Onwards to freedom!

edinburgher

Do you or Ms SSS have salary sacrifice pensions?

Mrs E still has one and we are looking to up her contributions to capture some of the fantastic unintended gains you are experiencing

I like the stability of my DB pension, but I always strangely enjoyed the ups (and downs) of having a DC pension. I have a pot of £40k or so ticking over in the background, but no new contributions for quite some time.

SuperSecretSquirrel

Hi Ed We both have salary sacrifice DC pensions. I'd love a decent DB pension, though I'm sure I would miss following the ups and downs. I think the security/certainty of DB would make that quite bearable though :rotfl:

edinburgher

Have you ever explored how much you can pay in using them before you get down to minimum wage levels of NI? It's insane! I think we figured Mrs E could pay in 47% of her wages and benefit from the tax/NI/student loan savings

Considering it after we remortgage

shangaijimmy

We have the best of both worlds. Mrs SJ has DB and mine a DC scheme. So some joy of seeing ups and downs with security of not seeing everything too!!!

edinburgher

shangaijimmy wrote: »

We have the best of both worlds. Mrs SJ has DB and mine a DC scheme. So some joy of seeing ups and downs with security of not seeing everything too!!!

It is a golden combination, we are lucky in that I have a smallish DC pot, a couple of DB pensions and Mrs E with DC.

We might not be as rich as two people on DB, but we'll have more flexibility and choices (touch wood)

SuperSecretSquirrel

OH is already at the salsac/minwage limit with her current 10% of gross salary pension sacrifice.

Once paid childcare is a thing of the past, I could sacrifice up to 55% of my gross (currently sacrificing 20%). Although a huge percentage, it would absolutely be doable - it would just mean less going into the S&S ISA.

If I were to do this, my pension contributions would increase by £958.62 per month, and my net take-home would reduce by £651.86 per month. To pull this off, my monthly S&S ISA funding would have to drop from £1k to £348.14. Overall I would be £306.76 per month or £3681.12 a year better off...

That near £3700 per year boost is nothing to be sniffed at! :eek:

I still don't think I'd go for it though. I don't like the idea of so much wealth locked away in a pension that can only be accessed from age 57 (at the very earliest). Fear of political risk I guess. That, and the fact that we might miss out on other opportunities by being pension rich and liquid poor - I'm thinking vaguely about something like BTL or small business startup costs. Nothing planned as yet, but who knows what the future might hold... A lot could change in those 22 years, so much so that it may as well be 100 years! :rotfl:

I might increase my pension contributions a little once the childcare vouchers are done with, but right now I think it'll be more like 30% than 55%. Thanks once again for the nudge to look into the numbers and consider our options

edinburgher

Childcare was horrendous, we're down to £50/MTH of vouchers now and it's lovely. We did, however, spend about £50k more on our house than a comparable local authority with dearer childcare, so swings and roundabouts

Your numbers sound very healthy, plenty of wiggle room

Karmacat

SuperSecretSquirrel wrote: »

I don't like the idea of so much wealth locked away in a pension that can only be accessed from age 57 (at the very earliest). Fear of political risk I guess. That, and the fact that we might miss out on other opportunities by being pension rich and liquid poor - I'm thinking vaguely about something like BTL or small business startup costs. Nothing planned as yet, but who knows what the future might hold... A lot could change in those 22 years, so much so that it may as well be 100 years! :rotfl:

I might increase my pension contributions a little once the childcare vouchers are done with, but right now I think it'll be more like 30% than 55%. Thanks once again for the nudge to look into the numbers and consider our options

Options are crucial, you're *so* right - when I retired as a self employed therapist, that was my third career - the other two were office-based export finance admin and office-based charity admin, nothing that anyone would ever *aim* at early on in their career, but all have been invaluable in one way or another. I took long breaks between each clump of careers too - 3 months batting around London, two months in Turkey and Greece, and long holidays of 3 weeks were pretty normal for a while. It takes you to a different world

And to do what you're doing, doing that while building up the Ultimate Freedom Pot, is brilliant

SuperSecretSquirrel

Remind me to never ride the swings in that particular playground Ed! :undecided Still, you should take the wins where you can

KC, options and freedom of choice are what I think it's all about Those breaks in between careers sound wonderful! My toe dipped in the world of freedom currently equates to a four day week, and as of last week half the school summer holiday booked off work. That'll do nicely for now I can't wait to spend the summer doing fun stuff with the children and as a family. It seems every outing costs a noticeable amount of money in the winter (and autumn and spring :rotfl:), but in summer, provided we get the weather, all that's needed for a cheap day out is some fuel in the car and some ice cream money in hand

Courtesy of the recent foray into pension discussions, I've opted to squeeze a further 5% salary sacrifice juice out of my monthly wage Near enough 10k per annum will be paid into my pension as a result. It would be nice to see the pot break into six figures in the next couple of years! Can't set a target as we're at the mercy of the great roulette wheel, but it would be nice I'm sat at just over 80k right now, so if everything were to remain steady for a couple of years it would happen - but steadiness is far from what has been observed recently!

edinburgher

That's fantastic SSS - go you

Re. 4 day weeks - are you working part-time - or compressed hours? I'm working compressed hours which is the best of both worlds as regards money and time, but not energy levels :rotfl: