Early-retirement wannabe

Snakey

Only the LTA gets the uplift.

I have Fixed Protection and under current rules it is likely that by the time I get to access my pension the LTA will have overtaken the protected amount, rendering it pointless.

Or, they could abolish it altogether and I'll be kicking myself for not having magically known this and carried on shoveling money in throughout.

The reason I took it anyway, is that they could just as easily reduce the LTA once more, or cap the lump sum forever at 25% of this year's LTA (in which case hopefully existing protections will also protect against that).

UK Governments cannot resist messing around with pension rules. Long-term planning is impossible... and yet we need to plan for the long term nonetheless. All you can do is make decisions that are sensible based on current knowledge and where the downside of a different outcome won't damage you too much, and hope for the best.

jamesd

Just the standard allowance. You get the higher of the two so if it's cut you get yours back.

gfplux

aldershot wrote: »

The !!!!!!!s have made me redundant :j

Last day will be the 11th August (if I can be bothered to go in).

Mrs Aldershot retired a year ago and now she's going to have me for company. She said she's fine with this as long as I'm out of the house between 9 and 6 We'll be 55 and 54 later in the year. I put some numbers on another thread last year so I won't repeat them here but I think we we'll be OK. I think it's going to take me a few months to get my head around this as I've been stressing about this for about a year and it's not gone away.

How do others answer the endless number of people (friends, relatives and (soon to be ex) colleagues) who ask "what are you going to do, as if going to the office is the only function one can possible have?

Don't try and explain as it is far to early. Those asking the questions in some instances will be genuinely curious, just as probably you are.
I have been retired over 20 years and what I do with my day now is different to the first 6 months.
For me there was a sense of loss but that soon passed. It also took some time for ME to give ME Permission to do NOTHING. When you have always been very busy just doing nothing can be a guilty pleasure that the guilt destroys.
Don't make hasty decisions, just enjoy the freedom.
Good Luck.

AnotherJoe

To all recent retirees, something you may have forgotten to do, I did until this morning.

Inform your car insurer of your change of occupational status from badger wrangler (or whatever) to "retired", as technically you could be invalidating your insurance.

Now that I'm no longer wrangling badgers, (and mileage dropped from 10k to 8k) my insurers are refunding me £7 (pro rated, my current policy only has 3 months to run) , which will help me bridge the gap to SP

I can also save a tadge next renewal, wont need a guaranteed hire car any more.

aldershot

madeinireland wrote: »

Just one other question. Is there anything else that people would recommend that I should be doing as a last minute thing to prepare?

I read a lovely comment about early retirement, "When I left the office, it's the little things I miss the most.......pens, paper clips, post-it notes...."

Raid the stationery cupboard.....

ianthy

Biggest recent pleasure watching Wimbledon in the afternoon at home... pure bliss!

davieg11

Linton wrote: »

To answer your questions one by one:

1) I retired at 56, 5 years ago.

2) Serious planning - about 6 years previously. However from about 35 I was maxing out on pension contributions and had started on serious investing from around 45.

Driver - I realised that I would be in a position not to need to work and the increasing stress associated with a well paid job was becoming less justifiable. Anyway IMHO there are better things to do with ones life.

3) Strategy:
a) Decide how much income you want to retire on. To do this you need to know how much your are spending, on what, now. Just budgetting bottom up isnt a good guide.
b) Have good money and investment management tools so you know what you've got in detail without the need to repeatedly work it all out from scratch.
c) Put all your spare income into tax free investments - ie shares and funds. Doing this is vital. Whether those savings are ISAs or Pensions is a secondary matter.
d) Spend hours on a detailed plan to cover you and dependents until you are 90 at least. I used MSMoney lifetime planner, but its doable with a spreadsheet. You will need to have a column (or row) per year and calculate inflation adjusted assets at start,income and expenditure, assets at close. Make reasonably pessimistic assumptions on inflation and investment reuturns - I used 3% and 4%. Also understand how much increase in inflation/drop in returns would seriously compromise the plan.
e) Educate yourself on investing, pensions & annuities etc
f) From the plan you know what asset base you need, so when you get there - jump, ideally at the same time as your employer is offering voluntary redundancies.

4) I planned on a 10% increase in expenditure, rising with RPI. It's better to work from expenditure rather than income.

5) I dont have any major concerns, though halfway through the credit crunch I was possibly getting a little worried.

6) Despite the credit crunch progress is much better than planned. My total assets in cash terms are larger than when I retired. I am having difficulty spending as much as planned, though trying hard! It is clear to me that RPI is a very pessimistic measure.


