USS - One More Year and flexible retirement

Simes122

With retirement looming (originally around end Mar 22), been having that conversation with my boss.

My role is such that reduced hours flexi retirement was never going to be an option (for me, or for him) - it's just too busy, and I'd just end up doing 5 days work in fewer days for less money and it's needed 5 days a week.    However, I've been given another potential option - that I move into a different, interesting, short lifed role for another year, my successor is recruited, with reduced hours being an option for me in the new role - I'd probably look at 0.8FTE with a review at 6 months, and possibly then go to 0.6FTE.

This is attractive - I enjoy working (at least many aspects), but didn't want to sustain my current role as it was affecting my health.   The new option is a win for me - as I don't mind doing OMY in something I will enjoy, and reduced hours is attractive as a taper down to retirement potentially end Mar 23.  Financially it's positive, it completes my NI history which would be 1 year missing otherwise.  My employer would be happy as I can make headway on a change project that has been difficult to make progress on with a busy BAU workload, and it makes for an easier succession as I'll be on hand in case any issues.

I am in no need of taking any USS pension early - I have a Forces DB pension, and I've been taking min wage from my Uni salary for a while now.   And earning 80% (or 60%) means I can exploit my Annual Allowance optimally.  All good.   I might want to take Tax free money to pay off a PCP Car early though and for a wedding gift.

My question really relates to what is the best thing to do re USS flexi retirement options - something, nothing.   I could obviously use flexible retirement to take some pension early, but don't need to, but I do need some Tax Free cash.   Is there an upside to USS flexi options that I need to be aware of that make it more advantageous to just waiting till I do retire, or am I best just waiting?

Grateful for any thoughts from any USS members who are going down this route or have been down this route.

Cheers, S

bluenose1

If you don’t need the money not sure there is any point in taking the flexible retirement, as reducing your future income. 

My understanding that any withdrawing from USS flexible funds is taxable, it may be an option to transfer to a SIPP provider like HL to withdraw tax free cash.  However there may be more benefits by keeping it in USS such as lower charges and they give a small amount of interest on cash in your pot unlike HL.
If I needed cash urgently I would be looking if it was better to even get a loan to cover me until my pensions started, rather than withdrawing. 

Another spreadsheet situation I’m afraid…..

Simes122

Thanks - yes that’s what my instinct is telling me.  Just leave it be, work for another year (for fewer hours) and keep squirrelling nuts!  Haven’t 100% decided on another year yet though,  nor have they - it needs to work for both me and them.   I’m also trying to decide if it’s that I want to work another year or if it’s a bit of trepidation over taking the leap that is keeping me from pulling the handle 😂. That said, I do like the idea of a bit of best of both worlds as I transition and if it doesn't work for me, I can pull the plug then.

PJM_62

hi @Simes122
Just wondering what decision you made ?

I'm thinking of dropping to a 2 or 3 day week, and keen to know the pros and cons of the FR option, over just asking to reduce hours.

Simes122

PJM_62 said:

hi @Simes122
Just wondering what decision you made ?

I'm thinking of dropping to a 2 or 3 day week, and keen to know the pros and cons of the FR option, over just asking to reduce hours.

Nothing transpired to enable me to reduce my hours, so I’m still FT!  But I’ve managed to change my mindset a a bit and under less stress just now as I’ve reached my number, so I’m working to improve my retirement while markets and energy pricing are in turmoil.  The latter being a concern that I feel I need to mitigate, as it could potentially require me to find another 4-5k per annum in retirement - at least till state pension kicks in - potentially another £40-£50k of energy costs during my bridging period that I’d not expected!  S

PJM_62

Yeah those energy prices are a bit of a rethink for many of us.
Who'd have thought it would be like this 2 years ago? 😀

Simes122

PJM_62 said:

Yeah those energy prices are a bit of a rethink for many of us.
Who'd have thought it would be like this 2 years ago? 😀

Not me - that was my replacement car funding wedge in 5 years time lol!

Albermarle

so I’m working to improve my retirement while markets and energy pricing are in turmoil.  The latter being a concern that I feel I need to mitigate, as it could potentially require me to find another 4-5k per annum in retirement -

The increased energy costs are clearly a problem (I  retired a year ago when my monthly DD was £105 . In 6 months it could be £400....) Lucky I did OMY ( or three )

However the financial/stock markets are not 'in turmoil' . No more than usual anyway, and ups and downs are par for the course, and will happen regularly during your retirement.

Simes122

Albermarle said:

so I’m working to improve my retirement while markets and energy pricing are in turmoil.  The latter being a concern that I feel I need to mitigate, as it could potentially require me to find another 4-5k per annum in retirement -

The increased energy costs are clearly a problem (I  retired a year ago when my monthly DD was £105 . In 6 months it could be £400....) Lucky I did OMY ( or three )

However the financial/stock markets are not 'in turmoil' . No more than usual anyway, and ups and downs are par for the course, and will happen regularly during your retirement.

I agree partially - ok, in turmoil might not suit your preferred descriptor, but they have dropped significantly just prior to my planned retirement - a point in time where I might need to crystallise losses and start taking pension.   Which for me, I'm happy to describe as being in turmoil at an inconvenient point in time.   ie, turmoil in the sense that there is a war ongoing, energy prices through the roof, inflation rising, all of which creates turmoil - a state of uncertainty, and confusion.