The Hard Life of the Defined-Benefit Scheme Member

Peelerfart

Can so very nearly taste the bitterness.

Ah well, moving on

crv1963

FatherAbraham wrote: »

I was chatting to a recently-retired acquaintance, who's about 15 years older than I. When he told me that he's now retired, I replied that I'm now seriously committed to a retirement date (I'm DC, so I get to choose), and working on achieving that.

So he asked me whether I'm now reducing work hours in preparation for the change to not working, in the way that he did in his last few years.

I found myself somewhat speechless, considering that my plans up to the retirement date mostly consist in trying to get a big enough pot together to avoid being well below the poverty threshold, and thus include considering increasing my workload or seeking a more stressful and better-paid job during the remaining years before retirement.

People like me simply don't have the luxury of worrying about how the change from full-time work to retirement will challenge us, psychologically speaking, because the more pressing existential question of having enough money to enjoy retirement gets in the way. Perhaps it's healthier not to be a DB member, and have real problems to deal with?

I expect Dr Maslow had something to say about this.

I wouldn't worry about what other people have or don't have. There are, as in all areas of life always some who have more than others. What seems like a good amount to one person is not enough or way too much for another, it is all about personal perception, expectation and ability.

What I consider reasonable for me, you may think is not enough for you or vice versa. I think that some of us with DB pensions have a good idea of real problems and deal with them, just as I also think some with DC pensions have real problems and don't have a clue how to deal with them.

I count myself fortunate that I found this site and in particular this board in good enough time to make real changes to our planning so although our plans are not perfect and in an ideal world I would have started planning earlier we will hopefully reach a good way along the path to meeting the ultimate goal for most on here- a reasonably comfortable retirement.

I think IMHO that those that have more than me or are better placed than me- good on you. For those that have or will have less then also good on you, as long as you can be comfortable with what you've got. For me it is not the comparison that matters it is the journey or planning with like minded people, none of whom I expect that I'll ever meet, the sharing of tips, ideas, knowledge and experience that counts.

I've shared some of the suggestions I have been given with my sons and some colleagues, steered them towards this site and I know of three colleagues that have begun to seriously plan for an earlier retirement using ideas here, they haven't become jealous because my particular section of our DB scheme is more generous than theirs, they recognise that although our journey or goal- retire reasonably young (50s) is the same, our paths to it are along different roads.

As for Dr Maslow, he would suggest always trying to attain the next level, is always the goal. All of the people can't achieve this all of the time, but the goal is always all of the people to have their need for hygiene, food, shelter and social interaction met all of the time- that's where I see the SP being the safety net, personal pensions either DB or DC are to attain the next levels of pleasure and self achievement and if we are lucky some of the time self actualisation.

crv1963

For those that are interested in what Maslow said:=

https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs

marlot

Wenlock wrote: »

I expect you realise that many DB pensioners receive extremely modest pensions?

Whereas many of the posters on this forum have almost obscene sums in their pension pots but still delay retirement, despite having projected annual pension income way above the wage of regular workers.

I know a few people who retired 10-20 years ago who had great deals.

Everyone I know who is going early now has made the concious decision to make significant extra contributions to their pensions over the last 15 years or so, because we realised that our standard provision would not be enough. In my case about half my gross pay went into savings.

I was driving around in an old mondeo when my peers had leased new cars. I was the one bringing sandwiches to work. I was the one cycling to the station. I used a £200 android phone instead of the latest iPhone. You get the drift.

The great thing about chosing to live a more modest lifestyle is that you tend to carry that into retirement, so need a lower pension too. Sure, I see lovely new cars I'd love to go out and buy, but I don't need one - and I'd rather be retired than working to pay for it.

The trick is to find the right balance - there's no point living so frugally that you don't enjoy life!

I still get lots of people telling me I'm 'lucky' to be retiring at 55. There is no luck involved - just more frugal living, and saving for the event.


Coming back to the OP's point. I could have gone at 53 but I didn't quite have the savings then. But I did find ways to create the time for the hobbies I wanted to take up in retirement. I dropped to 4 days a week. I found ways to volunteer in the community that my employer was happy to sponsor [give me a few extra days off for] etc. I agree that not everyone can do that, but if you can, it makes retiring easier.

Marcon

What a bizarre post. As you say, the person concerned is 15 years older and the world has changed...change with it, which may mean putting back your retirement date.

There are many DB members who were forced to retire before they wanted to stop work (funnily enough quite a lot of people actually like their jobs), because it used to be possible for employers to enforce a retirement age. They now have the cash but miss the company, the status and all the others things that go with a thoroughly enjoyable job.

k6chris

marlot wrote: »

I still get lots of people telling me I'm 'lucky' to be retiring at 55. There is no luck involved - just more frugal living, and saving for the event.

^^ This - FIRE in one sentence. You are saving more and requiring less to live on when you retire. Well said.

System

My FS pension was took away in 2009 and we transfered into a DC scheme this has made a massive difference to my retirement outlook and yet friends of ours are lucky to still have their FS schemes and dont shut up about how rosy their retirement plans are looking one of which has just been promoted with a year left before they retire because as they state "Its not what you know but who you know " and they say that the increase in salary will hopefully make a big difference in their already good FS scheme. Many of us in the private sector lucky if we get 5% percent contribution from the employer yet in the public sector the employer (Tax Payer) contribution is 12% plus which is why you dont see many in the public sector staying till they reach 65 some ive seen retiring early and having more income from their pension than if they carried on working My companies FS scheme has a £34 million blackhole in it. It doesnt make good reading every annual statement.. Plus rumours are that the top Management have somehow kept their FS scheme

hugheskevi

yet in the public sector the employer (Tax Payer) contribution is 12% plus

From April 1st, average employer contribution rates are:

NHS 20.68%
Teachers 23.6% (to be confirmed)
Civil Service 26.6% to 30.3% (depending on salary)

Although given most employer funding comes from the Exchequer to employers and then is paid back by employers to the Exchequer, it doesn't really matter what the employer contribution rate is given it is just money following around the system.

Plus rumours are that the top Management have somehow kept their FS scheme

Executive pension schemes are common, sometimes called Top Hat schemes.

It is commonly suggested that all employees should have to be in the same pension scheme, primarily to ensure the top of the office have appropriate incentives around governance of managing all the company's pension schemes.

theoretica

I think it is important to consider the whole package - a great pension isn't generous if the salary is significantly lower. Eg nurses' (good) NHS pension scheme and their (not so good) salaries.

lisboa84

Nikond4 wrote: »

friends of ours are lucky to still have their FS schemes and dont shut up about how rosy their retirement plans are looking one of which has just been promoted with a year left before they retire because as they state "Its not what you know but who you know " and they say that the increase in salary will hopefully make a big difference in their already good FS scheme.

Am I missing something, or does it seem like from the company's point of view, it's a poor financial decision to promote someone who is due to retire in one year and pay them an increase in salary, which is effectively going to cost that company for the next 30 years in increased final salary pension pay-outs.