Hi folks,
I would appreciate some ideas and opinions on this please.
Teacher age 50 with 20 years service. I will be 10 years short for full pension age 60 when I retire. I have a pension from a previous employer - very good DB pension that is currently worth 12K / year payable from age 65 (Guinness).
I had started doing AVCs over the last 2 years and put 18K into an AVC fund. I have since decided that buying back notional service is probably better.
I could afford to buy back the full 10 years. This would mean that fro age 60 I will get the benefit of a full state pension with all its benefits. My issue is that from 65 I will be getting my Guinness pension too on top and that will probably be all taxed at the higher rate.
If I don't buy back any years I will have @22.5k / year from 60-65 and then at 65 I will have @34K which will keep me at the low tax rate. So if I Does buying back year not make sense if it means that you will be pushing yourself into the higher tax bracket. I could save the money that I am going to use to buy back years and use this to keep me going from 60 -65 instead!
Is this an obvious yes or no or is it more complex????
Thanks Sidzer
I would appreciate some ideas and opinions on this please.
Teacher age 50 with 20 years service. I will be 10 years short for full pension age 60 when I retire. I have a pension from a previous employer - very good DB pension that is currently worth 12K / year payable from age 65 (Guinness).
I had started doing AVCs over the last 2 years and put 18K into an AVC fund. I have since decided that buying back notional service is probably better.
I could afford to buy back the full 10 years. This would mean that fro age 60 I will get the benefit of a full state pension with all its benefits. My issue is that from 65 I will be getting my Guinness pension too on top and that will probably be all taxed at the higher rate.
If I don't buy back any years I will have @22.5k / year from 60-65 and then at 65 I will have @34K which will keep me at the low tax rate. So if I Does buying back year not make sense if it means that you will be pushing yourself into the higher tax bracket. I could save the money that I am going to use to buy back years and use this to keep me going from 60 -65 instead!
Is this an obvious yes or no or is it more complex????
Thanks Sidzer