Actuarial reduction vs longer retirement

xylophone

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.

Clamour? Or climbing the greasy pole?:)

If you retire ten years early and live to a ripe old age, then you may regret that AR.

On the other hand, if you don't retire early, a stress related heart attack may decide the issue for you... (one way or another)...:eek:

hyubh

Silvertabby wrote: »

This wouldn't get round the problem of the huge early retirement reduction.

It actually might if we were talking about the LGPS, and the person concerned is a longstanding member, since the 85 year rule would apply even if they were under 60. On the other hand, that may well make things less likely to be granted in the first place given the strain charge involved...!

jfdi

I took early retirement, and took the hit on my actuarially reduced CS pension, by going over 5 years early.

I calculated my break even point is when I'm 86!

Not regretted it one second, I'd rather have time now when health is ok, than extra money later.

jennyjj

jfdi wrote: »

I took early retirement, and took the hit on my actuarially reduced CS pension, by going over 5 years early.

I calculated my break even point is when I'm 86!

Not regretted it one second, I'd rather have time now when health is ok, than extra money later.

Cheers JFDI,
I very roughly non-adjusted estimate was 77 - 80 with my own figures. It could be much more and I doubt it's much less.
Did your calculations depend on some investment performance or accommodate inflation and/or tax? It would be useful to compare notes on how this calculation should be estimated/calculated and to show here how it's done. AR is not always a poison pill.

jamesperrett

One other thing to consider is the rise in wages compared to the rise in CPI. If CP! rises above 1% (assuming you are in a typical civil service role) then some of that actuarial reduction will be cancelled out.

jfdi

jennyjj wrote: »

Cheers JFDI,
I very roughly non-adjusted estimate was 77 - 80 with my own figures. It could be much more and I doubt it's much less.
Did your calculations depend on some investment performance or accommodate inflation and/or tax? It would be useful to compare notes on how this calculation should be estimated/calculated and to show here how it's done. AR is not always a poison pill.

Nothing too clever!
I just assumed zero inflation and full pension entitlement in 5 years and then ran it on with current AR pension until they balanced. I ignored the lump sum increase and salary for those extra years.
I guess as I'd been living off pension level money and saving the rest (from my salary) for a couple of years it helped as I knew I could live off the reduced amount.

atush

Save outside your DB pension into a PP or Sipp. So you c an retire before your DB pensions pays out in full.

Actuarial reductions are best for people will ill health who wont make old bones.

But saving in this way will impact your everyday life as you are probably overspending.

Thrugelmir

jamesperrett wrote: »

One other thing to consider is the rise in wages compared to the rise in CPI. If CP! rises above 1% (assuming you are in a typical civil service role) then some of that actuarial reduction will be cancelled out.

Last year was 0% increase. Even a 1% pay rise is better.

LHW99

Are your skills suitable to offer as a consultancy role for a couple of days a week?
It would bring in a "part time" salary, and give you control over how many days you work - could be a regular 2 or 3, or a burst of full time for a month and then two months off.

melanzana

No point in having money if your health is going or gone.

Go now if you can afford the actuarial reduction. You will be amazed how quickly you adapt to a non working environment. The relief is amazing.

You should read through the thread below. It is full of people wondering about the same thing you are. Go on.... there are lots who have escaped and are loving it. Like MYSELF, and I am an (infrequent) poster there having early retired.

I am too busy to post much now lol. Too busy enjoying myself I should say, nothing planned, no other work, just great.

Have a look...

https://forums.moneysavingexpert.com/discussion/2840632