Cost Neutral retirement- calculation-do I have to retire on my birthday?

B

buzybee

Registered User
Messages
201
I am a member of the post 2004 pre 2013 scheme. If I retire at 62, I ger 83.6% of my pension. If I retire at 63 I get 88.5%.

My birthday is in October. I would love to retire in Spring, when I would be 62 years and 6 months. If I did this, would the percentage applied be still the 83.6% or would it be a composite between 83.6% (rate at 62) and 88.5% (rate at 63).?

If the rate at 62 is applied throught the year I am 62, then I am better off going when I turn 62, or waiting until I turn 63.
 
You can retire anytime you like. For example, if you retire at 62.5 you actuarial reduction will be set at half way between those points.
 
Ruffian said:
ou can retire anytime you like. For example, if you retire at 62.5 you actuarial reduction will be set at" half way between those points.
Click to expand...
I didn't know this was the case. The relevant circular 10/2005 lists the percentage reduction for CNER in relation to "age at last birthday"? I wasn't aware than these percentages changed in the intervening months between two birthdays.
 
Threadser said:
I didn't know this was the case
Click to expand...

It is. I took CNER and it was prorated between the two birthdays to the decimal point. I also saw documented reference to it somewhere but can't locate it now.

Anyway, here is example I ran through the modeller for a "New Entrant" (post 2004) on €100,000 retiring with 30 years service:

If CNER retirement is at 62 the pension is €21,891.
If CNER retirement is at 63 the pension is €23,173.
If CNER retirement is at 62.5 the pension is €22,537 (essentially half way - slightly over because I went slightly past the half way age point!).
 
Last edited:
Setforlife said:
the age last birthday is for the reduction, but result is based on exact service as days since the birthday adjusts the formula below, which has the reduction factor for both last and next birthdays in it.
Click to expand...

That's it. But the adjustment is for the exact age. The reduction factor for 30 years service (say) and retirement at 62 years and 65 days is bigger that the reduction factor for someone else with the same length service at 62 years and 105 days, etc. Obviously any one person will have more service at the later age but this is accounted for separately (in the calculation of the pension before actuarial reduction, which is the preserved benefit in your formula above - [A + ((B/365) × (C-A))] × preserved benefit based on service).
 
Last edited:
Thats great, I thought they only pro-rata'ed the actuarial reduction in your last year. Its great that it works for the intervening years as well.
 
I wasn't aware they pro-rated the actuarial reduction. Planning on going early at some point so good to know
 
You must log in or register to reply here.
Menu
Log in
Register