Early Retirement viewpoints

[Deleted User]

Still on track for retiring in November, my previous answers are roughly the same apart from the fact I have ditched the IFA, they put a load of extra charges on - so including the OCFs and the IFA fee and the Fund Management Portfolio fee (and VAT) it was getting over £10k a year.
I have a planned a portfolio based around 4 buckets of differing times (1-2 years, 3-5 years, 5-10 years and 10 years +) with a array of bonds, shares and commodities
Overall the portfolio is 50% shares, 30% bonds/gilts, 15% cash/premium bonds, 5% commodities across three SIPP platforms with the charges including the OCFs at £2,300, I know I will have to rebalance the 4 buckets each year and when I get bored of this in a few years I will probably go down the route of simplification rather than full diversification.
With regards to losses, I was already mostly in cash which I have now started to drip feed into the portfolio, so am down quite lightly at -0.114% compared to this time last year. 

andy001

Deleted_User
Well done you Sir!
You've come unscathed in this climate
November is not far.. Enjoy

cfw1994

andy001 said:

Hi All
Hope you're all well and safe
With market changes, how are we holding the investments?
Have you changed your plans? Have you modified your investment strategies?
Would this be a setback for early retirement?
Andy

All good here thanks - I am trying to continue with the work (lots of zoom/webinars!) whilst treating this as a practice semi-retirement - relaxing at home, got the family helping with gardening and cooking - the weather clearly helps.   
I am VERY conscious there are a huge number of people working to keep the lights on - obviously the NHS doing an amazing job, but also delivery drivers, local shops, schools (some physical, some virtual) etc, etc.  I applaud them all.   Me staying at home as much as possible feels a weak effort, but I understand the logic behind it all....

I've kept a stupidly detailed daily check on the finances - main pension pot.    
Short answer - pretty happy with things, no major changes here.

It peaked at 21st Feb, dropped by 16% at the lowest point on 16th March, and is only now 4.5% below that peak.  Oh yes, & up 1.4% on Jan 3rd figures....so in summary, I am fairly comfortable with where we are.  
Obviously I had payments go in at end Jan/Feb/Mar, so not entirely scientific (ie, I am still working and contributing), but overall pretty happy with it, and I view the next few months broadly as an investing opportunity.  I do appreciate this is a very volatile time, and that things could plummet further.

Just re-read my earlier reply - "but the 20% I put into North American funds blew away the rest of them for the past 10+ years".   Well, they didn't hold up quite so well!    The good news is I took 5% more across to a safer fund back in Feb, before the peak, so that was lucky timing (if only I had moved the lot!!)
They (+ my world tracker fund) dropped nearly 25% at the lows.....whilst the other half of my investments (bonds/gilts/fixed int) only dropped 11%.  The latter is now back up around 4%, whilst those riskier funds are now down about 12%.    All that said, I view these investments as something for 30+ years, and in my view, it needs those 'riskier' funds to drive the growth in the future, which I firmly believe it will.

For me, on the finance front (not the virus generally!), this is actually a bit of a relief to happen - my biggest unknown leading into retirement was the "sequence of returns risk", and having this happen now helps LOWER that risk, in my opinion (if I look 12+ months out).  Plus I have seen how well the lower-risk pieces have performed.
Son planning to do a Masters is a bigger risk to my early retirement, but I am sure things will be fine 
Hope all are well! 

cfw1994

Deleted_User said:

Still on track for retiring in November, my previous answers are roughly the same apart from the fact I have ditched the IFA, they put a load of extra charges on - so including the OCFs and the IFA fee and the Fund Management Portfolio fee (and VAT) it was getting over £10k a year.
I have a planned a portfolio based around 4 buckets of differing times (1-2 years, 3-5 years, 5-10 years and 10 years +) with a array of bonds, shares and commodities
Overall the portfolio is 50% shares, 30% bonds/gilts, 15% cash/premium bonds, 5% commodities across three SIPP platforms with the charges including the OCFs at £2,300, I know I will have to rebalance the 4 buckets each year and when I get bored of this in a few years I will probably go down the route of simplification rather than full diversification.
With regards to losses, I was already mostly in cash which I have now started to drip feed into the portfolio, so am down quite lightly at -0.114% compared to this time last year. 

Sounds very good!
Do you mean ALL your funds are currently in cash? 
If so - well done!   How long was that for, & HOW will you decide when to dive into your planned portfolio?

[Deleted User]

cfw1994 said:

Sounds very good!
Do you mean ALL your funds are currently in cash? 
If so - well done!   How long was that for, & HOW will you decide when to dive into your planned portfolio?

