Weighting up early retirement pension reductions
Discussion
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?
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?
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