Chage of plan?

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arnoldy
arnoldy Posts: 505 Forumite
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in Pensions, annuities & retirement planning
Evening all,
A curve balls come in, I know overall I'm pretty fortunate despite this. I'll be consulting an IFA, but I'm still interested in your good thoughts. Age 52, married (wife NHS nurse - 32 years in NHS). Home owner, no mortgage, 1 daughter (18).

Original plan was to retire at 55 (FS pension projection was 37k if taken then and I would have supplemented with SIPP - currently 170k).

I now think I'll be made redundant. I'll get a settlement of circa 90k post tax. After 30 + years of corporate life I feel my heart is not in it, so I'm now planning to do no paid work for a while - look after ageing mother and take a new direction. I need about 2k/month after tax.

Options:
1. Take pension 30k pa now, let 170k SIPP grow. Invest the settlement. If I defer FS pension I think the factors for early retirement get worse. Plus if I defer I might croak before getting any pension at all (not expecting to but male 50+).
2. Take CETV of £1.2m, use settlement of £90k after tax to see me through next 2-3 years. Hopefully my pension monies will grow and then I'd do some form of drawdown at 55, maybe take 250k ish TFLS. Yes there are LTA problems.
3. Other?

My fag packet calculations suggest taking the CETV is the way to go. Plus the "financial wheels" are falling off the company I work for, so worried about being washed up in PPF.


Any opinions or views - thanks?

Comments

  • NoMore
    NoMore Posts: 1,085 Forumite
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    Not sure why your changing plans. 90k will see you to 55 and then you can enact your original plan
  • Brynsam
    Brynsam Posts: 3,643 Forumite
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    arnoldy wrote: »
    Options:
    1. Take pension 30k pa now, let 170k SIPP grow. Invest the settlement. If I defer FS pension I think the factors for early retirement get worse. Plus if I defer I might croak before getting any pension at all (not expecting to but male 50+).

    You're right - early retirement factors are frequently better if you take your pension at the time you leave service.

    Just checking - do you have a 'protected' pension age which would let you draw your pension at age 52?
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    arnoldy wrote: »
    Plus if I defer I might croak before getting any pension at all (not expecting to but male 50+)

    Middle aged men used to perish of heart attacks. It's now much rarer: heart attacks are an illness of the old. So, particularly if you don't smoke, you're not particularly likely to croak in your fifties.
    Free the dunston one next time too.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    arnoldy wrote: »
    I'll get a settlement of circa 90k post tax.

    Is it impossible to avoid most or all of all your higher rate tax by making a pension contribution? Have you useful amounts of Annual Allowance to carry forward?
    Free the dunston one next time too.
  • Bimbly
    Bimbly Posts: 483 Forumite
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    kidmugsy wrote: »
    Is it impossible to avoid most or all of all your higher rate tax by making a pension contribution? Have you useful amounts of Annual Allowance to carry forward?
    What about the LTA?
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    Bimbly wrote: »
    What about the LTA?

    "Take pension 30k pa now, let 170k SIPP grow."

    £30k x 20 + £170k = £770k, miles less than the LTA.

    "Original plan was to retire at 55 (FS pension projection was 37k if taken then":

    £37k x 20 + £170k = £910k, comfortably short of LTA.
    Free the dunston one next time too.
  • atush
    atush Posts: 18,726 Forumite
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    What is 90K plus tax? Your redundancy? What is the total? How much tax will you pay? Cant you put some of this in your Sipp?

    Do you have other savings and investments to use to live on so you can save some of the tax?
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