Take the money or not

[P739]

Now you can take your pension at 55 Just wondering would you take it or not If so why and if not likewise

[Tomolo208]

It all depends on your financial situation. If you've got enough money to not really need the pension then by all means retire away.

If you need more than you'll get at 55 then keep working.

My plan is to reduce my hours when I approach 55 so the workload doesn't kill me early and I can enjoy retirement. But I hopefully won't draw my pension until 65, as you tend to lose a big chunk of it by taking it early!

[RobertT]

Taking your pension while still working is a subject that’s been covered many times on these forums, but it’s always a decision based on your own personal financial circumstances, but in general it’s bad move for most people.

Not only do you get hit with a 5% reduction for each full year you take it early but you’ll also be paying income tax on it to. And based on average life expectancy you will get more in total by taking it at normal retirement age compared to earlier.

I can understand the motives for taking your pension and so enabling you to stop doing OT, or perhaps to go part time and still bring in the same amount of money. But ultimately the aim of a pension is to fund your retirement and not to make your working life a bit easier. Because of the reductions applied, it’s less likely to be enough to live on in retirement and so could actually be increasing your working life.

The general rule is always take your pension at Normal Retirement Age. Because if you take it early it gets reduced, but if you defer it, it doesn’t increase.

There’s a video from the CWU that I suggest you watch: https://www.youtube.com/watch?v=ICYgWTAD3aA" onclick="window.open(this.href);return false;

[cloherty1976]

Taking your pension while still working is a subject that’s been covered many times on these forums, but it’s always a decision based on your own personal financial circumstances, but in general it’s bad move for most people.

Not only do you get hit with a 5% reduction for each full year you take it early but you’ll also be paying income tax on it to. And based on average life expectancy you will get more in total by taking it at normal retirement age compared to earlier.

I can understand the motives for taking your pension and so enabling you to stop doing OT, or perhaps to go part time and still bring in the same amount of money. But ultimately the aim of a pension is to fund your retirement and not to make your working life a bit easier. Because of the reductions applied, it’s less likely to be enough to live on in retirement and so could actually be increasing your working life.

The general rule is always take your pension at Normal Retirement Age. Because if you take it early it gets reduced, but if you defer it, it doesn’t increase.

There’s a video from the CWU that I suggest you watch: https://www.youtube.com/watch?v=ICYgWTAD3aA" onclick="window.open(this.href);return false;

Robert T what happens when I finish paying my pension after 40 years. 10 to go in first pension as I currently pay £140 a month but will be paid up in that one at age 58. Then will I pay for the next 5 years at the same £140 a month into the second pension?

[RobertT]

Robert T what happens when I finish paying my pension after 40 years. 10 to go in first pension as I currently pay £140 a month but will be paid up in that one at age 58. Then will I pay for the next 5 years at the same £140 a month into the second pension?

40 years used to be the maximum time we could pay into our RM pensions. A few years ago(I forget exactly when) that was increased to 45. And the proposals as per the booklet we received last week, is that that cap will be removed completely.

The government took over our pensions in 2012 and are now responsible for paying them out. RM are responsible for our pensions from 2012 onwards, so all contributions go towards that at the moment.

When the RMPP closes to future accrual on 31st March 2018 ours and RM’s contributions will go towards the Cash Balance/DC pension, assuming that’s what is brought in. Which is in a ‘new section’ of the RMPP and is designed to fund the tax free lump sum.

[Tomneilly]

If you take your pension early at 55 do you get the pension till death or a set number of years?

[RobertT]

If you take your pension early at 55 do you get the pension till death or a set number of years?

The RM Pension Plan pays out a pension until death and then a spouses pension until their death, regardless of whether you take it early or at the NRA/s.