- Taxes are paid on income while you are working.
- Post-tax payments do not lower your current income for tax purposes.
- Contract timing and amounts can be changed, if you choose.
- Contracts can be stopped completely.
Interest is calculated on your service credit purchase
The cost of your service credit includes the interest your contributions would have earned, had they been on deposit with CCCERA, from the date you became a member to the date your purchase contract commenced, or lump sum payment was accepted. If your purchase is a redeposit, interest is calculated from the date you withdrew your funds.
If you choose monthly payments, your monthly payroll deduction will be calculated using the interest rate assumption in effect at the time your contract is signed.
In effect, you are “making up” the interest that didn’t accumulate on the time you are purchasing to make your account whole. With monthly payments, you are paying interest on the contracted funds, like a traditional financing agreement.