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    • satrdayboy
    • By satrdayboy 5th Jul 17, 11:52 AM
    • 49Posts
    • 1Thanks
    satrdayboy
    Another planning for retirement post
    • #1
    • 5th Jul 17, 11:52 AM
    Another planning for retirement post 5th Jul 17 at 11:52 AM
    I was in a final salary pension scheme which consistently gave good annual pension, lump sum and option of retiring at 60. That has now closed and i have applied for a final transfer value, its £475000, which if i left in the scheme woks out at 23 times what my annual pension would be at 65. I certainly don't want to work till I'm 65. I'm about to start talking to a number of IFA about transferring the pension out of the current scheme, because there is a danger of it going into the PPF and there are penalties for leaving scheme before 65.

    My and my wifes current financial situation is this we have combined SIPPS of £40000, Combined S&S ISAs of 40000, cash ISAS of £25000. and my wife has a pension which will pay currently £7000 at 65. Im 53 next birthday, currently earn approx £37000 pa and in new pension scheme i pay 10% and employer pays 10%. we have also stopped overpaying on our small mortgage and between us pay £600 a month into our SIPPS.

    What else can we do to achieve my plan to finish at 60 or sooner?
Page 2
    • jerrysimon
    • By jerrysimon 7th Jul 17, 9:21 AM
    • 220 Posts
    • 132 Thanks
    jerrysimon
    The flip side of that is you are taking the lower pension for 5 extra years, so it's not quite the same as losing 25% as you get 5 more years of payment.
    Originally posted by k6chris
    A point often overlooked and always well made. I took my pension this year at 56.5 years old with a reduction of 2.8K/year. However drawing my pension early meant I will have drawn 60.2K in 3.5 years which would take me 13 years (I would be 70 before being in credit) to gain back assuming I had carried on and left at 60. This includes added years and pension I would have accrued.

    Jerry
    • satrdayboy
    • By satrdayboy 8th Jul 17, 11:20 AM
    • 49 Posts
    • 1 Thanks
    satrdayboy
    I read a lot of the posts on hear and a few mention spreadsheets. Any suggestions for what data goes into them, are there any examples to copy? thanks
    • Thrugelmir
    • By Thrugelmir 8th Jul 17, 11:37 AM
    • 54,390 Posts
    • 47,202 Thanks
    Thrugelmir
    A point often overlooked and always well made. I took my pension this year at 56.5 years old with a reduction of 2.8K/year. However drawing my pension early meant I will have drawn 60.2K in 3.5 years which would take me 13 years (I would be 70 before being in credit) to gain back assuming I had carried on and left at 60. This includes added years and pension I would have accrued.

    Jerry
    Originally posted by jerrysimon
    Looking at the reduction alone. At 2% CPI in 13 years time the £2.8k will have risen to £3.6k. By the time you are 80 over £4.2k. CPI is currently well above 2%. Compounding is the key. Jam today or more jam tomorrow.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • k6chris
    • By k6chris 8th Jul 17, 1:38 PM
    • 86 Posts
    • 110 Thanks
    k6chris
    Looking at the reduction alone. At 2% CPI in 13 years time the £2.8k will have risen to £3.6k. By the time you are 80 over £4.2k. CPI is currently well above 2%. Compounding is the key. Jam today or more jam tomorrow.
    Originally posted by Thrugelmir
    Jam today, PLUS the free time you now have because you retired earlier, or more jam tomorrow, but not that extra time. It's a time vs jam balancing act!
    EatingSoup
    • Hussel
    • By Hussel 8th Jul 17, 7:46 PM
    • 4 Posts
    • 1 Thanks
    Hussel
    Jam today, PLUS the free time you now have because you retired earlier, or more jam tomorrow, but not that extra time. It's a time vs jam balancing act!
    Originally posted by k6chris
    Agreed. There seems to be a lot of aversion to early retirement reductions but they're there as an option because a lot of people don't want to be working until their normal retirement age and may not have other bridging arrangements available. They should also be cost-neutral to the pension fund so an 'average' member should receive the same value if they retire early or not.
    • justme111
    • By justme111 8th Jul 17, 11:58 PM
    • 2,703 Posts
    • 2,605 Thanks
    justme111
    If one is happy with one spoon of jam daily there is no point in holding off jam today so that tomorrow one has enough of it for two spoons daily
    • satrdayboy
    • By satrdayboy 11th Jul 17, 2:35 PM
    • 49 Posts
    • 1 Thanks
    satrdayboy
    If i did transfer my pot and it grew at say 4% a year and i took 25% tax free at 60. How much would it have to continue to grow for me to take £19000 a year without me touching my remains pot? sorry if this a bit confusing
    • satrdayboy
    • By satrdayboy 11th Jul 17, 2:36 PM
    • 49 Posts
    • 1 Thanks
    satrdayboy
    If i did transfer my pot and it grew at say 4% a year and i took 25% tax free at 60. How much would it have to continue to grow for me to take £19000 a year without me touching my remains pot? sorry if this a bit confusing
    Originally posted by satrdayboy
    remaining not remains, typo sorry
    • justme111
    • By justme111 11th Jul 17, 3:10 PM
    • 2,703 Posts
    • 2,605 Thanks
    justme111
    You can Google compund return and drawdown calculators and play with changing numbers.
    • atush
    • By atush 11th Jul 17, 5:02 PM
    • 16,101 Posts
    • 9,807 Thanks
    atush
    If one is happy with one spoon of jam daily there is no point in holding off jam today so that tomorrow one has enough of it for two spoons daily
    Originally posted by justme111
    If one wants one spoon of jam daily but eats 2 spoons because they are greedy for a whole week, what happens the next day? Week? month?
    • justme111
    • By justme111 11th Jul 17, 5:49 PM
    • 2,703 Posts
    • 2,605 Thanks
    justme111
    The other end of alimentary canal gets sticky
    • satrdayboy
    • By satrdayboy 11th Jul 17, 6:59 PM
    • 49 Posts
    • 1 Thanks
    satrdayboy
    If one wants one spoon of jam daily but eats 2 spoons because they are greedy for a whole week, what happens the next day? Week? month?
    Originally posted by atush
    lots of jam analogies. i prefer lemon curd though
    • jamesperrett
    • By jamesperrett 12th Jul 17, 2:24 PM
    • 643 Posts
    • 312 Thanks
    jamesperrett
    However drawing my pension early meant I will have drawn 60.2K in 3.5 years which would take me 13 years (I would be 70 before being in credit) to gain back assuming I had carried on and left at 60. This includes added years and pension I would have accrued.
    Originally posted by jerrysimon
    One other thing to factor in is how the final salary is calculated. In Jerry's case (and mine) it would have been calculated on the best salary earned in the 3 years just prior to retirement. How are your wages going to rise in comparison to the revaluation of your pension? In my case it looks like wages will be limited to a less than 1% rise (again) while inflation reaches 3% so half of the actuarial reduction for taking the pension early has been wiped out.
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