12-year option point
 

Gentlemen,

I'm interested to hear the thoughts of those out there who decided to take their 12-year option from the RAF.

What was it that made your mind up to take the option? Did the 4 years spent from age 34 to 38 with your new company/career pay dividends?

With a few weeks left to commit, I'm 99.9% there with my decision.

Well if your 99% out with your decision this may not be relevant but for just 4 years extra pain you will have a small extra income for the rest of your life. Should you find yourself between jobs at any stage it can make all the difference. It is a major comfort blanket.

What pension scheme are you on?

Do you have a job to go to as soon as you hang up the uniform?

I banged out at the 12 year mark and re-trained, within three years I was in a completely new career scenario.

Short term pain for long term gain:ok:

Rotormonkey,

Have a look at the option of investing your military pension that you accrue after the 12 year point.

No, you won't have an immediate income.....

But you might be very very surprised as to what a properly managed pension fund can give you back.....

It might even leave you better off....

I had an interesting discussion with forcespensiontransfer.

Things like your death benefits for spouse and kids are rubbish with the mil. In transferred schemes, they get ALL of the pension pot.

You will need to look long and hard at the risk you wish to take versus growth......

Ralph

And if you are just 34, you have 21 years of investment before the earliest point at which you can take the money....

As opposed to the Mil rulings.

Google compound interest calculator!

Having spent the past 25 years as an IFA I'd be very wary of transferring anyone out of a defined benefit scheme into a money purchase scheme, particularly one that had inflation proofed benefits. This is a complex area of financial planning and taking any advice from "fat bloke down the pub" or "some well meaning but unqualified PPruner" could be a very expensive mistake. Take professional advice and make bloody sure you understand the ramifications of any transfer out of the AFPS.

Im no expert but this is worth a read

'I lost £150,000 due to Nineties pension sales frenzy' - Telegraph

Door step salesman!

Basics!

Agreed.....you need to do the maths and research heavily.

If like some you had intended to leave and effectively discount your pension because the timescale for receipt is almost too abstract, you could transfer and top up.

My thoughts are that any figures I look at should be viewed with 4% growth. Nowhere near the 8% projected.

Add to the fact I can start a second pension, or top up...is a bonus.

The default setting for transfers out should always be 'no', but never a blindly dogmatic or prescriptive 'no'. For some people, switching makes sense.. but they are always going to be very much in the minority. AFPS might still be a defined benefit - allbeit a moving target and declining defined benefit, but it offers certainty and as such should remain at the core of any long term financial planning. Sure, consider adding to it but only replace it with something else if there are extenuating circumstances.