Best time of year to retire?

marlot

p00hsticks wrote: »

... If it's like most employers where holidays are 'x days plus bank holidays' then bank holidays come out of your annual leave allowance so if there aren't any before you leave you'd end up getting the money instead. ...

Its not worked like that at any of the ten employers I've worked for. I suspect it depends on whether its a business that's open on bank holidays? All of mine have been closed on bank holidays, so one simply takes the bank holidays as they come around. Leave is calculated based on the remaining non-BH days.

pimento

marlot wrote: »

Its not worked like that at any of the ten employers I've worked for. I suspect it depends on whether its a business that's open on bank holidays? All of mine have been closed on bank holidays, so one simply takes the bank holidays as they come around. Leave is calculated based on the remaining non-BH days.

Yes, none of the British bank holidays form part of our annual leave allowance. I work for a foreign government so we get a few of their bank holidays too.

lisyloo

Wouldn't it be best to go once one has earned personal allowance so pay zero tax? (or filled up the basic rate tax band if that suits).
I'm suprised no=one has suggested that.
Am I missing something?

p00hsticks

lisyloo wrote: »

Wouldn't it be best to go once one has earned personal allowance so pay zero tax? (or filled up the basic rate tax band if that suits).
I'm suprised no=one has suggested that.
Am I missing something?

I think people are assuming that once the OP has retired, they will be drawing their pension, and will be using their tax allowance up that way.



However if they are simply planning on living off savings for a while rather than draw their pension straight away you are correct in saying that it may be worth staying until they have earned up to the annual allowance. They'd then have to either claim the overpaid tax back from HMRC or wait for an automatic rebate after the end of the tax year.

Anonymous101

This type of decision will vary depending on the persons circumstances.

If they are contributing to a SIPP or DC pension, how many years NI contributions they have, if they are drawing a pension immediatley or living from savings for a while, what their annual salary is while they're working, health situation, family commitments children or grandchildren to look after? etc etc

It sounds as though the OP is planning on retiring and immediately drawing the TFLS. Is your work seasonal? What about the commute? If you're an outdoors type person would you want to make the most of the summer by being off or would it be better to work for the summer because the travel is easier and working is more enjoyable.

Albermarle

Apart from financial issues , I always assumed it would be best to retire in the Spring/after Easter .
It seems for many people , stopping work and finding yourself at a loose end can be a much bigger issue mentally than just a worry about tax years . So stopping work in the Autumn /Winter as the nights are drawing in might not be the best idea...

Ganga

pimento wrote: »

I am thinking of retiring within the next 12 months or so. I have a defined benefit scheme through my work.
Is there a better time of the year to retire from a tax perspective? I know that my lump sum will be tax free but I will also qualify for 12 weeks severance pay and as I'm a higher rate taxpayer I wondered if it would be better to retire at the start of the financial year.

I also have a season ticket that will expire in March 2019 that will give me no refund should I cancel it before then.

Does it really make a difference? As I have a choice when to go (as long as I give 2 months notice) I thought I might as well make it as advantageous to me as possible.

Can you not continue going to the match and supporting your team till the season ticket expires then you can pay at the turnstile:rotfl::rotfl::rotfl:

pimento

Anonymous101 wrote: »

This type of decision will vary depending on the persons circumstances.

If they are contributing to a SIPP or DC pension, how many years NI contributions they have, if they are drawing a pension immediatley or living from savings for a while, what their annual salary is while they're working, health situation, family commitments children or grandchildren to look after? etc etc

It sounds as though the OP is planning on retiring and immediately drawing the TFLS. Is your work seasonal? What about the commute? If you're an outdoors type person would you want to make the most of the summer by being off or would it be better to work for the summer because the travel is easier and working is more enjoyable.

All these question are great because I never considered living off my savings and not drawing my pension immediately. I never knew you could do that! What are the benefits/implications of doing this?

I'm a few years away from the full pension (I'm 58 and have been paying into the pension for 22 years) so although I will get enough to live on, it will be a bit of a drop from my salary.

My husband will keep on working for a while (unlike me, he doesn't have a 2 hour each way commute and enjoys his job) and we plan to sell our house (no mortgage) and downsize to a cheaper area to free some equity. We love to travel.
I have a health problem which means I don't expect to live to a very old age so I'm keen to do as much traveling as I can for as long as I can.

Is there anything else I need to consider? Where should I put my lump sum until I need it? etc.

SmashedAvacado

i would choose the end of January so i got to do all the dossy christmas stuff and then have nothing new to do in january because i was off soon.

ex-pat_scot

pimento wrote: »

I am thinking of retiring within the next 12 months or so. I have a defined benefit scheme through my work.
Is there a better time of the year to retire from a tax perspective?

There's certainly a better time from a pensions perspective! I am presuming that you will be retiring "early" and that there will be a certain actuarial reduction.
On that basis (although CHECK!), retiring on or just after your birthday would be advantageous, as you would have one fewer year of actuarial reduction.


From a NI / state pensions perspective, it would make sense to have paid enough NI to trigger an additional year's "stamp" towards state pension. If you need it.

This is about £10,000 or so - near (but frustratingly not the same as) the tax free allowance.


From a pure tax perspective, earn £11,850 salary (gross after pension contributions) in the tax year ie before you hit the 32% marginal tax rate (20% basic rate plus 12% ees NI). This might take you one month if highly paid, or several months if on more modest earnings.


From an "ideal time of the year" - perhaps stop in September. You can then treat yourself to a relaxed extended holiday after the busy / expensive season, and before the weather turns.