Teachers pension and early retirement

pauljoecoe

Sorry if this question is a little dumb but I just need to get my head around this and my options.

I am nearly 55 so could take early retirement from this summer, I am possibly going to stop working in teaching and therefore paying into the teachers scheme however I don't nessesarily need to draw the pension right away, what would be the best option, take early retirement at 55 and start drawling on the pension of about say 15K per year or leave it for 5 years and start drawing at around 60. Pros and cons? Rough differences in financial terms? An ideas anyone?

Techno

Have you logged into your account on the TPS website? Lots of personal information on there including how taking your pension early will affect how much you get.
It all depends on which version of the scheme you are with. My beloved is on 80ths with a lump sum payable at 60 mine is 60ths part payable at 65 and part at 67. Whichever one it is, there will be an actuarial reduction if taken before the pension age however, you will be getting 5 years worth of pension so really depends on whether you need it now.

AnotherJoe

Not enough info by a long way.

People would need to know your tax position after retirement , what the reduction would be for taking at 55 rather than 60, whether there is a partner you'd like to leave any pension,to, their position, and so on.

I'd also question why, if you don't need it, you'd consider taking it with a reduction at 55 instead if waiting to 60. Do you have another job lined up or a partner with large income or or or ?

atush

If you take the pension early, and dont need it, you are throwing up to 25% of it away as it will be reduced. Better to leave it to grow unless

You are of poor health and not likely to live very long, and you have no one to take a spousal pension should you die early.

pauljoecoe

The wife I'd moving abroad to work. Salary is good enough for both of us to live on and we have cash saving anyway. I hope to pick up work when I get there so I don't really need the money. So the question really was to get a very rough idea of whether there was a benefit to leaving it for 5 years, give that I could be taking 15k a year for 5 years if I retired now... I.e 75k. Would the reduction in the pension be much more than that? I realise it's not that simple and depend on how long I live etc!

I also know the TPS will be able to help but have lost my log in details at the mo!

AnotherJoe

pauljoecoe wrote: »

So the question really was to get a very rough idea of whether there was a benefit to leaving it for 5 years, give that I could be taking 15k a year for 5 years if I retired now... I.e 75k. Would the reduction in the pension be much more than that? I realise it's not that simple and depend on how long I live etc!

As is indicated in post 3 that's a decision dependent upon your exact circumstances.

I also know the TPS will be able to help but have lost my log in details at the mo!

Expecting people here to guess is no substitute for you doing it properly.

jerrysimon

Another way to look at drawing your pension early is that in the five years as you say you would draw 75K.

Now if you waited until you were 60 and drew 20K it would take 10-15 years of the extra 5K (assuming it was increased by some inflation related rate) to break even.

I have done just that knowing that my wife's very small part time job makes up for the difference and of course in 10 years our SP will kick in. We also have access to our lump sum albeit again reduced given I have taken it 3.5 years early.

Regards

Jerry

pauljoecoe

That is the sort of direction I was thinking. What I am not quite understanding is that if for the 5 years between 55 and 60 I contribute nothing, why would the pension be bigger - just because I haven't drawn on it for 5 years? I mean it's not like it's going to grow like an invested pension, there is no 'pot' in the teachers superannuation scheme.

AnotherJoe

pauljoecoe wrote: »

That is the sort of direction I was thinking. What I am not quite understanding is that if for the 5 years between 55 and 60 I contribute nothing, why would the pension be bigger - just because I haven't drawn on it for 5 years? I mean it's not like it's going to grow like an invested pension, there is no 'pot' in the teachers superannuation scheme.

It may have inflation linking.
Hey I know, you could ask people here to guess, and retire based on that, or you could take a wild flyer and ask TPS what applies to your specific scheme !

mrsval

What I would like to know is why the women of the 1950s are being forced to work an extra 6 years when they started work aged 14/15 years old, they have already paid in over 40+ years. These women have worked hard, they have also given this country next generation workers. They worked throughout the years when they didn't have equality or all the health and safety protections. They already know for a fact that their is an NI £30 billion + surplus. Currently only 35 years NI contributions are needed so why are these women being treated so cruelly? They have worked, They have paid in so they need to have their meagre pensions paid out.

bigadaj

mrsval wrote: »

What I would like to know is why the women of the 1950s are being forced to work an extra 6 years when they started work aged 14/15 years old, they have already paid in over 40+ years. These women have worked hard, they have also given this country next generation workers. They worked throughout the years when they didn't have equality or all the health and safety protections. They already know for a fact that their is an NI £30 billion + surplus. Currently only 35 years NI contributions are needed so why are these women being treated so cruelly? They have worked, They have paid in so they need to have their meagre pensions paid out.

Because we are trying to promote equality, and why should women be treated any differently than men.

The waspi argument gets little time in these boards, there are some women who were caught without enough notice with the second change to their state pension age, but the initial change gave them nearly twenty years notice, with increasing life expectancy and so more paid out in pension overall. Paid for by people of current working age who will have to wait far longer.