Reply to Question for teachers.....Purchasing prior service credit towards your pension

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I am in Maryland and in the process of planning my 'exit ticket' also known as retirement, which is approaching soon. I have a significant number of years of prior service in another state, and I recently made a formal request for verification of this service.

As I eagerly await the verification, I find myself quite anxious about the outcome. To add a personal perspective, my grade-level Administrator, who coincidentally shares my age and years of service, mentioned that the process is being deemed 'cost-prohibitive.' In fact, she was quoted a staggering $45,000 for the verification of just two and a half years of her own previous service. It's important to note that my grade-level Administrator holds an administrative position and receives a corresponding salary.

While this revelation might initially lead to discouragement, it's essential to consider the bigger picture. My love for my job runs deep, and I had never contemplated retiring 'early'. However, I've come to realize that my life holds far more value than any job or career. To make this transition feasible, I've taken steps such as upping my 403b contributions to the maximum allowed. These contributions will provide the funds necessary to purchase my time I am essentially rolling it from one retirement account to another, allowing me to retire one and a half years earlier than originally planned.

In sharing this journey, I hope to shed light on the financial challenges that individuals like me face when it comes to verifying prior service years. It's a topic that deserves our attention and consideration, as it impacts the choices we make in planning our retirements. Despite these challenges, I remain optimistic about the future and the opportunities that lie ahead.[/quote]

Did you get a cost for this 1.5 years yet? How many years of service do you currently have? I am thinking about doing the same thing, so I am curious what the cost per year is.
[/quote].

You might also want to consider the tax implications of using the 403b before age 59.5 You will pay a fed penalty of 10% along with typical yearly taxes probably in the marginal 22% area.

Staff considering adding pension years should start putting money into a brokerage account probably at least 5 years out or more. At least $500 a month.[/quote]

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