commuting and lump sum investing

memsquared

Husband retiring in August 2008 from 39 years teaching aged 60. He can commute part of pension to create an additional lump sum of £50000 tax free which would add to the normal lump sum of £60000. Taking additional lump sum will reduce annual pension by about £4000.The pension is index linked to RPI.
Should he commute the max.amount? Should he pay towards the mortgage of a buy to let?
and any suggestions for investment of lump sums?:rolleyes:

simonleblank

I think that you need to post more information to generate a response, things like what the pension will be and also your tax status and earnings, what other savings/investments you both have

Retired_I.F.A.

To be honest there is no right answer.

Should I buy an annuity?
Should I buy to let?
Should I buy invest in a b or c?


Whats right for one is totally wrong for someone else. You may as well ask should I have a t-bone steak or beans on toast for tea?

However, go seek out an IFA tell him of your circumstances goals and risk attitude and he'll put himself in you shoes and make recommendations based on his knowledge of what's available from the whole market place.
An IFA is really the only one qualified and legally allowed to advise on all such products and doing so here on a message board could get him struck off.

memsquared

simonleblank wrote: »

I think that you need to post more information to generate a response, things like what the pension will be and also your tax status and earnings, what other savings/investments you both have

pension = 39/80 of about £42,000 +lump sum of 3x annual pension.
can commute about £4000 of pension (tax free)into lump sum at rate of £12 per pound of pension (about £50,000 to be added to original lump sum).
Question is - could larger lump sum be better invested than index linked (RPI) pension? The pension will be subject to tax and with the 10% level being axed in April, and the 22% being reduced to 20% in April!!!
From retirement the income will be partly from pension and partly from part-time work.