Should I take voluntary redundancy and retire early?

ewor1958

It's funny you should Mention that, there's been a bit of a development today that has changed my thinking.

I've been waiting for an updated pension statement, as the last one I had 4 years ago assumed staying in the scheme until 60 .
It seems I had over estimated the effects of leaving the scheme 3 years early, so with the effect of a bigger avc pot, my pension at 57 was as much as I anticipated getting at 60. And the difference between 57 & 60 would take nearly 20 years to pay back.

So, my thoughts now are, top up this years avc to the max, pay the maximum abc for next tax year from the redundancy pay, and take the pension immediately, freeing up much more of the redundancy and relieving the pressure of no income for 3 years

Any flaws in that plan, are there tax implications with redundancy and retirement at the same time?

jamesd

No tax implications that haven't already been discussed.

kidmugsy

ewor1958 wrote: »

And the difference between 57 & 60 would take nearly 20 years to pay back.

Only if you ignore inflation, presumably. None of us knows whether that will prove to be a good approximation or not. As a couple you can even hedge your bets, with one of you starting the pension pronto and the other deferring. You're spoilt for choice.

Baalmaiden

Obviously you must do your sums but all the people I know who have taken early retirement with a final salary pension have said it was the best thing they have ever done.
Don't forget you can get a part time job if things get a bit tight. Also you will probably save quite a bit on travel costs.