LGPS Shared Cost AVC

jamjar92

QrizB said:

jamjar92 said:

Originally was going to increase my pension to offset retiring earlier but now will be taking the max lump possible ...

The LGPS commutation rate of 12 means it's rarely a good idea to take the maximum lump sum. The minimum lump plus the max pension is a better choice for most people.

(This is an LGPS hread; if your employer isn't LGPS or any other public service body, this might not apply.)

Its all based on choice, with the majority of the lump sum is coming from AVC's, reducing the pension to keep under 40% tax bracket after the state pension kicks in, spending the money earlier in retirement. Later in retirement you spend less.

I think @Silvertabby once said given the low commutation the majority of people take the larger lump sum.

Financially I would tend to agree with you, but there are other factors in play. I have many retirees friends I have discussed this with who have a good number of years ahead of me doing this, they may have not taken the max but certainly did not take the min.

RidingEast

jamjar92 said:

My employer offered SSAVC, I left the old one as is, others transferred it. I decided to leave as is on chatting about the options with pension scheme. Originally was going to increase my pension to offset retiring earlier but now will be taking the max lump possible, maybe some from the pension offered I will run the figures again in 4 years when I am 60.

I’m still on the fence about whether to leave as is or transfer. I hope there’s a good lump sum from the AVC as I don’t want to commute any of my LGPS pension, it’s a very personal choice isn’t it.

jamjar92

RidingEast said:

jamjar92 said:

My employer offered SSAVC, I left the old one as is, others transferred it. I decided to leave as is on chatting about the options with pension scheme. Originally was going to increase my pension to offset retiring earlier but now will be taking the max lump possible, maybe some from the pension offered I will run the figures again in 4 years when I am 60.

I’m still on the fence about whether to leave as is or transfer. I hope there’s a good lump sum from the AVC as I don’t want to commute any of my LGPS pension, it’s a very personal choice isn’t it.

If its about getting the biggest lump sum along your LGPS pension then it makes no if you leave as it or transfer. Once you transfer the previous benefit options are gone. I think leaving as is you have the best of best worlds to decide when your deciding what to do at retirement. Using it for a lump was now my motivation but have the option to change my mind.

Lemon_dr1zzle

jamjar92 said:

QrizB said:

jamjar92 said:

Originally was going to increase my pension to offset retiring earlier but now will be taking the max lump possible ...

The LGPS commutation rate of 12 means it's rarely a good idea to take the maximum lump sum. The minimum lump plus the max pension is a better choice for most people.

(This is an LGPS hread; if your employer isn't LGPS or any other public service body, this might not apply.)

Its all based on choice, with the majority of the lump sum is coming from AVC's, reducing the pension to keep under 40% tax bracket after the state pension kicks in, spending the money earlier in retirement. Later in retirement you spend less.

I think @Silvertabby once said given the low commutation the majority of people take the larger lump sum.

Financially I would tend to agree with you, but there are other factors in play. I have many retirees friends I have discussed this with who have a good number of years ahead of me doing this, they may have not taken the max but certainly did not take the min.

More people now request to convert to max lump sum than keep standard benefits.