Is it worth working any longer

bigfreddiel

I am a civil servent and will have 23 years pensionable service when I retire in 2011 at age 60.

My pension then will be about £8,000 a year, current forecast is £7,000 approx.

I have savings in PEPs, ISAs, Savings accounts of £380,000 and my house is paid for and worth £500,000 - why should I continue to work in a job I no longer enjoy!

So what are the opinions of the forum - is it worth hanging on for maybe £1000 more on my pension (£15 a week in reality)?

Or should I leave and do something I would enjoy for the next four years that probably pays almost as much as my civil service job?

ckerrd

Stopping work is about more than money.
You sound financially secure, which is good, so you really have to examine the "social" reasons for working

jem16

bigfreddiel wrote:

I am a civil servent and will have 23 years pensionable service when I retire in 2011 at age 60.

My pension then will be about £8,000 a year, current forecast is £7,000 approx.

You will also have to take into account that you will not get the full £7000 that is currently forecast if you retire early. It will be actuarially(sp?) reduced by a certain amount fir each year you retire early.

For example in my Teacher's Pension it would be 0.742 of the amount due if I retired at 55 instead of 60. That would make it £5194 instead of £7000.

This may be something you want to check out first.

bigfreddiel

Yes, I hadn't thought of that, back to the calculator!

seven-day-weekend

My husband lost a quarter of his Teachers' Pension because he took it at 55.

However, we knew that and it was planned for in our budget.

We decided on 'quality' rather than 'quantity'.

Alfrescodave

If you do decide to go for the early retirement, which seems to me to be very attractive; you might want look into when in the year is the most favourable time. Tax position, leave allowance etc

jem16

seven-day-weekend wrote:

We decided on 'quality' rather than 'quantity'.

The way teaching is going these days, I might well follow your example!

Andy_L

At lot depends on where you are on your pay scale. If in the next 4 years you can drastically increase you pensionable salary (eg promotion, overtime, shift allowance) those 4 years will be worth far more than that £1000.

With the current civil service job cuts schemes, might be worth seeing if you can get approved early retirement & avoid any actuarial reduction.

Andy

vfairbrass

jem16 wrote:

You will also have to take into account that you will not get the full £7000 that is currently forecast if you retire early. It will be actuarially(sp?) reduced by a certain amount fir each year you retire early.

For example in my Teacher's Pension it would be 0.742 of the amount due if I retired at 55 instead of 60. That would make it £5194 instead of £7000.

This may be something you want to check out first.

I am in a similar position - 55 now, in the Local Government Pension Scheme, and no longer enjoying work enough to justify the £1900 a year extra pension I would get if I stayed to 60 (and the slightly reduced lump sum). My union put on an excellent retirement seminar to which they invited all those of my age and they made a strong case for leaving work in these circumstances. At least, the case they made wasn't just based on the financial angles but explored the quality of life you could experience by giving up, reducing your life style to match your reduced circumstances but saying goodbye to the stress of employment. I was so taken by the idea, not having considered going early before, that I intend to jump ship this year and just be frugal. And that's with two kids at Uni.

bigfreddiel

My point about going on working in job I no longer enjoy and my pension was not how much I may lose on my pension. I wanted an opinion on if £380,000 in savings of one kind and another enough?

I have now debts and mortgage paid off.

Any advice gratefully received.

jem16

bigfreddiel wrote:

My point about going on working in job I no longer enjoy and my pension was not how much I may lose on my pension. I wanted an opinion on if £380,000 in savings of one kind and another enough?

I have now debts and mortgage paid off.

Any advice gratefully received.

The £380,000 at 5% interest could generate £19k pa although you would lose some to tax(probably all at 22% as you would have your pension from work). So it sounds perfectly feasible.

Only drawback is that your £380,000 would erode in value over the years if it's only in savings. It might be better properly invested and then take a fixed income from it whilst still allowing for capital growth.