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Reinstatement Of Missouri Years (Buy-Back)
Have you sold any pension service years? Although you may have many years of service at retirement,
it may surprise you to learn how much extra pension income you will receive by
repurchasing some, or all, of the years sold.
Some people consider the reinstatement price "too expensive". But, don't forget, there are
two sides to the story-the cost of the repurchase, and the
benefit from the repurchase. A look at our "Potential Value of Additional Service Credits"
numbers will tell you the rest of the story.
Very often it is too costly not to repurchase those
pension service years.
Contact us if you would like to see the impact of repurchasing pension
service years on your retirement income. Even if you have not "sold"
any pension service years, you are allowed to "buy" half a year. That
could move you to a higher pension factor, and that small purchase could
make a worthwhile difference in your retirement income.
Reinstatement Cost Example
The Concept: You "sold back" some time to the PSRS/PEERS.
The amount of money you received represented some portion of your credited service
(more than 0% and up to 100%). It is this amount of money that you can return
(at PSRS/PEERS current interest rate*) to the PSRS/PEERS and "reinstate"
the years of service you forfeited.
Computing Your Missouri Reinstatement Cost:
| Col A |
Col B |
Col C |
Col D |
| Per $1,000 Rcvd Fm PSRS |
Cost Per $1,000 |
Cost Per $1,000 In |
Cost Per $1,000 In |
| # Years Ago |
Now |
5 Years |
10 Years |
| 5 |
$1,469 |
$2,159 |
$3,172 |
| 6 |
$1,587 |
$2,332 |
$3,426 |
| 7 |
$1,714 |
$2,518 |
$3,700 |
| 8 |
$1,851 |
$2,720 |
$3,996 |
| 9 |
$1,999 |
$2,937 |
$4,316 |
| 10 |
$2,159 |
$3,172 |
$4,661 |
| 11 |
$2,332 |
$3,426 |
$5,034 |
| 12 |
$2,518 |
$3,700 |
$5,437 |
| 13 |
$2,720 |
$3,996 |
$5,871 |
| 14 |
$2,937 |
$4,316 |
$6,341 |
| 15 |
$3,172 |
$4,661 |
$6,848 |
| 16 |
$3,426 |
$5,034 |
$7,396 |
| 17 |
$3,700 |
$5,437 |
$7,988 |
| 18 |
$3,996 |
$5,871 |
$8,627 |
| 19 |
$4,316 |
$6,341 |
$9,317 |
| 20 |
$4,661 |
$6,848 |
$10,063 |
| 21 |
$5,034 |
$7,396 |
$10,868 |
| 22 |
$5,437 |
$7,988 |
$11,737 |
| 23 |
$5,871 |
$8,627 |
$12,676 |
| 24 |
$6,341 |
$9,317 |
$13,690 |
| 25 |
$6,848 |
$10,063 |
$14,785 |
* At 8% current interest rate charged by PSRS/PEERS
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Examples
$1,000 received exactly 8 years ago:
Look up 8th year value in Col B
Answer: $1,851
$2,500 received exactly 8 years ago:
Look up 8th year value in Col B, multiply
that number by $2,500, and divide by 1,000
Answer: $4,627
$8,000 received exactly 15.5 years ago:
Look up 15th year value in Col B and
subtract that value from the 16th year value.
Multiply that number by (.5) the number of
10ths of a year.
Add that number to the 15th year value,
multiply by $8,000 and divide by 1,000
Answer: $26,392
Ready to try it yourself?
$14,812 received 18 years, 7 months ago:
Click here to check your answer
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The Potential Value of Additional Service Credits
| Age Of Retiree |
Final Avg. Salary |
Years Before Purchase |
Number of Years Purchased |
Original Option 1 Income |
Increase in Option 1 Income |
Total Gain at Life Expectancy |
| 50 |
$50,000 |
23 |
0 |
Not Elig. |
$0 |
$0 |
| 50 |
$50,000 |
23 |
1 |
Not Elig. |
$0 |
$0 |
| 50 |
$50,000 |
23 |
3 |
$27,500 |
$1,750 |
$99,000 |
| 50 |
$50,000 |
23 |
5 |
$27,500 |
$5,400 |
$190,000 |
| |
| 55 |
$50,000 |
23 |
0 |
$18,100 |
$0 |
$0 |
| 55 |
$50,000 |
23 |
1 |
$18,100 |
$800 |
$20,000 |
| 55 |
$50,000 |
23 |
3 |
$18,100 |
$14,400 |
$360,000 |
| 55 |
$50,000 |
23 |
5 |
$18,100 |
$16,900 |
$422,000 |
| |
| 58 |
$75,000 |
28 |
0 |
$52,500 |
$0 |
$0 |
| 58 |
$75,000 |
28 |
1 |
$52,500 |
$1,900 |
$43,700 |
| 58 |
$75,000 |
28 |
3 |
$52,500 |
$6,800 |
$156,400 |
| 58 |
$75,000 |
28 |
5 |
$52,500 |
$10,600 |
$243,800 |
| |
| 60 |
$100,000 |
30 |
0 |
$75,000 |
$0 |
$0 |
| 60 |
$100,000 |
30 |
1 |
$75,000 |
$4,000 |
$84,000 |
| 60 |
$100,000 |
30 |
3 |
$75,000 |
$9,100 |
$138,600 |
| 60 |
$100,000 |
30 |
5 |
$75,000 |
$14,200 |
$298,300 |
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