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Retirement advice for the nearly 50

Discussion in 'Retirement' started by ferretmasta, Dec 7, 2018.

  1. ferretmasta

    ferretmasta New commenter

    Dearest brothers and sisters "in arms". Any guidance gratefully received from a 48 yo lifer who has taught for nearly 25 years in the same school in a challenging yet mostly wonderful secondary school.
    I'd love to retire at 60 have unbroken full time service and standard pension contributions akin to the lazy swine I am that just left things as they were.
    Currently jealous of older colleagues with greater contributions to old pension scheme.
    Any thoughts gratefully received and rewarded with your choice of unwavering gratitude or flippant sarcasm. Thanks good people.
  2. emerald52

    emerald52 Star commenter

    If you haven’t paid into the teachers pension scheme then start now. The new scheme is still shedloads better than any private pension.
  3. PeterQuint

    PeterQuint Lead commenter

    I’m unclear, have you been paying into the pension scheme or not? Or are you just saying you wished you’d paid extra?

    If you’ve been paying in for 25 years, and you’re 48 now, then you can go at 55. That’s in 7 years where you’ve potentially paid in for 32 years.

    If that’s the case, I’d say my number one piece of advice is to pay off your mortgage ASAP.
  4. binaryhex

    binaryhex Lead commenter

    It’s basic common sense. What advice do you need? The first job is go hell for leather to pay off all credit cards and loans. The second job is to pay the mortgage off. Then save; start a SIPP, buy extra pension, use an ISA, buy gold or ideally a mixture of these. Look very carefully at *all* your outgoings and reduce them to save more. Cut out frivolous spending. Drive a smaller car, shop in Aldi, have cheaper holidays, cut gym membership and buy a bike, cook your own food and eat cheaper, cut right back on cocaine, women and gin, check any costs for utilities, insurance etc and switch regularly. Keep a firm eye focused on all outgoings.
  5. FrankWolley

    FrankWolley Star commenter

    Have you registered with the TPS and looked at what you can expect if you retire at 60? Then look and see what difference it would make if you went at 59? Or 58? All the way down to 55.

    Then look at your expenditure, and see how the expected income at each age can be met, remembering that you will also get a state pension later (at 66, I expect - check that). If you take your pension early, you can still earn afterwards with no limit (if you do supply etc). Perhaps that can be a factor?

    It all really depends on your personal circumstances. I went at 56 (nearly 57), now at 62 I think that was just right...and I haven't needed to do any further work.
    Gainingcontrol likes this.
  6. PeterQuint

    PeterQuint Lead commenter

    Cuing back on the coke might be necessary evil, but shopping at Alidi?
    yodaami2 and lardylady like this.
  7. ferretmasta

    ferretmasta New commenter

    I knew I was right to have faith in you guys, thanks for the suggestions. Yes I've been paying into TPS all 25 years the standard amount. Paying off mortgage on the radar have been overpaying as much as I can. Shopping at Aldi and Alidi whichever is cheaper each week, Asda when feeling flush. I guess the advice is do your research get rid of any debt which is indeed common sense of which I'm blessed with not much. I think I need to get into the detail of the way the pension will be calculated and study it hard to be better informed. A colleague of mine said he phoned the TPS folk before deciding his exit strategy and they were dashed helpful. Thanks again.
  8. Brianthedog

    Brianthedog Occasional commenter

    I got a very pleasant surprise when I registered with TPS rather than just using their modellers. I'm due to retire next year. Will have 28 years service only. On my current salary, just short of £40k, I was expecting less pension than I will actually get, as I didn't take into account my revalued salary, which is currently £47k. For those of us solely on final salary pensions, this is very significant! So much so that I can actually retire at 60 rather than having to continue til 66, my state pension age. In actual fact, I have decided to claim my pension at 59 and a half and retire a couple of days later on 3 days. My new contract is already signed
    I will just about have paid off my mortgage, have no more debts so will be £1k a month better off, and my new salary plus pension will be £500 a month more than I get now full time! As I am not class based, I will be able to be flexible with the days I work, which could mean I also get to have cheaper term time holidays. Win win!
    stopwatch and Sundaytrekker like this.
  9. lindenlea

    lindenlea Star commenter

    Well @Brianthedog I'm in awe at your skill in managing this. I think you can be allowed to feel smug. But, as I say, you've been pretty clever.
  10. PeterQuint

    PeterQuint Lead commenter

    If you look at your benefit statement it should be fairly easy to calculate.

    Look at what you have now. Add the following to the average salary figure: salary x 7 divided by 57.

    Reduce the two pensions the appropriate amount for retiring early - I can’t remember what they are, will post later if I remember.
  11. binaryhex

    binaryhex Lead commenter

    Also, there is a tendency to 'save' in retirement, or to earn in retirement so you can continue to accumulate. But for what? The idea in retirement is to enjoy life, spend what you have got and balance the yearly spend with the money coming in, with a few quid saved for emergencies, a new car every 5 years etc. Getting out of the save mentality when retired takes some adjustment.
  12. FrankWolley

    FrankWolley Star commenter

    Good advice.

    And if, like me, you return early you know that a few years down the line the state pension will kick in, boosting one's income. :)

    Remember, you can't take it with you, and no-one ever died wishing they'd spent more time at work!o_O
    Prim, HelenREMfan and yodaami2 like this.
  13. PeterQuint

    PeterQuint Lead commenter

    I'm working on the assumption that your normal retirement age is 60 for the Final Salary portion of your pension and 67 for the Average Salary portion.

