Staying on track to be MF and ready to support my daughter at 18

Cheery_Daff

Our grass hasn't really started growing properly yet ElmoR so maybe it's just not warm enough yet?  

Doesn't sound to me like you're dithering! Although I confess the nitty gritty mechanics are beyond me. I'm impressed at all your financial planning though, and glad the FIREside chats are helping (are they an MSE thing?)

What's brought on your daughter's pilot enthusiasm? Why aren't you keen - I imagine it's wildly more expensive than a degree but that's based on literally no knowledge, just speculation... 

ElmoR

Thanks for popping in @Cheery_Daff

The grass not growing is not unusual then, I shall keep watering the patches and talking soothingly to it...

DD just came out with the pilot job plan out of thin air. It costs approx £80K to get yourself fully qualified. We had to explain that the back garden has no magic money tree. She didn't fully understand that university involves student loans that you eventually pay back as a sort of tax. Yes, we will help her, but not the fees part, we don't have that amount saved. I don't think you get student loans like that for pilot schooling and that is how it becomes out of reach while doing a Uni course is within reach. Her answer is to do a year of full time work in a supermarket or such, but she hasn't properly done the sums yet. That won't find her the sum she needs either.  No idea why she went off healthcare as a career route? Have encouraged her to go and see the school's career advisor but I suspect that she isn't receptive to anyone's advice right now. I've explained about NHS pensions, work life balance, relationship challenges, and your average daily routine for working in a hospital v being a pilot. Doesn't hear me.

Feeling very queasy and unsettled now too. DD throwing us a curve ball and now the USS pension mess is kicking off again. Almost certainly strikes coming. I just want to do my job (well) and retire at 60, my energy/motivation levels aren't high enough for any fights or extra stress. The employers have suggested that the scheme be changed differently to what the scheme is suggesting (and which was supposed to come into effect in oct 2021, so soon). Scheme trustees want to hike the contributions by employee and employer to massive % but not increase the benefits, they stay same. The employers suggest changing DB to 1/85th and capping to £40k (currently £50K), above which you add to the DC not the DB pot. Looking at the FIRE spreadsheet, I don't know what to add for pension, it's all up in the air. If I work with what I've accrued so far then retiring at 60 requires me to make up the new shortfall of approx ~£60K, which is on top of what I thought I already needed of £70k to get from age 60 to 67. So overnight, the sum has gone from do-able to not so sure now. The prospect of having to continue at my workplace into my 60s fills me with dread. The dream barn could go out the window and we could aim for a frugal 7 first years of retirement maybe? I wouldn't mind a part time job in a shop/supermarket/anything either, but will anyone want to hire us at 60+years old?

I used to love my job too.

Sorry for the downer,

ElmoR

Cheery_Daff

Oh EmloR, it does all sound very uncertain, I'm not surprised you're down about it 😕

I suppose there's not much you can do about daughter, and it sounds like trying to advise might only make her dig her heels in... Has she gone away and done her own research about pilot school? Would she be willing to do the sums herself, and then see if working in a supermarket is a realistic option? Is she reluctant to go to university for another reason? First years have had a rough time this year, an entire year online and not meeting anyone else - I wouldn't be surprised if the new cohort is discouraged 😕

As for pensions, urgh 😕 Not surprised you're discouraged either! I'm so glad I've switched to TPS, although it was sheer inertia and lack of willingness to learn anything about pensions that led me to it, not anything savvy. Nothing sensible to add I'm afraid, but just give yourself time to feel discombobulated for a while xx

South_coast

Becoming a pilot would be a fantastic thing to do - if most planes hadn't been grounded for over a year. I know it will take time to qualify, but does she understand that they are unlikely to be taking on any new staff for some time? What will she fall back on in the meantime? Also, I think (although could be completely wrong) that training is usually undertaken by the airlines. They may have suspended that part of their operation entirely for the next few years. Best of luck with speaking to her x

