Royal Mail FINAL SALARY PENSION

[CORTINA]

Those that have a final salary pension that was stopped a few years ago and frozen etc....

If you are around 55 now and take that pension at say 60 and save that monthly pension for 5 years the sum will by many thousands in say an TAX FREE .. ISA ACCOUNT.

£400 a month over 5 years is around £24,000 plus interest..... and ADD to this amount a lump sum that you can also take when you take your pension at 60 ...of say another £25,000 ... this depends of course on personal amounts pro rata.

By 65 you could amass 50k to 60k and retire when you like or 65 or sooner with less ... Instead of waiting to 67 or 68 .... plus you could also have the current pension that many are paying into since the final salary stopped...increasing your pot from the day you do retire even more.....

You then tick along enjoying life for 2 or 3 years while still drawing the final salary pension and the current pension and have a large savings pot in an ISA .. to draw on if needed untill the State pension kicks in for another £100 plus a week......

If you have say 15 to 20 years in the Final Salary Scheme and aged around 55 plus it could well be an option of taking early pension and saving it while working a few years to build up a nice wedge and retire at your pace earlier...

It has suited some work mates.... and if you are in that position and probably many others.... are .....its worth thinking about.... ...just do the maths... at least it is an option... for some long timers... if you want to get out early....

Or just build up am massive money pot while working to normal retirement age.... with plenty of extra money to use while still working..... spend or save it you only get one chance of what to do with an early pension...

[dvbuk55]

Those that have a final salary pension that was stopped a few years ago and frozen etc....

If you are around 55 now and take that pension at say 60 and save that monthly pension for 5 years the sum will by many thousands in say an TAX FREE .. ISA ACCOUNT.

£400 a month over 5 years is around £24,000 plus interest..... and ADD to this amount a lump sum that you can also take when you take your pension at 60 ...of say another £25,000 ... this depends of course on personal amounts pro rata.

By 65 you could amass 50k to 60k and retire when you like or 65 or sooner with less ... Instead of waiting to 67 or 68 .... plus you could also have the current pension that many are paying into since the final salary stopped...increasing your pot from the day you do retire even more.....

You then tick along enjoying life for 2 or 3 years while still drawing the final salary pension and the current pension and have a large savings pot in an ISA .. to draw on if needed untill the State pension kicks in for another £100 plus a week......

If you have say 15 to 20 years in the Final Salary Scheme and aged around 55 plus it could well be an option of taking early pension and saving it while working a few years to build up a nice wedge and retire at your pace earlier...

It has suited some work mates.... and if you are in that position and probably many others.... are .....its worth thinking about.... ...just do the maths... at least it is an option... for some long timers... if you want to get out early....

Or just build up am massive money pot while working to normal retirement age.... with plenty of extra money to use while still working..... spend or save it you only get one chance of what to do with an early pension...

Except for the tax man of course. I have some pensions and the tax man takes such a wedge it's hardly worth working and I only work part time.

[CORTINA]

Depends on your situation..

The facts are there .... of course you pay more tax ..as your income has grown...

But the bottom line is you can save a wade of cash and retire earlier if you want....

Like many do ...work 2 or 3 years and draw a pension as well ... saving 3k to 6k a year around 60 years of age is a great boost with the big lump sum as well.... for early retirement....

Not so good for all part timers...

[Martin Walsh]

Any service Pre 2008 will still be calculated on a final salary basis at the time you request for it to be at aged 60 or 65 or 55 with a reduction. Your other pension pot service after 2008 can be taken at 65 .

[Lincox]

The post 2008 pension can be taken earlier than 65 but there would be a deduction for taking earlier than 65.

[IcanthelpthewayIam]

Those that have a final salary pension that was stopped a few years ago and frozen etc....

If you are around 55 now and take that pension at say 60 and save that monthly pension for 5 years the sum will by many thousands in say an TAX FREE .. ISA ACCOUNT.

£400 a month over 5 years is around £24,000 plus interest..... and ADD to this amount a lump sum that you can also take when you take your pension at 60 ...of say another £25,000 ... this depends of course on personal amounts pro rata.

By 65 you could amass 50k to 60k and retire when you like or 65 or sooner with less ... Instead of waiting to 67 or 68 .... plus you could also have the current pension that many are paying into since the final salary stopped...increasing your pot from the day you do retire even more.....

You then tick along enjoying life for 2 or 3 years while still drawing the final salary pension and the current pension and have a large savings pot in an ISA .. to draw on if needed untill the State pension kicks in for another £100 plus a week......

