The Piano Diary

savingholmes

Glad DS was okay. Sounds like a shock. 

Good thinking on the card points.

glass_half_full

Dear diary and all,

No news yet on DS’s car and whether it is repairable etc. I imagine we will hear soon as it is over a week since it happened. Made a bit more progress in the transfer of the second DC pension as I have an e-mail from the fund manager saying that they have all the information to process the transfer and so now it will go ahead, but they can’t give a specific date by which it will be done. It has been a bit challenging to navigate, but I have persevered. I suppose it is good that they are cautious and prevent fraud. Regarding the increase to savings into the pension I have had an e-mail from my pension/payroll people asking me, are you sure you really want to do this? ie save 90% of your salary into your pension, you will have nothing left. I suppose they think it might be a typo or mistake. Anyway, I will write back and say, yes, this is what I want to do.

In the new SIPP fund I have invested in six funds and since I invested in mid-March they have collectively risen by 1.4% so not too bad. The overall position is £280K across all three current DC funds. So if I can hit my target of saving around £60K per annum for the next two years, I should reach the target of £400K. When the £25K transfers I am thinking of investing in a few shares. This £25K has been bumping around £20 – 25K for the last couple of years, so I am aiming to at least increase the value. I have been reading a few investment books over the holiday and understanding this area in more detail. I realise there are risks but I would rather at least have a go rather than leaving it underperforming. I will be being conservative in my selections. I guess it is becoming a bit of a hobby for me.

Last day of the holiday, we are seeing DS and his GF later. Then the weekend and back to work on Monday.

savingholmes

Fantastic to be able to do. 

Sunshine_girl2

Hi GHF, I followed you on the debt free diaries under a different user name . I have just caught up on about 2 years of your diary . I am so pleased for you on all fronts , I will continue to read along as I want to see if you get to retire in 2025. 

I myself have been DF over 2 years which enabled me to go semi retired in June 2022 . I could retire if I wanted but living alone and doing a fairly enjoyable job I decided to stay. I took a previous work pension at 60 and have a healthy lump sum behind me which I add to every month. 

I would never return full time now , I also have 2 elderly parents and am supporting my DD financially at the moment in a small way . 

Anyway look forward to your updates .

glass_half_full

Hi @Sunshine_girl2, thanks so much for your kind comment! And congratulations on your own achievement of becoming DF and being able to go semi-retired. This is also my goal, i.e. I want the freedom to decide what I do. I want to stay active and involved either in working or in volunteering etc. Maybe not having to work will change the way I see it and I will decide to continue part time in some way. All I do know is that I wont be working full time at this intensity once I don't need to any more. Anyway, I do intend to document this journey with semi-regular updates towards the goal of April 2025.

savingholmes

I think that's the core isn't it - we want more choice over how we spend our time.

glass_half_full

 Dear diary and all,

A little while since my last update, a few things have happened since. I mentioned in an earlier post that DS was involved in a car accident and his car was written off. Since then he has received the payout from the insurance company. He has bought a replacement car. He organised it himself which was great as I didn’t want to get too involved. Insurance up for renewal in August and I’m concerned that it may go up significantly, lets see.

On the pension front, the second DC pension (£24K) has finally transferred into the SIPP, so now everything is in one place, apart from my current employer. There was a nervous period of about 2 weeks where the money was withdrawn from one pension account but had not appeared in the other account. I was quite concerned thinking maybe I had somehow been a victim of some kind of sophisticated fraud. Its also hard to get responses because they are quite slow to respond, although to be fair, the new SIPP operator are very responsive. It is good to have it all in one place, I feel more in control and ultimately it will simplify things. It was more complicated and time consuming to make it happen than I thought it would be. I used the £24K to buy some actual shares in the SIPP so I now own shares in some FTSE100 companies. I went for a few large companies who pay dividends and are in the food/FMCG area. So I now have £188K in the SIPP and £92K in the other fund making a total of £280K.

This month (May) I made the first increased contribution of £4500 to my AVC account which is £54K across the year. This is below the £60k limit. So May will be the first month living on OH’s salary alone.

I have been following a coupe of Youtubers whose channel is called Two Sides of FI. They have run a series on something called the SWR or Safe Withdrawal Rate Toolbox. This is a spreadsheet which allows you to model the withdrawal rate from a fund over your lifetime of retirement with various assumptions. The clever bit for me is that it also allows you to model future cashflows, so other income streams in the future such as other pensions and the state pension etc. Its really helpful when you have complicated and fragmented sources of income and you want to see the bigger picture. So I used it to run the numbers based on my current situation aiming to finish in May 2025 and it showed that the safe withdrawal rate would give us the target income I am aiming for. It was interesting because it basically showed a better picture than I thought. This is because it shows that really the main purpose of the DC fund will be to bridge the period between stopping work and when we receive pensions. This sounds obvious, but is actually quite complex to model in practice. These guys have figured out the complex maths that allows you to model it all. More scarily, I then did a thought experiment ie what if I stopped work today, we lived on OH’s salary and I take income from the fund (which would be smaller) in 2 years time. It showed that we would manage, just. So I guess at one level I could declare FI today, because in effect that means in extremis I don’t have to work if I don’t want to. However, I’m not going to do anything hasty, especially as I have just started to work through the numbers in the last few days.

At work the big cheeses have made what I think (know) is a really stupid decision. They have cancelled a contract with a provider without any transition plans or thinking through the consequences. This kind of thing happens so often, I think because we have such poor leaders these days, and many of them have no idea of the consequences of their decisions at the front line. This is going to lead to a lot of disruption and pain amongst our customers. It only serves to focus my mind on keeping focused on building the escape tunnel!

If you have read this far, thank you for your perseverance and I hope your own plans towards mortgage freedom or FI are going well, keep focused on the goal!

savingholmes

It sounds like you are at 'lean fire' and would prefer more of a safety net or even 'fat fire'. Sounds perfectly reasonable to me.

I get why you want an escape tunnel too... I got sucked into the buy abroad type videos again recently as it's the only way I could afford to retire any time soon... 

glass_half_full

Dear diary and all,

Made it to the weekend! Tomorrow OH and I are going to visit Shropshire and scout out an area we might eventually move to. I have booked Sunday lunch in a nice looking pub. This is how we will move from the pipe dream stage to the ‘we are actually going to do this’ stage. I also think that it will help managing the next couple of years as I think it will make it easier to continue knowing that our future is becoming clearer. We are also doing a bit of window shopping for houses. We are not yet at the stage of wanting to go around them, but we can visit some of the areas to get a feel for them. Last night we took DS and his GF out for a meal. It was lovely to see them.

savingholmes

Sounds exciting - planning a move. Glad things are going well.