Should I stay or should I go - teacher

Bobon_Time

Headteacher looking for the door....... stress of the job has become too much. Its not the kids - its the politics, OfSted, staffing issues and lack of funding which prevents me from meeting the needs of the pupils causing stress because I cant do the job the best of my ability (Outstanding in all 3 previous ofsted - council inner city school) but standards declining due to external factors which I cant stop which causes me stress/anxiety. Anyway when to go and Pension. 

I am 53. No mortgage. No loans etc. My wife is part time teacher (half time) Only food and bills to pay. My son is at university, 2nd year, and cost me approx £550 month. Apart from the usual poor teacher drinking habits I dont have other outgoings.

I have savings of £170,000 in premium bonds/ISA/High interest savings. Also £30k in AVC.

If my son was out of Uni I would happily go at the end of this year at 54 and work in a less stressful environment for a year and top up using my savings.

If I retire at 55 should I live off my savings keeping my pension (£25k) untouched for as long as possible. OR take my pension and lump sum and invest my savings and use the interest to top up my pension until 67 when state pension kicks in.

I have got a meeting with Weslayan (pension advisors) next week

Thanks

Bob

Kim1965

From a health perspective you must quit. My Sister retired last year, 55 Head. She has not regretted it. Someone will offer their thought about the finances shortly. 

diystarter7

LEAVE NOW

Life is short, you are in a relatively good position. I'm

You can semi-retire at 55, but we just left everyone financial situations, spending habits are different so difficult to say based on what you have posted

However, I'm clear about you leaving as being that unhappy, please leave but you will miss the school hols

Marcon

Bobon_Time said:

Headteacher looking for the door....... stress of the job has become too much. Its not the kids - its the politics, OfSted, staffing issues and lack of funding which prevents me from meeting the needs of the pupils causing stress because I cant do the job the best of my ability (Outstanding in all 3 previous ofsted - council inner city school) but standards declining due to external factors which I cant stop which causes me stress/anxiety. Anyway when to go and Pension. 

I am 53. No mortgage. No loans etc. My wife is part time teacher (half time) Only food and bills to pay. My son is at university, 2nd year, and cost me approx £550 month. Apart from the usual poor teacher drinking habits I dont have other outgoings.

I have savings of £170,000 in premium bonds/ISA/High interest savings. Also £30k in AVC.

If my son was out of Uni I would happily go at the end of this year at 54 and work in a less stressful environment for a year and top up using my savings.

If I retire at 55 should I live off my savings keeping my pension (£25k) untouched for as long as possible. OR take my pension and lump sum and invest my savings and use the interest to top up my pension until 67 when state pension kicks in.

I have got a meeting with Weslayan (pension advisors) next week

Thanks

Bob

Why are you posting here - so that people who know absolutely nothing about you or your circumstances other than the couple of paragraphs in your post can endorse the decision which your post indicates you've pretty much made already? It's a serious question; re-reading your own post surely confirms that you've already made your choice and it's now just a question of financing it.

You are talking to your pension advisers next week, so wait to see what they have to say. Meanwhile consider whether the cost centre known as 'son' can reasonably be reduced - could he manage on a bit less cash? Get a part-time job during term time, or a full time job during vacations? Very many students do, and provided he cuts down on his social life rather than his studying(!), it's not going to harm his education. I suspect he would prefer a happy, healthy father to the alternative.

You've done your bit for society. Now do your bit for your family - and yourself.

dunstonh

If I retire at 55 should I live off my savings keeping my pension (£25k) untouched for as long as possible. OR take my pension and lump sum and invest my savings and use the interest to top up my pension until 67 when state pension kicks in.

At 55, you are likely to be alive for another 30-40 years.  So, you need to consider your spending needs over the next 30-40 years and model it out.

£170k sounds like a lot, but it is not for a significantly early retirement.   Think about the costs you are going to incur in that 30-40 year period.   House repairs, cars, and ad-hoc lifestyle expenditure.    Think a bit harder about what is ahead.  Are you gas or oil?   You will need to install a heat pump soon.  That could cost £13k if its a simple install.   It could cost upto £150k if your property needs significant work to bring it to the required level.

How much of a lifestyle reduction are you willing to take?
What about alternative jobs to fill the gap?

Apart from the usual poor teacher drinking habits I dont have other outgoings.

You will need something to do to fill your time.  That will likely come at a cost.   Failure to do so would probably increase the drinking, increase your boredom and make you no better off health wise.   Planning for the future is not just about money but about life.

I have got a meeting with Weslayan (pension advisors) next week

Seeing a sales rep is not ideal. If you need advice, then use a local IFA.    You are likely to need revised products but primarily you need planning and modelling.   

Pat38493

dunstonh said:

If I retire at 55 should I live off my savings keeping my pension (£25k) untouched for as long as possible. OR take my pension and lump sum and invest my savings and use the interest to top up my pension until 67 when state pension kicks in.

At 55, you are likely to be alive for another 30-40 years.  So, you need to consider your spending needs over the next 30-40 years and model it out.

£170k sounds like a lot, but it is not for a significantly early retirement.   Think about the costs you are going to incur in that 30-40 year period.   House repairs, cars, and ad-hoc lifestyle expenditure.    Think a bit harder about what is ahead.  Are you gas or oil?   You will need to install a heat pump soon.  That could cost £13k if its a simple install.   It could cost upto £150k if your property needs significant work to bring it to the required level.