    Now look at your benefit statement.

    The Final Salary bit is finished. It'll go up and down a bit with inflation, but that aside the only things that'll change it are retiring early and if you've had any higher salary in the past which you've lost. It's based on the best 3 consecutive years of your last decade, so if you plan to go at 55 you need to have had your 'good' salary at least up to when you're 48.

    If that's all good, then that'll be your pension for that portion if you take it at 60. If you take it at 55, multiply that figure be 0.796. At 56 x 0.833, for 57 it's 0.871, 58 x by 0.912 and 59 x 0.956. Whatever figure that gives you will be your Final Salary Pension Then x that by 3 for your automatic lump sum.

    Now look at the Average Salary portion. There's a big drop in this if you retire at 55, as that's a full 12 years early (67 - 55 = 12). Now, take your current salary, presuming that's what you'll be on for the next 7 year. Divide by 57. That's how much your Average Salary Pension will increase for every year you contribute, so x that by 7 for how much it'll increase over the next 7 years (48-55). Add that to the figure already on the Average Salary portion of your benefit statement, and that's what you'll have accumulated by 55.

    Now, if you go at 55 x that by 0.546. For 56 x 0.572, 57 x 0.599, 58 x 0.628, 59 x 0.659, and for 60 x 0.692. That's what you'll get for your Average Salary Pension at that age.

    Finally, add your Average Salary and Final Salary figures together for that age.

    Bingo, etc.

    strawbs and Prim like this.
  14. Guest

    Guest Guest

    I'm with Peter Quint on the subject of shopping at Aldi or Lidl! If I wanted to eat cardboard I would use them! Until then it's Sainsbury's and Marks and Spencer for me!

    Whilst I see your point Binaryhex about the savings thing,everyone needs a sensible buffer in retirement for emergencies. As I have said before you are fortunate to have substantial savings, but your case is not typical. For most of us putting something by for the unforeseen is important. Many teachers use parts of lump sum to pay from mortgage and other debts etc.. it's not all 'fun' money.
  15. FrankWolley

    FrankWolley Star commenter

    We've recently moved house. There is a Lidl within 3 minutes on foot, so not surprisingly we've started using it. And have been impressed by a lot of the food on offer, though it doesn't have the product range of (say) a large Tesco/Sainsburys etc. At the moment we alternate.
    stopwatch likes this.
  16. Guest

    Guest Guest

    Having returned to teaching part-time last September after a year out (apart from invigilation) I will continue to work until I'm at least 63. In fact i have just been offered more work by my previous school. I expect Binaryhex will splutter out more coffee reading this!:eek:. However,as detailed in another thread, I am doing so partly as I still enjoy it and partly for financial reasons. Financially, it will allow me to maintain a cash/investment buffer that gives me peace of mind as well as allowing me to maintain house/garden, update car in 2021 and have holidays I enjoy. I'm afraid visiting places on the cheap and getting back to nature have never been my thing:rolleyes:.
    Of course as others keep saying on here I could become ill or even drop dead, but statistically I will probably be ok.
    At times on this forum there can be a lack of objectivity concerning the pros and cons of retirement. Each to his/her own. Personally I do not feel there is anything wrong with working past 60. For some of us it makes financial and personal sense.
    Last edited by a moderator: Dec 9, 2018
    Sundaytrekker likes this.
  17. Guest

    Guest Guest

    Agree FrankWolley about benefit of state pension kicking in at 66. I am making sure I have a full record by April 2024 to qualify for the full 'new' pension. Altogether i will have made 47 years contributions to qualify owing to so many years contracted out. Then I will feel fully secure with that pension , my very small AVC , original teacher's pension and the additional one I'm now paying into!
    Are you doing the same FrankWolley as I remember you saying you retired at 57? Just being nosey and curious;). I enjoy you posts as you provide useful detail lol!
  18. FrankWolley

    FrankWolley Star commenter

    We're living off my TPS pension & 2 small AVCs, and have just downsized by selling our house for (what we regarded as) a good price, and buying a smaller, but brand new, one. The difference will be useful! And I'm expecting the heating bill to be less also.

    We have enough to keep us going until the Sate Pension kicks in, and (I don't want to boast) we seem to be better off than we ever were before. I think my state pension will be full, or near so, but Mrs FW, though she qualifies for one also, is an EU citizen so who knows...:confused:
  19. heldon

    heldon Occasional commenter

    best advice I can give is to get rid of all debt as early as possible then bang everything you can, up to the allowance into a sipp then front run your teachers pension. Advice at this link is basically what I am currently doing. I moved my SIPP to cash a couple of years ago so stock market falls not an issue. https://simplelivingsomerset.wordpr...-state-pension-with-a-new-osborne-style-sipp/

    Of course now the personal allowance goes to £12.5 k from April 2019 meaning that you could draw £16666 from your SIPP tax free. As ever do your own research and do what is right for you. We sacrificed big cars and lifestyle inflation in order to stop early. On a Sunday afternoon it feels as if it was worth it.
  20. catmother

    catmother Star commenter

    I don't know if Aldi and Lidl are different in Scotland and England but around here the food is really nice and fresh. The fact that their car parks are full of expensive cars is quite telling.

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