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

Expotter

Sea_Shell said:

Expotter said:

Sea_Shell said:

Musings for a Sunday Morning...

For those of us who have FIRE'd or are planning to...are we really "FI", or are we deluding ourselves?

As, at the end of the day, most of us are not so rich that we are immune to the vagaries of government policy, international affairs, monetary policy and business.    We still need things to "go our way" to a certain extent.

Can we ever really call ourselves Financially Independent, when in most cases, we really aren't, truly independent, in reality?



Our figures are looking "too good to be true" with the recent market increases in our ISA and Pension funds as we approach both mid year and our 5 year anniversary of our FIRE decision.

The next 5 years could be....interesting?!?

Whenever I'm inclined to dwell on this, I remember Donald Rumsfeld's quote:

"As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know."

I plan for the known knowns, try to make sure there's enough flexibility and slack in the plan for the known unknowns and as far as the unknown unknowns, I can only hope for the best.

(without getting political...yet!  , as I don't want my thread canned )    It's the unknown unknowns that I'm worried about !!!!    Or are they known unknowns?      Time will tell, but my gut is having it's own thoughts. 

Agree. I am, by nature, a worrier (and not much of an optimist either) so I'm finding it really hard at the moment not to worry about those unknown unknowns, especially when there's so many rumours, suggestions and speculations being thrown about that are not totally beyond the realm of possibilities. 

zagfles

Expotter said:

Sea_Shell said:

Expotter said:

Sea_Shell said:

Musings for a Sunday Morning...

For those of us who have FIRE'd or are planning to...are we really "FI", or are we deluding ourselves?

As, at the end of the day, most of us are not so rich that we are immune to the vagaries of government policy, international affairs, monetary policy and business.    We still need things to "go our way" to a certain extent.

Can we ever really call ourselves Financially Independent, when in most cases, we really aren't, truly independent, in reality?



Our figures are looking "too good to be true" with the recent market increases in our ISA and Pension funds as we approach both mid year and our 5 year anniversary of our FIRE decision.

The next 5 years could be....interesting?!?

Whenever I'm inclined to dwell on this, I remember Donald Rumsfeld's quote:

"As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know."

I plan for the known knowns, try to make sure there's enough flexibility and slack in the plan for the known unknowns and as far as the unknown unknowns, I can only hope for the best.

(without getting political...yet!  , as I don't want my thread canned )    It's the unknown unknowns that I'm worried about !!!!    Or are they known unknowns?      Time will tell, but my gut is having it's own thoughts. 

Agree. I am, by nature, a worrier (and not much of an optimist either) so I'm finding it really hard at the moment not to worry about those unknown unknowns, especially when there's so many rumours, suggestions and speculations being thrown about that are not totally beyond the realm of possibilities. 

Look across the water at the choice the French are facing. That'll make you feel better!

Shimrod

Sea_Shell said:

westv said:

Apart from Brexit, Covid and Russia's invasion of Ukraine the last 5 years had nothing of "interest"?

Quite.    If we've come through that lot financially unscathed, the next 5 years should be a breeze!!! 

The only thing we can do really is build in a buffer level such that our potential income is greater than the amount we need. Deciding on what that level of buffer should be a personal decision based on your attitude to risk (how big a buffer is enough?) and how flexible you can be in cutting expenditure without being resentful. Too big a buffer can mean working longer than you needed to, too small can mean an unexpected return to work. 
After considering a early retirement in 2021 I decided to work a bit longer and changed jobs instead - which I think for me was the right decision - and the intention is to retire sometime before the end of this year.

SouthCoastBoy

I changed jobs just over 12 months ago, rather than retire, I was 58 at the time. New job was a 40k pay cut but has meant I can work 100% at home rather than commuting 4 hrs a day, and has enabled me to top up my pension a little longer.

Not too sure when I will retire, I did a review of my current savings yesterday, total pot is 1,669,810, pension is 838,586 and savings/investments 831,224 I have calculated we need 2500 per month net of tax.

I may retire at 60, which is early next year, or continue for another year or two.

