final salary pension : take early or not?

flyguy66

leosayer said:

In simplified terms, only salary can be added to a SIPP and attract tax relief. Is your wife's non-pension income from a salary? If not then you're out of luck.

If you expect your family's annual expenses including discretionary to be around £48k per year and your wife's pension income + rental income is £46k then I don't see why you are looking to draw from your SIPP when your DB pension will give you more than your family need even with a reduction for taking it early.
It isn't quite that, I would need to take from my SIPP even if I took my DB as early as I could. The numbers I mention at 67 include my state pension. My original post was about the sense in doing that and maintaining a bigger SIPP pot and maxing draw down from DB. On balance delaying accessing DB a little and using more SIPP pot seems to strike a nice balance, and avoiding higher rate tax threshold down the line  

Having 100% of your retirement income needs met by guaranteed income for the rest of your life is a great place to be and then (I assume) this will be further enhanced with state pensions.
SP was included in the figures I used

If it was me, I would commence your DB schemes as soon as you retire and retain your SIPP as an investment should they be required for additional spending now, or for later life care should that be necessary.
Accessing later when all DB and SP are also income leads to higher rate tax threshold should I need to access it

Seeing as this could be 20+ years the SIPP has plenty of time to grown significantly if invested sensibly.  If the SIPP isn't depleted when you die then it can go to your kids.
It's been there an invested for a while already, it would definitely make a big pot if left invested, but that was never the intention.  I wanted  to retire early on this, the kids can have the house and invested savings 

In fact, that above is pretty much exactly what I am planning to do when my wife and I stop working next year.
Enjoy your retirement, I hope it all works well for you and your wife. 

see above leosayer

tigerspill

SarahB16 said:

tigerspill said:

For me, it was a no brainer - I took my DB pension at 55 rather than waiting until 60.  The reduction factors at the time were around 3.2% per year.  I did a spreadsheet and worked out that it would take a very long time for taking at 60 worked out better (and I would likely be long dead by that time).

Yes but it seems that you were in the very fortunate position that you could live off the reduced pension taken at 55 for the rest of your life.  

I know for many people and this includes myself that I need to continue working until the pension I have accrued is sufficient to live off.  

Thats fair enough, but the original question to me assumed that taking early was a real option.  

Spreadsheet_Addict

This is my plan; I am 55 in April. I will retire at the end of July this year. I will take the hit on actuarial reduction- I have 21 years NHS pension with a NRA of 60 and 14 in LGPS with a NRA of 65/67, depending on which one works out best for the years to 2022 under McCloud. I will have almost £100k in lump sums and LGPS AVC (tax free.)

Wife retires 2 years later from TPS with about £75k in lump sums and savings.  Our combined pensions are roughly what we live on now as a large proportion of salary went on debt/mortgage repayment (all paid now) and savings/AVCs.

After doing some significant home improvements,  the rest of our lump sums will top up our income till I am 67 and get my state pension. The extra will all be for holidays and fun.

Yes I could work later, put more away and have a higher pension, but who says how well I'll be then? Will I be able to enjoy it? Brother died at 50, a colleague the same age as me died of cancer, 4 months after finding they had it last year. Another colleague is a year older and has a serious cancer diagnosis. 

Tomorrow is promised to nobody and I'll be almost 80 by the time I lose money.  If you can afford it; do it, I say.

MetaPhysical

I am in Siemens pension scheme.  Anyone else?
I am currently 56 and have been playing with the numbers upon retiring at 58 on the Siemens online calculator.  I'd have to live to 83 to make forgoing the lump sum work out better.  So I am taking the lump sum and enjoying the money.  I won't spend most of it but will draw upon it - from a highish percentage bank account -  to make up shortfalls of the slightly lesser salary if I needed to and to contribute towards holidays for me and my soon-to-be-wife, hopefully for many years.

MetaPhysical

Spreadsheet_Addict said:

Yes I could work later, put more away and have a higher pension, but who says how well I'll be then? Will I be able to enjoy it? Brother died at 50, a colleague the same age as me died of cancer, 4 months after finding they had it last year. Another colleague is a year older and has a serious cancer diagnosis. 

Tomorrow is promised to nobody and I'll be almost 80 by the time I lose money.  If you can afford it; do it, I say.

100%.  My rationale too and that of many others.  The only thing certain in this life is that you will die.  Hopefully many years hence but, maybe not.  So enjoy your go-go years whilst you can, travel and do the things you always wanted to now you have the time (and money).  I am doing the same albeit at 57 - 58 (56 currently) , to pay just a bit more into the pot and enjoy my salary another 2 years.