1 Reply Latest reply on Jan 13, 2011 1:23 PM by JerryD

    Nonqualified Service credit (Airtime)

    Ret.Teacher
      I'm 60 years old with 22 years in my school district, and I plan to retire in three years. I've been crunching numbers to see if it is worth purchasing Nonqualified Service Credit (Airtime) from CalSTRS at this late stage, and wondered what others here think.
      It would cost $113,989 to purchase five years of Nonqualified Service Credit at this time. The purchase would increase my Unmodified Monthly Benefit at retirement from $4021.99 to 4803.81, giving me $781.82 more per month, for the rest of my life. My calculations tell me that it would take 12.15 years to “make up” the $113,989 from the increased monthly amount.
      Currently I have approximately $260,000 in a variety of mutual funds. Would you suggest going forward with the purchase of the Nonqualified Service Credit, or do you think the money could yield a better result leaving it where it is?
      I’m looking forward to your thoughts.
        • Re: Nonqualified Service credit (Airtime)
          JerryD
          If steady income is your objective, why don't you look around to see what kind of income that amount would buy you for an immediate annuity at several reputable insurance companies starting with TIAA-CREF before you decide. I have read that annuity payouts are low now but one might ladder them for better return, that is put a portion into a new annuity in the future on some kind of schedule hopefully for a better rate..