Student loan paid off! What now?

daveofstoft

So firstly, STUDENT LOAN IS PAID OFF NEXT MONTH! Graduated in 2005 so it was the older style loans but still happy it's gone. Since 2006 I've been in full time employment and recently been paying £120 ish a month off my student loan. As of next month I won't have to do it but I'm thinking that I may have a great opportunity here. I'm lucky enough to have never felt like I was paying the money, it all went out of my wages before I saw it and therefore I never noticed it. If I let this trickle into my bank I'll notice a nice bump but probably my spending will increase to take it into account much like previous small pay ruses have done.

I'd quite like to do something with the money but i'm not sure what. I'm 36 year old teacher and starting to think about retirement plans (I realise that this is quite sad) and would love to shave some years off. A colleague of mine managed to "retire" 5 years early by investing some money in his late 40's then living off the savings for the 5 years between his "retirement" and actually taking his state pension. I'd quite like to do the same or better if possible. My father in law tells me that I should be buying gold bars from Royal Mint as it's a better deal than the banks although I shudder at the idea of having a Scrooge McDuck style swimming pool of them by the time I'm ready to sell them off. That said, I like the security that the Gold will always be worth 'something'. I've seen enough global financial crises to be a bit scared of the stock market.

So two questions,
1) Has anyone invested in Gold via the sort of thing from the Royal Mint? Any good?
2) Anyone ever been in a similar situation and what have you done to invest for the future?

For clarity, I already have an ISA and a (very low rate) savings account with a couple of hundred in each which are my "car broke down" fund. I have a mortgage already and would love to pay that off sooner but that seems to be a very difficult thing to do. I can afford now to pay about £150 ish a month towards this future plan. Any advice appreciated. 

JoeCrystal

daveofstoft said:

I'm 36 year old teacher and starting to think about retirement plans (I realise that this is quite sad) and would love to shave some years off. 

You already got a retirement plan. It is called TPS, which is very generous. It might be worth looking at using options available in TPS such as Additional Pension Faster Accrual & AAB Buy-Out.

daveofstoft

JoeCrystal said:

You already got a retirement plan. It is called TPS, which is very generous. It might be worth looking at using options available in TPS such as Additional Pension Faster Accrual & AAB Buy-Out.

Ah I see. I guess I was worried that any extra I pay in would only be available at pension age rather than earlier. I'll give them an email to see what the options are. Thanks for your help!

[Deleted User]

If you are serious about the single asset of Gold then please read this https://www.lovemoney.com/news/70728/how-to-invest-gold-royal-mint-uk-buy
I do have gold in my portfolio, but only 5% and it's invested in this 

ISHARES PHYSICAL METALS PLC PHYSICAL GOLD ETC (SGLN)

Please don't take this as advice, do your own research

crv1963

daveofstoft said:

So two questions,
1) Has anyone invested in Gold via the sort of thing from the Royal Mint? Any good?
2) Anyone ever been in a similar situation and what have you done to invest for the future?

For clarity, I already have an ISA and a (very low rate) savings account with a couple of hundred in each which are my "car broke down" fund. I have a mortgage already and would love to pay that off sooner but that seems to be a very difficult thing to do. I can afford now to pay about £150 ish a month towards this future plan. Any advice appreciated. 

1) Several friends and colleagues simply buy Sovereigns and Half Sovereigns as a means to hold gold, no idea where they keep them! One I know uses them to be turned into cash if he needs it- he's never needed to sell any so gave his son some as an emergency fund when his son went to Uni. Gold is of course high at the moment and it could go higher or lower- just like the stock market.
2) Take a trawl through some of the threads- work out when you would like to retire, how much you would want to have as an income and plan accordingly, we looked at basic income needs (have to have to live), would like (stuck on an extra amount for holidays/ cars etc) and luxury retirement (additional and long haul holidays). We then aimed for the luxury sum, have surpassed the basic sum so we'll hopefully land somewhere towards the upper end of our would like target. 

Like you we have a DB Pension underpinning our plans, do you have a partner/ spouse and what are their plans/ provisions/ thoughts on the subject? If like many (including Mrs CRV) they have no real interest in the details do your research and test some ideas- the people who come on the forum have amazed me with their generosity of time/ knowledge and helped me (us) from nebulous thinking about retirement to making and putting into action plans to make it happen. Mrs CRV is always interested in the bottom line, how much now and when will we retire she does of course keep me grounded and we had to revise our figure upwards when I under estimated the costs of our monthly vet bills ( a long story).

Overpaying the mortgage is a great idea- simply round up your payment (if permitted) to the nearest whole figure then put the rest into your pension planning. Paying off the mortgage early and retirement planning aren't mutually exclusive- some people make a choice of one over the other which IMHO is an error but it is their call and they are doing what they feel is the correct thing for them.

You could open a LISA as you're under 40, it may or may not come in handy. Take the long view if you are retiring 5 years early then it is age 63 so 27 years in the stock market, if 10 years early then 22 years in the stock market- there will be lots of rises and falls over the timeframe. Being too risk adverse also hits your savings growth or even in the current low interest era actually costs you spending power to inflation.

Good luck with the planning!

OldBeanz

One of the options in the TPS is to buy an earlier pension.
You should register on the TPS site as a minimum to ensure they are correctly updating your pension each year. It is far easier to sort out issues as you go than finding out 33 years later.
https://www.teacherspensions.co.uk

atush

if you want to retire early, i wouldnt be buying added pension at full price to have it reduced as much as 50% when taking it early.  Lisa and a DC pension would be good ideas.

Sun-Is-Fun

You could buy additional pension from the TPS, faster accrual or you open a SIPP. Every £80 you put into the SIPP is topped up to make it £100 by the governernment. You can pay in up to your salary minus your contributions to teacher's pensions. You could use the funds in the SIPP to retire at 57 and then take your teacher's pension later to stop any reductions  by taking it early.

Anonymous101

If you have early retirement ambitions then the best place to start in my opinion would be the FIRE blogs. Financial Independence Retire Early. A lot of the questions you are asking have already been asked there so general answers are easy to find.
I'm a keen reader of https://theescapeartist.me/about/ blog which i think is the best UK based FIRE blog, but there's many many more.

Personally if I were in your position I would be looking at investing in low cost index tracker funds such as Vanguards lifestyle products held within a Stocks and Share ISA. As others have said if you're planning on retiring early then access to the investments in your 40's or 50's is important.
A LISA is a good option if you think you'll not be needing the cash until age 60+. These are comparable with pensions IMO so whether they are suitable very much depend on your expected retirement age and tax situation.