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Exit Plan

Discussion in 'Workplace dilemmas' started by pocketlocket, Sep 15, 2019.

  1. pocketlocket

    pocketlocket New commenter

    I've just started my exit plan. I'm 52 and work 10mins from home. In terms of planning I'm overpaying on the mortgage to cut the remaining term from 6 years to 2years and 8 months. I've cleared the credit card and settled the car finance.

    I'm not sure what I'll do for a continued income yet because my main focus is being able to walk away when the stress gets too much again but I've only got 15years in TPS.

    My question is, what else should I be thinking about/ get in place? I'd be grateful for any suggestions for managing on a tight budget.

  2. Lara mfl 05

    Lara mfl 05 Star commenter

    Well done for thinking about an exit plan well in advance.

    You've already made a great start.

    The only other suggestions I could make would be
    to think about food finances. Could you cut back on expenditure? Learning to use cheaper cuts/ less meat. Possibly grow some of your own veg? Even a balcony can be usefu,

    to think about 'leisure expenditure, s that won't come as such a shock if you have less income,

    to consider gaining some extra skills, computer training accounting . . .anything you can do at your own pace online to have a wider range of skills to offer future employers.
  3. diddydave

    diddydave Established commenter

    We looked at a yearly budget and worked out what we thought we needed, we then - whilst still working - attempted to live within it by using one of our accounts as 'the account' into which we paid the minimum amount and the rest went into the other account. This meant we knew how much we needed before stopping work and so had a target - knowing how much you need to a) survive, b) be comfortable and c) still be able to save for large items is a good idea.

    Our 'net' income that we needed was considerably less than our teacher's salaries as from those you lose not only income tax but all the other deductions - NI, pension, union fees, etc, my teacher's salary was around £40k but my take-home was under £30k, so whilst you may still pay income tax on a pension (the part over £12.5k) the gap between it and your salary may not be as large as you think.

    In the 2-3 years before leaving I also sought out examiner jobs and by just doing two sessions a year (A-Levels in Jan and June) I bring in around £7k extra a year, something I can continue doing in retirement.

    When the extra income took me into the higher tax bracket I put it into the AVC pot and we have that as our emergency fund should we need it.
  4. princesslegend

    princesslegend Occasional commenter

    I don't have any advice to offer (except check that your pension is secure I guess?) but wanted to wish you all the luck in the world. I think you've made a realistic exit plan that is very sensible - this is important. My friend is leaving teaching at Oct half term with over £35k in personal debt, an unsupportive husband, full mortgage and a child with quite severe secial needs. No job lined up. :( So I am glad to see real planning done!

    Sending you love, well wishes and lots of happy thoughts xxxxxxx
  5. mothorchid

    mothorchid Star commenter

    Good for you! I wish I'd been able to do this - it sounds manageable and sensible. Do check your pension options. Can you up the amount you pay in for the next few years? Or start an AVC pension fund? If you have fewer than 20 years in TPS, do you have another pension scheme you can access at some point?
    Think about other possible big costs ahead - will you require a new boiler, for example, or will your roof need work? Try to get these things done before you leave teaching, as they aren't going to get cheaper and will be a big hit financially if you're on a tight budget.
    Once the mortgage and car have been paid off, you'll have "spare" income. Save it. Add to it as much as you can; even just £50pcm will help.
    At some stage, start gently researching other possible ways forward as far as work goes. I believe that over 50% of working women over 50 are self-employed, which is an amazing statistic. So could you do some sort of work like this? Can you make a start before you leave teaching, and build it up? Tutoring is an obvious one, but there are many others.
    I wish you the very best of luck.
  6. harpplayer

    harpplayer Occasional commenter

    The usual advice is attack debts first, like mortgage, credit cards, loans etc. Then start looking at reducing outgoings, so look at switching utilities, shopping in Aldi, cheaper broadband and phone contracts, getting a much cheaper mobile service, getting rid of Sky if you have it, stop watching terrestrial TV so you don't need a TV licence and use streaming instead, switch to a much smaller car with lower bills and insurance, cook more from scratch rather than buying meals, cancel gym membership and buy a bike, declutter the entire house aggressively room by room and sell stuff on eBay or throw away junk you never use or don't want, start monitoring like a hawk all monthly outgoings so you understand your finances and how much you are saving each month and year by your efforts, examine carefully interest rates for savings and switch to the best ones, start saving regularly. Holiday in cheaper places, look at exam marking as a way to top up income, start cutting back on the work you do for the teaching job No and start saying No when asked to do new things, and start leaving work at 4.00pm and stop. Begin retiring now!
    Last edited: Sep 16, 2019
  7. pocketlocket