Retirement isnt just a financial matter - you do need to know beforehand how you want to use your time in the long term. There would be nothing worse than retiring and then spend the rest of your life watching daytime TV because you have nothing better to do.

I notice you have retired for almost 12 years now Linton and are the most knowledgeable person on this board. I am 43 and now contributing 25% of my salary with salary sacrifice. Like you I would like to get started on serious investing. I know from your posts you do not like revealing what you invest in as people copy you and I know you like active investing like me. So any chance of now revealing what your investments are? (not p2p which you like as it's not available to me), to help novice investors like me. I was in my works Standard Life Managed Pension Fund and after loads of reading and following this forum, I have settled on Baillie Gifford Life Managed Fund 75%, SL International Equity Fund 15%, SL Old Mutual Mid Cap 5% and SL Schroder US Mid Cap 5%. Is this better? What would you recommend?

fatbeetle

18 weeks to go for me. Then 5 weeks of paid leave, before I retire officially. (I'll be 59.) :j

We will live on a savings pot for 6 years, before our pensions/superannuation kick in.

ams25

Long time lurker...love this thread. Finally joining in!!

Stopped working nearly a year ago now (age 52) after 30+ plus years of a mostly intense and stressful work (do we get more burned out than we realise or acknowledge?). Honestly can say I've not missed work for a single second which for an one time (not lately though) workaholic surprises me a bit. Still have quite young kids (primary age) and my wife just went back to work after a career break (she's younger) so not sure I'm retired really but I have retired from the corporate world and it feels great.

Congrats Marinelife on reaching your (final) destination...look forward to reading the blog about your journey onwards.

Linton

davieg11 wrote: »

I notice you have retired for almost 12 years now Linton and are the most knowledgeable person on this board. I am 43 and now contributing 25% of my salary with salary sacrifice. Like you I would like to get started on serious investing. I know from your posts you do not like revealing what you invest in as people copy you and I know you like active investing like me. So any chance of now revealing what your investments are? (not p2p which you like as it's not available to me), to help novice investors like me. I was in my works Standard Life Managed Pension Fund and after loads of reading and following this forum, I have settled on Baillie Gifford Life Managed Fund 75%, SL International Equity Fund 15%, SL Old Mutual Mid Cap 5% and SL Schroder US Mid Cap 5%. Is this better? What would you recommend?

Wow! You are quoting a posting from 2010.

I wouldnt claim to be anywhere near the most knowledgeable person on the board. Others have a far deeper knowledge than me - check anything I say before acting on it! My main advantage is that I am one of the early people to have gone through the process since the current flexibilities became widely available.

I dont think there is anything fundamentally wrong with P2P. Its two main disadvantages at the moment are the restricted availability of ISAs and the fact that it has yet to experience a serious economic downturn so the level of risk is unclear. For these reasons I dont see it yet as a mainstream part of retirement investing.

I adopt a strongly top down asset allocation approach rather than trying to pick lucrative shares or funds. For that reason my particular choice of investments shouldnt be seen as a recommmendation. Each investment bought should have a well defined and ideally unique objective. As there are three quite distinct objectives I have set up three different portfolios:

1) Growth
2) Income
3) Wealth preservation

Of these only (1) is really relevent to long term investing prior to retirement.

The funds/% allocation in the Growth poerfolio is:

Artemis Global Growth I 20.3
Schroder QEP US Core Acc 15.5
Threadneedle Euro Small Co Z 11.7
F&C US Smaller Companies C Inc 7.8
Jupiter European Opportunities Trust 7.5
Fidelity Asian Values PLC 7.1
JPM Nat Res C 6.5
Baillie Gifford Japan SC B 5.1
Marlborough Special Situations P Acc 4.9
Stewart Invest Asia Pac Leaders B Acc 4.2
Neptune UK Mid Cap C Acc 4.1
AXA Framlington Health Z 2.8
Blackrock Frontier Trust 2.5

People may notice there is some duplication of funds within the UK, Asian and European sectors. This is largely due to indecision as to which way to go. The global Artemis fund mainly exists to provide general large company exposure as most of the other funds are heavily weighted to small companies. The Schroder US fund exists to provide extra US allocation as small company investment there is not particularly advantageous.

Some overall statistics:
US/Canada: 37%
Europe (ex UK): 25%
Asia/Pac (ex Japan): 16%
UK: 15%
Japan: 7%

Large companies: 45%
MidRange: 30%
Small: 24%

My next rebalancing will probably increase the Large Company % somewhat possibly via industry sector funds.