I went into cash around July 2018 as the prospect of early retirement suddenly became a reality, I have been drip feeding my pension contributions into the normal funds since then (on average these have lost -0.482%).
Why did I go into cash, mainly to protect the pot at 55, I could model my future on this as it became a guaranteed amount and I wanted to take the tax free cash, I am moving abroad so I needed to take the tax free cash and move them out of the pension into ISAs and normal trading accounts as the tax regimes in Cyprus and Spain treat non pension income (dividends/CGT) much better than pension income.
I have now started transferring out of the cash DCs into my SIPPs and since I have done that (three weeks ago) I am still holding mostly cash in the SIPPs (and some nice Fundsmith which has gained 17%)

rebuswad

Since I last posted I brought my planned timeline in from 2023 to mid 2021, and with that I've a more cautious asset allocation. As cfw1994 above said I just see it as the SORR coming to fruition early, which gives some additional options as can work longer if I choose.
Net worth was down 3% from peak and accessible funds 8% at end of March so low impact, I'm more concerned about the price lowering further and lack of future growth. As things stand today I'm still on track, but I may push back a few months if we get a further crash.

Anonymous101

Nothing much has changed for me with regards investment strategy. I'm still 95% equities having 8-9 years to go until FI I'm not planning on changing this for the next year or two.
I'm still working full time at home, (Death by video call!) however income has taken a dipped by roughly a third due to Covid. I'm fortunate that I've set myself up with plenty headroom in my spending / income which means that with the reduced opportunity to spend the pay cut as it stands shouldn't hurt me too much. My hope is that equity prices stay lower for an extended period past my salary returning to normal.

Beyond our friends and families immediate health, which thankfully there have been no concerns as yet, this time has given lots of opportunity for reflection. Due to our circumstances we've been at home for 7 weeks now. I've enjoyed working from home and spending much more time with the family and working a little more flexibly. My desire to reach FI and get away from the 9-5 (more accurately 7-7) has never been stronger. I'm actually dreading going back to commuting every day and am now working on  how the FIRE approach may enable me to change lifestyle much sooner than if I were to work up until my full FI number.

andy001

cfw1994 , rebuswad and anon101- well done for your continued efforts towards FI..
Anon101- I agree, The COVID situation has put things in perspective for me and  realised my  priorities in life!

crv1963

andy001 said:

Hi All
Hope you're all well and safe
With market changes, how are we holding the investments?
Have you changed your plans? Have you modified your investment strategies?
Would this be a setback for early retirement?
Andy

Hi Andy,

Our investment plans haven't changed, but circumstances have. Now retiring next week, plan was to work part time, possibly agency work but with the changes to the pension/ earnings rules and Covid-19 emergency law I retire next Thursday and return full time on Saturday.

This means for us I carry on working full time+ and due to staffing difficulties even further away from home. So we plan to use my TFLS to pay off the mortgage, help our builder as the loft conversion has ground to a halt we're going to pay a schedule for the planned extension, but he tells me that some building suppliers are re-opening as they feel the pressure of no cash flow. He tells me that they are open to trade only for pre-ordered items that means everything is done to comply with the social distancing rules.

I'll now have pension plus wage so we'll open a pension in my name to try to avoid HRT threshold and put 80% of Mrs CRV wage into a pension. I expect there will be a multiple number of changes to tax rules and pensions as an eventual outcome of the current situation.

My plans for retiring by the age of 60 are still there although I've agreed to work where needed until the situation is better overall- I was told yesterday that my secondment to a different Team is likely to be a minimum of a year. So taking me to 58.

One of my sons has upped his pension contributions and mortgage deposit saving as he's furloughed on 80% of his salary but says his spending has fallen through the floor, as he tells me he's 23 with nowhere to go and safe in his flat for 23 hours a day. Spends his day with a routine and has discovered yoga!

Bravepants

I do feel sorry for those who will eventually return to 12 or 13 hour days including horrendous commuting once this all blows over. I only live a mile from work, but I can do 95% of everything I do at work at home. I keep hoping that work life in general for the wider population will change with companies having discovered that working from home is eminently possible for a large proportion of time.

I have four main investments/pots; my cash emergency fund, a DB pension, a S&S ISA and SIPP held as cash. I'm going to boost my emergency fund with a small bonus at the end of this month, taking me from 3 months emergency expenditure to 6 months.

My plan is to retire early at 55, in three years time, but with the likely short term future being more austerity to pay back the Government furlough scheme (someone WILL have to pay for all of this), tax changes, possible pension changes, and reductions in public sector spending, I'm considering reducing contributions to my ISA to half and buying Added Pension with the difference.

This though might be at the expense of my being able to walk away from work at 53, two years earlier than planned, if I have to. I think if I was offered redundancy today I would take it, and I would be fairly comfortable, I would not need the cash SIPP and instead would probably stick it into a balanced fund ready for draw down from 55, since I won't need the cash to carry me to 60.

So my options are simple and fairly flexible and, whatever the future holds, I have an equally simple plan.