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It's time to start digging up those Squirrelled Nuts!!!!

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  • RetSolRetSol Forumite
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    FWIW, and sorry if this is off-topic but it feels like it may not be, I took my civil service pension early in April and have some investment income on top.  I am 55, own my home and can also look forward to a full state pension at 67.  I have been tinkering with my investments over the last 12 months and think that I now have an allocation which I am happy with.  Just need to implement by shifting a few things around.  However, these are uncertain times and even though the bulk of my income comes from a civil service pension which covers my basic living expenses I find myself being anxious about the future and, if anything, more inclined to bury my squirreled nuts than spend them.  Atm, maybe that's not such a bad thing.  It doesn't seem like the right time to book a world cruise... even if I could afford one.  However., there is a danger for me that I will spend less than I can afford to the detriment of my taking advantage of my early "retirement".  It is difficult, I find, to get the balance right.  
  • Sea_ShellSea_Shell Forumite
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    1,000 Posts Fifth Anniversary Name Dropper Hung up my suit!
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    Sea_Shell said:
    IT'S BEEN 1 YEAR!!!!     Since I finished work. 

    Wow, that's gone quick. 
    Achieved bu**er all in that time, mind you.
    2020 so far has been a year to forget.
    Financially, we are almost exactly where we were last year, growth of pot = spends from pot.
    We shall muddle through the remainder of this year, as allowed, and hope that 2021 will be better.
    congratulations on your anniversary.   we are considering jumping three years before we intended to retire but would need to self fund.  when you say your pot is same and spending equals gains, have you had any other source of income  or just your savings/investments?  trying to work out if our new plan is doable....thanks for any thoughts on this.   
    No other sources of income, unless you include the odd £5 here and there for doing surveys, cashback or selling bits on FB, so yes, that's just counting the overall growth of the "pot".     It includes Interest on cash (reducing every day!!), and the current values of ISA's/Pensions.    Just looked and we have "earned" £160 from the above activities so far this year.

    We're currently spending down our cash, and not touching our investments, as we also have a Fixed Term Bond (2.2%) due to mature in Sept 2021, at which point DH can start to draw from his DC pensions, and we will make another decision as to how much of that cash to keep as cash (possibly Premium Bonds, if interest rates are below 1%) and how much to invest at that time.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow ":beer: JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!! :j:j:j
  • edited 20 July at 8:11AM
    StubodStubod Forumite
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    edited 20 July at 8:11AM
    RetSol said:
    FWIW, and sorry if this is off-topic but it feels like it may not be, I took my civil service pension early in April and have some investment income on top.  I am 55, own my home and can also look forward to a full state pension at 67.  I have been tinkering with my investments over the last 12 months and think that I now have an allocation which I am happy with.  Just need to implement by shifting a few things around.  However, these are uncertain times and even though the bulk of my income comes from a civil service pension which covers my basic living expenses I find myself being anxious about the future and, if anything, more inclined to bury my squirreled nuts than spend them.  Atm, maybe that's not such a bad thing.  It doesn't seem like the right time to book a world cruise... even if I could afford one.  However., there is a danger for me that I will spend less than I can afford to the detriment of my taking advantage of my early "retirement".  It is difficult, I find, to get the balance right.  

    This is not an uncommon problem, we are in the same boat, a lifetime of no debt (mortgage paid off early), and always educated by parents to save save save and it's a difficult habit to break as our brains are now hard wired into savings mode!
    The key thing is to set a realistic spending budget and then spend what you have planned.
    Mind you we have been retired for 3 years now and according to our income/expenditure budget we should be about £60k down from our retirement starting point (some pensions don't start for another year or two so we planned to live off savings), but we are actually showing a small increase in overall funds available.....so I can't even follow my own advice!
    When you find out how to spend it please let me know...
  • edited 20 July at 9:30AM
    BravepantsBravepants Forumite
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    edited 20 July at 9:30AM
    Retsol, do you have a monthly budget, which you might have perhaps recorded in a spreadsheet? Also, do you have another spreadsheet that shows your total monthly income after tax, including from your CS pension, and perhaps 3 to 4 % (the Safe Withdrawal Rate) equivalent annual drawdown from your investments?