edinburgher

1/85th? Jings, that's awful

ElmoR

Thanks @Cheery_Daff and @South_coast for the DD sympathies

Older teenagers are tricky things to handle. I've been trying to do lots of puppy walks with her so that we have time to chat but then I must wait for her to bring the topic up. She's slowly working through the realities herself. New possible route is a uni degree in biomed sciences or microbiology or molecular biology, so she is keeping her mind open at least. She looked at uni websites too, she likes the idea of a campus and not having to walk anywhere (the priorities are a bit weird) and she wants to be away from home but not too far away. I'm cheering for Glasgow since she has many relatives there and I did my PhD there, so know the city and universities quite well. Our Yorkshire-Glasgow trek usually takes about 5 hours though. Who knows. She'll probably change her mind a zillion times before this time next year...I miss those simple years where you would ask her what she wanted to be when she grew up and her answer was a hippopotamus.

@edinburgher "jings?" I have been using much more fruity language than that. I do love @taka 's choice of emoji in the FIRE Side chat thread. I suppose I'm in a hippo stage just now myself - wallowing in the anger and unfairness. According to a self help guru, it's ok to wallow a bit, but I probably should kick myself out of it soon. The uncertainty makes planning tougher, but as others point out, a plan often gets shredded once it sees the light of day and real life has a go at it. So I'm going to try to have a 'direction' for now, rather than a plan. I really like the FU approach too.

This next while I am going to research the heck out of the USS scheme, what can and can't be done, it's performance etc. Compare it with my SIPPs. I have set up two now - the fancy pants H&L and a sparkly new Van Target Retirement 2030 Fund.

Interesting factoid just found out - you can transfer money out of the USS Investment Builder (the DC part), so in theory, I am hoping I can pay via salary sacrifice, get the tax relief, then transfer to the SIPP. The reply from USS, and the transfer out form, implies that it may involve closing the DC pot, which isn't what I want to do at all, so am having to dig deeper and find out if part withdrawals are ok or not while the pot continues.

Once all the information is gathered, time to make decisions on how much gets flung where. At 52, going on 53, it makes more sense to put into pensions to get the tax relief and still have @ 8 years to snowball.

@taka - you mention buying more DB using the DC pot on retirement - I missed that part, so will look that up too...

Part of me wants to build a bonfire and throw USS onto it, but I must rein that feeling in and make sure we do the sensible thing money-wise...if there is a shortfall in my sums, that might be the kick up the jacksie that I need to pick back up on the book writing ...

ElmoR xx

Cheery_Daff

Sounds like some good planning you're doing there, and it sounds like DD is too - clearly she has a good role model! 😊

taka

Deeply buried in the USS website there is info on the options for the Investment pot. This page for financial advisors (and the linked PDF from the page) gives a bit of info on the current costs of using the DC pot to buy more DB. One of the modellers also alows you to play around with it too with your own numbers / predicted numbers under the current scheme rules and costs. Who knows what changes will happen before retirement though...

You can transfer the DC part out but, (if I've understood it correctly!), your potential death in service payout amount and incapacity early retirement amount may possibly also be affected. I think they reclaim employer contributions too. There is a pdf that explains more but I can't find it at the mo though... 🤔 Their website is like a maze.

Check with your Uni if they allow you to pay into the Investment pot voluntarily via Salary Sacrifice. Mine does but I've heard some only allow the 1% match (despite it no longer running!) & not anything above this via Sal Sac. That way you don't need to pay 12% NI on the amount via Sal Sav versus a normal SIPP.

Hope your DD manages to make a realistic decision on her future plans whithout too much pain. Pilot vs Life Sciences degree seem vastly different options to each other! 🤣 The Life Sciences acedemic route certainly doesn't offer much job security that is for sure...

P.S. Pressing the Windows key and . on your keyboard (window computers) = menu for more smilies! 😁 🤪

ElmoR

Annual Leave day, yay

Currently minus 2 degrees out there so will wait for it to warm up a bit before a bit of greenhouse time. I'm riding on a wave of success with the tomato seedlings and will try some cucumber and maybe some annual flowers too. I have 65 of the little coir seedling pods to fill...not sure what DH will think of the spare room window sill and shelves being over run with these, but it's only for a couple of weeks, surely?? The weather has to warm up soon? Going to start off some more sweet peas too, the others look very sickly after the recent hot, freezing, hot, freezing cycling in the greenhouse.

