Pension/Redundancy

mgdavid

skmcc1960 wrote: »

........

Actuarial Reduction - I dont know what this means?

It's a reduction in pension payments for taking it early.
If the Pension scheme has a Normal Retirement Age of (say) 65, then there is a penalty for each and every year you take it early. Typically this penalty could be 5% per annum so in this example if you take it at 55 you will lose HALF of the pension (5% x 10 years).
This is why the usual advice is to leave DB pensions untouched until NRA or at least as long as humanly possible, by looking at other ways of bridging financial / income gaps.

atush

mangle101 wrote: »

Not in relation to your pension or redundancy but, with your debts, have you posted on the Debt Free Wannabe board? Lots of knowledgeable people who may be able to provide assistance.

And are you Snowballing your debt?

atush

use the redundancy to pay off debt (or at least the first 30K- do you know how much it will be?)

If you need to take a pension, take 25% of the DC one, leave the 75% for now- if you are still not working by next april take the rest thenYou will pay less tax on it. Not much good to take a tax hit with money that could be paying off debt.

Leave the DB pension for when you can take it at scheme age, unreduced. In the mean time both of you should build up savings with the 1400 a month, so that you dont need to take a LS from your DB pension.