The Piano Diary

glass_half_full

savingholmes said:

I agree on needing to know what you are retiring to. Well done on reaching that milestone. It's a huge achievement.

Is that care cost limit per person or per couple? It is a scary amount. 

Hi @savingholmes, it seems like it is quite complicated and I wouldn't want to mislead anyone. It looks like the cap will be £86,000 and apply to individuals. The cap has been delayed to October 2025 not 2023 as I said above. 

South_coast said:

On the cost of care, I think it depends on what your eventual plan for your assets is. For me personally, my thinking is that by the point I start needing full-time care (whether at home or in a home) I'm probably done with wanting to spend the money on other things, so if it all gets used up/home gets sold then that's just what has to happen. But I don't have any children, so I've never really had any plans on leaving anything for the next generation.

I think if you start trying to plan for every eventuality you'll end up sucked into One More Year Syndrome, which could be just as dangerous as not making any plans at all. What if in your final year of work you learn you've only got a few months left to live? All the planning rather than living would seem like a bit of a joke then. That said, I have a vague notion that in the US they offer insurance for big-ticket medical expenses like care. Maybe seeing whether that could be an option here might be a middle ground?

Hi @South_coast, yes I get where you are coming from. If I ever thought about this before it would have been: a) I hope I don't end up in long term residential care and b) if I do I am not bothered if my assets all go to pay for it. Its only recently watching my FIL actually writing cheques (as it were no body writes cheques any more) for it that it brought home the reality of it. I don't think I would save money into a specific pot called 'costs for my care' later in life. But I suppose if you are in a couple then chances are one of you may end up needing paid for care either at home or in a home.

glass_half_full

Dear diary and all,

Normal service has resumed on the stock market front. A brief recovery took the funds above their original value before they fell back to 1-2% below what I paid for them. When the Bank of England kept interest rates the same there was a brief rally, and then it was if people said, hang on why are they not raising rates? Well yes, its because inflation is down, but also because the economy is flat lining. And then the markets fell back again. It’s a bit frustrating as I want to exit one fund when I can, but I don’t want to crystallise a loss so I would like it to get at least +1% to approx. cover the costs of selling it and buying something else. Its because I want to get out of fossil fuel investments. I was a bit remiss and invested in a fund which had underlying investments in oil companies which I didn’t spot. Now I know about it I need to get out of it when I can.

So reluctantly and not for the first time I must conclude that the cavalry are not coming, nor will they come in the future. By that I mean there is no magic bullet that will provide any kind of short cut to achieving my financial goals. There is only one reliable way which is the slow steady saving that we are all committed to on these forums. My total fund has remained at £305K, the £4K I have paid in September just making up for the drop in the fund values. Received wisdom is that pound cost averaging means that we benefit from the falls in values because we are buying at that lower level. But somehow it never seems to show up in the numbers.

I have reduced the amount I am saving recently and freed up some money to allow us to fund some stuff we want to do like a bit of eating out, holidays etc. No point completely sacrificing today for tomorrow. Perhaps I had been a bit ambitious on the saving front, but I needed to find that out. I feel like we have about the right balance now.  

savingholmes

Well done on the £4K going in - that's phenomenal. Hopefully the stockmarket will sort itself out and it will all be worth it. Good in the meantime to ensure you get some balance though and have fun and play now too.

glass_half_full

Dear diary and all,

I have saved £4.3K towards the pension in October, but the overall fund has remained the same at around £305K due to the fall in value of the funds. Pension savings will go down in November since I have reduced the savings rate a bit to free up some cash. I think the new rate will be around £3.5K per month. I have incurred a few household related costs this month. There was a leak down the outside of the house from a white overflow pipe towards the roof of the house. It turned out to be that the cold water tank ball valve wasn’t shutting off the water. I got our local plumber to fix it and it cost £70. Looking up at the roof I realised that the gutters high up haven’t been cleared for a while so I have asked the window cleaning firm to clean the gutters so that cost £120 for the whole house. I’m thinking about replacing the fencing at the back of the house since it is the original fencing when the house was built and in places is definitely on its last legs. So far I haven’t had to use savings for all this but it reinforces the need to free up a bit more cash to use for these necessary costs.

