Pensions Planning: The NUMBER

michaels

thickasabrick said:

michaels said:

If we switched from gas to resistive electric heating it would cost us £2900 extra per year in energy cost which would very rapidly pay for extra insulation, heat pumps, replumbing etc etc.

The advantages of triple glazing, insulation almost up to passivhaus standards and a modern house (1987), extra £292 per year assuming that resistive electric heating swap in replacement for the gas boiler consumes the equivalent 242 units per month. That's a 4 bedroom with about 160 m2 or 1700 square feet , smart heating with individual control of all the radiators and boiler in the house.
I think I would probably switch to a combination of heat pumps and far infrared heating panels if I switched from gas to electric and add solar panels as part of the switch. 

Supply Unit rate p per kWh Standing charge p per day Units consumed Units consumed cost £ Days Standing charge £ Average cost / day Per Annum Gas 2.546 14.7 242 £6.16 32 £4.70 £0.34 £123.93 Electricity 13.125 14.7 242 £31.76 32 £4.70 £1.14 £415.95

40% of our usage is hot water which could only be reduced by kicking the kids and wife out of the house and going dirty...
Yours is very impressive, in theory we are EPC B and similar floor area but do heat the whole house 24/7.

savingmore

I love this pensions thread.......funny how it’s morphing into an energy thread 🤣🤣😢😢😢.   

Anyone revising their number now that we have a roadmap out of lockdown?  anyone retiring sooner, or delaying?

ex-pat_scot

savingmore said:

I love this pensions thread.......funny how it’s morphing into an energy thread 🤣🤣😢😢😢.   

Anyone revising their number now that we have a roadmap out of lockdown?  anyone retiring sooner, or delaying?

Lockdown is redoubling my ambition to stop in 3-4 years.
I've worked away from home (long hours, stressful job, high pay) for years, and always previously described my perfect job as how the last year has been ie WFH, time with the family, some leisure time. 
I'm not looking forward to returning to some sort of hybrid arrangement - the travel, costs, wasted time and being away from home.  It's inevitable that I'll have to endure some of it over the next few years though, before I get to 55 and able to peer into the opened door of the pension. It's become a compelling thought, that I might be able to live as I do now, without the workload and pressures, and with the day to day freedoms which should be returning for my children.
None of the above is really finance/ NUMBER related. I've no idea what will happen to the markets between now and 2024/25, never mind what will happen in the 35 odd years of my retirement.
I figure my number is #probably around £4,000 net per month but will change over time as my children pass into adulthood and independence. I haven't really revised the thinking, as I rather expect that we will adapt to whatever challenges come our way- be they financial, family, health or whatever.

I'm cautious about commenting on energy, as it's a touchy subject!
We are deep in the N Yorks moors, on heating oil, which is very volatile in price (and delivery times).
One of my many early projects in retirement will be to address a more sustainable energy strategy for us.
1. draughty large house, which we struggle to heat even with a large boiler
2. 1930s Aga (family heirloom) that is non-negotiable
3. insulation
4. solar
5. electric car. Next door neighbour has just bought a BMW i3, so I'm keen to see how they get on with it.

trevjl

Lockdown has made me realise I can retire and be very busy. I always thought this but when I was offered furlough if I wanted it beginning of January I bit their hands off, never having had more than 3 weeks off ever in nearly 42 years of continuous work.
I will go back next month, see how things go, if the overseas travelling kicks off again then I will carry on, but if I get stuck in the workshop putting up with head office BS and the 'elf n safety" brigade I will probably pack it in 

westv

trevjl said:

Lockdown has made me realise I can retire and be very busy. 

What is keeping you busy when we effectively can't go anywhere?

trevjl

DIY, dog walks, cooking,  have an elderly mother that needs daily care visits and I am general maintenance dogs body (and chairman) of my local cricket club so have been working up there for much or the time (permitted under the guidelines before someone says it ! ) Don't know how I ever found to time for work.

sheslookinhot

trevjl said:

DIY, dog walks, cooking,  have an elderly mother that needs daily care visits and I am general maintenance dogs body (and chairman) of my local cricket club so have been working up there for much or the time (permitted under the guidelines before someone says it ! ) Don't know how I ever found to time for work.

