Actuarial reduction vs longer retirement

chiefie

I'm struggling with this a bit. Know how good DB pensions are, and taking them 10 years early can halve them. But I also know if I carry on working my health will suffer with too much work related stress. The complication is that I will miss the social intereaction and buzz of exciting new projects which I am always the one to clamber for.

How have others dealt with this conundrum ? At the moment I plan to go at 55 and live of SIPP for 6-12 months then decide what to do next. Ideally an interesting p/t position or self employment. I love being around other people.

Thrugelmir

Downgrade your job. Makes work stress free if you approach it in the right mindset.

jerrysimon

In almost an identical position and plan to take both my wifes and my DB pension 5/4 years early.

Like you the only thing I really enjoy at work is the social interaction and cycling to work every day. I guess both those can be replaced with cycle rides every day when and for however long I like and PT/Voluntary work

PS I now hate new projects usually because they are completly underfunded, under resourced and have ridiculous delivery dates.

Jerry

hyubh

chiefie wrote: »

Know how good DB pensions are, and taking them 10 years early can halve them. But I also know if I carry on working my health will suffer with too much work related stress.

If this is public sector, investigate whether the employer would be open to a flexible retirement. The exact term can differ, but it's where you start draw your pension while still employed yet either going down a grade or two or significantly cutting down your hours.

jennyjj

chiefie wrote: »

I'm struggling with this a bit. ... taking them 10 years early can halve them. But I also know if I carry on working my health will suffer with too much work related stress. The complication is that I will miss the social intereaction and buzz of exciting new projects which I am always the one to clamber for.

How have others dealt with this conundrum ?

I share(d) exactly those concerns and situation. Will PM some specifics, too personal for here.
You have to deal with the health and longevity issue first. In my case, I left my well paid stressful job and took on a low stress, low pay job. Never looked back on that GREAT choice. Then after a few years, negotiated myself a shorter week: First 4.5 day then 3 day. That too was a no-brainer. It really helped to transition away from the dependence on workers for social interaction. Next stage is full resignation which I'm on the brink of.
Actuarial reduction will affect my DB pension too, but it's not as bad as it sounds. You may get less pension but you get it far longer which balances out if you plan to die at about 77.

JJ

saver861

First thing would be to ascertain all the options within your current employment. Relocate, Part-Time, Sabbatical etc etc. If nothing doing then it is a decision you will need to make.

You will always have the option of being around people when you retire via voluntary means. Indeed you have more choice who you choose to spend your time with.

However, as with many, the financial side of it will be the deciding factor. You really need to knuckle down on your finances and see where you are at. Part-time employment always an option to fill gaps, while you still have good health to do it!

Silvertabby

If this is public sector, investigate whether the employer would be open to a flexible retirement. The exact term can differ, but it's where you start draw your pension while still employed yet either going down a grade or two or significantly cutting down your hours.

This wouldn't get round the problem of the huge early retirement reduction. Could you afford to just reduce your hours/go part time/jobshare without taking your pension until you fully retire?

jennyjj

Silvertabby wrote: »

This wouldn't get round the problem of the huge early retirement reduction. Could you afford to just reduce your hours/go part time/jobshare without taking your pension until you fully retire?

While I agree that reduced hours would be a good option for Chiefie, don't overstate the problem of actuarial reduction. That reduction is generally almost cost neutral based on life expectancy to about age 77 ( typically) because the reduced pension and lump sum will be paid out much sooner and for much longer.

molerat

You need to weigh up your health and happiness against income. Many of my contemporaries have far more money than I do but they look worn out wrecks (those that are still around that is). I took the lower income retirement at 55 option 7 years ago and have never regretted it. You can't make much use of that higher income when you are in a jar on the mantlepiece

jerrysimon

molerat wrote: »

You need to weigh up your health and happiness against income. Many of my contemporaries have far more money than I do but they look worn out wrecks (those that are still around that is). I took the lower income retirement at 55 option 7 years ago and have never regretted it. You can't make much use of that higher income when you are in a jar on the mantlepiece

My thinking exactly!

I have colleagues at work 66+ and they look ready to drop. Many could have retired on full work pension at 60.

That said I have another one who works in our group fixing PCs still aged 67 and is as happy as larry. No family, children etc though.

Jerry

kidmugsy

jennyjj wrote: »

That reduction is generally almost cost neutral based on life expectancy to about age 77 ( typically)

The average life expectancy of a 55-year-old is far older than 77.