In Reply to: Re: Pension questions posted by Pete Warren on 10 June 2003 at 22:14:43:
Further to ": I assume from the original question that you are trying to work out the pros and cons of retiring. Remember to take into account, in your calcualtions, that not only are you not paying NI but there is no longer the cost of travel to work and buying suits etc. It does make a difference in the final calculation. I certainly don't regret it.
":
>If you are trying to take a 'retire early or not' decision, I'd like to pass on a snippet regarding the penalty with the C plan of taking the money early (before 60). There was a document somewhere that stated that the penalty would be 0.25% per month earlier than age 60 of your start-to-take date Of Your "Final Pensionable Salary". This has proved not to be the case. The deduction is only 0.25% of your pension that you would have received on starting to take your C pension at age 60.
In my case this actual deduction is less than half of the deduction I was expecting. I actually didn't take my pension on leaving IBM because I considered the deduction cost too great despite the benefit of having the pension early. I now regret not having started taking my pension earlier as the cost of this much smaller deduction is for me actuarily overridden by the value of having the monthly pension payments now instead of waiting till age 60 before starting to take the C pension (when the deduction for starting early has reduced to zero).
Don't underestimate the possibility of feeling its hardly worth getting another employment once your pension starts to trickle in! Having experienced a) being unemployed without taking a pension and b) being unemployed with a pension, I can vouch that the pension makes a difference to my attitude. and the pension is not huge! Obviously spouse earnings, other earnings opportunities etc. will make everyone's situation different.