Getting Ready to Retire

MallyGirl

brokenglasses wrote: »

My spreadsheet assumes they no longer be dependent after they finish university, but perhaps I'll change my assumptions and add an extra year or two to see how the figures pan out.

...

Yes, I've done something similar although not added extras for additional retirement holidays or hobbies yet. I estimate the kids are costing about £6k per year each

I have allowed for a year after uni and possibly a gap year too. DD is aiming for vet med which is very competitive so she might not get in first time - and then it is a 5 or 6 (Cambridge) year course.
She has started 6th form at an Indie today after 5 years at a grammar so the next couple of years will be pushing the flexible mortgage up not down.
I know she will only get the minimum maintenance loan so we will need to top up by at least £4.5k per year once she is at uni. On the other hand I spend nearly £3k per year on music lessons, orchestras and Stagecoach today so uni will be much cheaper overall!
We only have one child to plan for. I am aiming to retire once she is qualified and earning - unless I can't stick it that long!!!!

Bimbly

brokenglasses wrote: »

OK. That makes sense. Do you think I should start selling equities and building the cash fund now or would you suggest waiting until I crystallise the benefits at 55?

Do you still pay into your pension? You could put future contributions into cash/bonds rather than sell equities (or allowing you to sell fewer).

I will let the more qualified say whether you should be selling equities as such, although I understand a 60/40 equity/bond split is common.

Another book oft recommended is Living Off Your Money by Michael H McClung.

cfw1994

Those pesky kids keep us all at the grindstone, eh!
Mine finish next summer and the one after.....that would be a good time for me to re-evaluate things.
Already working on my to do list:

1. get a nice small camper - currently considering part-ex'ing the 2013 SMax for a decent 'crew van' with all bells & whistles, then converting it myself later!
2. travel
3. try not to run out of money

Sounds like a plan, right?! What could possibly go wrong!

MallyGirl

I already have the van - currently kitted out with crates for the dogs. We plan to hire a camper of the same model for the weekend to see if it is going to be big enough (I am tall for a girl and taller than DH).
We kickstarted the travelling again this year after years of Lake District and other UK locations with child/dogs. I don't want to be too old/knackered to do exciting travel if I leave it all to actual retirement.

atush

Currently student loans are running around 6%. I think i'd not be planning on them having to pay back expensive loans if you can afford it.

You need to build a cash pile over the next several years to cope with Drawdown during dodgy markets.

bostonerimus

Wade Pfau produces some interesting articles on retirement income and it's good that you are reading the literature. You mention a planning spreadsheet, but not the parameters you are using in your projections. Have you done a detailed budget, what are your assumptions for annual return, inflation, life expectancy etc.? Have you stress tested your plan by taking your assumptions and maybe varying your parameters by +/- 2 or 3 standard deviations?

kidmugsy

brokenglasses wrote: »

I have £1m SIPP + £550k ISAs + £85k Endowment Policy Maturing next year
...Because my SIPP is right on the LTA I intend to crystallise benefits when I reach 55.

I take a rather gloomy view of the stock markets, especially in the US. So in your shoes I'd probably move the SIPP into something very low risk while I waited to crystallise at 55.

For example, a gilt with a convenient maturity date or, if I moved part of the SIPP to a suitable provider, a deposit account paying non-trivial interest.

Your total portfolio would still have plenty of equity when you add up your wife's SIPP, the endowment, two ISAs, and the geared investment in the house.

cfw1994

atush wrote: »

Currently student loans are running around 6%. I think i'd not be planning on them having to pay back expensive loans if you can afford it.

You need to build a cash pile over the next several years to cope with Drawdown during dodgy markets.

Defo agree with the last paragraph.

Not so sure about the first: are you implying helping them out and having them NOT take the student loans?
Maybe I am mis-reading your comment.

Pretty sure the majority of students will never repay the loans, so whether the rate was 1% or 50%, they will 'just' be paying the "graduate contribution" until they are 50. See point 4 here.

kidmugsy wrote: »

I take a rather gloomy view of the stock markets, especially in the US. So in your shoes I'd probably move the SIPP into something very low risk while I waited to crystallise at 55.

I too feel there is an overdue correction in the global markets.....
...but if I had locked my funds into very low interest but far safer things 12 months ago, I'd have missed out on a huge rise.
Timing. As Eric Morecombe put it: How I loved that girl!

If only I could find where I put that pesky crystal ball....

atush

Yes, I meant that they shouldnt have the loans.

As for many not paying them back- maybe those from years past, but university entrance numbers seem to be falling. As those who took rather silly degrees in the past counldnt get good jobs. And those who are graduating now with 60k DEBT are fairly worried about their pospects of ever buying a home.

All 3 of mine now earn enuogh to be paying student loans back, and the twins would have ben paying 6% or more. So am very glad i was able to help them not to deal with the loans. So dont be 'pretty sure'

westv

It's not really a loan though is it? More a graduate tax.