Which month is best to retire in

mark55man

Just been playing with my spreadsheets  to work out when I meet my combination of requirements: namely retiring a bit early, having something to spare by not draining my SIPP completely before I can access my DB and State Pension.  On some conservative assumptions it seems like July to October in a couple of years would be the right time money wise.  I just wondered what people's lived experience / planning preference was here.  My head was spinning around
* Retire in March - close out working career maybe use savings to make one last contribution (I am HRT in employment, and will be BRT in retirement)
* Retire in April - New tax year, summer ahead, time for gardening
* Retire in Summer (July) - Seems to waste the opportunity of being free for spring
* Retire in Autumn (September) - Even sweeter to go away and catch some winter sun outside school holidays
* Retire in Winter - Seems the worst of the lot - although we do have a lot of house maintenance and decluttering to do!!  But for me couple of pensions come payable!

Or is it just something you do when you can and make the most of it??
(and yes I am overthinking it)

p00hsticks

One thing to perhaps consider is whether you need further NI years to get a full state pension, and if you do, how many weeks /  months into the tax year you need to work for the final year to count as a full one

https://www.gov.uk/check-state-pension 

AnotherJoe

Retire in June or so and you will likely get back a lot of the tax you paid.  Same for September still a lot of tax back and july/aug being school holidays the roads and trains are much less congested if you are commuting to work plus they tend in many industries to be slack months anyway (and depending on your job of course but i found the last few months not much to do anyway as I handed work off)

yes, retire in say Oct/Nov its gloomy outside, OTOH you arent commuting in cold and wet.

I retired in June, worked out for me.

Marcon

mark55man said:

Just been playing with my spreadsheets  to work out when I meet my combination of requirements: namely retiring a bit early, having something to spare by not draining my SIPP completely before I can access my DB and State Pension.  On some conservative assumptions it seems like July to October in a couple of years would be the right time money wise.  I just wondered what people's lived experience / planning preference was here.  My head was spinning around
* Retire in March - close out working career maybe use savings to make one last contribution (I am HRT in employment, and will be BRT in retirement)
* Retire in April - New tax year, summer ahead, time for gardening
* Retire in Summer (July) - Seems to waste the opportunity of being free for spring
* Retire in Autumn (September) - Even sweeter to go away and catch some winter sun outside school holidays
* Retire in Winter - Seems the worst of the lot - although we do have a lot of house maintenance and decluttering to do!!  But for me couple of pensions come payable!

Or is it just something you do when you can and make the most of it??
(and yes I am overthinking it)

Once you've retired, spring, summer, autumn and winter will all come round again, regular as clockwork, every year. You really are over-thinking it!

mark55man

Thank you all
- this year is my final contributing year to NI and I'm pretty much there already
- Yes I do like the sound of June.  Maybe with 2 weeks holiday  from unused allowance, I mean why go on holiday earlier in the year when you are about to retire
- That's very true - and I hope they all roll around for many years to come

jamesd

March is handy since the whole remaining basic rate band can be taken from a pension then the excess income tax reclaimed rapidly.

March might also work well with 40k maybe plus some carry-forward to increase the basic rate band so even higher rate tax payers can have lots left in that band.

March also gives a full year of pay to help with the pension contributions.

Triumph13

End of May is optimal as you get paid for the two May bank holidays, and the two at Easter in March / April !
The correct answer though is: 'As soon as you can afford it!'

MX5huggy

Last month or second best next. 

Wentthedaywell?

AnotherJoe said:

Retire in June or so and you will likely get back a lot of the tax you paid.  Same for September still a lot of tax back and july/aug being school holidays the roads and trains are much less congested if you are commuting to work plus they tend in many industries to be slack months anyway (and depending on your job of course but i found the last few months not much to do anyway as I handed work off)

yes, retire in say Oct/Nov its gloomy outside, OTOH you arent commuting in cold and wet.

I retired in June, worked out for me.

I'm in a similar position as Mark55man; it's all new one-off territory. So, excuse my ignorance, but why/how does one get tax back, assuming that one's pension exceeds the personal allowance?

Dazed_and_C0nfused

You don't get an actual refund but in Mark55Man's scenario he would have paid some 40% tax whilst working and would then be a 20% payer in retirement so the 40% tax paid at the start of the tax year would reduce the tax which needed to be deducted from their pension later in the same tax year.

Wentthedaywell?

Ah, thanks Dazed. I'm flexi-retired, only working two days pw, and so only a 20% tax payer. I can't see any financial dis/advantages to what time of year I go other than my NI contributions for the year, and possibly ISA allowances.