I think I am doing okay

Mistermeaner

Albermarle wrote: »

2.5% pa is low historically but we seem to be in a long term low inflation environment so could be a good figure to use .

I'll re run the numbers tomorrow and factor in mortgage pay off as well

OP please check back tomorrow

worried_jim

Mistermeaner wrote: »

I'll re run the numbers tomorrow and factor in mortgage pay off as well

OP please check back tomorrow

Will do! Much appreciated!

Oliver1191

I mean this politely, but you're doing terribly.

Firstly, my question to you would be: how much do you need for lean FIRE?

My lean FIRE is 1k a month. Using the 4% withdrawal rate, that means i need at least 300k total pot. At 46, you're nowehere near this.

You've got something, which is good, but you need to increase your investment rate asap.

Mistermeaner

Oliver1191 wrote: »

I mean this politely, but you're doing terribly.

Firstly, my question to you would be: how much do you need for lean FIRE?

My lean FIRE is 1k a month. Using the 4% withdrawal rate, that means i need at least 300k total pot. At 46, you're nowehere near this.

You've got something, which is good, but you need to increase your investment rate asap.

the OP never talked about retiring early

Also there are penalties in withdrawing a pension before the allowable age, which I think for the OP will be 56

The OP is not doing terribly at all

Mistermeaner

OP;

Re-run your numbers with a little bit more precision:

Age today: 45

Starting balance: £161,000

Annual payments in by you next 10 years: £4594, increasing by 1% per annum (assumes you get modest pay rises)

Annual payments in by you after 10 years: £as above + an extra £5K per annum assuming you have paid off your mortgage

Growth rate: 2.5% (as suggested above)


This would give you the following total pot at various ages:

age 56 £293,386
age 57 £310,946
age 58 £329,048
age 59 £347,705
age 60 £366,934
age 61 £386,748
age 62 £407,164
age 63 £428,199
age 64 £449,867
age 65 £472,187
age 66 £495,175
age 67 £518,851



If we assume you take the full 25% lump sum and then draw down the remaining pot at 3%, and get the full state pensions at age 67 this would give you the following:

lump sum annual income 3% state pension
total
age 56 £73,346 £6,601 £6,601
age 57 £77,737 £6,996 £6,996
age 58 £82,262 £7,404 £7,404
age 59 £86,926 £7,823 £7,823
age 60 £91,733 £8,256 £8,256
age 61 £96,687 £8,702 £8,702
age 62 £101,791 £9,161 £9,161
age 63 £107,050 £9,634 £9,634
age 64 £112,467 £10,122 £10,122
age 65 £118,047 £10,624 £10,624
age 66 £123,794 £11,141 £11,141
age 67 £129,713 £11,674 £8,546
£20,220


So providing you work until you are 67 and pay in the additional amount once you are mortgage free you are on track to hit your £20K/annum target (and you will have a nice £129K tax free lump sum) – good job!




A quick bit of maths can also test how long your pot will last:

- Using age 67 as your retirement age and assuming you take the 25% lump sum as above your pot will have £389K left in it; withdrawing 3% of this as income gives you the £11,674 as mentioned above
- Lets assume you want to increase your withdrawal each year by 3% to cover the increased cost of living caused by inflation we need to increase this by 3% year on year; so it becomes £12,024 age 68, £12,385 age 69 etc
- Also assume the remaining pot continues to grow at the 2.5% rates
- You will run out of pot at the ripe old age of 99; details below
- Nut shell summary you are on target!!


starting pot withdrawn growth
age 67 £389,138 £11,674 £9,728
age 68 £387,192 £12,024 £9,680
age 69 £384,848 £12,385 £9,621
age 70 £382,084 £12,756 £9,552
age 71 £378,880 £13,139 £9,472
age 72 £375,213 £13,533 £9,380
age 73 £371,060 £13,939 £9,276
age 74 £366,397 £14,358 £9,160
age 75 £361,199 £14,788 £9,030
age 76 £355,441 £15,232 £8,886
age 77 £349,095 £15,689 £8,727
age 78 £342,133 £16,160 £8,553
age 79 £334,527 £16,644 £8,363
age 80 £326,246 £17,144 £8,156
age 81 £317,258 £17,658 £7,931
age 82 £307,532 £18,188 £7,688
age 83 £297,033 £18,733 £7,426
age 84 £285,725 £19,295 £7,143
age 85 £273,573 £19,874 £6,839
age 86 £260,538 £20,470 £6,513
age 87 £246,581 £21,085 £6,165
age 88 £231,661 £21,717 £5,792
age 89 £215,735 £22,369 £5,393
age 90 £198,760 £23,040 £4,969
age 91 £180,690 £23,731 £4,517
age 92 £161,476 £24,443 £4,037
age 93 £141,070 £25,176 £3,527
age 94 £119,421 £25,931 £2,986
age 95 £96,475 £26,709 £2,412
age 96 £72,178 £27,511 £1,804
age 97 £46,471 £28,336 £1,162
age 98 £19,297 £29,186 £482
age 99 -£9,406 £30,062 -£235

worried_jim

Oliver1191 wrote: »

I mean this politely, but you're doing terribly.

Firstly, my question to you would be: how much do you need for lean FIRE?

