April to June are the months that are busiest for applications for retirement. It takes two to three months to process a retirement application; therefore, choices must be taken now.
Choosing when to retire is tough. There are financial consequences for your lifestyle and your pension and consequences on how you spend your time. You may not feel like you have the energy for the classroom anymore, but you are not ready to be put out to pasture.
Can you afford it?
Working out if you are ready to apply for retirement requires some research. Your first stop might be with an independent financial advisor, as you may need to know if retirement is an affordable option for you.
When you retire early, your benefits are actuarially reduced. You are expected to claim your pension for longer, so this is considered. You will also have accrued fewer years of pensionable service, so your benefits might not be as high as you hoped.
While the calculators on the Teacher Pension Scheme website are useful, you will need the help of an advisor who can work through the calculations to get accurate and indicative figures.
Still want employment?
The other question is more about how you spend your time in retirement from teaching. It might be that you reduce your hours in the classroom rather than full retirement. This choice can have an impact on your pension benefits, too.
Alternatively, you may leave teaching but choose other employment. Depending on the employment you choose, you could impact your pension benefits. Consequently, working out how much you will earn by taking employment requires some detailed discussion with an independent financial advisor. It is worth remembering that the Teacher Pension Scheme can only provide you with factual-based information and not offer advice or guidance on how you might act.
Talking with your employer
Finally, you will also need to negotiate your retirement date with your employer, and your application for retirement will need to be endorsed by them. While they can only refuse your request for 6 months, you may want to talk with your headteacher before submitting your forms to your administrators in your school.
The content in this article was correct on May 29th 2022. 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.
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