If you have say 15 to 20 years in the Final Salary Scheme and aged around 55 plus it could well be an option of taking early pension and saving it while working a few years to build up a nice wedge and retire at your pace earlier...

It has suited some work mates.... and if you are in that position and probably many others.... are .....its worth thinking about.... ...just do the maths... at least it is an option... for some long timers... if you want to get out early....

Or just build up am massive money pot while working to normal retirement age.... with plenty of extra money to use while still working..... spend or save it you only get one chance of what to do with an early pension...

following this advice would dramatically reduce the pension income after retirement age, yes you would have a lump sum to play with but how far is it going to last? a few good years followed by potentially another 20 to 30 on a reduced income is not always an attractive options, always best getting proper financial advice before doing something like this

[RobertT]

Any service Pre 2008 will still be calculated on a final salary basis at the time you request for it to be at aged 60 or 65 or 55 with a reduction. Your other pension pot service after 2008 can be taken at 65 .

The post 2008 pension can be taken earlier than 65 but there would be a deduction for taking earlier than 65.

The pension built up before April 2010 has a normal pension age of 60, so that includes all final salary and two years of career average. Pension built up after April 2010 has a normal age of 65.
Both can be taken any time after 55 as long as the company agree, but would be subject to a reduction.

[CORTINA]

Lets say a person takes their final salary pension at 60 with a lump sum...a lump sum of 25k plus a pension of 5k a year... he saves the 25k and 5k pension each year and works 5 years until 65... total savings in bank of 50k plus 5 years compound interest... say 55k. Cash in the bank at 65 retirement age less 1k a year extra tax ...50k
50k invested at 2% = another 1k a year extra

Or he works till 65 and then starts to draw a lump sum of say 30k and say 6k a year pension .. total in bank of 30k and starts to draw 1st pension payment at 65... cash in the bank at 65 years.... 30k
30k invested at 2% = £600 extra

This is just a possible 2 examples... maybe more money involved or less ..depending on individual situations...

Yes seek financial advice ...but do your maths and one option maybe better for some than the normal basic retirement status...

To some the first option of drawing a slightly smaller amount earlier at 60 and saving your pension while working ...will build a far bigger total pot with compound interest over the last 5 years of working... maybe upto double ...than waiting to draw what you get at 65....?

Yes you will pay extra tax but some prefer money in their hand at 60 and build up a bigger savings pot than waiting to 65 to draw the normal pension.... at least there is a choice ........

[Poorly]

Everyones circumstances are different, I doubt many people would have the willpower to leave £30k untouched in the bank for 5 years.

You need to take into account benefits, tax, death in service etc. I'd seek financial advice first.

[Lincox]

Yes, lots to consider, but Cortina you are spot on with your analogy of taking the pot earlier. The other thing you have not factored in is the contributions that you will also save during those five years. If these are saved and added to the pot then the lump sum at 65 becomes significantly higher. I figured this scenario out when I was 50 and started taking some of my pensions then, as at that time you could take them out earlier. OK I have not managed to save all the money, due to funding the kids through Uni etc, but it has made life a lot easier than having to find all this money out of earned income.

[Jefferson Starfish]

To some the first option of drawing a slightly smaller amount earlier at 60 and saving your pension while working ...will build a far bigger total pot with compound interest over the last 5 years of working... maybe upto double ...than waiting to draw what you get at 65....?

Yes you will pay extra tax but some prefer money in their hand at 60 and build up a bigger savings pot than waiting to 65 to draw the normal pension.... at least there is a choice ........

Have you come up with a plan to retire completely at 60?

[dvbuk55]

Taking the pot earlier means you don't have to earn that much and what you do earn is a bonus - and the tax man thinks so too

[CORTINA]

To some the first option of drawing a slightly smaller amount earlier at 60 and saving your pension while working ...will build a far bigger total pot with compound interest over the last 5 years of working... maybe upto double ...than waiting to draw what you get at 65....?

Yes you will pay extra tax but some prefer money in their hand at 60 and build up a bigger savings pot than waiting to 65 to draw the normal pension.... at least there is a choice ........

Have you come up with a plan to retire completely at 60?

Not yet ..but i have given you a possble idea of doubling you money by taking early pension ...rather than waiting to 65 to draw you pension... some are doing this accross the country ..not just in RM

Over to you Jefferson...can you better it...?