On the job front, the interim role is going well so far. I spoke to my coach / senior manager yesterday and she said that they are going to advertise the role inside and externally too. She encouraged me to think about applying for it. I’m not sure what I think at the moment. I think I will see what they write into it first! Another consideration is that I feel that I would need to be willing to commit to it for at least 2 and probably 3 years because this is how long it would take to make a difference and you owe it to the team in that area to provide some consistency and stability which has been sadly lacking over the last few years. This doesn’t fit with my current plan to step down in 18 months time.

savingholmes

I would prioritise your own needs rather than worry about the team. No guarantee a different person would stay any longer than you.

Makes sense to keep some money back to cashflow house jobs. Always best to nip potential issues in the bud.

glass_half_full

Dear diary,

Home alone with the cat since OH has gone out for a meal with a friend. It gives me a chance to process some thoughts in my diary. In October I have saved less into the pension, £3500, in order to increase my take home pay a bit. This is to adjust from the position I took in April which in retrospect was a little too ambitious. The budget has been too tight and I have had to raid the savings to cover some costs including £500 to get the car serviced. This was a bit more than expected because it needed new brake pads. The car has done 80,000 miles now and is around 9 years old. I would like to keep it going for at least another 2-3 years as it is reliable and I see no need to replace it. The increased take home pay should allow for a more realistic budget going forward.

Total pension fund is in fact down to £300K due to the drop in fund values in the last few weeks. OH found out about a financial adviser who has advised some of her colleagues recently who have retired. I’m not sure about getting independent financial advice. In some ways I would like the idea of an objective review, but I suspect that they would just tell me what I already know. I read an interesting article in the FT about getting financial advice about pensions. It mentioned a free modelling tool called Guiide which I have tried out, and which is really quite good. Thing is, I don’t want advice on how to consolidate pensions as I have already done that. Nor about what funds to invest in since I am quite into that myself. So all that is left is modelling, which again I am quite in to. If I did go to one I would want it to be fixed fee, but I would need to think about what questions do I want answers to.

I had to help DS out recently financially. I am taking him out to lunch next week and I hope to work through with him some basics around budgeting, principles of an emergency fund etc. I am thinking of giving him an emergency fund (£1000) as a starter. I know this probably goes against the principle of learning the discipline of saving it himself. But I worry that he won’t get there under his own steam.

South_coast

I think if you are over 50 you are entitled to a free pension advice session from the Govt? That might be a good place to start if you're just looking for a sense check in the first instance

savingholmes

I think like you I'd be wary of the advice part - and if you pay for any advice pay for one off rather than an on-going %.

glass_half_full

Dear diary and all,

Thanks @South_coast, I will go for this free session.

The lunch with DS was great. He seemed very receptive to my advice. I have given him the £1000 emergency fund. We talked about what constitutes an emergency, and how you need to refill the emergency fund afterwards.

My pension contribution in October was closer to £4000 in the end due to employer contributions. Due to a slight recovery in the funds the total has increased from £300K to £312K so an £8K increase in value as well as the £4000 contribution. I have two funds. One is the SIPP which I consolidated from two other pensions. This is currently worth £187K. Then there is the one that is with my current employer which I am contributing into which is worth £125K. In this second one there is a fund that has been doing particularly well. A few months ago I moved 50% to this fund. Last week I moved all of it over.

The interim role is going ok. It has been advertised and I am going to apply. I am working on the application over this weekend. I have also been encouraged to apply for another role. My line manager thinks this other role would be more suitable. Its more strategic and would involve less of the operational day to day responsibility. I have also put my name forward for that too. I feel like I might as well do something interesting for the next year or so.

savingholmes

Sounds exciting on the job front and a relief about the pension recovery