Cutting it Fine - the challenge is on!

Fortune_Smiles

Oooh - love a good life wheel @SandyShores.  I've got a good worksheet if you're interested.  I can try to pm you with it?

Fortune x

savingholmes

They call it the wheel of life - but I don't think it is quite right. You can't be balanced in every sector all at the same time. There are times when you go after a passion project for example that may mean that you have to give up something else. The biggest thing I've learned is that you may be able to do anything but you can't do everything. Saying yes to one thing often means saying no to something else. For me I find it it is better to target some areas of my life that I can control than try to get perfection in all as it will never happen.

savingholmes

Well done on your pension progress with DH. Getting a decent EF together is a great goal. Good that you have other safety nets in place too. 

SandyShores

Thanks SH, I've been looking at Dave Ramsey's baby steps and realised he says you should put 15% of your gross household income into pensions, and not include employer contributions.  I've recalculated and even including tax relief of 20% DH will need to put another 4% into the employer pension and then another £70/mth into his personal pension to meet 15% of gross salary.  For myself I'm in a final salary pension putting in 9% so I'll need to put in another 4% of my gross salary.  That can be via AVC's or a SIPP - I need to look at those two in more detail.  It looks like the AVCs are less flexible as they are linked to workplace pension but they can be used to reduce your retirement age.  SIPPS seem completely flexible and you take them whenever you want to.  Just when I thought I was getting to grips with it, its a big consideration as it will mean using money intended for our mortgage overpayments, but its definitely something to think about - I think Dave Ramsey's advice is good, but I need to make sure its right for our circumstances.

Edit - I have just remembered that I am already receiving a final salary pension which after tax is equivalent to 6% of my current salary.  Its only small, but is Dave Ramsey saying I should be repaying 15% of that back into a pension?  I need to think about that one I think.

Fortune, love a good worksheet if you can PM it please do   I've also found The Wheel of Life on MindTools: https://www.mindtools.com/pages/article/newHTE_93.htm  it echos SH in that it says balance isn't about having everything equal, its about having your ideal balance.  I'm going to enjoy working through these. 

caeler

Eek I’m not hitting 15%! Gosh that’s focused the mind a bit! Once the mortgage is done I’ll focus on pension. 

joshiesaunt

I don't post often but enjoy reading your thread Sandyshores as i too am older with a big mortgage.  We just take it a month at a time, pay down what we can (minimum of £200 a month).  Our plan is to eventually move to the south coast when our son has flown the nest in about 9 years time and that should hopefully see us mortgage free/very low mortgage that we can clear with a pension lump sum.  That's the plan anyway but we'll see!

savingholmes

I think with pensions - you need to work out how much money you think you will need to live on in retirement - and how to get to that. The Which offers some good guidance on what singles or couples would need for different levels of retirement. There are sliders you can play with too. I think DR works on the basis of all 401K type pots rather than final salary. I think his stuff is a useful guide but shouldn't be taken too literally - as he is working with a US system which is very different to ours. 

If I change nothing (due to final / career average pensions) - and work until I am at least 55 - I would get £13K from one pot at age 67 and close to £8K from another - plus have £9.1K or more state pension. My pension is therefore largely fine as it is. If I worked to age 67 - my £13K pension would become £23K. DH however would get about £4K from his defined contribution pension based on what he's accumulated to date plus £9K+ state pension. He therefore needs to rapidly accumulate more pension - as if I die before him he loses access to my state pension and my other pensions halve or worse... 

Those are the kind of figures you need to work out to know how much you still need to save for pension. HTH

Bargainhunter30

I loved Projectme Sandy for her variation on the life wheel. https://myprojectme.com/

SandyShores

caeler said:

Eek I’m not hitting 15%! Gosh that’s focused the mind a bit! Once the mortgage is done I’ll focus on pension. 

I know caeler, get me trying to be all fancy   Trouble is retirement is coming upon me and Mr Shore's fast and so the mortgage may not be paid in time.  I'm going to do what savingholmes says and work out the income we'd be happy with in retirement (one or two million £££s ) and try and be pragmatic about it, while paying off the mortgage.

joshiesaunt said:

I don't post often but enjoy reading your thread Sandyshores as i too am older with a big mortgage.  We just take it a month at a time, pay down what we can (minimum of £200 a month).  Our plan is to eventually move to the south coast when our son has flown the nest in about 9 years time and that should hopefully see us mortgage free/very low mortgage that we can clear with a pension lump sum.  That's the plan anyway but we'll see!

Aw thanks joshiesaunt, that's really nice to hear.  Putting my ramblings down on paper really helps me.  Just a few year's ago I had no plans and so having even a remote possibility of paying off the mortgage before retiring is amazing.  And if we end up with a small sum to either clear or keep paying off  (you can get mortgages until 85 or older I believe) it will be fine.  I feel very much the same as you, I have a plan, but we'll see what life brings.

Savingholmes I will have to have  a play with the Which slider.  And thanks Bargainhunter30, Projectme looks great.  I suppose I have been kind of having a 'me project', so anything supporting that is helpful.  It looks really positive as well, just my thing.  

I've been loads more positive today, the sunshine has definitely helped and I was out in the garden a lot this weekend.  But, thinking about balance has lifted my attitude too.  We've also been making more plans for the house, and of course talking about a couple of largish purchases to really finish things off.  Definitely not going to get into debt again, but its another balancing act isn't it, managing it so that you can enjoy your life now, whilst still being able to enjoy it later.  Lots to do and think about, which will probably be better done tomorrow, as I've just realised it isn't Wednesday tomorrow (so I can have a lie in).  Definitely need a good sleep now

SandyShores

Unexpected amount in bagging area Xmas saver - fund now £153

Got to say, the temptation was to spend it, but its going into the pot.