early retirement and National Insurance

dreaming · 9 March 2013 at 7:38PM

atush wrote: »

You can earn up to 146 w/o paying NI. So look for work with pay and hours less than that? Might be nice to have a little extra so you don't have to live so frugally?

and you can claim JS while looking for said work. In the unlikely event you are offered FT employment and did not take it, you would have to stop taking JS. But maybe you would prefer to work?

Do you need to take the LS form the work pension? If your redundancy payment is large enough, perhaps the higher pension paid would be more useful to you?

Redundancy payment is very good so my plan is to put everything over 30k into pension then take lump sums and pension - pay off mtge. and invest residue + pension lump sum, and live off pension.
When I say I would have to live frugally I mean pretty much as I do now, which is fairly comfortable. Have budgetted to keep car (and repairs), internet/tv etc. I don't crave foreign holidays or expensive hobbies - am quite happy pottering round my house and garden and visiting friends and family - things I would like to do more of now if I didn't have to work! So a part-time job would only be for extras.
Extra pension if I don't take lump sum is about £80/month but would not get pension for 2 years if I don't draw lump sum now so would definitely have to find work, and probably full time.

jamesd · 9 March 2013 at 9:58PM

You should think more about paying off the mortgage. It's not hard to get fairly predictable 5-6% income from investments at the moment and that means that it's usually more financially efficient to invest the money and use it to pay the mortgage interest payments, keeping the extra or using it for some of the capital part.

Would the work pension increase if you waited before taking it? Some redundancy deals get you full rate, others reduced rate. If it's reduced rate it is often going to be a good deal to live on savings for a while to delay and get a higher pension rate.