Only freedom will do

edinburgher

Took it a bit easier yesterday, just prep for work and finishing off painting the front and side of the chimney breast. Today will be super relaxed, just got to rehang the wall mounted TV and put one final coat of white on the other side of the chimney. Maybe some light sanding as well, but that's it, honest

Managed to be a bit less spendy today, took in a packed lunch etc. (although I did top it up with some veggie soup from Ald1 as I was Hank Marvin)!

All spreadsheets updated and things are looking a bit grim. In some ways this isn't a bad thing, as it will encourage us to take our time with the decoration and try and avoid any other big jobs in the very near future.

On the positive side, I managed to beat my car insurance renewal by £120, less than £250 for the year I also noticed that my first month of increased pension payments has gone in, a very healthy £411 tucked away. I was in a reflective mood yesterday morning (breakfast at a cheap local chain pub) and was a little bit saddened by the bar flies, many of whom seemed to be retired. I couldn't help but wonder how many pints I could get for £411 :rotfl:

Not sure how many people on here read the Early Retirement Wannabe thread on the Pensions board? It's a great discussion on why it's so important to run *towards* something. I wonder if I'm doing that yet.

Plodding on, remembering to breathe...

PositiveBalance

edinburgher wrote: »

Took it a bit easier yesterday, just prep for work and finishing off painting the front and side of the chimney breast. Today will be super relaxed, just got to rehang the wall mounted TV and put one final coat of white on the other side of the chimney. Maybe some light sanding as well, but that's it, honest

Hmm. Methinks the gentleman doth protest too much. Behave yourself else we will have to send someone round to forcibly make you relax so you can get well, if that's not an oxymoron.

edinburgher wrote: »

On the positive side, I managed to beat my car insurance renewal by £120, less than £250 for the year

Oh gosh, mine is due at the end of the month as well. I got a letter through the door with the quote from my current insurers is :eek:. I hope I can seriously beat it on the price comparison websites, else I'm going to be ludicriously poor!

edinburgher wrote: »

I also noticed that my first month of increased pension payments has gone in, a very healthy £411 tucked away. I was in a reflective mood yesterday morning (breakfast at a cheap local chain pub) and was a little bit saddened by the bar flies, many of whom seemed to be retired. I couldn't help but wonder how many pints I could get for £411 :rotfl:

Enough to ensure you will never need that pension if you drink them in a short period of time!

edinburgher wrote: »

Not sure how many people on here read the Early Retirement Wannabe thread on the Pensions board? It's a great discussion on why it's so important to run *towards* something. I wonder if I'm doing that yet.

Ooh, I didn't know that existed! *Zips over to Pensions Board* *Opens thread* *Reads avidly* Thanks! :T

I know what you mean about running *toward* something. I think I need to fix a goal and warm up with a jog...

edinburgher

I did relax, I did! DD took ages to go to sleep. DIY = none, glasses of wine= 1.

LadyGnome

Morning Ed
Do take it easy today. It sounds like you've achieved a lot.

Thanks from me too for mentioning the ERW thread. It's very thought provoking. Although I have a decent occupational pension pot, what do I do if I want to retire before it's due? I need to do some more focussed thinking.

edinburgher

It makes me think all the time!

I've come to realise that I identify more with the really rich people on the thread, but I'm probably more like the really poor people in reality, a temporarily embarrassed millionaire, if you will

This has made me realise that for people with relatively large mortgages but average incomes, pensions are as important (if not more important) than OPing. I've always been engaged and paid into a pension, but I'd never really realised just how big a deal it will be in a few decades.

The pension board is useful in general, I've picked up things like the true value of salary sacrifice when paying into a DC pension and a few suggestions that will be helpful for the inlaws (ways to get back a few extra £££ in retirement etc.)

PositiveBalance

edinburgher wrote: »

I've come to realise that I identify more with the really rich people on the thread, but I'm probably more like the really poor people in reality, a temporarily embarrassed millionaire, if you will

Surely this is the start of how to get there? You have to be able to see it to get there? None any of us ever gets us anywhere without either looking at others who have achieved what we want to achieve and figuring out how they got there and modelling (and maybe adjusting) that behaviour as is appropriate to our circumstances or having a HUGE capacity to envision what other people can't and move toward it regardless. Equally, if you got there straight away it might not help you keep it. How many people who are born into wealth but blow it all as they have never had to work for it as it has just always been there and they take it for granted, or have never had to work toward a goal or realise the value of the money they have and what it can do if they use it wisely? You have the right mindset and are putting it into action. I think you will get there. But compound interest takes time!

edinburgher wrote: »

This has made me realise that for people with relatively large mortgages but average incomes, pensions are as important (if not more important) than OPing. I've always been engaged and paid into a pension, but I'd never really realised just how big a deal it will be in a few decades.

