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vacuman · 17th May 2017, 20:25

I took early retirement (at 57) from BT last year after 39 years. The advice I received was to take the largest lump sum which is tax free and equals a quarter of your total pot.

Whilst this reduces the monthly income the fact is that you now have that cash and, if you died tomorrow, it's still part of your estate.

I've since paid off my mortgage, spread some into investments in low-cost share ISAs (nutmeg & moneyfarm) and even bought £10k of premium bonds. I've been happily married for 33 years so happy to put a lump into a pension for my wife (she didn't previously have one) which immediately is topped up by 25% by the government. I also did the same for myself (and gained 25%) with a nominal maturity in five years.

So far my remaining cash has grown above inflation and certainly more than it would have done if i had left it in the pot.

Basically I'm allowing myself to spend it all by the time I start receiving a state pension at the age of 66

Footnote: I calculated that the difference between the small and the big lump sums was equal to about 26 years or so of the difference to the two different monthly payments. So, in other words, ignoring any extra returns (or losses) from investments I might might make, I will pass the point of being better off with the smaller lump sum when I'm 83.....if i make it that far.

17th May 2017, 20:25	#15
vacuman Gets stuck in MG ZT-T Join Date: Feb 2017 Location: St Albans Posts: 855 Thanks: 69 Thanked 236 Times in 172 Posts	I took early retirement (at 57) from BT last year after 39 years. The advice I received was to take the largest lump sum which is tax free and equals a quarter of your total pot. Whilst this reduces the monthly income the fact is that you now have that cash and, if you died tomorrow, it's still part of your estate. I've since paid off my mortgage, spread some into investments in low-cost share ISAs (nutmeg & moneyfarm) and even bought £10k of premium bonds. I've been happily married for 33 years so happy to put a lump into a pension for my wife (she didn't previously have one) which immediately is topped up by 25% by the government. I also did the same for myself (and gained 25%) with a nominal maturity in five years. So far my remaining cash has grown above inflation and certainly more than it would have done if i had left it in the pot. Basically I'm allowing myself to spend it all by the time I start receiving a state pension at the age of 66 Footnote: I calculated that the difference between the small and the big lump sums was equal to about 26 years or so of the difference to the two different monthly payments. So, in other words, ignoring any extra returns (or losses) from investments I might might make, I will pass the point of being better off with the smaller lump sum when I'm 83.....if i make it that far. __________________ • This vehicle was the 8,186th ZT-T to run off the production line, out of 8,249 • This vehicle was the 1,723rd ZT-T 190 + to be made out of 1,756 • This vehicle was the 149th ZT-T in Mica Blue (Ignition) (code: JGY) to be made out of 160 Mica Blue (Ignition) ZT-Ts Last edited by vacuman; 17th May 2017 at 20:34..