    pocketlocket New commenter

    Thank you all so much for taking the time to reply. Much of what you have said didn't even occur to me! I'm going to take on board so many of these tips starting immediately especially replacing the boiler and shopping smarter.

    Thanks Again
  8. katepink

    katepink New commenter

    Check your pension contributions record to ensure that all your employment (so contributions) is recorded correctly; check in particular that there are no gaps. It will be easier to sort any anomalies out now, rather than when you are trying to claim your Teacher's Pension.
    Also, look at your prediction for State Pension. Like most teachers I will not be entitled to a full state pension because we were contracted out until two or three years ago. One of the big insurance firms used to do a really useful booklet on this - I think it was Royal London. It is possible to 'buy' some of these missing years, but you need to have the funds in order to be able to do this.
    pocketlocket and Lara mfl 05 like this.
  9. missbrody

    missbrody New commenter

    As katepink said, check your State Pension status. If you have a government gateway account you will be able to access your full national insurance record and check for gaps.
    The gaps can be filled for up to 7 years and is worth doing.

    This is just my second year back in the UK, after 5 years away, so I intend to pay to "fill in" at least one or two of those years.

    If you can afford to save between £50 and £250 per month then look at starting a regular savings plan. They pay significantly more interest than any other accounts (currently about 4%).

    Good luck with your planning and your subsequent career change!
    pocketlocket and Lara mfl 05 like this.
  10. diddydave

    diddydave Established commenter

    It is definitely worth considering, if you need to get extra years for your state pension, that you can pay the vastly lower National Insurance class 2 contributions IF you work during that year as an examiner or invigilator. (or be self-employed).

    The class 2 NI is £3 a week = £156 per year compared to the class 3 which is £15 a week = £780 per year
    pocketlocket and Lara mfl 05 like this.
  11. Shedman

    Shedman Star commenter

    Start shopping at Aldi.
    pocketlocket and Lara mfl 05 like this.
  12. pocketlocket

    pocketlocket New commenter

    Thanks, I've checked my state pension it says 34 years paid in £154 per week pension so far. Three more years needed for the full state pension, Another full year will be added next March/ April so I should be on track but 37years! I thought it was only 30 needed so it was well worth checking.

    Everyone needs to check this.
    missbrody likes this.
  13. yoda92

    yoda92 New commenter

    I've just gone part time. 0.6 after 32 years full time. And I can honestly say it's the best feeling ( excepting birth of child!) ever. I feel like I have my life back, I can catch up with Doctors Dentists hair appointments etc without eating into my previously short weekends or evenings or holidays. I've time to plan effectively, and that cut in marking is liberating. And no I'm not eating into my days off either. I'm less snappy with the kids, have more energy for the learning and behaviour management that relationships are fab at the moment.
    I'd originally planned to do part time for a year and then fully retire on ARB, however it's so lovely I think I've got another few years in me.
    So consider not leaving completely!
    If you must then there's lots of good advice above.
    Lara mfl 05 and pocketlocket like this.
  14. thejudgesscoresarein

    thejudgesscoresarein Occasional commenter

    Looks like you have made a good start to your exit plan. Have you considered a part time role once you leave teaching? Exam Invigilation or Exam Marker roles seem to be popular for ex-teachers, but these are only seasonal roles at certain points of the year, so if you’ll still have a mortgage or other significant bills to pay, then this wouldn’t really be viable- unless, of course, you have a permanent part time role that you can work around this.

    One of the teachers in my school who retired last year is working for a supermarket on the checkouts now (complete change) for 20 hours a week- it’s a decent wage for what the job is from what they’ve told me, so that might be worth a shot?
    Shedman and Lara mfl 05 like this.

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