The Piano Diary

glass_half_full

Dear diary and all,

Week off and have been catching up on a few things. Trying to enjoy ourselves and at the same time not spend too much. Went shopping with DS and he bought himself some clothes which was nice to see. He has some disposable income now he is not having to fund a household. Assembled a bathroom cabinet which took 2 hours. It made me smile how these companies get us to assemble the furniture for them. We have gone today to an out of town designer outlet today. Was an ok day out although didn’t find a lot to buy. Coffees and eating out has become super expensive.

We have both been paid and have been able to make a payment to the credit card.

Have rebalanced the pension funds to 20% liquidity, 80% equities as I want to give myself potential of growth. The 20% would cover around 2 years of expenses once retired. Despite the dramatic falls, still almost at my target of £400k.

Current balances:

HSBC card - £1500     £0

Sains card - £11,500 (£9,600) (Interest 0%)  nice to go under £10k - Target to clear - August

Loan - £18,000 (£15,345) (Interest 7.4%) - Target to clear - December

EF - £1,000

Pension fund –  total £399K

Liquidity Fund - £78K  

UK Fund - £159K

US Fund - £162K

savingholmes

Glad that you are finding the right balance for you. I hate the stock market volatility - but I suppose if we want the climbs we have to allow for the falls and hiccoughs along the way too... 

glass_half_full

Dear diary and all,

Beautiful weather and am able to work from home out on the patio which is nice. Been pondering the retirement decision and timeline. I remember years ago when I started work in the eighties retirement was a fixed date for most people, unless they had to retire early due to ill health. Thus people didn’t have to really make the decision about when to retire, it was a fixed date. The new pension freedoms are great in that they give us all more choices, but at the same time that choice itself can create dilemmas. At one point I thought I might go at 59 but here I am six months away from my 59th birthday in November 2025 and I find I am not quite ready to go. I think I have been toying with the idea but not really committing to it in reality. I have said to friends recently that I won’t work beyond 60 and I think that is the case. Financially I could probably go at 59 but 60 would be a bit more comfortable according to my modelling.

A part of this decision is that I am enjoying my job. I am lucky to have two managers, both women, who are really supportive and are happy to promote others and share the kudos of achievements very generously. This means that work is less of a chore and I can imagine myself sticking at it for another 18 months. Financially I think I have got things sorted near enough. I can use the next 12-18 months to clear away the debt I accumulated recently with the home improvements. I will then build up a few months cash prior to retirement. The DC fund has hit the target I set myself some time ago. I’m going to stop tinkering with it and leave it alone now until I need to drawdown at 60.

I have signed up for two pre-retirement courses to prepare. One is tomorrow and another is later in the month. I’m going to use these to draw up a more specific plan to follow.

glass_half_full

Dear diary and all,

Just using this to record my thoughts whilst they are fresh in my mind.

Attended a 'planning ahead for your retirement' pension webinar this week. Reassuring that mostly I knew and understood what they presented. Some of it was a refresher and some helped me to understand it a bit better.

What did I learn?

Normal pension age (NPA) for this scheme is 66. This is unrelated to your state pension age (in my case 67) which of course will vary by individual. This NPA is important as it means benefits are adjusted depending on whether you retire before or after this age. The scheme consists of a defined benefit part and a defined contribution part, each of which works differently. The amount you can take as a tax free lump sum varies and is calculated as 0.25 x (lump sum of DB + DC pot value) within a certain limit.

What will I do as a result

Didn’t learn anything that changed my current plan to retire at 60.

-          Will probably transfer DC pot to drawdown on retirement

-          After I have paid off Credit Card will probably build up cash and save a bit more into pension

-          Will delay any major purchases for now (car, home improvement, big holidays)

-          Perhaps plan a holiday post-retirement with OH

-          Need to consider how to fund DS with a deposit for a flat if possible

Timeline

-          November 2025 – request retirement quote

-          July 2026 – Notify employer – 3 mths agree retirement date November 2026

-          September 2026 - Submit notification of retirement form

-          November 2026 – retire

Next Webinar at the end of the month – ‘Approaching retirement’ which will hopefully add a bit more detail.

glass_half_full

Dear diary and all,

It has been an expensive month. Some expenses that I didn’t anticipate have come my way including:

Dental - £250

Replacement phone - £280

Credit card debt on 0% is £9400. Current plan to clear by October this year.

We have had a restructuring at work. The top boss has decided to remove a management layer. This is to flatten the structure and improve accountability, decision making speed etc. I don’t disagree with it in principle, but strange that it was there for so long and apparently now we have realised that we don’t need it. So my manager’s manager has been moved sideways. It will impact me since my role is related to all of this. I’m not sure yet how I feel about it. Need some time to digest etc and probably will be good to think through over summer. I’m coming around to the idea of taking retirement at the end of this year after all. I think I may be over all the shenanigans. The numbers are ok and the pension fund has recovered to £420K which is above the target. I have another pension webinar next week which focuses on the process to retirement so will learn more then. I would probably go on my holiday in August and then hand in notice in September/October to leave 31st December.

DS seems settled with us again. Its good to see him enjoying life etc.

AgathaSquirrel

Sometimes decisions are made for us. It sounds like it might be a natural time to leave.

glass_half_full

AgathaSquirrel said:

Sometimes decisions are made for us. It sounds like it might be a natural time to leave.

Yes, its feeling like that to be honest.

glass_half_full

Dear diary and all,

Away at a conference and up early. Time difference messes with my sleep. I often find myself listening to ‘wake up to money’ when away in Europe whereas I am not usually up early enough to listen to it when at home.

How much household income will you need in retirement? If we ask this question at all it is probably a distant issue and most of us will probably stick a finger in the air. One view is some % of your current spend, usually less, maybe 60-80% on the assumption that we will spend less in retirement due to reduction in commuting etc. Another view is the PLSA retirement income standards. As we approach retirement or ‘going on sabbatical’ as OH and I have decided to call it as we don’t like the R word, this is becoming more real. We had a good chat at the weekend. Probably the first proper conversation about what we want income wise and also when we are going to time all this. We had a proper look at the various pensions we are both going to receive as well as the potential income levels that we could expect. OH felt that the ‘moderate’ PLSA standard for a couple of £43,000 was a bit too frugal. I must admit, she is probably right. Another useful bit of data is that our average monthly spend for the last couple of years has been around £4000 so that would mean a gross household income of around £59000 which is the PLSA comfortable standard. A bit of modelling showed that if we both finish at the end of 2026 then this level of income would be possible. This means me carrying on for 2026 and finishing at 60 and OH will be 58.

Its interesting how this is playing out in reality versus the hypothetical when it is in the future. Reality is when you walk away from your main income from work it is a big decision and you need to get it right.

savingholmes

I think you have worked really hard to put money away and you can choose your dates. Fab position to be in.

AgathaSquirrel

Amazing position to be in. Many, including me, can only dream of a comfortable PLSA standard.