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#171468 - 12/07/06 11:20 AM Buyout vs. Payout
Nosara Offline
recently joined

Registered: 12/07/06
Posts: 6
I work for the Federal Government. My STBX of 10 years works for a Defense contractor we each have a retirement, mine is currently worth more. Is it financially smarter to buy her out of my retirements now or wait until we retire in close to 25 years and let her draw a percentage?

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#171469 - 12/07/06 11:49 AM Re: Buyout vs. Payout [Re: Nosara]
Redlegg Offline
Carpal \'Tunnel

Registered: 10/06/06
Posts: 27903
There are a lot of things to consider, how much will be there in 25 years, your ages, life expectancy. What kind of retirement is it (401k, or a pension from the federal government). If its a pension, would you be giving her more if you didn't buy her out. 30 percent of your retirement now vs. 30% later, would be a huge difference. Would she take a specific number instead of a percentage, or is there a formula to compensate for the time you were not together. There are a lot of things to consider.

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#171470 - 12/08/06 03:41 AM Re: Buyout vs. Payout [Re: Redlegg]
Nosara Offline
recently joined

Registered: 12/07/06
Posts: 6
Thatís what I figured itís never easy... How do people go through this more than once??? She will not even talk to me so we can work on an agreement and she is the one who left for another man (Her cooperate Boss).

I live in the house now and she pays half the mortgage.. I was thinking of moving out let her move in and then keep showing up hoping she would speed things up the to get me out of her life?? Are ther any forseen advantages or disadvantages (legal or illigal) to this?

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#171471 - 12/08/06 06:41 AM Re: Buyout vs. Payout [Re: Nosara]
Addy Offline
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Registered: 12/06/06
Posts: 21
I don't know where you live and if you have children so it's hard to know what your situation is. Where you live and if you have children would have a lot of bearing on whether you should stay in the house or move out.

Who makes more money? Did you purchase the house together? All those things make a difference.


Edited by Addy (12/08/06 06:43 AM)

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#171472 - 12/08/06 11:08 AM Re: Buyout vs. Payout [Re: Addy]
Nosara Offline
recently joined

Registered: 12/07/06
Posts: 6
I live in Virginia. We own the house as joint tenants in entirety. No children. I make more money. If I do move out do I have to inform her I am taking the bed and TV?

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#171473 - 12/15/06 03:14 PM Re: Buyout vs. Payout [Re: Nosara]
joan Offline
enthusiast

Registered: 09/24/04
Posts: 248
I also work for the Federal government at the time of my divorce I had 10 years non-marital and 20 years marital. Right now, I plan on working another 10 years.

I can tell you that the actuary thought I was crazy to even attempt to buy him out. One difference between our cases is that he did not have any retirement to offset mine.

I had three different actuarial companies evaluate my retirement and, based on their estimates, his portion would have been between $250,000 and $350,000. I still offered to buy him out and he refused. His accountant felt his portion of my retirement was $1.5M. Yeh, right. So we had the COAP written giving him a percentage of my retirement when I retire. That is the law in Illinois unless we can agree to a payoff amount.

If I work 30 years he get 1/3 (10 years non-marital and 20 years marital = 2/3 of the retirement is marital and he gets 1/2 of that) and if I work 40 years he gets 1/4 (20 marital years and 20 non-marital years = 1/2 of the retirement is marital and he gets 1/2 of that). Additionally, if he wants a spousal annuity upon my death he must pay for it out of his share. In the Federal government if you choose to provide an annuity for your spouse after your death this is called a spousal annuity. OPM reduces the amount of your retirement if your choose this option at retirement. Itís about a 10% reduction. Say I get $9,000 per month in retirement after 40 years of service, I would get $6,750 (75%) and he would get $2,250 (25%) then if he wanted to continue to get any retirement after my death it would cost him about $900 per month so his net payment would be $1,350 per month.

So what the actuary told me is that it makes more sense to give him $1,350 per month in 10 years (heíll be 70 years old then) rather than pay him about $300,000 now. He does have in the COAP that upon his death, his portion of the retirement will continue to be paid to his estate. That will only be true if he chooses the spousal annuity. If he doesnít choose it, that portion would come back to me.

Since every case is different and each state has different laws, my advice to you is to hire a retirement consulting company (it cost me about $350) and have them lay all the facts out and then make your decision. There is a company in PA that was very good, I think they are called Pension Consultants (you can google them).

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#171474 - 12/19/06 06:33 AM Re: Buyout vs. Payout [Re: joan]
Nosara Offline
recently joined

Registered: 12/07/06
Posts: 6
Joan,

Thank you so much that information is far more helpful than my soon to be fired attorney has offered yet.

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