DC pension - retirement age?

[xyz123]

Hi, I have couple of DC pensions. Both have different retirement age in the plan. I just want to understand if this retirement age matters or not?

I manage investments within funds rather than relying on a" target date" type of investment which automatically and gradually adjust exposure to equity closer to retirement. Am I right that the in my specific case, the retirement age in the plan doesn't matter as I can withdraw at anytime after 57 (as per current rules). or am I missing something? If it matters, I am 10+ years away from retirement


Thanks

[silentbrown]

xyz123 said:

Hi, I have couple of DC pensions. Both have different retirement age in the plan. I just want to understand if this retirement age matters or not?

Pretty sure that the retirement age is just used as to show potential value of your fund at a point in the future.
I hit 65 and notified them that I wasn't retiring immediately, and now my DC pension paperwork shows a retirement age of 75!

[northandy]

It’s normally there as the basis of the phasing of the last 10 years to switch your investments away from equities gradually over the last 10 years before you retire

[Philvrs]

xyz123 said:

Hi, I have couple of DC pensions. Both have different retirement age in the plan. I just want to understand if this retirement age matters or not?

I manage investments within funds rather than relying on a" target date" type of investment which automatically and gradually adjust exposure to equity closer to retirement. Am I right that the in my specific case, the retirement age in the plan doesn't matter as I can withdraw at anytime after 57 (as per current rules). or am I missing something? If it matters, I am 10+ years away from retirement


Thanks

I recently transferred a dc pot over to my new employers scheme, and part of my pot has a protected access age of 55 which I didn’t know about, I presume because it was contributed before the law changed on ages.
You may be able to access some before 57.

[Truckosaurus]

I have a couple of DC pots, the smaller one I plan on taking soon after I can get my hands on it at 57, but has 67 as the expected age to take it.

I spoke with the company it is with and they said that the age didn't matter as these days they don't do the 'move things to less risky investments' anymore as they expect people want their pot to keep growing after retirement.

[davek_964]

Truckosaurus said:

I spoke with the company it is with and they said that the age didn't matter as these days they don't do the 'move things to less risky investments' anymore as they expect people want their pot to keep growing after retirement.

Hmm.

Donald might make them rethink that.

[craig1912]

davek_964 said:

Hmm.

Donald might make them rethink that.

Why? As he said most people want the investment to keep working for them for what could be 20-30 years after they have retired. Current situation is just a minor blip in the overall scheme of things.

[CraigyMc]

craig1912 said:

davek_964 said:

Hmm.

Donald might make them rethink that.

Why? As he said most people want the investment to keep working for them for what could be 20-30 years after they have retired. Current situation is just a minor blip in the overall scheme of things.

Exactly.

If there's a big bump of inflation due to oil price going up and causing everything else to go up in lockstep, share prices would typically dip for a bit then catch up to where they'd otherwise be. Bonds wouldn't. Essentially you'd move into "less risky investments" and lose out.

If it works to build value when you're 20/30/40 years old, why would it stop at 50/60/70 years old?

People aren't busing annuities at the point of retiring any more.

[LeoSayer]

The retirement age generally does make a difference to DC schemes because of "lifestyling" where they reduce the equity exposure as you near the retirement date with a view to either 1) preparing to take an annuity at your retirement age or 2) avoiding the impact of any equity market crash just as you start selling stuff to drawdown.

The chances of the default DC scheme investment being exactly correct for any individual is pretty small so it's definitely something that everyone should look at and understand.

DC schemes have no knowledge of your state of health, life expectancy, debts, savings, other pensions, other income, life plans or your wider family finances.

Edited by LeoSayer on Friday 3rd April 13:10

[craig1912]

“Life styling “ is a little outdated although I accept some scheme still do it and, if someone I’d definitely buying an annuity then maybe a good strategy but, there are better strategies, particularly if someone expects to live 10+ years after retirement.