Onwards to freedom!

SuperSecretSquirrel

Hello SC and Ed 👋 Nice to “see” you both 🙂

SC, contentment is good. There could always be more, but it's nice to be in a place where I'm happy with my lot 🙂

Ed, the DB pension is a bit of a mystery to me, and to a degree OH. All I get is an update at the start of each year, a single value that would be payable each year from retirement date. This amount is uprated by inflation over time. It looks like the value we see increases once a year, or possibly less often. We may have had two years worth added this January (I have a feeling we checked on the 1st Jan last year, 2nd Jan this year, that first working day of the year could explain it). Using simplified numbers - the base annual amount increases by 2% of salary each year worked, I take this value and multiply by 25 to estimate the value for net worth. Even before the inflation adjustment it looks like 50% of OH's salary is added to her pension each year. Maybe I'm doing something wrong here, it feels very high. Add my suspicion that we missed last year's update and saw two years worth of catchup this year, and it looks like 100% of OHs salary has been added to her pension this year 😵‍💫

If I were to include SPs using the same logic, it would add an extra 532k to our joint NW, which seems slightly unbelievable 🤔

If you spot a fault in my logic, please let me know!

Watty1

The value of DB pensions can be really hard to calculate.    As part of the hearing with my ex I had to get his valued and astonishingly to me it was valued at over a million.  It was explained to me that one has to view these as how much would one get if one was to have a private pension to provide the same amount?

Maybe just view it as how much will OH get each year?  And what lump sum?  And then compare that year on year?

(Am no pensions whizz as will be seen from own mess!)

LadyWithAPlan

Really structured clear and fabulous round up SSS. Great to see the annual figures and breakdowns and the peace that comes with having your ducks in a row 
Your Isas and sipps are an inspiration:) 

I actually asked once for the cash in value of my v old DB just so I could get a handle on it’s worth - it’s worth about £6647  per year in 2020 pre crazy recent inflation levels) but the cash out value itself was about £241,000 and that was about 7-8 years ago . It’s inflation linked and kicks in at 60 as well which presumably adds to the value. The valuation came with warnings of needing advice before I could sign etc - I am not planning to cash it in as I view it as  my bond portion of my pension planning so I invest the rest in Van etf and funds and never buy bonds myself in my own Sipps with this DB to cover that. 

It’s an old bank DB and I had no idea at the time how lucky my few high earning early years at such a great scheme helped my pension planning accidentally! They no longer give such pensions out. So I get your ‘work in govt’ angle to help the future planning. 

savingholmes

Lovely to see your figures. Thanks for sharing.

With the DB pension if it's local gov England - then it goes up 1/49 plus inflation each year. Some years therefore it pretty much only goes up by the contribution. The inflation is measured in September each year I believe. I have had a similar joy over the value increase of my pension the last couple of years when you take that 1/49th plus inflation and multiply it by 25 to get an estimate of what you'd need if you were self-funding to achieve the same amount and using the 4% calc for drawdown. What I would say though is that annuity rates have recently improved - and so you might now get better figures that were available 2-3 years ago so also worth considering those at some point.

I still think finding somewhere with a DB pension is an excellent financial call. I am so grateful I have two and could kick myself for the 5 or 6 years I wasn't in it when I was contracting and the number of years in the first DB when I only paid half rate. However I have to be grateful for what is... 

SuperSecretSquirrel

Thank you all for posting 🙂 It doesn't sound like I'm doing anything particularly stupid with my estimates from what you've all said, and in fact may be underestimating the DB value by using a 4%/25x multiplier to transform the annual payment to a net worth line. Of course the flipside of that is that I would also be overestimating the value of cash and shares if 25x doesn't really cut it. I'll just leave the numbers as they stand as I value a consistent yardstick to measure progress from one year to the next and 4%/25x doesn't seem too outlandish.

savingholmes

I think for calculation purposes the 25 times if anything is an under-estimate but a useful comparator. A year or so ago people were saying even a 3-3.5% withdrawal rate per year might be pushing it to be 'safe' - but that's only really an issue if the stock market was down that particular year - and if you have other healthy savings - then you could weather the hopefully temp low market by using savings if needed.

