If you want to retire before 67...

[RoseThornside]

And your work pension only kicks in at 67, how do you find the years before 67? I am thinking I'd like to retire at 64 or 65, but I'm already in my late 50s. I have a small work pension that I can take at 67, and obviously the government pension will start then too.

How do I fund the 2 or 3 years before that? From savings? Or is there a better way?

We will be funding years between retiring and when we can claim any of our pensions using savings.

Part time (nice) little job and lodgers?

I retired early but the package gave me actuarially reduced pension so although not rich I manage fine.

If you can do it, go for it. I guarantee you won't regret it. I am sure others will be along with more information.

You could consider posting on Money Saving Expert, there is a good forum there about retirement and pensions if I recall correctly. Best of luck.

I'm in this situation - pension kicks in at 67 but I'd like to retire at 62.

I'm overpaying my pension so I can take it without penalty at 65, and I have another two pensions that kick in at 65 and 66.

The years up to 65 will have to be funded by savings. I've got roughly what I need (from a recent inheritance) but they are in the stock market so I'm watching them anxiously ...

Thank you all. Savings it is then! Will start trying to put as much as possible by.

I've a teacher pension, that I can choose to take earlier than 67, if I take penalties on it. But also an AVC I took out that I am considering taking early at 60, along a possible part time job or some tutoring while I wait for the other pencion to kick in.

Hoping to retire at 60 and take my NHS pension ( not currently working in the NHS ) and hope I can manage on that small amount until 67. It will be very tight though so I'm accepting I may have to do a part time job.

Save into your pension. Most tax efficient way to save as you’ll get the tax relief.

Best thing to do is reduce your outgoings.

So if your outgoings are low you will need less money.

My aims are to pay off my mortgage ASAP.

After this and if I've paid off any other debts I will only need approx £1k a month living expenses.

Then instead of stopping work completely work very part time, or even change your job to something you think you will enjoy more

The last 3 years have shown we never know what is in the future. Even if you think you've got enough to fund yourself until retirement there are no guarantees.

So easiest way is to decrease your outgoing. You savings will go way longer.

Only if you can get to that money when you want it. I can't access mine until 57 (10 years before retirement age) so I am putting some into savings to enable me to retire early 50s.

I've got a public DB pension and state pension that kicks in at 67 (or 68 I can't remember), but I've also started a private DC pension I can withdraw from from 60 to bridge the gap (hopefully) plus savings.

We were aiming for 60 but manged at just over 50.
We saved a lot, never paid interest on credit cards, loans etc other than our mortgage. Never borrowed money other than the house and never lived hand to mouth and paid into pensions and always made sure we had over 20k in the bak lat 25 years or so. Never bought a car on loan/lease etc and always paid off cc's no interest and taken advantages of money back etc, etc

When we were younger, me and DH often worked 50 hour weeks and did not throw our money away o cabs, eating out weekly etc.

nor have we done designer clothes, latest mobile phone etc

Now e can afford a lovely car, a Range Rover Sport the big version and rare car as these dont often have 7 seat dH told me and i drive a Mercedes SLK

Nice house, all done up, money in the bank and about 2 hols abroad per 12 months and couple of breaks in the UK

Trick is to plan early and the sooner you leave work the better.

I'm thinking of retraining in something I can do as a 'wind down' career such as counselling or coaching where I can offer sessions from home pick my hours etc and not be dependent on a corporate job as I am now .

Can you set up a pension that only lasts for 2 or 3 years then? I thought if I paid extra into my pension, the extra I paid would just join the rest of my money in the pot, which would then be paid out over my whole retirement? I am not a high earner, far from it, so if I chuck say £20k into my pension, how will that cover the years between 65 and 67? Surely better to keep it in savings and 'pay' myself £10k a year for those two years?

I have a DB (final salary) pension I'll take without penalty at 65. I've got a separate DC pension I'm ploughing cash into, and will take that as drawdown from 57 to bridge the gap. So yes, this pension lasts as many years as i want it to. OP this is far more tax efficient than saving cash.

blog.moneyfarm.com/en/pensions/what-is-pension-drawdown/?gclid=EAIaIQobChMIl4ajpbTZ_AIV-IFQBh1zBQ6VEAAYBCAAEgJrE_D_BwE

Thank you @SilentHedges. It's all so complicated but maybe I need to try and find an independent financial advisor? Always steered clear of them since in my 20s I was advised to take out a private pension instead of my work one when I worked for the local government! I had no idea at the time. 😐

If you pay into your pension you benefit from the tax relief. You don’t if you save into any other account. You get 20% tax relief which is technically free money from the government. Let’s say you pay in 10k. With tax relief you’ll end up with 12.5k.

if you are paying in via employer and using salary sacrifice you’ ll also get NI savings.

also look to see if your employer will ‘match’ any additional contributions you pay in.

bottom line - save into pension. At your age you can access from 55.

assumption is your pension is defined contribution, not a final salary,

My workplace pension is local government (I work in a school) but it's small because I work in admin and am term-time only. Also I can't take it till I'm 67. I don't think I can face doddering around at school till I'm 67. So I thought maybe I could finish at 65 (which in itself reduces the pittance I'll get monthly at 67!) but how to afford that 2 year gap.

Could you pay funds into a SIPP and then access that to bridge the gap.

Thank you @Galliano - am I allowed to pay say £20k into a SIPP and then take the entire balance of the SIPP over the 2 years I need it? Basically empty the account?

Through work I bought AVC (Additional Voluntary Contributions) Pension (I was working in a public sector organisation) - which helped me to retire early. Your workplace pension provider can give you more information about what they offer.

Thank you @LittleLlama - I have tried to ask but they are very firm that they won't give 'advice' and I just can't understand any of it from the information they will provide. 🙁

S&S ISA is useful for bridging a gap.
Some pensions have a flexible option from age 55 whereby you can reduce amount of work done, take some of the pension but continue working for the organisation.
Defined benefit pensions often have an early retirement option which then adjusts what you get each year, so the sooner you retire before Normal Retirement Age for the scheme, the less you get each year but you get it for longer.

Need to be careful about what is paid to a SIPP whilst you are in a Defined Benefit pension scheme. You want to avoid exceeding pension annual allowance (unless you earn quite a lot and have carry forward available).

Have a look at your last few pension statements for a PIA (pension input amount). Notice how that goes up each year, as it represents how much the benefit has increased. You may be able to calculate what the PIA is for the current year and then take that away from your total gross pay, then x0.8 to get the max that could be paid to SIPP in that tax year... but leave a margin for error.

Using AVCs can be easier as that is taken from your pay.

Union may have information about the pension scheme and what options are. Still not advice but they may have guidance documents.