DB Pension options.

Shedman

daveyjp said:

Spouse then has no lump sum and a lower annual pension.

These scenarios are why planning is essential.

Spouse would actually have no reduction in pension from the DB pension if a lump sum is taken, as OP said, and is quite usual when taking lump sums from DB pensions. Plus there's the potential for an additional amount of cash left for them if invested sensibly.  

But, as you say, scenario planning is essential.

Shedman

Also by the way has the OP checked with the pension administrators that the second pension is still RPI indexed.   Since the 2011 changes a number of pension schemes have changed to CPI (especially if the indexation wording was suitably vague like "in line with inflation").   My main DB pension has, although I'm fighting a rearguard battle on that due to what I believe were guarantees given when company was merged.

etienneg

daveyjp said:
Spouse then has no lump sum and a lower annual pension.

aberamagold said:

Wife is 62 working part time and gets half my pension if i die first what ever route i go down.

I agree that planning is essential, but it has to be on the correct facts.
It is common (although not universal) for the spousal part of a DB pension NOT to be reduced because the lump sum is taken. So daveyjp's assertion (about a lower annual spousal pension) has no basis in fact.

I'm not arguing for or against taking the lump sum, simply that all relevant facts need to be taken into account. This includes the fact the the lump sum is tax free and (in this case) the spousal pension is the same with or without lump sum. The opposite scenario to daveyjp's is that you don't take either lump sum and die the day after retirement! With two DB pensions, you might choose to hedge your bets and take one lump sum, leaving the other as a full pension with index linking.

One more point: Are you sure that the whole pension increases with cpi/rpi? Often the pre 1998 part (for example) has no index linking, or a reduced/limited percentage. Just check to be sure you are basing your decision on the correct facts!

Scallypud

Albermarle said:

 . If you have no very bad habits and are educated with a past career at a desk, with little money worries then it is likely you will be in that 50% .

Why do you think the well educated live longer?

Albermarle

Scallypud said:

Albermarle said:

 . If you have no very bad habits and are educated with a past career at a desk, with little money worries then it is likely you will be in that 50% .

Why do you think the well educated live longer?

I think it is mainly the link to what job you do . Somebody who is educated is more likely to have a physically easier job, earn more  and be able to retire early. 

garmeg

Albermarle said:

Scallypud said:

Albermarle said:

 . If you have no very bad habits and are educated with a past career at a desk, with little money worries then it is likely you will be in that 50% .

Why do you think the well educated live longer?

I think it is mainly the link to what job you do . Somebody who is educated is more likely to have a physically easier job, earn more  and be able to retire early. 

They are probably less likely to drink to excess or smoke. But there are exceptions like Dylan Thomas, very intelligent but was fond of both. He died at 39.

BobQ

I have not seen it mentioned so far, so has the OP checked that the terms of his pension allow him to take the pension in that way? Most DB schemes are public sector and do not allow  this so hopefully these are schemes offering this flexibility
On the general point, I would say that unless the OP has reason to think he will be significantly short of  average life expectancy or desperately  needs the money, keeping the pension is the best option rather the hassle and risks of investing  the cash  fund himself

BobQ

 

They are probably less likely to drink to excess or smoke. But there are exceptions like Dylan Thomas, very intelligent but was fond of both. He died at 39.

Try  justifying your argument based on REAL EVIDENCE and not unrepresentative examples. As Amy Whinehouse said:
"Life's short. Anything could happen, and it usually does, so there is no point in sitting around thinking about all the ifs, ands and buts."
You may indeed die the day after taking a DB pension. But you could  live until you are 100 and get more benefit than you ever imagined from a DB pension. Everything is about probabilities. 

garmeg

BobQ said:

 

They are probably less likely to drink to excess or smoke. But there are exceptions like Dylan Thomas, very intelligent but was fond of both. He died at 39.

Try  justifying your argument based on REAL EVIDENCE and not unrepresentative examples. As Amy Whinehouse said:
"Life's short. Anything could happen, and it usually does, so there is no point in sitting around thinking about all the ifs, ands and buts."
You may indeed die the day after taking a DB pension. But you could  live until you are 100 and get more benefit than you ever imagined from a DB pension. Everything is about probabilities. 

I am not criticising DB pensions. On the contrary I would never trade mine in for a CETV as I value the guarantees too highly. A DB and some DC is probably a sweet point as far as pension provision is concerned.

And I stand by my comment that educated people will live longer, Dylan Thomas was an example to the contrary. I dont know whether Amy Winehouse was educated or not but I did think she was lovely.

NottinghamKnight

garmeg said:

Albermarle said:

Scallypud said:

Albermarle said:

 . If you have no very bad habits and are educated with a past career at a desk, with little money worries then it is likely you will be in that 50% .

Why do you think the well educated live longer?

I think it is mainly the link to what job you do . Somebody who is educated is more likely to have a physically easier job, earn more  and be able to retire early. 

They are probably less likely to drink to excess or smoke. But there are exceptions like Dylan Thomas, very intelligent but was fond of both. He died at 39.

Intelligent maybe but not very educated and an example from nearly seventy years ago so not exactly pertinent to modern times.