Too late to retire early?

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  • justme111
    justme111 Posts: 3,508
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    Then why don't you remove mortgage from your future expenses - if you pay it at by 60 you will need a couple of k less a year in retirement so the numbers add up. I did not mean generating income from lump sum , I meant just spreading it over 8 years- it would be about 2 k a year. It would generate something of course but not enough to talk about when we roughly plan.
    The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
    Often people seem to use this word mistakenly where "quandary" would fit better.
  • atush
    atush Posts: 18,719
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    edited 18 July 2017 at 11:14AM
    I’m not sure why you advise not to overpay the mortgage? Sorry if I’m being dim but I thought that it’s better to get rid of debt before upping savings?

    Because unless you have an unusually high mtg (mine is 1%), you ca do better by investing over periods of near 10 years or more. The average return is inflation plus 4-5%.

    The quote function.

    At the top of the box you type in are a bunch of symbols incl B I U etc. The last one, that looks like writing in a text box is the one you click. There is a quote and end quote, post copied quote in between.
  • jamesd
    jamesd Posts: 26,103
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    edited 17 July 2017 at 10:16PM
    You appear to be in a funded public sector scheme, meaning that you can transfer to a personal pension. Have you considered doing that and asked for a transfer value to help consider the option?

    See the examples linked from here and the rest of that thread for more on drawdown planning and how to pick a safe withdrawal rate.

    The old employer's pension might also be defined benefit and transferrable. You could perhaps investigate them both. For earliest retirement take the current one and use the old one to provide guaranteed income. For later but still early retirement keep the current one and transfer the old one.

    Whether you might get ill health retirement from the current one is a very major consideration.
  • Excuse me being nosy but can I ask what the £190 benefits are for? You put that you are single and don't mention a child, bit like my situation, so wondering if I am missing out on something that I could look into claiming, as you earn more than I do. I know when my SP kicks in I can live comfortably but would like to go earlier if possible rather than stay until 65yrs 9 mths.
    Paddle No 21 :wave:
  • justme111
    justme111 Posts: 3,508
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    If you read her post she says it is due to health issues .
    The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
    Often people seem to use this word mistakenly where "quandary" would fit better.
  • Sj62
    Sj62 Posts: 56 Forumite
    - “JustMe and atush

    Thanks for clarifying - I'm not the best with numbers so this is really helpful. On different pieces of advice in here I've decided to stop overpaying my mortgage by £50 and put £65 (before tax) onto my AVC (that being roughly £50 after tax) and any other money I can get together will go into an emergency fund then an S&S ISA to build up my capital. That seems to make the most sense but, if not, then please someone put me right?

    JamesD – I thought the DB pension I have is a better option than a private pension because my employer will keep paying into it until I retire?
    GibbsRule – the benefit is DLA (Disability Living Allowance) which I get at the low rate for having several different medical conditions. It’s in the process of being phased out and replaced with PIP (Personal Independence Payment) which I’ll have to apply for and may not get. Neither benefit is means tested.
  • jamesd
    jamesd Posts: 26,103
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    You will only get value added to your DB pension (extra years or higher pay base level) while you are still working there. That stops once you leave employment, as you would if you retired. You would continue to get inflation increases regardless.

    AVCs are often a good choice but sometimes you can't take money out of them unless you also take the main pension. If that applies to yours it would prevent you from taking the AVCs to bridge the gap between retiring and taking the defined benefit pension.

    What a transfer could do is let you retire now, or sooner than with the DB scheme. That's because you can take money from that sort of pension from age 55. The income would probably be lower, depends how high the transfer value is.
  • Sj62
    Sj62 Posts: 56 Forumite
    edited 23 July 2017 at 11:53AM
    jamesd wrote: »
    You will only get value added to your DB pension (extra years or higher pay base level) while you are still working there. That stops once you leave employment, as you would if you retired. You would continue to get inflation increases regardless.

    AVCs are often a good choice but sometimes you can't take money out of them unless you also take the main pension. If that applies to yours it would prevent you from taking the AVCs to bridge the gap between retiring and taking the defined benefit pension.

    What a transfer could do is let you retire now, or sooner than with the DB scheme. That's because you can take money from that sort of pension from age 55. The income would probably be lower, depends how high the transfer value is.

    Thanks JamesD.. You're right about the AVC - I can't take it till I take the main DB pension. I've had another look at my previous employer's pension forecast - £900 per annum if I take it now or £1650 if I wait till 60. If I take a reduced amount of £1200 at 60 I could get a lump sum of £8000 which would help spread the cost till my state pension kicks in.

    My LGPS pension wouldn't give me nearly enough to live on if I took it now but if I can manage till 60 then the LGPS plus £1200 plus lump sums of £13400 and £8000 would be enough to manage on till the SP at 67. I think I need to hold on till then. I doubt they'd offer me ill health retiral - it's a real fight to get that although it would give an improved £13000 pa if I could get it. I suppose it depends on whether I can maintain my current state of health or not ...
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