PERS HB 1049 Update
House Bill 1049 was passed by the Oregon Legislature and is in process of writing the administrative rules and determine if there are any issues with the bill. Most of these changes affect those still working and don’t take place until Jan. 1, 2020.
The biggest shift is the amount being contributed to your IAP. In 2020 a portion will be set aside into “Employee Pension Stability Account”. For Tier One/Tier Two this is 2.5% of the 6% contributed on your behalf. For ORSRP members this will be 0.75%. You will have an option to make up this difference yourself.
For full explantions go to Oregon PERS HB 1049
The number two question is “What option should I take?”
Members who have worked 20-30 years are now faced with one of the most important decisions in their lives.
If you are a Tier 1 or Tier 2 member there are thirteen different options to choose from and after 60 days the decision is final. There are educational seminars all over the state, but one question they won’t answer is what choice is best for you. They encourage you to meet with an advisor to help you choose the best option. This takes some financial planning and we encourage people to do this within a few years of retiring.
But if you are retiring next month we may not be a good fit. Having a good strategy is important and our services are better utilized with a 3-5 year plan.
Everyone has a different set of circumstances. You need to know how you coordinate your PERS benefits with your other investments and Social Security.
1. Should you choose the Variable or Fixed bucket in retirement? How do you feel about consistent income or control over investments? This is a one-time decision and you can’t change your mind later.
2. What is the Individual Account Balance and what do you do about it?
3. What benefit do I get if I am in OPSRP (Anyone employed after August 2003)? This plan has 5 options.
4. How do I ensure I can change beneficiaries if I need to? How does a divorce affect me?
We love working with clients on these questions.
We start with your goals: Family, travel, charity, or even a new career. Find out what is really important to you and then we get technical and really get into the weeds. We look at the options with PERS and combine that with a member’s other resources to find the best solution. So you can focus on the things that are important like enjoying retirement and family.
The best time to start planning is NOW. Not when it is time to fill out the retirement paperwork. When you start planning early you will provide yourself with MORE options and More opportunities. You will be ready to fill out the PERS paperwork.
Call us to find out if our services meet your needs. Advisors at Clarity Wealth Development have your best interests at heart. We want to make sure we help you make a good decision. That’s why we require a basic financial plan to get started.