Early retirement

ashley

Hi I'm totally confused at moment. I applied for early retirement last year didn't get it but have been offered it this year. But only have 4 days to decide. Reckon I'll go as have health problems ,chronic ,but would not get health retirement as it's episodic in nature.
Anyway due to health I dropped down to0.8 working pattern last December. This means I'm now only entitled to 2 years enhancement rather than 4 which I'd get IIf I'd stayed full time.
Figures are tight and I'd like advice on whether to take smaller lump sum to increase pension or vice versa. I have no luck financially,miss out on deals etc. so would be great full for any opinions.
I am 56 and after taking a year off to get on top of my illness hope to train as counsellor.
No mortgage so at least one less expense.
Thanks

mgdavid

generally one would go for the bigger pension and smallest lumpsum possible; however if health issues are serious enough to drastically shorten life expectancy then the big lumpsum might look the better option. Bear in mind if you get on top of the health issues you could live another 30 years.

Annie1960

mgdavid wrote: »

generally one would go for the bigger pension and smallest lumpsum possible; however if health issues are serious enough to drastically shorten life expectancy then the big lumpsum might look the better option. Bear in mind if you get on top of the health issues you could live another 30 years.

I agree with this. A lump sum is good if you need to pay off mortgage or other debts, or want to buy a new car or go on a long holiday. If you have some savings already and want more income, then look into increasing your pension.

A factor to consider in this is what rate will they give you for giving up your lump sum (if you scheme works like this) and whether your pension payments will have any sort of inflation increases in the future.

ashley

I think I'll go for the bigger pension as I then know Ill have a regular income which I can budget and hopefully live on for another 50 years.