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Question for the Money Doctors

Question submitted on Mar 10, 2013.


Actually, the question is not for me personally but in regards to buying retirement time. A family member can add years to their pension at the public entity they work. At this time, they have about 25-26 years into the job and would like to retire with 30yrs but working 4-5 more years is looking dicey. They can buy the 4-5 years to make it an even 30year work and qualify for a 30yr pension. Their only problem, they do not have the money the public pension says they need ~140,000 to buy the time. The family member plans to borrow the money to pay for it. Is this a sound investment on their part? Also, they owe over 450000 on their mortgage and have no other retirement savings. Additionally, the public entity the family member works for did not contribute to social security on their behalf. I guess this is legal for public entities so the only source of income will be the pension. Additionally, their salary is 100k per year before over-time which bumps them up to ~$125K


It depends. Alot more information is needed to access properly. Like mortgage is 450K but is the house worth 3 million or 300K as an example of missing information. Health of the potential retiree? etc..

Wish I could help more but much deeper data is needed. Please submit additional information and we will try to answer your question.

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