Have we got our sums right?? Appraise our plan.

Sea_Shell

Another 6 months books closed off, and the figures are in...

In the first 6 months of 2018, we've spent £6233, including £1770 on holidays. So that's all our everyday other bills/spending at only £4463.

This compares to £6737 - £2320 = £4417 (for the first 6 months of 2017)
and £5727 - £718 = £5009 (for the 2nd 6 months of 2017), so we're pretty consistent with our spends it would seem.

Over 18 months we've currently spent approx. £1050 pm, £12,600 pa. overall.

Going forwards I think an initial £15,000 grand budget is more than enough, to let us up our spending a little (which will mainly be holidays and days out)

As for net worth, this is still holding around the £500k mark (ex house), considering the markets seem a bit flat at the moment, i'm quite happy with that.

This time last year it was £482k, so approx 3.8% annual growth over the year (£18,000)

Thanks for reading.

Sea_Shell

I've also just remembered a quote from someone on another retirement thread which is something like...

"Running out of money is a possibility, running out of time is a certainty"

Wise words indeed.:beer:

justme111

but you still working ?:p

JoeEngland

Silvertabby wrote: »

I'm afraid so! We don't waste £3K+ a year on expensive holidays, but we do enjoy our new cars! That said, this year is an exception. The car we like has a new model out, but the engine we want isn't available yet - so we will wait for a year or so.

P.S. If it wasn't for us, there wouldn't be as many nice nearly new second hand cars for you to buy !

It's horses for courses. We spend more than 3k a year on hols and will do so even when retired as that's our big luxury. But I would never buy a new car as I see that as a complete waste of money. I tried to talk the missus out of buying a new car when she got an inheritance, but it fell on deaf ears. She viewed it as a reward for having done a lot for her parents over the years, and to be fair her previous car was about 15 years old.

Sea_Shell

Just been throwing some more figures about, re: asset allocation.

Out of our DC Pension/ISA pots, (£385k) these are roughly on a 70/30 Equity splits, so approx. £270k equities.

This leaves £115k in "other", we then have additional cash of £123k, so non-equities of £238k.

This equates to approx. 52% Equities overall, and 48% cash (other)

So in the event of say a 25% downturn, only £270k would be exposed....dropping to £202k, which would leave us with £440k total. Which could still last us (@£15k p.a.) c.30 years, even with no further growth from that point.

Does that seem about right?? Or have i got my calculator in a knot!!?

Spreadsheetman

Sea_Shell wrote: »

Just been throwing some more figures about, re: asset allocation.

Out of our DC Pension/ISA pots, (£385k) these are roughly on a 70/30 Equity splits, so approx. £270k equities.

This leaves £115k in "other", we then have additional cash of £123k, so non-equities of £238k.

This equates to approx. 52% Equities overall, and 48% cash (other)

So in the event of say a 25% downturn, only £270k would be exposed....dropping to £202k, which would leave us with £440k total. Which could still last us (@£15k p.a.) c.30 years, even with no further growth from that point.

Does that seem about right?? Or have i got my calculator in a knot!!?

You are not allowing for inflation though - that £15k is worth less than £7.5k in real terms after 30 years at 2.5%.

If you compensate by increasing the £15k by (say) 2.5% annually you run out at around year 22.

Sea_Shell

Yes, I see your point. That would be worst case scenario, but you'd also hope that after a 25% downturn, they'd then be a period of recovery.

Also if a 25% downturn did happen, then we could cut our spending further, and shave that 2.5% off somewhere else (holidays etc.) if we really felt a bit squeezed and needed to "ride it out".

cfw1994

What is the £115k in "other" actually in? Cash in the fund?

Thanks for sharing! Approaching this point, I need to do some sums of my own....I suspect like JoeEngland, our holiday desires might need a bigger fund, but we are generally fairly frugal-minded, even if outgoings currently include too many luxury items!

crv1963

cfw1994 wrote: »

Thanks for sharing! Approaching this point, I need to do some sums of my own....I suspect like JoeEngland, our holiday desires might need a bigger fund, but we are generally fairly frugal-minded, even if outgoings currently include too many luxury items!

I get bewildered by all the pots we need. I think if we were to try and cover every eventuality I might never get to retire! I do think like JoeEngland and cfw1994 we will need a bigger holiday fund or maybe make some compromises when the time comes. I really don't mind driving older cars but Mrs CRV does like her newish cars every 3-5 years.


I'm thinking that when we do retire maybe we should if it's still on the go put our 2880/ 3600 pa in a SIPP 100% equities from maybe 60-75 and keep that separate for care fees/ old, old age and if we don't ever need it (as 80% of the population don't) then we've left a tidy sum to heirs also assuming we live that long!

Sea_Shell

I've noticed a flaw (anomaly) in my figures, in that when noting/tracking the net growth we've had year on year, I've not taken into account that it currently includes my salary and pension benefits, worth £12,000 p.a. (which I obviously will no longer receive once I quit)

So our growth since this time last year, might look like 5.5% (£26,300), it is actually only £14,300 (3%)

However, i'm not overly worried, as this growth is still net of our spending....so we'd still see the pot increase, rather than reduce (crash not withstanding!!!).