Retirement income strategy on the back of a fag packet

Avgeek

I used that same term yesterday to my new IFA. He laughed but agreed that many people do use "fag packet calculations" and cross their fingers. I'm on the countdown now - end of next year I will hopefully jump off the cliff into retirement (another term he laughed at but said I shouldn't feel like that) - so I am definitely looking far more closely than I ever did. This forum is the best place I've found and the tips on here are just so so helpful. My biggest reason for being quite thorough at the moment is the thought that I may not be making the best use of tax relief, having funds in the best place possible etc, but I do have a fear that after I do retire I will still be obsessed with checking on here and looking at my plans daily. So many people on here to thank for the advice - I do hope you know that many of us on here maybe don't post that often but browse and learn regularly.

Albermarle

Pension v ISA, World economic cycle, gilts v bonds v cash, funds v ITs v ETFs, SWR, tax, trusts, inflation, state pension, risk, volatility etc etc

Just because someone is not going into fine detail , spreadsheets etc does not necessarily they are uninformed about these important issues. My question is not whether people going into retirement should be badly or well informed ( clearly the latter) but whether a lot of detailed analysis of possible scenarios,  is really necessary . Often the best plans often unravel in the face of unexpected events anyway .

cfw1994

Good post, Robert, although I suspect there may be a few pieces tucked in there that perhaps don't have to form part of a retiree's knowledge, or maybe even impinge on their life.  This is particularly if they have DB schemes, of course, but even with DC pots to manage.
Funds v ITs v ETFs, & trusts, in particular, I suspect are less important to dive into the weeds of for people on a relatively 'simple' lifestyle with straightforward investments.     By straightforward, I mean simple fund selections - Vanguard Lifestyle 60 or 80, perhaps. 

When I said "I like my finances in a box that I can easily understand" - some people, and especially those close to the industry, revel in the mystery of what is in the detail of things - heck, the FA/IFA industry is almost predicated on making the need to manage things complex, and something people should pay for - when sometimes, it isn't necessary!

The "care home provision" piece (& healthcare in retirement) is a big one to try to cater for.  In many ways, it is almost impossible unless you have a lot of wealth.  An area I am not really clear how (or whether!) to cater for.   We are hugely fortunate in the UK to have our NHS - a facility I feel much of the world should aim to replicate, for all it's underfunded flaws! - and I have seen some of it for elderly relatives over recent years.   Trying to fund a private home for an unknown period of time seems almost impossible to me, and in many ways I feel that "proofing the home" to enable care at home is a better use of those funds.

Thrugelmir

Albermarle said:

Pension v ISA, World economic cycle, gilts v bonds v cash, funds v ITs v ETFs, SWR, tax, trusts, inflation, state pension, risk, volatility etc etc

Just because someone is not going into fine detail , spreadsheets etc does not necessarily they are uninformed about these important issues. My question is not whether people going into retirement should be badly or well informed ( clearly the latter) but whether a lot of detailed analysis of possible scenarios,  is really necessary . Often the best plans often unravel in the face of unexpected events anyway .

Focussing on the investments themselves is key and where the time should be spent.  As that's a factor one can control. 

dharm999

i have a spreadsheet, with lots of worksheets that track the pension and investment values on a monthly basis, and then models growth based on 3%/5%/7% growth rates.  I have a rough idea of what we will spend in retirement, but don't keep a detailed budget of what we spend now, as i have a pretty good idea now of what we spend our money on.  

It takes a couple of hours a month to update the spreadsheet, usually done on a Saturday morning, on the last day of the month.  My wife calls it my 'fiddling time'!

tigerspill

I think I have got to that point.
Until recently, I spent many hours per week playing with my financial spreadsheets.  Probably for 10 years.
Once I retired last year and have made it through a year, and all is OK - I have much less interest.
My OH has come into an inheritance that will allow us significantly increase our expenditure - I have even less interest.
I do still track daily expenditure, but dont do anywhere as much future modelling any more.

BritishInvestor

cfw1994 said:

When I said "I like my finances in a box that I can easily understand" - some people, and especially those close to the industry, revel in the mystery of what is in the detail of things - heck, the FA/IFA industry is almost predicated on making the need to manage things complex, and something people should pay for - when sometimes, it isn't necessary!

Surely that's an outdated view? Loads of IFAs creating podcasts, courses, publishing books etc. 

83705628

I did have a detailed FIRE by 40 plan I made 3-4 years ago but all I've learned since is the need to be flexible. I'm having to move to Manchester for a job and the commitment looks like 3-5 years, and at least initially until I get to know the place my current plan is to rent and then use the knowledge I'll get by living there to look at buying something I could rent when I move on. But the earnings potential from this job, which I never expected, will be more than worth it and will likely lead to very flexible working options that could fit around a FIRE lifestyle and build up a sufficient DB pension even if I retire at 40 and start claiming it as early as I can.
Always have at least £20k cash, the rest stocks and shares ISAs.

cfw1994

BritishInvestor said:

cfw1994 said:

When I said "I like my finances in a box that I can easily understand" - some people, and especially those close to the industry, revel in the mystery of what is in the detail of things - heck, the FA/IFA industry is almost predicated on making the need to manage things complex, and something people should pay for - when sometimes, it isn't necessary!

Surely that's an outdated view? Loads of IFAs creating podcasts, courses, publishing books etc. 

Is it?  
You tell me - you're an IFA, (or FA?), right?

Sure, there is a LOAD of information online in podcasts etc.   What are your favourites?

My only 'recent' IFA experience was a seminar by a very well regarded company locally: it was pretty awful !!   
I guess I should say "awful to anyone with a vague handle on their finances" - I imagine there were may have been one or two at the seminar who found something useful, but to me (& SWMBO), as people with a faint interest in where we are, fiscally speaking, it was *incredibly* rudimentary.  No really useful detail offered up in a 3 hour afternoon session.

What do you think?

@tchallaghan93 - my only advice to you is to live a little first, rather than just focussing on retiring ;-)

crv1963

cfw1994 said:

BritishInvestor said:

cfw1994 said:

When I said "I like my finances in a box that I can easily understand" - some people, and especially those close to the industry, revel in the mystery of what is in the detail of things - heck, the FA/IFA industry is almost predicated on making the need to manage things complex, and something people should pay for - when sometimes, it isn't necessary!

Surely that's an outdated view? Loads of IFAs creating podcasts, courses, publishing books etc. 

@tchallaghan93 - my only advice to you is to live a little first, rather than just focussing on retiring ;-)

I'd second that, admirable to have a goal and I hope you make it but please not at the exclusion of enjoying life. Also have an idea of what you are retiring to.