Pension - if retiring at 60 / 65

D

Davida

Registered User
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7
Hi - I worked full time in the private sector from the age of 17 - 31 (1989 - 2003), had three children and looked after kids at home (2003 - 2010), returned to work in a different company part-time from (2011-2016)

No real pension for the above (I think 2 years pension contributions by me in 2001-2003 and then to a different company in 2014-2016)

I'm now a teacher in secondary school on full time contract since 2016 but want to look at options of retiring at 60 (ten years time).

The whole pension aspect is a blackhole to me - I can contact HR but it's by email and it can take months for them to get back on general/non urgent pension queries.


I should have enough contributions for State Pension (but that probably won't kick in until I'm 67). I was wondering if there is any indication of what general amount I'd expect to receive from my pension as a teacher if I did retire at 60, 65 or 67 (note: my actual contract states 70 is my retirement age !! I can barely imagine being able to teach in my mid/late 60s let alone at 70).

Any thoughts/guidance/advice or information would be really appreciated. Many thanks.
 
Davida said:
I was wondering if there is any indication of what general amount I'd expect to receive from my pension as a teacher if I did retire at 60, 65 or 67 (note: my actual contract states 70 is my retirement age !! I can barely imagine being able to teach in my mid/late 60s let alone at 70).
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It looks like you are in the Single Pension Scheme. You can work until age 70 at the maximum but your "normal retirement age" is whatever the State Pension Age is at the time. Currently it is 66 but it may well rise to 67.

It is very difficult to project your pension benefits in the Single Scheme as it is based on career average earnings. I note you don't give any indication of your current pensionable salary. Also, just to note that you can retire and take a pension from 55 but the amount of pension will be actuarially reduced on a progressive scale to reflect this early retirement (CNER).

Anyway, just to give an indication, lets assume that your career average earnings (in today's terms) are about €55,000 pa. and that the State Pension age remains at 66. If you have 16 years service at 60 then your accrued pension benefits would amout to in the region of €5,600 pa - you could preserve this and draw it down from State Pension age. However, if you want to draw it down immediately at 60 (Cost Neutral Early Retirement) it would be reduced to about €4,500 pa. Your tax free lump sum would also be reduced slightly to about €32,000.

At 65 you would have 21 years service. Again we will assume career average earnings of €55K and the State Pension age remains at 66. Your accrued annual pension of €7500 would be reduced to €7,200 under CNER. The lump sum would approximate to €43K.

In the event that the State Pension Age rises from 66 in the meantime, those figures for CNER would be a little lower.

The above figures include lots of assumptions and are approximate in any event. But they may give you some indication. Also, whatever you get under the State pension is seperate and additional. I note that you expect that you will qualify for a full State Pension.

I would strongly suggest that you consider investing in AVCs between now and your retirement if you have any spare financial capacity. Some of the accumulated fund could be used to augment the tax free lump sum and the rest invested in an ARF and drawn down flexibly. If you take CNER this might help in the gap years before the State Pension becomes payable.
 
Early Riser said:
I would strongly suggest that you consider investing in AVCs between now and your retirement if you have any spare financial capacity. Some of the accumulated fund could be used to augment the tax free lump sum and the rest invested in an ARF and drawn down flexibly.
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Do the above if you can. Based on current rules, monthly ARF drawdowns in the year you turn 63 should qualify you for the 65's payment.
 
Early Riser said:
It looks like you are in the Single Pension Scheme. You can work until age 70 at the maximum but your "normal retirement age" is whatever the State Pension Age is at the time. Currently it is 66 but it may well rise to 67.

It is very difficult to project your pension benefits in the Single Scheme as it is based on career average earnings. I note you don't give any indication of your current pensionable salary. Also, just to note that you can retire and take a pension from 55 but the amount of pension will be actuarially reduced on a progressive scale to reflect this early retirement (CNER).

Anyway, just to give an indication, lets assume that your career average earnings (in today's terms) are about €55,000 pa. and that the State Pension age remains at 66. If you have 16 years service at 60 then your accrued pension benefits would amout to in the region of €5,600 pa - you could preserve this and draw it down from State Pension age. However, if you want to draw it down immediately at 60 (Cost Neutral Early Retirement) it would be reduced to about €4,500 pa. Your tax free lump sum would also be reduced slightly to about €32,000.

At 65 you would have 21 years service. Again we will assume career average earnings of €55K and the State Pension age remains at 66. Your accrued annual pension of €7500 would be reduced to €7,200 under CNER. The lump sum would approximate to €43K.

In the event that the State Pension Age rises from 66 in the meantime, those figures for CNER would be a little lower.

The above figures include lots of assumptions and are approximate in any event. But they may give you some indication. Also, whatever you get under the State pension is seperate and additional. I note that you expect that you will qualify for a full State Pension.

I would strongly suggest that you consider investing in AVCs between now and your retirement if you have any spare financial capacity. Some of the accumulated fund could be used to augment the tax free lump sum and the rest invested in an ARF and drawn down flexibly. If you take CNER this might help in the gap years before the State Pension becomes payable.
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Thanks so much for that
Early Riser said:
It looks like you are in the Single Pension Scheme. You can work until age 70 at the maximum but your "normal retirement age" is whatever the State Pension Age is at the time. Currently it is 66 but it may well rise to 67.

It is very difficult to project your pension benefits in the Single Scheme as it is based on career average earnings. I note you don't give any indication of your current pensionable salary. Also, just to note that you can retire and take a pension from 55 but the amount of pension will be actuarially reduced on a progressive scale to reflect this early retirement (CNER).

Anyway, just to give an indication, lets assume that your career average earnings (in today's terms) are about €55,000 pa. and that the State Pension age remains at 66. If you have 16 years service at 60 then your accrued pension benefits would amout to in the region of €5,600 pa - you could preserve this and draw it down from State Pension age. However, if you want to draw it down immediately at 60 (Cost Neutral Early Retirement) it would be reduced to about €4,500 pa. Your tax free lump sum would also be reduced slightly to about €32,000.

At 65 you would have 21 years service. Again we will assume career average earnings of €55K and the State Pension age remains at 66. Your accrued annual pension of €7500 would be reduced to €7,200 under CNER. The lump sum would approximate to €43K.

In the event that the State Pension Age rises from 66 in the meantime, those figures for CNER would be a little lower.

The above figures include lots of assumptions and are approximate in any event. But they may give you some indication. Also, whatever you get under the State pension is seperate and additional. I note that you expect that you will qualify for a full State Pension.

I would strongly suggest that you consider investing in AVCs between now and your retirement if you have any spare financial capacity. Some of the accumulated fund could be used to augment the tax free lump sum and the rest invested in an ARF and drawn down flexibly. If you take CNER this might help in the gap years before the State Pension becomes payable.
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Thanks so much for that brilliant insight - that makes it so much clearer to me and is a great help. It looks so low and is such a massive reduction so I'm really glad you've highlighted that. I think you're right and I'll start to look into AVCs. Really really appreciate it (this is the first time I've gotten any approximate figures so it makes it more real to me and definitely makes me focus now on what I need to do). Thank you very very much.
 
Davida said:
It looks so low and is such a massive reduction so I'm really glad you've highlighted that.
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Yes, when the State Pension is excluded and service is relatively short it can look stark. Unfortunately you missed out on the final salary scheme. Just to note again the assumption of career average earnings of €55K. Obviously the outcome would be better if the career average turned out to be higher than this.
 
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