Cheery's country living adventure

Cheery_Daff

Little brain is whirring around pensions, having been inspired by ElmoR's retirement calculations. But I'm in bed with no pen & paper so this is very rough and I will sort out tomorrow!

Without mortgage (and current regular OPs) we live on about £1800 a month (which is a ludicrous amount and I'm sure could come down but let's accept for now).

Mr Cheery can claim state pension in 2029, roughly £750 a month.

Mortgage at current OP will be gone by 2033 at latest. 

Earliest I can take work pension is currently 2035 (although set to rise to 2037 maybe).

So how much do we need to have in the bank to keep us in custard creams if I retire as soon as we've paid the mortgage off, until my work pension kicks in in 2037?? Assuming we've kept up OPs in the meantime and got rid of mortgage by 2030? Ignoring my state pension as that's not due til 2048 and goodness knows where we'll be by then

If we did that, we'd be living of Mr Cheery's pension  (work and state) - total of £1350 ish. Meaning at current spending rates a monthly shortfall of £450. 
 So for 7 years x 12 months that's £34800? Doesn't seem like that much to be able to retire at 50 ...

Hmm. Going to go through this tomorrow with pen and paper to find the many obvious flaws. But I think finances are the one area where an 18 year age gap does actually work in our favour...

ElmoR

Ooops, sorry to stir up the pension dust bunnies in your mind! One you start thinking about it, it seems to become a little bit obsessive, or it did for me, maybe it's the current state of anarchy at our workplace prompting things?

Have you ever done the MSE budget spreadsheet tool thing? I have been using it for a few years and it's been instrumental in seeing what the lay of the financial land is and what I can target. Then you also have all the data you need to calculate what you need to survive after retirement. It was soooo wonderful taking out the mortgage monthly payment

Next thing was to set up a FIRE excel spreadsheet that breaks down into years going up to statutory retirement age. Slot in what savings you have now etc and use the pension calculator tool on USS (assuming you have that one) to fill in predictions. I had the mortgage in there too, as an expense, so it eventually disappears later on in the long line of years. The rest is detective work, playing with numbers and eventually some magic numbers appear that can be aimed for.

There are also some good calculators on Wh1ch and Age websites, allowing you to play around and get a feel.

Hope that helps settle your mind down

ElmoR x

Staffordia

Hello Cheery, I hope you don't mind me delurking especially as I am going to be a bit of a doommonger.  Given the age difference then I think that you need to consider Mr Cheery's survivor pension benefits in your calculations, you don't want to leave yourself short in your early 60s if anything should happen to Mr C.  Of course anyone of us could be hit by a bus tomorrow and Mr C could get a telegram from King William.
Anyway I'm going back to lurkdom now, but I definitely recommend early retirement.

Cheery_Daff

Ooh, thank you! That's really helpful. Last night my mind was just idly drifting round possibilities as I nodded off, but actually I'm definitely going to play around with those calculators, thank you! 

I might start with pension rather than budget - what we're spending at the minute isn't super frugal but it's a rate we're happy with, so I'll see what maintaining that would take.

I've got USS from old job, now in TPS but they both have calculators of course. I've only actually been paying in for just over 10 years so they won't be massive at the minute, but hopefully reasonable in another 10 years!

Exciting!

Of course I'm going to win a million on the premium bonds in the meantime so this will all become irrelevant

Viking_mfw

Knocking off 10 years with dribs and drabs is very heartening as a possibility! Well done

I am fairly sure that you can make additional payments into TPS to increase your number of service 'years' - you certainly used to be able to - so that might be worth investigating.

Karmacat

Fantastic set of calculations and knowledge, Cheery remember that you currently have all sorts of work expenditures (memberships, books etc, didn't you say something about work clothes the other day?) that you won't have when you retire.

rtandon27

Karmacat said:

...work clothes the other day?) that you won't have when you retire.

Though you will still need to be clothed unless you put a fence between you & the public path!
🤣🤣🤣

South_coast

Nah, the locals will just dub her "that mad chicken lady" and roll their eyes 🤣

Cheery_Daff

Thank you all for your encouragement and advice, and Staffordia, I'm sorry, we cross posted earlier but that is definitely a good suggestion, especially as we only have life insurance for me, not Mr Cheery...

I confess I don't exactly spend that much on work clothes the odd charity shop dress, and yes I did buy some knee high boots last week but they'll get worn generally anyway, nt specifically for work. If we ever get to go anywhere other than the chicken run, that is!

Just finishing work, well, still got stuff to do so I'm more 'abandoning' than 'finishing' We're off for a walk in the dark and then I might start doing some exciting sums!

Cheery_Daff

Ok, pension spam

Pension 1 (old job)
Easy - all details at work, membership number I have is from 2014 and they've changed since then, can't register for online until I can ring them in working hours. Paid in for 5.5 years. 

Pension 2 (new job, ongoing)
Paid in for 5 years so far, career average scheme.
No automatic lump sum, but I can convert part of my pension to one.
Normal pension age 68 (in 2048, pah!)
I can choose to buy additional pension (apparently it will cost me £2360 to get an additional £250 a year), or 'faster accrual' at 1/55th, 1/50th, or 1/45th of my annual salary (Standard is 1/57th)
Can retire from 55 with reduced benefits, or can do phased retirement (if I reduce salary by 20%) - can do this twice before I'm 60. 
Assuming I continue to work full time, and don't have any salary increase (unlikely, I hope!)... 
Retire at 68 = £53k annual pension or £228k lump (25%), £34k annual, which would still suffice
Retire at 60 = £23k annual, or £101k lump sum, £15k annual
Retire at 55 = £13k annual, or £56k lump sum, £8.5k annual

Ok, this is helpful... going to post before I lose all my calculations!