Value of 'one more year'? Is 5% more a year for life worth working an extra year for?

michaels

Universidad said:

I'll say this - I've spent getting on for two years of my life in the Civil Service primarily aimed at vesting a decent amount of DB pension to make up the shortfall in my pension expectations, having spent the first 20 years of my career in the University sector in an environment of, frankly, constant decline.

By just about any metric my new job is superior, and it's the first time since the financial crisis that I've found myself with a sense of having golden handcuffs back on my wrists - I don't know of anywhere that I could move easily that would improve my circumstances.

And yet, those two years have felt like a long time, as I wait for the pension vesting gamble to finally pay off.

And yet, if I thought I could stop working tomorrow, I would do that.

Could have stuck a small amount in a sipp and 'transferred in' to overcome the 2 year vesting period (ok so it would have taken about 6-8 months of extremely slow processing but less than 2 years!

I came from nearly 30 years in the private sector, in theory I am doing similar work on much easier terms but it doesn't half drag in comparison!

sheslookinhot

Of all the things money can buy, it cannot buy time.

Universidad

michaels said:

Could have stuck a small amount in a sipp and 'transferred in' to overcome the 2 year vesting period (ok so it would have taken about 6-8 months of extremely slow processing but less than 2 years!

I actually have a small SIPP which I set up with that exact purpose in mind, but the transfer in of an occupational pension was underway which was going to reduce my vesting period by some measure, and with some exit fees on the SIPP for getting out under 12 months I let the pot sit there instead. I won't regret this unless something goes wrong in the next few weeks...

I go back and check how that little SIPP is doing every so often - maybe I'll take my first retirement holiday off the back of it if it grows well.

sgx2000

Secret2ndAccount said:

             

...........

Brilliant......

NedS

I reach my planned target date in a few days time. I haven't handed in my notice yet, but I'm close. It's quite liberating knowing I can go at any time. I'll probably stay long enough to utilise my tax free allowance in the new tax year and benefit a little from the reduced NI.

Sometimes it's hard to walk away from that monthly salary and make the switch, but I believe you will know when the time is right. The vast majority of us only go to work for the money (we kid ourselves as to the other benefits of work), and once you have enough it's time to go. Do what feels right for you.

cloud_dog

I think, as a previous poster mentioned, it (for me) would not come down to the finance aspect, but would come down to the work enjoyment aspect.  If you are enjoying your work life and the balance and opportunities that offers with your home life, then by all means carry on, and simply recalculate the monetary benefit as you go.

Having recently lost my last parent, and having (obviously) witnessed their last year, I'm not sure how much money I would swap for an extra year early on.

We may be in a similar position to yourself (number wise), although work life for me is difficult at the moment (one day at a time), but we have decided 1 November 2024 is our date (to hand in notices); not an idea time of the year but it is the earliest feasible time.  

barnstar2077

You are thinking about this as an extra annual stipend for you, but what about the option of having a lump sum to spend on something, would that be worth it?

At the moment, assuming I have hit my target retirement amount by 55, I am toying with the idea of coming out of my pensions entirely and saving everything (including what would have previously gone into my ISA etc) for the next six months to give myself a lump sum that is outside of my current plans.  I would use it to pay off what would be a very small mortgage by that point, but it could also be used to take a guilt free cruise or be put towards a new car etc if you are so inclined!

michaels

barnstar2077 said:

You are thinking about this as an extra annual stipend for you, but what about the option of having a lump sum to spend on something, would that be worth it?

At the moment, assuming I have hit my target retirement amount by 55, I am toying with the idea of coming out of my pensions entirely and saving everything (including what would have previously gone into my ISA etc) for the next six months to give myself a lump sum that is outside of my current plans.  I would use it to pay off what would be a very small mortgage by that point, but it could also be used to take a guilt free cruise or be put towards a new car etc if you are so inclined!

I can flex my funds fairly easily between capital and income so luckily don't need to worry too much about that.

Asimovs_nightfall

sgx2000 said:

Secret2ndAccount said:

             

...........

Brilliant......

Albeit slightly difficult to follow.

Moby

I retired at 60 a couple of years ago, moved from London and bought a small holding in Wales. Its stating the bleedin obvious really but you have to weigh up your physical capacity to do the things that you want to do in the early years after retirement. If I had carried on working another couple of years I know I would have lacked that little bit more physical capacity to do the things I wanted to do. Is the extra income worth more to you than the associated risk of having less capacity to do the things you want to do? In my case I'm glad I didnt carry on working, If I had it would have been that bit harder to take the risk of moving and changing my lifestyle in such a dramatic way.