early pension calculation

harrynicholas

I'm thinking of taking my pension early - 55. I'm looking at a lump sum and an annuity, the figures I have from a recent illustration based on my contribution and retirement in 2019 are a max and min - 50,000 lump sum and 14,000 per annum if I retire at 65 max, and 40,000 and 9,000 min. I'm trying to figure out:

a) How much I save by not contributing anymore (monthly sum x 12 x 10 years = 24,000)
b) How much I get for starting 10 years early (500 per month [say] x 12 x 10 = 60,000)
c) What the lump sum and annuity might be based on the above min and max figures.

By my calculations I get 60,000 (annuity for ten years at minimum rate) plus I save 24,000 in contributions. So I might lose out on a 50,000 lump sum, but I get 60,000 for starting early, sounds too good to be true, am I making a mistake in my calculations?

chesky369

I presume it's not a final salary scheme. What percentage do you lose for each year before your normal retirement date?

harrynicholas

Thanks for the reply, but that's kinda what I want to know myself.

EdInvestor

harrynicholas wrote: »

Thanks for the reply, but that's kinda what I want to know myself.

Why not ring up and ask?Nobody here can tell you. :rolleyes:

dunstonh

Is your money invested in funds or based on years of service? This is important first question as the pros and cons differ with both options.

am I making a mistake in my calculations?

If its investment based you are not including future growth and higher annuity rates for being older. Also, if you are still working, your tax liaiblity will be higher. There is usually a break even point to when one option would be better than the other when using standard assumptions.

harrynicholas

Can't anybody read, can't anybody give a simple answer.
All I want to know is:

If I retire at 55 instead of 65 am I saving 24,000 by not having to pay the premium (200 a month) any more over the extra ten years, and making 60,000 by getting the pension 10 years early, offsetting the lower annuity and lump sum payout. This is what is 'too good to be true' I assume it affects the 'capital'.

I really want to know the formula that will give me any scenario, ie how much I can expect in pension and lump given the amount I've paid in over whatever number of years.

Those of you who have replied might as well not bothered, if you can't answer the question don't confound the issue, I'm expecting a report any day, I just couldn't find a sensible pension calculator on the net and I thought someone might know, obviously you're all from planet gobbledygook - forget I even asked.

bendix

That's the spirit harry. There's no better way of getting the right response than to come on a forum, ask a question which would be better off asked to your pension provider because we don't know your circumstances, and then slag people off for not giving you what you want.

Could I suggest that when you cash in your pension, one way to spend your lump sum might be to invest in a copy of 'How to Make Friends and Influence People?

Because sure as eggs are eggs noone is gonna help you now.

Goodbye and good luck.

harrynicholas

It sounds like you already have a copy of that book on your shelf, alongsides the 'how to be a nit-wit', I'm waiting for a quote from my agent, I thought I'd try and work it out for myself in the meantime, of course the 'help' page on pension sites want your details so they can pester you on the phone, and the ones that have a java calculator seem to hang, or be as confusing as you've been.
Go ahead and make out I'm the ignoramus, but when I aske a simple question all I got was the same stupid outcome, a stupid question in return. I still haven't got any sense out of you, so don't make out that it's because I'm deficient in some way.
Ask me a question, you'll get a straight answer, ask you a question and I get a question. What I asked was clear enough, I think you have kind of swelling inside your brain.

harrynicholas

I'm reminded of the guy who stops someone in the street and asks "How do I get to Sainsbury's" to which comes the reply, "It all depends where you start from."

bendix

harrynicholas wrote: »

It sounds like you already have a copy of that book on your shelf, alongsides the 'how to be a nit-wit', I'm waiting for a quote from my agent, I thought I'd try and work it out for myself in the meantime, of course the 'help' page on pension sites want your details so they can pester you on the phone, and the ones that have a java calculator seem to hang, or be as confusing as you've been.
Go ahead and make out I'm the ignoramus, but when I aske a simple question all I got was the same stupid outcome, a stupid question in return. I still haven't got any sense out of you, so don't make out that it's because I'm deficient in some way.
Ask me a question, you'll get a straight answer, ask you a question and I get a question. What I asked was clear enough, I think you have kind of swelling inside your brain.

For the record, this is a very good community and people will always offer very helpful advice when then feel they have enough information to do so. If they don't have the information, they might request more.

You posted a question yesterday. You yourself didnt know the answer to that question. Within hours you got a few replies, but you did not get the replies you wanted, and immediately started berating people like a petulant child who can't get their own way. You attacked people for not knowing something you don't know yourself.

Good luck getting more responses. I suspect you won't get much help from here, with that attitude.

harrynicholas

I wasn't attacking anyone, I was expressing the frustration that has accumulated through going to numerous 'pension calculator' websites, pensions advice websites and finally culminating in resorting to pester the 'moneysavingexpert' on the off-chance that someone might have the answer readily available - a shot in the dark.

"If its investment based you are not including future growth and higher annuity rates for being older." Although when I read this slowly (you know I'm thick already) it seems to make some sense, but as an answer to my question, which was a sort of maths problem, it's irrelevant, so stop trying to make out you're so wise and I'm so aweful to you for not being grateful for just getting more pension-speak when I was after the answer "42".

I'm sorry it's been such a pain for you to do your job, as in the meantime I sort of worked it out for myself, I do save 24,000 by not having any contributions to pay, there is no 'extra' 60,000 for the early start as this I assume comes out of a 'pot'.