That’s a very regular experience from almost everyone I know, or hear of, who has retired. Roll on early 2022, if God spares me.

westv

I think I would prefer a retirement of relax, relax, relax. 

hugheskevi

Our retirement date is now entirely dependent on COVID, the timetable is:

• Comprehensive financial assessment in April with new financial year, with spreadsheets set up to easily monitor position very accurately throughout 2021/22 as things like stamp duty change and mortgage assistance impact on housing market, and markets and exchange rates may move one way or another quite sharply at some point
  
• Check how UK is opening up internationally in June
  
• Check how world, and especially USA and Canada where we plan to travel to first, is opening up internationally in August/September
  
• If everything is looking good, take the Go/No go decision at end of September to retire in December/January, or push things back 6 months.

The whole COVID period has been great for giving insights into retirement, as a sort of dress rehearsal. I'm particularly interested to see the financial assessment of 2020/21 when I update spreadsheets at the end of the month, which should have a much lower spend figure than usual. We did manage a week and a half holiday in France and Spain last summer (total cost £1,750 which I carefully recorded as an exceptional item for the year), but that was about it, so spending is much lower than usual and will give a good 'baseline' expenditure figure to work with.

COVID removed any temptation to retire earlier than planned, so the 'window' of retirement between minimum required and maximum that could be desired is smaller than it would otherwise have been, but I doubt we would have retired any earlier if there had not been COVID around - although that just reflects that we are only now approaching the more central parts of the spectrum between minimum needed and maximum desired.

DairyQueen

savingmore said:

Anyone revising their number now that we have a roadmap out of lockdown?  anyone retiring sooner, or delaying?

Our number has been revised at least a couple of times each year since 2016. Our non-discretionary expenses have been a finger-in-the-air job as we had no idea where we would be living.

Just as we were preparing the first of our two (small) properties for sale, Covid hit. We had anticipated that we would be in our new home by Christmas to coincide with OH's retirement.

Yes, well, things didn't go quite to plan.

It took 6 months from offer to complete the sale, and it will be almost as long for the purchase  to complete (next week). In the interim Mr DQ has been WFH in our second, small property. I hadn't realised how much space two adults and a cat need when together 24/7. Believe me, it's a lot more than you think. Covid has provided a good opportunity to find out exactly what we need in our new home (garden office for him, snug for me, a bathroom each, utility room for the cat).

In the absence of any fun things to do during a winter lockdown OH delayed his retirement until the end of this year, although I suspect he will go sooner now we have the new home, lockdown is lifting, and the weather warmer.

I have reduced our number to allow for the freezing of tax allowances. Even at an assumed (pre-pandemic) 2% annual inflation, this makes a significant difference when compounded over several years. I have also reduced the real growth on our investments to zero as I have assumed inflation at 3%, and low returns on assets, over the same timeframe. 

I am either pessimistic or cautious (answers on a postcard).

We are planning to take sufficient drawdown to max-out tax thresholds (BRT - Mr DQ, zero rate - me) before SP kicks-in. This will give us an income of around £52.7k against a requirement of approx. £46.5k in 22/23. The freezing of allowances coincident with our front-loading drawdown will reduce our net income but, If investments grow more than expected, then we will happily pay HMRC their extra bite of the cherry by breaking the thresholds.

Tax year 21/22 will be more expensive than we thought as we will back to supporting two properties and property one is significantly larger than the home that it replaced. Plus, we have some major refurbs. on property one to complete before property two is sold.

I was hoping for a turnkey new home but Covid also put-paid to that plan. A red-hot property market has meant a dearth of choice in our area so the new home has been chosen for location and potential rather than condition. I have several interesting projects (replacement bathrooms, kitchen extension and refit, garden office, outside repairs, new windows) to keep me busy for the rest of this year. Mr DQ will be equally busy working to pay for it 

All-in-all we consider ourselves very fortunate. We have (so far) managed to escape infection and have both been vaccinated. We have sufficient income to enjoy a decent home and lifestyle regardless of most vagaries of the economic and investment landscapes. We are optimistic about resuming normal life this year, and hope to still enjoy the retirement we had planned, just a year later than anticipated.