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  • FIRST POST
    • nellis10
    • By nellis10 19th Feb 17, 9:37 AM
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    nellis10
    MFW & Retirement Planning on a Single Income
    • #1
    • 19th Feb 17, 9:37 AM
    MFW & Retirement Planning on a Single Income 19th Feb 17 at 9:37 AM
    Hi everyone,

    Longtime lurker/infrequent poster and all round fan of MSE back to post a wee diary to become mortgage free and plan for retirement in the next 15 years!

    I've recently been panicking about retirement and putting figures into the pension calculator and it is scaring me senseless!! So much so I don't know what to do first. But DF/MF is the first step!

    A little bit about me:
    I'm 46 (very soon!), divorced mum of 1 tween boy.
    I have a house worth about £80K with a mortgage of £67K.
    Mortgage currently 17.5 yrs remaining at 3.74%
    Going through remortgaging with First Direct for a 2 year fixed at 2.29%

    I currently pay £500/month towards mortgage of which £436 is actual repayment and the rest is a little overpayment.

    I have a car I own outright (just!!) which is 7 years old and runs fine.

    My house needs a lot doing to it, but I got central heating and rewiring last August and so I have some 0% debt (£3450) that I am paying off (central heating costs - I had NONE in the house just storage heaters, and a new boiler) at £550/month and I hope to have this paid off by June (if I get my bonus this March)

    I am following the Dave Ramsey Baby Steps so once the debt is gone, I am putting the £550/month into my Emergency fund for the rest of the year. I already have £1000 in EF as Baby Step 1.

    So from January 2018 my plan is to throw the £550 at the mortgage and be mortgage free some time in 2023.

    Then I plan to use the £550/month to invest for 15 years until I am 67/68 and can retire.

    So basically the sooner I am DF and MF, the sooner I can get my retirement plan underway and retire sooner than the state pension age of 67.

    Wish me luck!
    Nat.
    Last edited by nellis10; 20-02-2017 at 12:10 PM. Reason: Clarification
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
Page 4
    • edinburgher
    • By edinburgher 26th Feb 17, 4:22 PM
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    edinburgher
    I think I'm allowing for 3%, don't want to stretch things by assuming more.
    • nellis10
    • By nellis10 26th Feb 17, 4:23 PM
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    nellis10
    I think I'm allowing for 3%, don't want to stretch things by assuming more.
    Originally posted by edinburgher
    True...just makes it all the more of an uphill climb lol.
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • edinburgher
    • By edinburgher 26th Feb 17, 5:10 PM
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    • 54,290 Thanks
    edinburgher
    True...just makes it all the more of an uphill climb lol.
    Originally posted by nellis10
    Aye, but if I'm wrong there's some lovely lovely upside ☺
    • nellis10
    • By nellis10 27th Feb 17, 8:36 AM
    • 1,314 Posts
    • 3,059 Thanks
    nellis10
    Things wot I have done today to become a millionaire...
    • Given myself a near heartattack. My FD Easy Saver swept all my money into my savings account and left me overdrawn this morning by accident. Had plenty of funds but they went to the wrong place. Phone FD and they were brilliant. I moved the money back into the current account and there will be no charges. I've also stopped the monthly "Sweep" of my current account to prevent this happening again!
    • Phoning the Pension People to find out why there are payments of over £600 coming out of my pension alongside charges of a more reasonable £30
    • Tax Man has cashed my checks (quickest cheque cashing in history!!!) so phone HMRC today to find out what my new 2017/2018 tax code will be and how the rebate from 2016/2017 will affect me, if at all.
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • nellis10
    • By nellis10 27th Feb 17, 8:51 AM
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    nellis10
    OK phoned the tax man.

    The cheques have not been credited to my tax account as yet, but will probably take a few more days.

    Regarding my pension relief, the £844 is for 2017/2018 built into my personal allowance.

    If I am upping my pension to 20% it takes me into the 20% tax bracket, so I will need to phone the tax man once I up my pension, and tell them to take the £844 off my code.

    Does any of that make sense?
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • nellis10
    • By nellis10 1st Mar 17, 7:56 AM
    • 1,314 Posts
    • 3,059 Thanks
    nellis10
    Things wot I have done today to become a millionaire...
    Nowt.

    Well it's the start of a brand new "BIRTHDAY" month for me.

    Most of my Direct Debits come out today and tomorrow which brings my rather healthy bank balance down to buttons & washers!!

    I'll be taking out the cash for the month for groceries/petrol etc and I'm hoping to save about £50 cash from that in my mattress savings

    The aim of the cash savings is to tide me over in my "cash envelope" system for little emergencies like running out of loo roll at the end of the month, or needing an extra £50 because my child has torn their school uniform...those sorts of little emergencies that aren't worth dipping into the proper emergency fund for.

    It's also payrise and bonus month. I've been told I'll be getting both, but not how much as yet. I'm hoping the bonus will get me to mostly debt free by the end of the month and then just a few more payments to totally debt free.

    Being debt free is the first rung on the ladder to being a millionaire!!!
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • edinburgher
    • By edinburgher 1st Mar 17, 8:39 AM
    • 10,427 Posts
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    edinburgher
    You'll be a millionaire soon enough.