People who retire particularly early sometimes recommend a couple of year's savings in case the risk happens during the early part of 'drawdown'. A low market is helpful when you are putting £ in but can be scary if you are close to drawing it... I think you already have that level of savings? 

SuperSecretSquirrel

Hello February 🙂

I'm not the biggest fan of January, the lull after the excitement of Christmas, the bad weather, the return to work, the dark mornings and evenings, blech... The best thing about January seems to be that we enter hibernation mode and spend very little money. That said, having reviewed my personal spends I did buy a few treats during the month - out for lunch one day, dinner another, a trip to the theatre, a takeaway, some (more 😬) toys for the children. I know a few nice little treats snuck into the grocery spend too 😶

All that, coupled with making good use of the new Christmas board games and toys, spending a few evenings on a little hobby of mine, and catching up on some new movie releases have helped brighten the dreary days up a little.

We were surprisingly “good” over Christmas. I did go a little overboard on the food and drinks purchases, but no more than any other year. The meats and cheeses have served us well throughout January, as have the chocolates and biscuits - they have survived longer than I can ever remember them doing in the past, nearly at an end now. This has helped keep the grocery spending down, and by avoiding overindulgence in one massive binge my weight has remained remarkably stable - I remained within 1kg of my preferred weight throughout - far better than expected, especially since exercise has dropped off a cliff for winter 🙂

I bought lots of 15p veg in the run up to Christmas and made massive amounts of soup with them (mixed vegetable soup but very heavy on the broccoli, topped with stilton - love it 😋). I also lucked out and picked up a few packs of heavily reduced stew packs in January and used them in soups too (added some sorry looking potatoes, cabbage, mushrooms, leftover passata, and some chilli and harissa - truly delicious 😋). Also made “bubble and squeak burgers” - potatoes, carrots, cabbage, sprouts, herbs, spices, seasoning, mashed, mixed with a little flour and egg, then shaped into patties and dry fried - far tastier than they have any business being - excellent in a burger bun with ketchup and mustard and a sliver of cheese, or on a plate with some baked beans on the side and a poached egg on top 😋. I've found a ridiculously easy dahl recipe (verging on a less runny lentil soup - thanks to LaPlan for the original suggestion) and I'll be making a batch of that soon too. These batches of vegetarian foods get portioned up and frozen and make excellent work day lunches for me.

My lunches haven't all been totally vegetarian. I've made some delicious dry fried rice using some scraps of leftover roast meats, also tried my hand at a yogurt based pizza base (turned out great) topped with various bits of vegetables and roast meats and froze the leftovers in lunch sized portions. My lunches have been mostly vegetarian, with some vegetarian-ish (my term for a meal with very low meat content). This boost to vegetable consumption, with a relatively low white carb / fat / calorie count has been working well for me. In the evenings I enjoy the same family dinners as I always have, and a hot drink with a bit of cake or a few biscuits or a little chocolate afterwards, and manage to maintain my preferred weight. Really happy about that. It's also a ridiculously cheap way to eat, the fibre and vitamins can only be a good thing, it's a step in the right environmental direction, and it's super tasty. I fully intend to keep this up!

I've also been quite virtuous on the alcohol front. It certainly helps that there were no big nights out this Christmas and New Year, and OH doesn't drink... I got through three bottles of wine between Christmas and New Year, and I've had three bottles of beer in January. I have some untouched wine and spirits here that will probably survive until next Christmas… I also have another 9 beers to get through before they go bad this winter… I enjoy a beer after gardening work in spring/summer so they'll get used up then. Fizzy drinks aren't a big thing in this house either… I bought 24 soft drink cans before Christmas, we have 20 left…

So happy to see that it's light after 5pm again now. It'll soon be spring and we'll be out and about a lot more. Can't wait to get the hiking boots on, and soon after that it'll be wild swimming season again 😁

This is very much in danger of becoming more of a health diary post than an mse diary post, but there is a small financial aspect to it all. Not much else to say really, it's an unexciting financial time of year for us. I've slacked off on the surveys in January, simply couldn't be bothered. I'm hoping to get back into it this month 🙂

savingholmes

Well done on a healthy January. Many of us would benefit from following your example there.