Taking early retirement soon, confused about max lump sums, level pensions etc.

MK62

What are your state pension positions, does your wife have any pension provision other than state pension and how old is your wife? (obviously we wouldn't normally ask that, but it could be relevant here). Also, are there any other investments/savings which might be materially relevant here.
In the end, given your concerns, it's going to come down to your longevity.....and the net financial position you'd both be in beforehand versus the position your wife will be in afterwards (this is however, discounting the possibility of you living longer, though that may not be a material consideration here).

Mike_59_England

MK62 said:

What are your state pension positions, does your wife have any pension provision other than state pension and how old is your wife? (obviously we wouldn't normally ask that, but it could be relevant here). Also, are there any other investments/savings which might be materially relevant here.
In the end, given your concerns, it's going to come down to your longevity.....and the net financial position you'd both be in beforehand versus the position your wife will be in afterwards (this is however, discounting the possibility of you living longer, though that may not be a material consideration here).

Hi, state pension as per last post at bottom.
Wife will have her state pension she is 6 years younger than me however. We do have investments and savings. thanks

gamston

you have to think about how long you may live once retired to safe guard yuor wife
this is what i did 
I took maximum AVC commutation to bump up my annual pension, and a small lump sum as I hoped i would live longer than 12 yrs (commulation rate 12-1)
I took the standard pension (not level) as I wanted that extra boost when state pension kicked in
remember part of your pension may be COPE and so that bit only get maximum of 3% increase per yr, 
my total annual pension in 2013 was £28k, this year 23/24 it will be £40k +  now I get the state pension £10k a nice boost to my annual income

If i had taken a bigger lump sum (and a smaller annual pension) what would I have done with that lump sum ?
I could have got a house and rented it out and used that money to top up pension, with the second home as a golden nugget

which route was right ?

Nebulous2

Mike_T_1965 said:

MK62 said:

What are your state pension positions, does your wife have any pension provision other than state pension and how old is your wife? (obviously we wouldn't normally ask that, but it could be relevant here). Also, are there any other investments/savings which might be materially relevant here.
In the end, given your concerns, it's going to come down to your longevity.....and the net financial position you'd both be in beforehand versus the position your wife will be in afterwards (this is however, discounting the possibility of you living longer, though that may not be a material consideration here).

Hi, state pension as per last post at bottom.
Wife will have her state pension she is 6 years younger than me however. We do have investments and savings. thanks

It still, for me, would come down to taking a punt on how long you will live. Based on the figures you have given, between the basic lump sum and your £90k preference you are on a commutation rate of 12:1. 

There may be more than 50% pension for your wife - my pension has a 5 year guarantee if I die before that, for example. 

Would that extra £10k make a difference in any way to your lives, either together, or your wife on her own? 

The difference in both lump sum and pension is quite modest with your preferred option, and I'd say it isn't going to matter much either way, you still get a reasonable pension. 

VXman

Mike_T_1965 said:

I can take a maximum lump sum (about 40k more) and a reduced yearly pension, that looks small to me.

  Well, it's not much more less than I get and I manage with 4 months holiday a year! (I do have other savings)

   Seriously, the reduction in your pension is about 3.5K a year so if you spent 3.5K of your 40K lump sum each year would be gone in 12 years where as the bigger pension would continue. That's not taking into account any possible growth is you invested it. However, your pension would also grow. If it is inflation proofed that can be good - I got 10% increase this year.

in 10 years you will have the state pension too so that's an increase of £10K a year income.

So it all comes down to...

What is your expenditure? (What do you like to do with your money)

Do you see outgoings decreasing as you get into your 70's? (Being less active)

Do you need a lump now for a specific purpose?

You seem to be in a very comfortable situation it's just a case of making a choice (gamble?)

xylophone

Your forecast is £203.85 a week, £886.38 a month, £10,636.60 a year, says I need to continue to pay NI?

What is shown at 

"Estimate to 5/4/22(23)"?

Pension will be CPI protected.

Uncapped?

Is this a public service scheme?

If not, do you have pre and/ or post 88 GMP?

Mike_59_England

xylophone said:

Your forecast is £203.85 a week, £886.38 a month, £10,636.60 a year, says I need to continue to pay NI?

What is shown at 

"Estimate to 5/4/22(23)"?

Pension will be CPI protected.

Uncapped?

Is this a public service scheme?

If not, do you have pre and/ or post 88 GMP?

Railway pension.

xylophone

Let's  start with state pension forecast.


What is shown under

"Estimate to 5/4/22(23)"?

xylophone

Now scheme pension.

https://member.railwayspensions.co.uk/resources/news/2023/03/21/what-is-the-annual-pension-increase-for-2023-24-financial-year

Were you a member of the scheme  between 1978 and 1997?

LHW99

Whatever you choose, it may be worth using some of the lump sum to start a pension for your wife. She can put in £2880 pa even if not working, and get £720 added by HMRC and can do that each year until she is 75.