Weighting up early retirement pension reductions

[ScotHill]

My wife and I both have pensions that enable early retirement at a reduced rate of pension. I don't know what my reductions are but my wife's scheme is publicly available so we've done some calcs.

Projecting to living until 90 (for the sake of choosing a number) it looks like if she retires at 60 (5 years early) she would receive 80% of her annual pension. So we calculated that out over the 30 years from 60 to 90 at 80% pension she would be £20k worse off compared to the 25 years from 65-90 at 100% pension.

Does that sound the right approach to the calculations, and is this generally how people weigh up whether they can 'afford' to retire early? Is taking a pension early generally a bad idea?

[BoRED S2upid]

The way I'd calculate wether I could afford to retire early would be on a monthly basis. What will pensions give me per month and could I comfortably live on that. Not what it will give me over 25 or 30 years you could get hit by a bus tomorrow.

[CoolHands]

I also would consider what you get monthly rather than how much you're going to lose in totality.

[telford_mike]

It's not just about the total amount that you'll draw from the scheme. You need to consider how long you'll be active enough to enjoy the money. After a lot of thinking I took mine at 56 with the commensurate reduction. It was the right thing to do for me as I have an active lifestyle, but I know my fitness and good health won't last forever. You need to sit down and do the maths, but concentrate on working out what you need to enjoy your retirement now, rather than worrying about what you might be doing when you're in your eighties.

My advice after retiring 2 years ago: if you can afford to retire early - just do it.

[smckeown]

I would also co sider if the pension income rises with RPI or something?

[Armitage.Shanks]

90 is a tad ambitious to me. If I get that far I'll be knackered and won't be able to do much, or cost a lot I suspect.

I'm banking my figures on being active until 70 before which I'm most likely to spend more money and finishing at 55. OAP is going to top cash up later in life as long as they dont move the goalposts.