Teachers’ pension early retirement factors may be playing on your mind. You may be wondering what it would take to leave the classroom from 55 onwards. Most people are conscientious and plan for retirement. You will have set a date for when you want to retire and then managed money to ensure a regular income that will sustain you. Could you then, or even now, survive an emergency that directly tests your finances.
According to The Guardian, 33% of families are one month away from homelessness. If something happened that put a stop to income or required huge payouts – could be considered a disaster.
Therefore, when planning your teachers’ pension and early retirement, you need to factor in potential emergencies.
What does an emergency look like?
You may be thinking that the type of emergencies that could eat into your living costs are rare. However, imagine the likelihood and cost of some of the following potential emergencies:
- car breakdown
- dental costs
- boiler/ washing machine/ other large technology item needs replacement
- vets’ bills
- emergency home repairs after a storm or other weather event
- loss of mobile phone
- legal bills
- unexpected tax bill
- funeral costs
29% of people experienced a significant car bill in the last 12 months, 8% needed a new boiler and 11% required emergency dental work (Money Advisory Service)
Emergency Savings: how much is enough?
Everyone, whether retired or not, should have a sum of money set aside that could sustain them in the event of an emergency.
A general rule of thumb during your working life is to have about six months of living expenses in savings. You should have a minimum of three months set aside. This money should sit in an account that is easy to access, while the rest of your savings can go somewhere where it can work harder for you. In retirement, it is also a good idea to have enough money that is simple to liquidate in times of emergency.
Saving is difficult when you feel you are short of money. However, if you set aside £3 a day for a year, you would end up with over £1000 in savings.
The content in this article was correct on 10th August 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.