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Would it be best to retire at 58 but leave pension till 60?

Discussion in 'Retirement' started by YeeBod, Feb 6, 2012.

  1. I plan to retire at 58 in July 2013. I will have about 24 years in my TP at that point. I won't get my state pesnion till I am 65y 11months. I have savings which I could live on for a couple of years. Would my Teacher pension be best left till I am 60 or should I just take it at 58 when I retire? Would it be worth more by leaving it till I am 60?

  2. Dunteachin

    Dunteachin Star commenter

    Go onto the TP website, find the calculator, enter the figures and you'll be able to find out what you will get. I don't think there will be much of a reduction, taking it at 58. A bird in the hand...
  3. Do go onto the website and check - I believe it's 5% reduction per full year that you go early. Remember that your lump sum will also be reduced (grrr). Work out how much pension you'd be paid in total for those 2 years and compare with the reduction that you'd have not just at 58, but for the rest of your life. It's always a bit annoying that those with birthdays in Sept. effectively retire earlier anyway!
    If you can start reducing your outgoings now, you'll notice it less if you do decide to take ARB at 58. You don't want to retire early and feel you can't enjoy it because you're watching your money so carefully while you chomp through your savings. Could you add to your pension at this stage? You get the tax back on it but, if you pay it monthly, it gets done via your wages. If you do it as a lump sum, you have to reclaim it back from the tax office, so it looks like a heftier chunk at the time.
  4. I'm retiring in July and will be using only savings to take me til I'm 60. If you don't really need the money, then I think maximising what you get back is probably the best option. If you need the cash, then take it early.
  5. You can see the current, July 2011, factors at
    At 58 years 0 months the factor is 0.911, a reduction of 8.9% at the moment. If you are going to work the last summer term you would be applying for early retirement in September 2013. Chose the day of the month carefully to minimise the reduction.
    If you retire early the extra 2 years pension will put you in profit until you are around mid 70's. If you live any longer the lower pension and lump sum will put you into a loss.
  6. I'm finishing at 58 in the Summer and have only a few more years in. I am going to take my pension straight away. I want to be able to enjoy myself now and not start retirement by watching the pennies. By the time I would be worse off in my seventies, I would have my state pension to top it up and lots of memories of the good time I will have had since 58.
    Also I know of a few too many teachers who have not lived long enough to warrant a delay in taking it.

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