Retire in 10 years -possible

Dandytf

Hi mser's I was asked to re post this on new thread -maybe I'not yet eligible to post via Early Reitirement thread.

I have M.S. since 2012 approx.
*Is it possible in financial sense to enjoy retirement from 55 which I've informed my employees DB pension scheme of*

My concerns are:- earliest pension@60 from previous employers for a few years is only 2700 currently and frozen until 60.
My current employers DB pension which is currently 9k approx (since 2014 or 2015 I think) -that could be possible to access from 55 if I''m correct as that's what I've chosen as retirement target .
Then at latest stage will be gov standard pension with Nat Ins stamps paid.

I'm basing this on hopefully paying off mortgage before 55 -though it could be close.
Forgot to add almost 10 years non pension-stupid I never got to join a very good company pension during 90's
MSER's is retirement @55 years possible in my example.
Note I don't have the luxury of a large pension as I have changed career at least twice hence part pension funds -the latest being reasonably valuable and growing as was 1st pension before I changed careers.

Last edited by Dandytf; Yesterday at 8:43 PM

k6chris

Your starter for ten - How much do you need a year to "enjoy retirement"??

MallyGirl

I guess it depends on what you need to live on and what you would like as extra on top to enjoy retirement.
The numbers above - if I am reading them right - wouldn't cover my fixed costs. You may have a very different setup in a cheaper part of the world with no expensive hobbies.
It could be a lean 12 odd years from 55 to 67 with £9k per annum till 60 and then £11,700 from 60 to 67.

Dandytf

MallyGirl wrote: »

I guess it depends on what you need to live on and what you would like as extra on top to enjoy retirement.
The numbers above - if I am reading them right - wouldn't cover my fixed costs. You may have a very different setup in a cheaper part of the world with no expensive hobbies.
It could be a lean 12 odd years from 55 to 67 with £9k per annum till 60 and then £11,700 from 60 to 67.

Thanks for your kind answer-once mortgage is complete, it could be possible.
Initially I'm only considering from 55 yrs -not looking as far ahead until late 60's.

I shall continue to pay mortgage and unsecured borrowing.
I could also have some form of gift from family I think maybe before I'm 55.
Also I don't yet see any positives in increasing DB as i'M +5% CONTS +5% AVC'S

Pension fund was looking much more value when I was full time until early 2017.
I don't intend to make this a health thread=though m.s. takes priority now hence reduced working hour etc.

Thanks mser's your advice is very much appreciated -quite motivational

Edited -Cannot comment on Disabilty benefits as such as no idea what my circumstances will be from next 10years, though what I did notice form the kind reply is quoted 11700 from 60 -that's equivalent to my part time earnings and I pay very little almost 0 tax -that is what I could possible continue to enjoy -again only once mortgage and unsecured borrowing is paid in full.

LHW99

Couple of comments - DB schemes are deferred, not frozen, ie there is some index linking in the years you do not draw on them.
Current Employers DB pension - you say

My current employers DB pension which is currently 9k approx (since 2014 or 2015 I think) -that could be possible to access from 55 if I''m correct as that's what I've chosen as retirement target .

You can access a pension from age 55, but a DB pension would normally have an "actuarial" reduction if it is taken before the normal retirement age. However, if you are granted ill-health retirement, you can be given the pension without reduction. This usually is at discretion of the trustees, and would depend on your health when you apply.
Have you checked on these points, because if that £9k is reduced because you take it early, your plans will be out the window.

Happier_Me

I think you need to double check the values of your DB's, when they become payable and the impact of any actuarial reduction if taken early.

The £9k DB scheme is presumably dependent on you continuing to contribute until you retire in 10 years? But if the £9k is the value of your pension at your pension schemes normal retirement age then the actuarial reductions could be significant. As an example I am a long standing member of a DB (21+years), with a pension 'in the bag' of £13,500 at my NPA (mix of 65 and 68)...if I were to take this at 55 I would receive less than £8k per annum.

