Light bulb moment

garrob

Good morning everyone,
As the title suggests, after having been thinking about transferring out of my DB pension for over a year now, I have finally came to the conclusion that it is best to leave it well alone.


I wonder if you can point me in the right direction/pointers as to what to do next?


I have a DB pension which was stopped by my work in April 2016.
The value is as follows - Age 65 gives me a pension of £11,623PA and a spouse pension of £5,811PA.


If I take my TFLS it changes to £8,278PA the TFLS is £55,187 this forecast was of yesterday so don't know if it will change much when I will collect at age 65, I am 59 just now. I was definately thinking of taking my TFLS as you never know what could happen in life.


I am paying into my company's DC pension now, I pay 10% and they pay in 15% I have also been paying AVCS of £150 per month since 2016. My fund should roughly be £100,000 when I plan to retire at 62, I was thinking of taking £1200 per month from my DC fund on retirement and I plan to get a small part time job maybe earning £400-500 per month.My full state pension kicks in at age 66. I have no Mortgage and will not have any car payments, my wife will still be working and earning a decent salary as a civil servant.


When I retire what would be the best place to put my £100,000? What will happen with my AVCS? Does this plan seem feasible? Many thanks in advance for looking over this.

mgdavid

I don't see the logic of taking TFLS from the DB pension.

You need £14400 pa from the DC pot to cover age 62 to 65, so you'll still have 56k left in it.
At 65 you take the unreduced DB £11600 pa, and top up from the remaining DC pot for the year until SP kicks in.

Have you accurately worked out how much you need to live on? If so, do a cashflow spreadsheet year on year to illustrate the above. Add the part-time job into the mix, to see what happens if you want to retire completely at say 63 or 64.

The usual recommendation is to maximise inflation protected income like the DB pension as you should live to see at least 80 and may make 90+.

garrob

Thank you for your reply,
The idea of taking a TFLS was to maybe buy a property overseas but that all depends on the Brexit situation.
If I retire at 62 we won't have any debt at all and from age 60 we can start saving a good chunk of money. When I retire my wife will still be working for another 5/6 years so we will have her income as well. Will the AVC'S that I am contributing be included in my DC pension or will they be seperate?


Thank you

Albermarle

When I retire what would be the best place to put my £100,000?

I guess the most obvious place is to leave it where it is . Normally with a DC scheme it is usually set up by an employer but you have direct access to the pension provider . When you leave employment you keep this direct access and it becomes just your personal pension.. If you have the time and/or inclination you may want to research other pension providers, compare charges, fund choice etc but there normally wouldn't be an urgent reason to change . Quite possibly it is perfectly good pension scheme.

atush

garrob wrote: »

Thank you for your reply,
The idea of taking a TFLS was to maybe buy a property overseas but that all depends on the Brexit situation.
If I retire at 62 we won't have any debt at all and from age 60 we can start saving a good chunk of money. When I retire my wife will still be working for another 5/6 years so we will have her income as well. Will the AVC'S that I am contributing be included in my DC pension or will they be seperate?


Thank you

Do you have a large home? Consider downsizing to pay for the property abroad. i have 2, one small gite in france, and a 3 bed house in the usa (where I am from).

Do note, that if you have a home abroad, it does restrict where yo go on holiday as you mainly go there. When the OH retires, we are thinking of selling the gite in France as 2 of 3 boys no longer go there with us, and we'd like to explore more of France/europe than we do now.

garrob

Thank so much for your replies. I will do some research nearer the time to see if the pension is cost effective. It's with Barnet Waddingham as is my DB pension and I don't think they do personal pensions when you retire. My house is a 4 bed detached so we could downsize if needed.

Kind regards