early retirement and return to work...
Discussion
I realise this might attract some disparaging remarks about the nhs pension scheme.
I have been in the scheme since 1987, and been lucky enough for be on a decent salary for a good part of my service.
I currently work more than full time overall, in two permanent part time posts for different trusts. I am in a position where I could take my retirement benefits early (with approx 20% reduction at my current age (53)). I could then return to work in one of my posts. So far as it goes my income would be slightly reduced (not by much) but I could off set this by clearing a chunk of mortgage with lump sum (or I could buy a TVR and pay off less). I would have 2 days a week to do something less stressful.
In the short term this seems to be be a win, win situation,meaning that I could reduce my work hours with no significant income reduction (and have a TVR), although in the longer term my pension income would be reduced. I understand that the newer scheme could be left frozen until I get to 67, giving me a payrise then. Unfortunately , if I return to work I would not be able to continue to contribute to this part of the scheme.
Running the numbers through a calculator, it seems that currently contributing 11k of my gross salary, adds about 1k to my lump sum, and just over that to my annual pension "salary" per year of contribution
If I were to buy into a private pension scheme for the next 7 years is it likely that I would attract anything like that return - I know the NHS scheme and normal pensions are somewhat different.
I wonder if anyone here has gone through the nhs retire and return process and has any views on the relative merits?
I have been in the scheme since 1987, and been lucky enough for be on a decent salary for a good part of my service.
I currently work more than full time overall, in two permanent part time posts for different trusts. I am in a position where I could take my retirement benefits early (with approx 20% reduction at my current age (53)). I could then return to work in one of my posts. So far as it goes my income would be slightly reduced (not by much) but I could off set this by clearing a chunk of mortgage with lump sum (or I could buy a TVR and pay off less). I would have 2 days a week to do something less stressful.
In the short term this seems to be be a win, win situation,meaning that I could reduce my work hours with no significant income reduction (and have a TVR), although in the longer term my pension income would be reduced. I understand that the newer scheme could be left frozen until I get to 67, giving me a payrise then. Unfortunately , if I return to work I would not be able to continue to contribute to this part of the scheme.
Running the numbers through a calculator, it seems that currently contributing 11k of my gross salary, adds about 1k to my lump sum, and just over that to my annual pension "salary" per year of contribution
If I were to buy into a private pension scheme for the next 7 years is it likely that I would attract anything like that return - I know the NHS scheme and normal pensions are somewhat different.
I wonder if anyone here has gone through the nhs retire and return process and has any views on the relative merits?
Back of a fag the NHS seems the best bet.
You’d get about a £90k pot, assuming 5% return, over 7 years and paying in £11k.
Based on the regulatory 20:1 + lump sum valuation for FS schemes you’d be looking at adding £7k pa and a £7k lump, assuming I’ve read your post right, so £147k equivalent, or at least deemed to be.
That said if leaving funds to the family, or greater flexibility is more important there could be good reasons to explore the other options.
Seek some qualified, independent advice, but be prepared to pay a fee.
You’d get about a £90k pot, assuming 5% return, over 7 years and paying in £11k.
Based on the regulatory 20:1 + lump sum valuation for FS schemes you’d be looking at adding £7k pa and a £7k lump, assuming I’ve read your post right, so £147k equivalent, or at least deemed to be.
That said if leaving funds to the family, or greater flexibility is more important there could be good reasons to explore the other options.
Seek some qualified, independent advice, but be prepared to pay a fee.
The prior NHS Pension Scheme was exceptionally good, the new Scheme only average. My inclination would be to build up as much as possible whilst a member of the Old Scheme, which will mean staying put for a few more years. 53 is young and the 20% reduction, whilst logically reasonable, is a big hit.
In other words, do a real evaluation on a year by year basis of what you'll be giving up by coming out of the Old Scheme, then decide.
R.
In other words, do a real evaluation on a year by year basis of what you'll be giving up by coming out of the Old Scheme, then decide.
R.
The Leaper said:
The prior NHS Pension Scheme was exceptionally good, the new Scheme only average. My inclination would be to build up as much as possible whilst a member of the Old Scheme, which will mean staying put for a few more years. 53 is young and the 20% reduction, whilst logically reasonable, is a big hit.
In other words, do a real evaluation on a year by year basis of what you'll be giving up by coming out of the Old Scheme, then decide.
R.
Yeah the maths is the key, I guess. In other words, do a real evaluation on a year by year basis of what you'll be giving up by coming out of the Old Scheme, then decide.
R.
quitting next summer would see me loosing about 16k of lump sum and 4k of annual pension in the 1995 scheme - further service doesn't add to this pot, but with each year I give less away. up to age 60
In the new 2015 scheme, each year does add to the pot (as i posted previously) . but you need to stay in to 67 to get all the benefit (at 55, 50% is given away, but It can be left frozen to a later age)
after tax, the pension contribution I would no longer be paying on the one remaining job would be about 5k pa. When you look at it this way it doesn't seem so attractive in the longer term I guess. (which is a slight concern, although the roar of a blackpool rocket is tempting). Alternatively I could just drop some superannuated work, taking a hit just now but giving me the free time I would like, but in the short term would leave me low on funds for super unleaded.
the things that set me on this track were the number of folks I know who struggled on to normal retirement age and are too knackered to enjoy their freedom, or do not even make it.
sawman said:
the things that set me on this track were the number of folks I know who struggled on to normal retirement age and are too knackered to enjoy their freedom, or do not even make it.
I’m with you on this.Funeral yesterday, another on Thursday this week: that’ll be four in less than 12 months.
Two under 55, the oldest about 68.
.....I’m feeling my own mortality very keenly this year
Got to plan for tomorrow, but by heck you’d best live for today!
sawman,
Yes, I know what you mean about "time left" etc. I had a plan to retire at 61 after 33 years at my employer and did so. Being in a decent final salary scheme and no early retirement factor applied helped so did the very generous leaving service financials at the time. That was 14 years ago and I have to say life's been very good over the period.
It looks like you have the numbers under control and know the effects of retiring early in your case.
R.
Yes, I know what you mean about "time left" etc. I had a plan to retire at 61 after 33 years at my employer and did so. Being in a decent final salary scheme and no early retirement factor applied helped so did the very generous leaving service financials at the time. That was 14 years ago and I have to say life's been very good over the period.
It looks like you have the numbers under control and know the effects of retiring early in your case.
R.
sawman,
Yes, I know what you mean about "time left" etc. I had a plan to retire at 61 after 33 years at my employer and did so. Being in a decent final salary scheme and no early retirement factor applied helped so did the very generous leaving service financials at the time. That was 14 years ago and I have to say life's been very good over the period.
It looks like you have the numbers under control and know the effects of retiring early in your case.
R.
Yes, I know what you mean about "time left" etc. I had a plan to retire at 61 after 33 years at my employer and did so. Being in a decent final salary scheme and no early retirement factor applied helped so did the very generous leaving service financials at the time. That was 14 years ago and I have to say life's been very good over the period.
It looks like you have the numbers under control and know the effects of retiring early in your case.
R.
Gassing Station | Finance | Top of Page | What's New | My Stuff