The point about financial independence is an interesting one, I'm always concerned about a stock market crash and 40% gets wiped off the value of my pensions and investments, which is I guess, why i've not retired

michaels

Perhaps it is a moment to think about really diversifying ones assets, not just the normal stocks Vs bonds but perhaps different jurisdictions and assets outside of the financial system not just gold bars under the mattress but things like solar panels that cost cash upfront but provide tangible returns in terms of generated electricity.

Sea_Shell

Maybe Vintage Champagne?? 🍾 

At least one can then drown one's sorrows when it all goes pear shaped 🤣😉

barnstar2077

SouthCoastBoy said:

I changed jobs just over 12 months ago, rather than retire, I was 58 at the time. New job was a 40k pay cut but has meant I can work 100% at home rather than commuting 4 hrs a day, and has enabled me to top up my pension a little longer.

Not too sure when I will retire, I did a review of my current savings yesterday, total pot is 1,669,810, pension is 838,586 and savings/investments 831,224 I have calculated we need 2500 per month net of tax.

I may retire at 60, which is early next year, or continue for another year or two.

The point about financial independence is an interesting one, I'm always concerned about a stock market crash and 40% gets wiped off the value of my pensions and investments, which is I guess, why i've not retired

Even if your assets halved in value you would have no problem finding £2.5k a month.

As you are concerned about sustainability, perhaps an annuity would give you peace of mind?  Not the right choice for everyone, but if you used your pension to purchase one you would know your bills would always be covered.  Then you could leave your savings invested without a second thought.

Also, if you are invested in equities, then it is a matter of when the next dip happens, not if.  They go up and down a lot, so nothing to worry about unless you need to remove a lot of money at exactly the wrong time.

DT2001

SouthCoastBoy said:

I changed jobs just over 12 months ago, rather than retire, I was 58 at the time. New job was a 40k pay cut but has meant I can work 100% at home rather than commuting 4 hrs a day, and has enabled me to top up my pension a little longer.

Not too sure when I will retire, I did a review of my current savings yesterday, total pot is 1,669,810, pension is 838,586 and savings/investments 831,224 I have calculated we need 2500 per month net of tax.

I may retire at 60, which is early next year, or continue for another year or two.

The point about financial independence is an interesting one, I'm always concerned about a stock market crash and 40% gets wiped off the value of my pensions and investments, which is I guess, why i've not retired

You are 8 years away from SPA. When your OH, assuming you both have full entitlement, reaches SPA  you’ll need £7/8k p.a. net.
Using a SWR of 3.25% (assuming U.K. based investments) £300k would suffice.

If your pots fail mine (and most/all contributors on this forum) will have failed some time beforehand and IMO we were FI 4 years ago (OH has continued to work as she loves what she does).

You have been savvy in building up your nest egg and you now just need to apply that to decumulation. Some combination of cash/bond ladders/fixed term annuity would derisk. I assume you are not 100% equities so a 40% drop in markets doesn’t equal a 40% drop in your pots.

MacMickster

Sea_Shell said:

Maybe Vintage Champagne?? 🍾 

At least one can then drown one's sorrows when it all goes pear shaped 🤣😉

At least you'd get some enjoyment from the bubble(s) bursting.

Triumph13

Hi Sea_Shell.  It's great to see that your FIRE is going so well.  I FIREd five years ago too, with not too dissimilar gaps until DB and state pensions came on line, so I'm intrigued by how different your strategy is to mine. 

Apologies if this has already been covered at length (400 pages is a bit daunting to catch up on) but do you mind if I ask the reasoning behind your approach?  It's pretty clear that you could probably double your current spending level if you were prepared to spend though more of your funds before the pensions come on line - eg by setting aside £10k a year until DH's pension comes on line, another £10k pa until the first state pension comes on line and then drawing down sustainably from the rest.   Are you particularly wanting to leave a large legacy?  Or just hate the idea of spending capital?  Or distrust the future of the state pension?  Or planning to have a really big income in old age to cover care needs?  I'm hoping it's just that you are perfectly happy as you are and can't imagine any higher spending making you happier