22

La Esperanza Group
Location: Ita, Paraguay
Repayment Term: 6 months
Activity: Food Production/Sales
Repayment Schedule: Monthly
Loan Use: Materials such as sugar cane, flour, sugar and coal
Repaid: $23.44

Iyunge Group
Location: Cibitoke, Burundi
Repayment Term: 8 months
Activity: Fruits & Vegetables
Repayment Schedule: Monthly
Loan Use: purchasing bigger quantities of beans but also new products to sell her customers
Repaid: $14.58

Siguikadi Group
Location: Kadiolo Sikasso, Mali
Repayment Term: 8 months
Activity: Retail
Repayment Schedule: Monthly
Loan Use: Purchase of selling items
Repaid: $20.83

Fight For Progress Group
Location: Makeni, Sierra Leone
Repayment Term: 12 months
Activity: Food Market
Repayment Schedule: Monthly
Loan Use: Buy palm-oil, rice, and oranges in wholesale quantities
Repaid: $12.50

Altantuya Lhasuren
Location: Tsetserleg, Arhangai, Mongolia
Repayment Term: 20 months
Activity: Butcher Shop
Repayment Schedule: Monthly
Loan Use: to purchase meat
Repaid: $8.34

LOANS PAID IN FULL:

Zenaida Daing- Farming, Sta. Josefa, Agusan Del Sur, Philippines
Elizabeth Aidoo- Food Market, Wiawso, Ghana
Mobateli Plus Group -Manufacturing, The Democratic Republic of the Congo
Paz y Amor Group -Fruits & Vegetables, Dominican Republic
Dustmatov Eralboy - Livestock, Tajikistan
Seccelambras Group -Food Production/Sales, Peru
Rashidat Mumuni -Fish Selling, Nigeria
Karla Vanessa Montiel Barahona -Housing, Nicaragua
Eal Nub -Fish Selling, Cambodia
Atim Irene's Group -Medical Clinic, Uganda
Obama Group- Grocery Store produce- Dar Es Salaam, Tanzania

As of today i've loaned and re-loaned out a total of $475.00 through KIVA to 19 different groups in 18 different places all around the world. Its amazing what $25.00 here and there can do when you continue to relend!

Like Kiva? Think its neat? then Lend www.kiva.org

Busy Busy Busy

I've been a really busy girl as of late, so updates and what not have been falling to the waste lines. Sorry!