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5 years before retirement

Discussion in 'Retirement' started by pentagonal, Jun 1, 2020.

  1. pentagonal

    pentagonal New commenter

    Could anyone give some helpful advice, on the things to do, on the countdown to retirement.
    Would love to hear people’s views on what worked for them.
    Financially and otherwise.
  2. diddydave

    diddydave Established commenter

    I've made a list of my thoughts and actions reflecting back on how we approached retirement...have a look and if you have any questions by all means ask...one thing I would suggest you check immediately is whether taking a month's break may be beneficial!


    With a 5-year plan you have time to check what you will be getting and to practice living off that amount, we did that and found we could actually go earlier than we had intended...before either of us were 55.
    Prim likes this.
  3. eljefeb90

    eljefeb90 Senior commenter

    Great number-crunching from @diddydave , especially the comparison between the pension of £20,000 and the salary of £45,000. The net difference is nearer £10,000 than £25000.
    I would emphasise the vital importance of your outgoings. Paying off your mortgage and car loan is key. I know it sounds unfeeling, but I was astonished how much richer I got when the offspring became more financially independent.
    Obviously, travel costs will be reduced, although this wasn't a factor in my case.
    Lastly, I would encourage new retirees to seek out part time and casual work. I choose when, and if, I want to work, but don't turn much work down to be honest. I earn on average about £700 a month, working between 7 and twenty days a month.
    I have never had more disposable income nor more savings. To think of retirement as a time of donning hairshirts is not accurate. Gone of the days of paying a hefty mortgage and ending each month in the red.
  4. lizziescat

    lizziescat Star commenter

    Financially, I over paid my mortgage to ensure it would be paid off before I retired. .When it was paid off ( a couple of years before I was due to retire the mortgage payments went on retirement proofing the house ie all those potentially big expenses - new boiler and central heating upgrade, replacement windows, new driveway etc (so it would be easier for a wheelchair or other frailty, a new car and finally some new furniture. ( 5 years into retirement, I’ve had no big expenses to eat into the lump sum ( gosh I really shouldn’t have tempted fate with that admission:eek:)

    Oh, and I also lived on my estimated net pension amount for the last year ish of employment - just to check I could. Contrary to others’ experience, my expenses haven’t really reduced that much - yes less travel to work but when I have a day out it’s a much longer trip ( oh and all those evening classes, trips to friends, bridge club, choir etc add up. Other cost savings are countered by having the heating on more at home as well as the new opportunities for nice things , films, theatre, talks etc.

    On the ‘me’ front, I decided that going from 100 miles an hour to zero would not be healthy so I planned a new ‘job’ - for me it was doing a Masters but the point was that it meant a) I didn’t look back - there was always an easy to write , a lecture coming up etc and it meant I couldn’t be tempted back by the ‘could you possibly just cover a weeks A level teaching’ and forme there was a (loose) structure and reason to get up, get on and get our.

    Looking back it was the best transition I could have made - a ‘job’ but one I enjoyed and could, of course, give up the moment it wasn’t enjoyable.
    Last edited: Jun 1, 2020
    baitranger, eljefeb90 and strawbs like this.
  5. lizziescat

    lizziescat Star commenter

    Oh, and the other thing I did.
    I had as my mantra, ‘ I decided that I would take a year to decide where my talents can best be deployed before I volunteer for anything’ . This was useful when it came to others giving hints or even decisions, that I’d like to join this or be on X committee etc.
    rooney1 and eljefeb90 like this.
  6. Prim

    Prim Occasional commenter

    I'm roughly the same age as you, focus on clearing debt, overpay mortgage and then add to your savings pot. Retirement is to be enjoyed. Best of luck!
    eljefeb90 likes this.
  7. S1a3t5u7r9n

    S1a3t5u7r9n Established commenter

    Always consider moving to a shorter timetable
    It worked for me after depression
    MrSaturday likes this.
  8. baitranger

    baitranger Senior commenter

    Five years before I retired, I bought 3.5 extra years pension. You can do a similar thing now . I paid 5 years in installments and the rest on retirement.
  9. diddydave

    diddydave Established commenter

    Unfortunately the Past Added Years (PAY) scheme was scrapped some time ago, you can now use other flexibilities - the younger you are the cheaper they are.

    I believe, from my calculations, that if you have more than 16 years to go before stopping teaching the "Faster Accrual" is better than "Additional Pension" due to the former getting the 1.6% above inflation boost which the latter does not, but if you are within 16 years then AP is better value. I didn't look into the 'AAB Buyout' option.
    baitranger and eljefeb90 like this.
  10. thejudgesscoresarein

    thejudgesscoresarein Occasional commenter

    All depends what you plan to do in your retirement- are you looking to move?
    I made the decision to initially retire in December 2020 back in 2010 when I was 50 so that I’d be retired just after my 60th Birthday. I decided last summer that I wanted to retire in August 2020 and handed my notice in back in October 2019, so that I had something to look forward to, and the CoG and governing body had plenty of time to secure a new HT for the school.
    About 4-5 years ago, I also looked at relocating to North Devon- and even went to the extent of putting my house up for sale. (I live in West Midlands)- we had a couple of offers, one that we accepted (and had planned to move into a rented property until I had finished work) - however, the sale fell through just before lockdown and since then, we’ve decided to remove it from the market for now and hopefully when lockdown lifts, fly out to our holiday home in Tenerife for 3-6 months and then look at moving in 2021 when everything has gone back to normal.

