You may have a distinct feeling that you are meant to be doing something. Each month, a massive chunk of your salary gets paid into a pension. You are aware of the commonly held view that this pension for teachers is a great deal. Although the money extracted for contributions are useful to your future, you are also aware you could do with more money to live comfortably right now. Alternatively, you might be in a situation where you have some disposable income. Is your pension the best place to hoard this extra cash?
All these questions reflect a need to manage your pension. You have control over aspects of your pension that could maximise your earnings now and in the future. But, what issues should you be making decisions about?
Pension benefits
You may want to make choices that will increase your benefits down the line. You want to live a comfortable retirement, and you are willing to make sacrifices now. You could make the most of a lump sum in retirement that you could invest in a money-making plan. There are ways of accruing more years on your pension so that your yearly income from your pension is higher.
Changes to your lifestyle
You may want the option to defer or withdraw from the pension, as you have chosen to leave teaching. This may be one of those times when you seek independent financial advice to guide you in how to use the pension you have accrued. Alternatively, you could have decided to work part-time, and you want to know how this will impact your pension.
In the event of difficulties
You may experience ill health and need to know how best to access benefits. It may be that you have recovered from a period of ill health, and you need to seek advice on what the impact of re-employment in a school would mean. Equally, you will want to name your dependents in the case of the worst happening and who will benefit from any death grant available.
Keeping up to date
Managing your pension may be much simpler than all of this. You may just want to keep up to date on your latest statement and the amounts you can expect in retirement. To be forewarned allows you to shape a lifestyle that will bring you contentment and security.
The content in this article was correct on 10th February 2020. 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.