It might be time to decide in the new year to retire. You have given it a lot of thought and you know this is the moment to transition into a more relaxed life that is focused on your hopes for the future. Before you take the first steps to this critical phase of your life, you need to know the answer to the following questions.
How are my pension benefits calculated?
Your pension is calculated differently depending on the scheme you’re enrolled in. You may be within the final salary scheme or the career average scheme. Therefore, you need to access your benefits statement on My Pension Online. It will either be a calculation based on your 40/80s of your final salary or the accrual of your average pay over your career.
Can I retire at 55?
As with most professions, you can retire from teaching at the age of 55. Be aware though that your pension benefits will be less than if you chose to retire at your Normal Pension Age (NPA). You should ask an independent financial advisor to explain the consequences of early retirement. You will need to understand the impact of Actuarially Adjusted Benefits (AAB).
What types of retirement are available?
There is more than just retirement at your NPA and early retirement. You may also apply for phased retirement, premature retirement, ill-health retirement and additional service after retirement (ASAR). It may be that one of these other forms of retirement are better suited to your situation and you should seek advice to guide your next move.
How do I apply for retirement?
Your application for retirement begins with an online form. It is best to start this process three to four months before you wish to receive your benefits. Therefore, if you are looking to retire in July 2020, your journey should begin in March. Make sure you are registered on My Pensions Online, where you can manage the process.
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.