I wouldn't rule out considering ill health retirement if it gets to the point where your MS symptoms mean working part time is not sustainable. In my scheme (LGPS) there are three tiers, tier 1 would enhance your pension to your NPA (and I have known MS to fall into a tier 1 category). Part time working as a direct result of your illness may also be disregarded. Ill health is also payable from the date its granted, so potentially earlier than 55.

The criteria for ill health is usually very strict and rightly so, but don't ignore this given your circumstances. Read up on your scheme rules so you're clear about all the options potentially available to you.

enthusiasticsaver

As others have said most DB schemes impose an actuarial reduction if taken early so is that £9k per annum quote based on you only contributing until 55 and drawing it then? I would suggest you track your expenditure for a year to see what you will actually need as an income in retirement. If you intend paying off all debt and your mortgage by then you can ignore these.

If you retire early on ill health grounds sometimes they don't impose the reduction so your best bet would be to continue working until your MS impacts. My brother has MS and is still leading a relatively active life so it really depends on the type of MS you have and whether it is progressive.

bugslet

Erm, I suggested, not asked. I suggested because, as I said, not all the clever pension gurus read the early retirement thread and I thought you may get a better response with a stand alone thread.

Just trying to be helpful.

Albermarle

An obvious question is do you have any cash savings ?. If not then I think it will be a struggle in the years before the state pension kicks in . Especially if some one off costs crop up ( as they will) like a new boiler or the roof needs mending etc .
Also to give another example of taking a DB pension early, mine is around £15 K at 65 but if I took it today 5.5 years early it would be less than £11K .

Dandytf

LHW99 wrote: »

Couple of comments - DB schemes are deferred, not frozen, ie there is some index linking in the years you do not draw on them.
Current Employers DB pension - you say
You can access a pension from age 55, but a DB pension would normally have an "actuarial" reduction if it is taken before the normal retirement age. However, if you are granted ill-health retirement, you can be given the pension without reduction. This usually is at discretion of the trustees, and would depend on your health when you apply.
Have you checked on these points, because if that £9k is reduced because you take it early, your plans will be out the window.[/QUTE]
This is most vital advice-thank's
As M.S. is progressive then quite possibly I could be considering early pension due to ill health.
I though it would be hospital or Neurologist signing me off from work if required -I haven't asked Pension providers-though I have called them to raise contributions and their help is very accurate and welcomig.

I could then give them a call early 2019 and ask them some scenario's if I want to retire early with M.S -thanks I won't comment on possible reductions unti I call them.
The 9k is current fund balance-I think it could continue growing over next 9-10 years-I chose cash/index link investments and my 5% conts is matched by employers -though 5% AVC's aren't matched.

If as mser's kindly mention that early retirement isn;t financially possible. I could consider a return to ful time next year -though employers would;t be happy as I declined a return after 6 weeks full time shifts early 2018 (I have lots of m.s. appointments and part time is ideal for my illness)
Thanks mse'rs next step is contact DB providers and re post.

Dandytf

Albermarle wrote: »

An obvious question is do you have any cash savings ?. If not then I think it will be a struggle in the years before the state pension kicks in . Especially if some one off costs crop up ( as they will) like a new boiler or the roof needs mending etc .
Also to give another example of taking a DB pension early, mine is around £15 K at 65 but if I took it today 5.5 years early it would be less than £11K .

Thanks, exactly I'm basing my early retirement on mortgage being paid in full.
I agree that Emergancy costs -I pay factors fee's and sometimes the quality bill can be slightly expensive.
I didn't;t answer cash question at this time -until I complete dmp -2021/22 -that would allow me to continue with some cash savings to accumulate over next 5-10 years.
I'm also on 3 year medical driving licence and don;t expect I'll be driving in 10 years
Thanks for your personal DB quote -that's consierdrable drop in pension funds.
As per tonight's posts-I'll contact DB fund providers and run some questions to try and understand my possible early retirement scenarios.