My lean FIRE is 1k a month. Using the 4% withdrawal rate, that means i need at least 300k total pot. At 46, you're nowehere near this.

You've got something, which is good, but you need to increase your investment rate asap.

Sadly there is nothing more I can add currently, living on my own my budget/income is fixed. I do save 18% per year and fortunately I do get a pay-rise 1-3% every year so my contribution also increases, once the mortgage is paid off I'll be able to put that money in and although it wont have many years to compound it will at least get tax relief so far greater potential than simply putting into a savings account. I agree though that the more saved the more opportunities it provides/buys in the future and I am trying!

worried_jim

Mistermeaner wrote: »

OP;

Re-run your numbers with a little bit more precision:

Age today: 45

Starting balance: £161,000

Annual payments in by you next 10 years: £4594, increasing by 1% per annum (assumes you get modest pay rises)

Annual payments in by you after 10 years: £as above + an extra £5K per annum assuming you have paid off your mortgage

Growth rate: 2.5% (as suggested above)


This would give you the following total pot at various ages:

age 56 £293,386
age 57 £310,946
age 58 £329,048
age 59 £347,705
age 60 £366,934
age 61 £386,748
age 62 £407,164
age 63 £428,199
age 64 £449,867
age 65 £472,187
age 66 £495,175
age 67 £518,851



If we assume you take the full 25% lump sum and then draw down the remaining pot at 3%, and get the full state pensions at age 67 this would give you the following:

lump sum annual income 3% state pension
total
age 56 £73,346 £6,601 £6,601
age 57 £77,737 £6,996 £6,996
age 58 £82,262 £7,404 £7,404
age 59 £86,926 £7,823 £7,823
age 60 £91,733 £8,256 £8,256
age 61 £96,687 £8,702 £8,702
age 62 £101,791 £9,161 £9,161
age 63 £107,050 £9,634 £9,634
age 64 £112,467 £10,122 £10,122
age 65 £118,047 £10,624 £10,624
age 66 £123,794 £11,141 £11,141
age 67 £129,713 £11,674 £8,546
£20,220


So providing you work until you are 67 and pay in the additional amount once you are mortgage free you are on track to hit your £20K/annum target (and you will have a nice £129K tax free lump sum) – good job!




A quick bit of maths can also test how long your pot will last:

- Using age 67 as your retirement age and assuming you take the 25% lump sum as above your pot will have £389K left in it; withdrawing 3% of this as income gives you the £11,674 as mentioned above
- Lets assume you want to increase your withdrawal each year by 3% to cover the increased cost of living caused by inflation we need to increase this by 3% year on year; so it becomes £12,024 age 68, £12,385 age 69 etc
- Also assume the remaining pot continues to grow at the 2.5% rates
- You will run out of pot at the ripe old age of 99; details below
- Nut shell summary you are on target!!


starting pot withdrawn growth
age 67 £389,138 £11,674 £9,728
age 68 £387,192 £12,024 £9,680
age 69 £384,848 £12,385 £9,621
age 70 £382,084 £12,756 £9,552
age 71 £378,880 £13,139 £9,472
age 72 £375,213 £13,533 £9,380
age 73 £371,060 £13,939 £9,276
age 74 £366,397 £14,358 £9,160
age 75 £361,199 £14,788 £9,030
age 76 £355,441 £15,232 £8,886
age 77 £349,095 £15,689 £8,727
age 78 £342,133 £16,160 £8,553
age 79 £334,527 £16,644 £8,363
age 80 £326,246 £17,144 £8,156
age 81 £317,258 £17,658 £7,931
age 82 £307,532 £18,188 £7,688
age 83 £297,033 £18,733 £7,426
age 84 £285,725 £19,295 £7,143
age 85 £273,573 £19,874 £6,839
age 86 £260,538 £20,470 £6,513
age 87 £246,581 £21,085 £6,165
age 88 £231,661 £21,717 £5,792
age 89 £215,735 £22,369 £5,393
age 90 £198,760 £23,040 £4,969
age 91 £180,690 £23,731 £4,517
age 92 £161,476 £24,443 £4,037
age 93 £141,070 £25,176 £3,527
age 94 £119,421 £25,931 £2,986
age 95 £96,475 £26,709 £2,412
age 96 £72,178 £27,511 £1,804
age 97 £46,471 £28,336 £1,162
age 98 £19,297 £29,186 £482
age 99 -£9,406 £30,062 -£235

Thank you Mistermeaner! I have saved these numbers, great work and very well explained.

atush

Have you considered a low carb or even keto diet to help control your type 2? Some doing this even come out of type 2.

Albermarle

Its administered by TowersWatson (I gather they do loads now), I searched for the charges but couldn't find them anywhere, I know there are some as I had an email a few weeks ago with a link to them and I thought when I have time I must have a look and of course I cant find the blooming email now. Friends Life took over Winterthur a few years ago and the Aviva workplace pension is 4 year old plan so I presume that both of these are pretty modern schemes.

It can be easier in the end to just call Towers Watson and ask them about the charges .
The fact that Friends Life took over an old pension does not mean it will automatically become a modern pension that support drawdown etc , probably the opposite .Again you need to check.

worried_jim

atush wrote: »

Have you considered a low carb or even keto diet to help control your type 2? Some doing this even come out of type 2.

I am already doing so.