Is there an arguement FOR early retirement in DB scheme?

R

ricta

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Is there an actuarial benefit in taking early retirement in a Defined Benefit scheme? Consider someone who could retire at 65 with a pension of €16,000 p.a., if that person retired at 62 they would get a pension of €14,000 p.a..
So for the three years before age 65 they would receive €14k x 3 = €42,000.

Then from 65 onwards, on the reduced pension, it would be 21 years before they begin to lose out overall on the reduced pension. If the person died before 86 then early retirement would have been correct?

The pension would get increments in line with CPI.

Is this scenario worth consideration?
 
Yes, I did it, I accessed mine 8 years before due, by the time the higher pension catchs me up I will be 76, if I'm here at all, for me, life is for living, take the money if the maths interests you and it must as most people do not see 86 and if they do they don't live expensive lives, cars, holidays..etc
 
You can be guaranteed that the actuaries will penalise you for taking early retirement. However the first question should be do I need the income now? Then go from there.
 
The life expectancy for an irish male at 65, is 20 years (https://health.gov.ie/wp-content/uploads/2018/12/KT2018-Figure-1-8.png)

Presumably, this means that half of all males age 65 will die before 85, and half will die after 85

The pension fund actuaries base their calculations on averages - but most people may have a different view based on their families history but this again is only a guess/estimate ...

Also while people may not have expensive living, health care costs are high and rising even if your future needs are unknown
 
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