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Subject:  Re: Buy years or buy stocks Date:  9/10/2013  6:18 PM
Author:  intercst Number:  72787 of 88041

JLC writes,

Even so, how much of your retirement income will this pension represent? And how much will this 6 year buy in equal?

You could be putting yourself in a position of someone buying company stock and it representing 80% of their retirement.


JLC makes a good point.

A retiree hopefully has a three-legged stool of a pension, Social Security, and an investment portfolio holding up his or her retirement. You don't want to let the pension leg get so large that a failure of the pension would sink your retirement. Unlike private pensions which are backstopped by the Pension Benefit Guaranty Corp (PBGC), state and municipal pension don't enjoy an equivalent guarantee.

Somebody mentioned the Detroit bankruptcy and possible loss of pension benefits. Like some 6 million other state and municipal workers Detroit employees don't pay FICA and don't get Social Security benefits. They started with a two-legged stool at best.

I believe Colorado is among the states where most public sector workers don't pay FICA or get Social Security.

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