Yup, but in some ways perhaps more accessible investments that a person can get to in 50/60s before they are able to take their pension are just as important, given the job market and the prejudice against older people in the workplace? I have known many people in their 50/60 just before they retire who have been let go from their jobs and have struggled to get a new one through no fault of their own. They have needed money they could access in order to survive and couldn't touch their pensions. Unless they cashed them in, which is clearly disastrous.

edinburgher wrote: »

The pension board is useful in general, I've picked up things like the true value of salary sacrifice when paying into a DC pension and a few suggestions that will be helpful for the inlaws (ways to get back a few extra £££ in retirement etc.)

Explain the DC bit to me, please, Ed.

For my circumstances, I have 4.6% of my salary go into a pension and my employers adds a hefty amount. I don't get the impression that the actual pension is the best (don't know enough yet) but they amount put in by my employer is, fortunately, pretty hefty. I'm not sure that at this point in my life (new house, needs doing up) that adding more of my actual earnings into the pension will have the best outcome for me, but I would be prepared to change that opinion once the house is more done up as things rarely stay the same in life. I don't have another private pension. I am a bit wary of tying more money up at this point in my life when I think that mid-term investments are also €necessary. Does this sound about right to you? I know it's not enough, but for the minute, it seems as though I would be trying to build my castle on a foundation of sand doing much more at this point.

Keep going, Ed. You might be the poorest millionnaire on the pensions thread for the moment, but I don't think that will be for long!

edinburgher

At the risk of getting caught in a wall of multiquote!

• Much as I love the thread, the 'USP' of quite a few of the posters appears to be either very high earnings or wonderful ability as regards thrift. I'm not sure that I can emulate either of those. Perhaps my USP is the ability to envision what others *won't* (as opposed to can't)?
• Completely agree that you need money other than that in your pension, but the pension is simply the cheapest, fastest way of reaching most lifetime purchasing goals. Even on basic rate tax, I can pay money into my pension with something like a 30% 'discount'. I'm thinking that the most sensible approach may be to front run pensions to a decent amount (say £150k) and then to go back to the minimum employer match and focusing on ISAs
• DC = defined contribution = pot of money. DB = defined benefit = for every year of service we will pay you 2.3% of your salary pa when you retire
• 4.6%? That sounds like you may have a defined benefit pension, which is usually better
• Your foundation of sand point is probably a valid one when you're still paying down unsecured debt, but it won't be forever!

Goldiegirl

edinburgher wrote: »

It makes me think all the time!

I've come to realise that I identify more with the really rich people on the thread, but I'm probably more like the really poor people in reality, a temporarily embarrassed millionaire, if you will

This has made me realise that for people with relatively large mortgages but average incomes, pensions are as important (if not more important) than OPing. I've always been engaged and paid into a pension, but I'd never really realised just how big a deal it will be in a few decades.

The pension board is useful in general, I've picked up things like the true value of salary sacrifice when paying into a DC pension and a few suggestions that will be helpful for the inlaws (ways to get back a few extra £££ in retirement etc.)

I think I agree with you about pensions probably being more important than overpaying the mortgage.

I never made an overpayment on my mortgage. I think my situation was different to many, as I had a staff interest rate on a good chunk of the mortgage, so the need to OP didn't seem very pressing. (It wasn't all good news, as the mortgage was looked on as a taxable benefit, so I paid more tax). I took out my first mortgage in 1981,and when I moved here in 1989, our new mortgage was over 17 years, so the thought must have occurred to me that it would be nice to pay off the mortgage by my mid 40's. But in the 80's and 90's it was still quite rare for people to overpay their mortgage.

I made AVC payments to my pension, and each year we were careful to increase payments to Mr Goldie's personal pension.

At this point in the proceedings, I have no regrets at all that I didn't make overpayments to the mortgage...... But I wish I'd paid in more to more to my pension. We have 'enough', but it would still be nice to have had 'more'.

So yes, I think the pension is the key.

The ERW thread holds a fascination for me as well.

I have to admit I also identify more with the really rich ones on the thread. I'm not by nature a frugal person, so I don't really identify with the off grid spoon whittler types

But I don't think any of us normal people will ever amass the money these people have.

I must admit I get a bit frustrated with some of them. Some have more than enough money for several lavish retirements, but they still feel they need more. As you said, analysis paralysis is rife.

I think it's important for us normal people to keep posting on that thread, to show it's possible to plan for early retirement and not be super rich or uber frugal

BookWorm

For me, the pension thing is in some ways a bit of a mystery. I fully appreciate that I need to have one but I think in order to get the best from it, I feel I need to understand investing (it's a DC one), and I just don't (despite being willing to try - and I do often!).

I contribute to my work pension to get maximum matched contribution from employer but other than that it's left to its own devices really (default choices). I am fairly sure there would be a better way to manage it but I just don't know where to start.

LadyGnome

I think you will find some of the higher earners will have a different perspective on pensions with the new rules that have come in. The annual allowance of £40K is tapered down once your adjusted income (inc employer's pension contributions) hits £150K reducing your AA to just £10K when your income hits £210K. Additionally, the Lifetime Allowance has been reduced to £1m. So pensions no longer have the same tax advantages for higher earners that they used to do.

Whilst higher earners will still do OK;) They may be looking at other vehicles as well e.g. VCT