Ten investment tips for teachers taking early retirement

27th October 1995 at 00:00
1. Take your time in deciding how to invest your lump sum; decisions made now can affect you for the rest of your life.

2. Don't leave your lump sum in a bank or building society current account for too long - most current accounts pay little or no interest.

3. Plan your investment strategy before your retirement date so that you are ready to start investing soon afterwards to make the most of your capital.

4. If you don't have time to plan before you leave - transfer the money into a high-interest instant access account such as a Postal Account as a temporary measure.

5. Try to work out how much income you will need from your lump sum by projecting income and outgoings for the year ahead.

6. Think carefully before paying off your mortgage. You may be left with little or no capital and need to raise funds in future, and you could both lose tax relief on the interest and be hit by penalties for early redemption.

7. The pension is index-linked to inflation but the lump sum isn't. To preserve the value of your capital some of your funds will need to be invested for growth.

8. Keep enough funds available in instant access acounts to cover emergencies and impulse expenditure.

9. Make use of tax-free investments such as TESSAs, PEPs, and National Savings Certificates, but don't let tax treatment alone dictate your investment choices.

10. Go for a variety of different investment types and aim for a balance between risk and reward. Invest for the short, medium and long-term to enjoy all of your retirement.

Log-in as an existing print or digital subscriber

Forgotten your subscriber ID?

Subscribe

To access this content and the full TES archive, subscribe now.

View subscriber offers

Get TES online and delivered to your door – for less than the price of a coffee

Save 33% off the cover price with this great subscription offer. Every copy delivered to your door by first-class post, plus full access to TES online and the TES app for just £1.90 per week.
 
Subscribers also enjoy a range of fantastic offers and benefits worth over £270:

  • Discounts off TES Institute courses
  • Access over 200,000 articles in the TES online archive
  • Free Tastecard membership worth £79.99
  • Discounts with Zipcar, Buyagift.com, Virgin Wines and other partners
Order your low-cost subscription today