Is there an optimum month to retire?

drummersdale

@Simes122 That's how I read it as well - so why on earth would you not want to retire early?

Nebulous2

Two reasons I can think of :- 

Drop in income. If you are earning £50k, £21k is a long way down. 

No further increases in pension. Those figures will be assuming no more pension accrues. Continuing to work wil build up a bigger entitlement in addition to reducing the actuarial reduction. 

I had an unexpected payrise in my final year which added almost £3k to the final salary element of my pension. I stayed until end of March to get a full year of it. In contrast my ex-employer is now impacted by a public sector pay freeze. 

MX5huggy

drummersdale said:

@Simes122 That's how I read it as well - so why on earth would you not want to retire early?

The calculation is based on dyeing at 86 which is probably average for someone in their 60’s (it’s 84 for the general population but as you get older you’re likely to live longer). Live many years longer and it will end up being better to of retired later. But yes I don’t there’s much point in holding out for extra years. Especially if say earn £30000 working 40 hours a week or could stay at home with £20000.

drummersdale

Nebulous2 said:

Two reasons I can think of :- 

Drop in income. If you are earning £50k, £21k is a long way down. 

No further increases in pension. Those figures will be assuming no more pension accrues. Continuing to work wil build up a bigger entitlement in addition to reducing the actuarial reduction. 

I had an unexpected payrise in my final year which added almost £3k to the final salary element of my pension. I stayed until end of March to get a full year of it. In contrast my ex-employer is now impacted by a public sector pay freeze. 

True - I suppose it’s all about choices - if you like working, like the interaction etc and want/need £50k a year and still be doing 37 hours a week when you’re in mid to late 60s then go for it. I am one of the many impacted by continual and never ending public sector pay freezes so will bizarrely likely get better rises in my pension once I take it than I ever will in my actual salary for the forseeable future.

Good point about the actuarial reduction - if the bulk of my pension was in Alpha with a NPA of 67 as opposed to 60 in Classic - where most of my years are - I suspect my view would be very different.

Albermarle

MX5huggy said:

drummersdale said:

@Simes122 That's how I read it as well - so why on earth would you not want to retire early?

The calculation is based on dyeing at 86 which is probably average for someone in their 60’s (it’s 84 for the general population but as you get older you’re likely to live longer). Live many years longer and it will end up being better to of retired later. But yes I don’t there’s much point in holding out for extra years. Especially if say earn £30000 working 40 hours a week or could stay at home with £20000.

From the ONS website 

Life expectancy at birth in the UK in 2017 to 2019 was 79.4 years for males and 83.1 years for females

Life expectancy at age 65 years was 18.8 years for males and 21.1 years for females,