    For my retirement planning I have such a spreadsheet that lists my age from age 55 up to about 90 or so, against a projected monthly income for each year. I include all pensions from the year I expect them to kick in, and uprate each total income amount by inflation (I assume 2% as that's the Government target). In this way I've created a road map of income and I can balance that against my needs and my discretionary spending. I can also look at various scenarios, for examples, suppose I don't draw anything from my ISA, thus reducing monthly income, but perhaps saving the capital and letting it grow for big purchases? Or perhaps drawing from my ISA allows me to save more cash towards holidays?

    If you haven't already, it really helps to write things down and actually see it all projected forward as an aid to thinking and planning. .
    If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.
    Be brave enough to invest against the herd!
  • Sea_ShellSea_Shell Forumite
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    Retsol, do you have a monthly budget, which you might have perhaps recorded in a spreadsheet? Also, do you have another spreadsheet that shows your total monthly income after tax, including from your CS pension, and perhaps 3 to 4 % (the Safe Withdrawal Rate) equivalent annual drawdown from your investments?

    For my retirement planning I have such a spreadsheet that lists my age from age 55 up to about 90 or so, against a projected monthly income for each year. I include all pensions from the year I expect them to kick in, and uprate each total income amount by inflation (I assume 2% as that's the Government target). In this way I've created a road map of income and I can balance that against my needs and my discretionary spending. I can also look at various scenarios, for examples, suppose I don't draw anything from my ISA, thus reducing monthly income, but perhaps saving the capital and letting it grow for big purchases? Or perhaps drawing from my ISA allows me to save more cash towards holidays?

    If you haven't already, it really helps to write things down and actually see it all projected forward as an aid to thinking and planning. .
    We do something similar, with a rolling "day one".    No point worrying about what's been!

    Opening pot total, predicted spends subject to inflation, predicted growth, with DB/SP income then coming into play at relevant points.

    We play around with the % for growth/inflation to see what predictions it makes.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow ":beer: JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!! :j:j:j
  • RetSolRetSol Forumite
    111 posts
    100 Posts Name Dropper
    Retsol, do you have a monthly budget, which you might have perhaps recorded in a spreadsheet? Also, do you have another spreadsheet that shows your total monthly income after tax, including from your CS pension, and perhaps 3 to 4 % (the Safe Withdrawal Rate) equivalent annual drawdown from your investments?

    For my retirement planning I have such a spreadsheet that lists my age from age 55 up to about 90 or so, against a projected monthly income for each year. I include all pensions from the year I expect them to kick in, and uprate each total income amount by inflation (I assume 2% as that's the Government target). In this way I've created a road map of income and I can balance that against my needs and my discretionary spending. I can also look at various scenarios, for examples, suppose I don't draw anything from my ISA, thus reducing monthly income, but perhaps saving the capital and letting it grow for big purchases? Or perhaps drawing from my ISA allows me to save more cash towards holidays?

    If you haven't already, it really helps to write things down and actually see it all projected forward as an aid to thinking and planning. .
    Thank you all for your responses. 
    I have started keeping a monthly budget spreadsheet, along the lines which Bravepants suggests, so that I know more about where I stand.
    I haven't gone as far as projecting my income up to age 99 but I might give it whirl.  Does anyone know of a template for this? 
  • edited 21 July at 7:16AM
    Sea_ShellSea_Shell Forumite
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    edited 21 July at 7:16AM
    I don't have a template as such, i just played around with Excel.

    I have the following columns.

    Year
    Starting fund
    Growth in £  (based on an adjustable % in another cell)
    Fund plus growth
    Estimated Spends - adjustable (linked to an adjustable inflation % each year)
    Income ( nil at present and then includes DB/SP when due)
    Net Balance
    Number of years spends at this rate

    Copy the Net balance back to the next line down as the starting fund for year 2, repeat. 
    You need to play around with the formulas a bit to get them to do what you need.

    It basically tells me that if i had say a starting pot of £500,000, with a 3% growth rate, that would give me growth in £ of £15,000.
    If I then said I would spend £20k per year, increasing at 2% inflation, it would show i'd have £495,000 for year 2, with growth in year 2 of £14,850 and spends of £20,400.   Drag the formulas down the columns to see when (if) you run out of money!!    Using the above, shows 25 years of spending, initially, with £400,000 left after 12 years.

    £166,200 of growth, to offset £266,400 of spends.  

    Hope that helps.

    " That pound I saved yesterday, is a pound I don't have to earn tomorrow ":beer: JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!! :j:j:j
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