Starting to feel a bit more settled finances wise. Managed a few wins this week. Claimed the WFH tax relief for this year again, for myself and DH. Changed electricity/gas tariff to a better deal. We're also eating down our Brexit prepper supplies from the garage stockpile. Lots of canned goods meals so might need a bit more fruit/veg to prevent scurvy.

Also feeling better on the direction for the next 8 to 10 years finances-wise. My local USS pension admin rep is probably cursing me for changing my mind 4 times on what additional contributions to make each month. Ironically, all I've done is put it back to what I had it at two months ago. Will check and see if my sums were correct in 6 months time. I used the salary calculator website to try to work out implications of OPs in terms of take home pay and tax relief etc. (thanks to bluenose for sharing that link with me)

https://www.thesalarycalculator.co.uk/

There's now a DC pot and two SIPPs to monitor. I'm going to watch these for 6 months and see what happens. One SIPP is a hybrid of part passive, part active. They are having a competition and I wanted to see if the FIL strategy (of selected Investment Trusts) won out or not. If they lose, I'll ditch them after review. No massive harm done since they represent a relatively small pot. After a few days of setting up...Fidelity Multi Asset World fund (my passive pick) gain is cancelling out the losses on the Investment Trusts (the active picks). this gambling involves a few pounds difference only, so I am comfortable with this experiment.

There's one remaining financial conundrum to solve. I posted about this on the Savings and investment board a long time ago, so will go back and re-read the advice, but I think I now know the sensible thing to do. There's a pot of money in an investment trust that I set up nearly 20 years ago and had fifty quid a month dripping in over that time. Don't ask me why (emotional rationale based) but I took £10K out in Jan 2020 and put it into my DD's cash ISA (3.6% interest), where it still sits. I think I wanted it ready for post 18 years deployment, but actually it's not needed quite yet. So maybe that should go back into the S&S Junior ISA that she can have at aged 18 as an adult (she's 17 and a half just now and already has a Junior S&S account just opened). So a loophole allows her to have two at age 18. Anyway, even after taking £10k out, there's still £14k left there and the regular 50 quid still going in. It's a general investment account though, not an ISA or a SIPP. Yes, I know it was dumb to set it up that way. 30 year old me knew none of what I now know. So clearly it needs action. This is going to sound bizarre but I feel that closing the account may jinx its great performance. To convert it into a SIPP will presumably mean selling and buying the same number of units again?! I can't make it into an ISA for me (already have one), but I could convert it into an adult ISA for my DD. Both mean it will be accessible for DD (since I'm less 3 years off 55 yrs). I would have to do the maths on the annual allowance (£40k?) into pensions to be sure, but I'm pretty certain it won't take me over that (considering those DC and SIPP contributions). But is it worth it for 3 to 5 years -ish timescale, once the tax at closure kicks in? Maybe the adult S&S ISA for my daughter makes more sense? I find these calculations really hard work. Then you have to factor in a yound adult who isn't sure what they want to do post 18 and being ready to help them.

On the topic of young adults, had to pay for DDs driving theory test booking though and lessons start in May hopefully. The instructor does a bundle scheme, so we'll opt for that. Not sure I would pass a theory test now to be honest. There's a heck of a lot more in there than we ever had to know. When she was primary age, she played a game on her phone that involved driving around and parking cars. She used to bump the cars off walls and other cars to move them around faster  I'm wondering how that will develop into her actual driving style...

In a very positive development, DD had a very good meeting with her school careers advisor. She is working out plans A, B and C with the advisor feeding her links to further information. Plan A, pilot, has more detail in terms of routes/costs/possible bursaries etc. Plan B will also now have a mentor provided by the school. I've also found her a book (the size of a phone book) that lists all jobs in the life sciences and what they entail/require for entry etc. Colleagues with slightly older 'children' have also suggested getting on the road during the summer and visiting as many uni open days as possible to see if anything clicks.

Time to get out to the garden,

have a good day all,

ElmoR

ladysummerisle

Stick Liverpool on the list for a visit - small enough city that it’s walkable for a start. Friendly is always the word that people use though when they arrive. I can speak to the dedication of the staff too.