    I love that your EF has an EF
    • nellis10
    • By nellis10 1st Mar 17, 8:47 AM
    • 1,314 Posts
    • 3,059 Thanks
    nellis10
    You'll be a millionaire soon enough.

    I love that your EF has an EF
    Originally posted by edinburgher
    I will have 3 Emergency funds eventually...

    1. Little bit of cash for extras at the end of my monthly budget
    2. Emergency fund for little accidents, breakages and gubbins
    3. Full Emergency fund for redundancy, illness or natural disasters

    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • nellis10
    • By nellis10 4th Mar 17, 10:29 AM
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    nellis10
    OK, so the remortgaging is approved subject now only to the valuation of the property.

    The surveyor is coming out on Tuesday so fingers crossed they value it at, at least £80,000.

    That would mean the interest rate would come down from 3.74% to 1.94% for 2 years fixed.

    I'm going to keep the direct debit at £500 thus I'll be overpaying by about £110/month.

    If I keep that level up, I will be able to pay off the mortgage 5 years early, in 12 years. Still seems like a really long way off, but it also means I can put money away into the pension and the investments at the same time.
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • FacelessNumber
    • By FacelessNumber 4th Mar 17, 5:03 PM
    • 352 Posts
    • 1,926 Thanks
    FacelessNumber
    Fingers crossed for you! We had our valuation done and ours had increased in value quite a bit, so hopefully yours does the same!

    • nellis10
    • By nellis10 11th Mar 17, 5:52 AM
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    nellis10
    Things wot I have done today to become a millionaire...
    I have made it to 46 years of age!! Woohoo!!

    Got news of 5% payrise and 10% bonus.
    So first things first - clear the remaining debt at the end of the month.

    Then start the full emergency fund saving - that will take me the rest of the year.
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • FacelessNumber
    • By FacelessNumber 11th Mar 17, 4:51 PM
    • 352 Posts
    • 1,926 Thanks
    FacelessNumber
    Good news on the payrise and bonus! Well done!


    And Happy Birthday!

    • edinburgher
    • By edinburgher 11th Mar 17, 7:48 PM
    • 10,427 Posts
    • 54,290 Thanks
    edinburgher
    Well done (and happy Birthday)
    • nellis10
    • By nellis10 14th Mar 17, 8:18 AM
    • 1,314 Posts
    • 3,059 Thanks
    nellis10
    Things wot I have done today to become a millionaire...
    I now own 0.5486 of a single fund thingy with VSL80!!!

    It's my very first ever proper fund purchase and I am soooo excited!!

    I am officially an equity owner!!
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • edinburgher
    • By edinburgher 14th Mar 17, 8:31 AM
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    edinburgher
    Congratulations! It's a good core fund (high up the risk threshold), it has served DD well, albeit in benign market conditions.
    • nellis10
    • By nellis10 14th Mar 17, 8:36 AM
    • 1,314 Posts
    • 3,059 Thanks
    nellis10
    Congratulations! It's a good core fund (high up the risk threshold), it has served DD well, albeit in benign market conditions.
    Originally posted by edinburgher
    I'm setting and forgetting it for 15 years. Only starting with £100/month and will up eventually to about £250 or £300.

    I figure the fan will be hit sometime during the next 15 years and I need to just ride it out.

    Will also swap down to VLS40 or similar after 15 years and maybe move to an inc vs acc account that that time.
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • FacelessNumber
    • By FacelessNumber 14th Mar 17, 8:41 AM
    • 352 Posts
    • 1,926 Thanks
    FacelessNumber
    Congratulations! How did you go about deciding what to invest in? Did you use an advisor? I only ask because I want to start but don't know where to!

    • nellis10
    • By nellis10 14th Mar 17, 10:45 AM
    • 1,314 Posts
    • 3,059 Thanks
    nellis10
    Congratulations! How did you go about deciding what to invest in? Did you use an advisor? I only ask because I want to start but don't know where to!
    Originally posted by FacelessNumber
    I have 2 pensions which are fairly balanced (ie default ratios from set up) so I figure they will weather most storms by the time I am pensionable.

    I will be building up a cash reserve (slowly) over the next 15 years and therefore I believe I can afford to take a higher risk with VLS80. Every 5 years I will move a % of my overall risk to a lower risk - at the moment it's 100% in an 80% equities fund to reduce exposure.

    I can't predict the market, I have 15 good years of earnings left and I have DC pensions in place for pension years.

    That's the philosophy I am following...rightly or wrongly lol
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
    • edinburgher
    • By edinburgher 14th Mar 17, 10:58 AM
    • 10,427 Posts
    • 54,290 Thanks
    edinburgher
    Have you read any of the articles floating around that look at rising equity glidepaths in retirement (Kitces etc.)?
    • nellis10
    • By nellis10 14th Mar 17, 11:00 AM
    • 1,314 Posts
    • 3,059 Thanks
    nellis10
    Have you read any of the articles floating around that look at rising equity glidepaths in retirement (Kitces etc.)?
    Originally posted by edinburgher
    Say wha????
    Speak English man!! (Or woman, or non-binary person, who am I to assume anyone's gender! )
    Nat
    Goals:
    Baby Step 1 = £1000 EF
    Baby Step 2= Debt Free by Apr 2017
    Baby Step 3 = Full EF £1170/£8000
    Mortgage Free by 2023!!
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