How much of a lifestyle reduction are you willing to take?
What about alternative jobs to fill the gap?

Apart from the usual poor teacher drinking habits I dont have other outgoings.

You will need something to do to fill your time.  That will likely come at a cost.   Failure to do so would probably increase the drinking, increase your boredom and make you no better off health wise.   Planning for the future is not just about money but about life.

I have got a meeting with Weslayan (pension advisors) next week

Seeing a sales rep is not ideal. If you need advice, then use a local IFA.    You are likely to need revised products but primarily you need planning and modelling.   

Maybe a silly question, but if the OP is a head teacher, surely they already have a DB pension scheme in addition to the savings mentioned - must be the case because AVCs are also mentioned.  

[Deleted User]

If I retire at 55 should I live off my savings keeping my pension (£25k) untouched for as long as possible. OR take my pension and lump sum and invest my savings and use the interest to top up my pension until 67 when state pension kicks in.

Presumably, you take a hit in annual payments for drawing DB pension early and gain by waiting.  As a general rule delaying DB pension is better.  Delaying state pension to 70 is also helpful if one can afford it.  We have another recent thread discussing similar issues.  

The main question is “what is your minimum essential expenditure”?  This is the amount that in an ideal world would be covered from DB sources, such as state pension + work DB. 

Getting a one-off advice is a good idea before making this type of jump. One thing to keep in mind is that if the advisor expects to manage your money on an ongoing basis  then his interest conflicts with yours.  An advisor paid a percentage fee from your liquid pot would want to draw from DB pension asap so the liquid pot isn’t depleted. 

P.S. Modelling is great but anyone who attempts to do a financial plan of their retirement, with or without a calculator, should read this classic by Bill Bernstein: The Retirement Calculator from Hell, Part III: Eat, Drink, and Be Merry. His conclusion that "any estimate of long-term financial success greater than about 80% is meaningless" is sobering.  Written in 2001, some of the points raised by Mr Bernstein go hand in glove with 2022 news.

dunstonh

Pat38493 said:

dunstonh said:

If I retire at 55 should I live off my savings keeping my pension (£25k) untouched for as long as possible. OR take my pension and lump sum and invest my savings and use the interest to top up my pension until 67 when state pension kicks in.

At 55, you are likely to be alive for another 30-40 years.  So, you need to consider your spending needs over the next 30-40 years and model it out.

£170k sounds like a lot, but it is not for a significantly early retirement.   Think about the costs you are going to incur in that 30-40 year period.   House repairs, cars, and ad-hoc lifestyle expenditure.    Think a bit harder about what is ahead.  Are you gas or oil?   You will need to install a heat pump soon.  That could cost £13k if its a simple install.   It could cost upto £150k if your property needs significant work to bring it to the required level.

How much of a lifestyle reduction are you willing to take?
What about alternative jobs to fill the gap?

Apart from the usual poor teacher drinking habits I dont have other outgoings.

You will need something to do to fill your time.  That will likely come at a cost.   Failure to do so would probably increase the drinking, increase your boredom and make you no better off health wise.   Planning for the future is not just about money but about life.

I have got a meeting with Weslayan (pension advisors) next week

Seeing a sales rep is not ideal. If you need advice, then use a local IFA.    You are likely to need revised products but primarily you need planning and modelling.   

Maybe a silly question, but if the OP is a head teacher, surely they already have a DB pension scheme in addition to the savings mentioned - must be the case because AVCs are also mentioned.  

They do.  However, the OP is looking at retiring early at 55.  If the pension is taken it will be actuarily reduced.   The alternative is to fund the gap until the pension has no actuarial adjustment.    There is a further delay until the state pension which is 67 or could be 68.

The OP says the DB pension is £25k (unclear whether that is at scheme age or the actuarily reduced figure).   That is almost certainly a significant drop in income from the current position.     

So, the different methods need modelling to see which is appropriate.   And the model needs to be realistic.  e.g. if they have a lifestyle based on say £68,000 a year income and are going to drop to zero for 5 years before a £25k pension starts and have to wait another 7 years for the £10k state pension then its easy to say you will reduce your lifestyle and in reality, people find that very difficult to achieve.    If the £170k is used to fund the gap to 60, then a lifestyle based of £68k reduced to £50k of spending will soon eat that up.

A lot of thought needs to go into expenditure before and nail that down before you can consider the methods and whether it is affordable or not.

Bobon_Time

£25k is actuarily reduced to retire at 55

Stubod

..if you basically liked the job, but not the stress, then why not consider returning to just teaching rather than being a head??

Apart from that you need to set up a budget planning spreadsheet with your typical/planned expenditure v income of the next (say) 40 years and see how it pans out??

Albermarle

If I retire at 55 should I live off my savings keeping my pension (£25k) untouched for as long as possible. OR take my pension and lump sum and invest my savings and use the interest to top up my pension until 67 when state pension kicks in

Do you what your Normal Retirement Age is, as it can vary depending on what scheme you are in AFAIU? Taking a DB scheme 10 years early means a big hit to valuable guaranteed income, but 5 years early less so.