    In regards to finances, I have been able to save at least £30
  11. eljefeb90

    eljefeb90 Senior commenter

    Very interesting! I confess I did very little planning as retirement became my only way out of an untenable situation that I was no longer willing to tolerate. It was only a few months prior that I had any idea of how much my pension would be. Luckily, I only had eight months left of mortgage payments and my son had only one last year at university.
    As you say, the transition can be a real shock as your body stops producing cortisol and you have all this time. I took myself off abroad for three months to do a lot of walking and thinking. I had done enough teaching, so, on my return, I signed up for stress free jobs like invigilating and working on the electoral roll. The main thing was to spend any money I made on fun things, nights out, holidays and home improvements. What is the point of saving? The lump sum is a nice nest egg and I can always downsize if need be. Retirement is what I was saving for and it has not disappointed!
    lizziescat likes this.
  12. lizziescat

    lizziescat Star commenter

    I realised the writing was on the wall 10 years earlier partly because (without any malice) redundancies became a possibility and later it was clear I was not ‘ flavour of the month’ but mainly because academisation was in sight. So I’d been building up a small ‘redundancy fund’ and planning anyway. In fact my new academy head was one of the best I’d orked for - valuing all staff including the older more experienced ones)
    - so when the ‘you cannot be serious ‘ moment came ( and aforementioned academy head was sympathetic) I knew there was just a few hundred left on the mortgage and all the big expenditure done.
    That sounds wonderful
  13. eljefeb90

    eljefeb90 Senior commenter

    Interesting comment @lizziescat . Thanks for sharing. The ironic thing was that I thought I was flavour of the month! Even though more was being heaped upon me, I felt I was part of the furniture (mixed metaphor klaxon!), until I became surplus to requirements. It was a bit of a Damascene moment..from thinking of myself as indispensable to being eager to leave. So it was a steep learning curve in my last six months, finding out more about ARB , lump sums, AVCs etc., but such a relief to be able to leave all the stress behind.
    Regarding the three months away, I rented an apartment near Valencia for three months mid January to mid April, mainly to take in the Fallas festival in March and to escape from the winter weather. It was their driest winter in decades, 18 degrees plus most days, even in January. Great for me, not so good for the orange harvest !
    PeterQuint and lizziescat like this.
  14. thejudgesscoresarein

    thejudgesscoresarein Occasional commenter

    It seems like my post was submitted prematurely!

    I have my pension as well as my OH’s pension and we’ve been able to save quite a considerable amount of money which will be topped up when we eventually sell the house.
    We also rent out the property we own in Tenerife (and although this year due to the coronavirus there has been no holiday makers)- this can be a good money earner for us too! We brought the villa in Tenerife for €125,000 in 2007 and after 13 years, the income received from this has enabled us to almost pay off the mortgage we have on it!
  15. br0wnsugar

    br0wnsugar Occasional commenter

    "Lastly, I would encourage new retirees to seek out part time and casual work. I choose when, and if, I want to work, but don't turn much work down to be honest. I earn on average about £700 a month, working between 7 and twenty days a month." (copied and pasted).

    I agree with this - I am currently trying to put together a plan. Still 10 years until retirement age and so looking to ease my way out having worked 4 days a week and now just decided that it - I need more me time, so having a break. I have no mortgage; sons working/completed uni and set up financially so hubby and I do not need to work as hard.
    You have all given some fabulous advice but I wonder if there any books one can recommend that can be read to assist one's plans for the future?
    eljefeb90 likes this.
  16. br0wnsugar

    br0wnsugar Occasional commenter

    I decided about two years ago to start saving towards leaving the profession for a short time as it was becoming obvious that the younger teaching staff were being given the opportunities, the UPS staff were loaded up with more other factors to deal with and legacy classes trainee teachers struggled with and no CPD plans in place to support middle leadership progression as 'funds were tight' etc and so it is a reality that once a teacher hits a certain place in schools it is time to anticipate an exit on your own terms and no longer consider SLT to look out for you or see you as their 'flavour of the month'. It's cynical but a thought I have lived by after seeing so many credible teachers misused and redeployed unfairly.
    You sound like you have a great future to look forward to and the 3 months abroad or just away sounds divine. I am certainly going to bring in more leisure time but keep base with education and roles with less stress while carving out a writing a book course or my other passion of fashion. It's all good. Just bills and maintaining a house to think about. Mortgage paid off 10 years ago, so relatively free from the chains that bind. Now is the time to free the mental slavery of working for someone and being approved by them.
    eljefeb90 and Prim like this.
  17. eljefeb90

    eljefeb90 Senior commenter

    @br0wnsugar Yes, all the micromanagement and lack of autonomy were major bugbears for me. I was 57 when I decided my time was up and I had 35 years accrued pension to pay the bills. My dad died that year and that crystallized my desire to get out from an increasingly stressful job and take back control, to coin a phrase. Life was too short to carry on shovelling ####. It has been a great few years. Like getting out of jail .
    tenpast7, Dorsetdreams and Prim like this.

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