You may be closing in on 55, and you can feel you are getting too tired and too cranky to continue in the classroom. Even though you could qualify for early retirement the decision to retire is a challenging one. Any sort of change to our life on this scale can be daunting. You are probably earning as much as you have ever enjoyed in your life. Therefore, the financial implication of retirement can feel profound.
The choice to retire takes a lot of planning. Not just because of the amount of disposable income you enjoy, but because any transition from full-time employment to retirement requires a period of change. There are many elements you need to consider, and we explore these here.
Reflect whether you want to retire
You need to be careful. You may be confusing your current employment situation with a desire to stop working altogether. The difficulties you face each day might be making more urgent a decision that deserves careful consideration. Ask yourself if you could instead adapt your job duties rather than retire from work altogether. It could be that you are more in need of a meeting with your headteacher and a reshaping of your responsibility. You might need to go part-time. It is even possible that you need to find a new job in a different part of the school.
Assess your finances
You need to track your expenses for a period. How much do you spend and on what? Are you able to find the room in your finances to cope with retirement? You will want to see that you can sustain your preferred lifestyle, else you may be going from one stressful situation to another. The general rule is that you need about 70% of your final salary per year in retirement to feel comfortable.
You also need to anticipate changes to your finances. Remember, you will need less money for clothes, and you won’t need to pay for your commute to work. However, you will spend more money on entertainment and your hobbies.
Take cautious action
There are two ways you should be careful. Firstly, you should consider meeting with an independent financial advisor. It might be that this objective observer will be able to come up with suggestions and solutions that can make retirement possible. Secondly, consider phased retirement. To go from full-time work to retirement in one single step will shake your sense of purpose to its core. Working in a school feeds a need to be busy, and the sudden change can challenge your sense of wellbeing.
In short, you might feel it is time to retire. However, you need to be sure you are not reacting to the tiredness and loss of direction that can sometimes hit us in our 50s.
The content in this article was correct on 18th December 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.